-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Lyaa660Hze43YIW/3seW+FCJzeCgsE/EgXjDyJWYgRuuKeXOm+wMF/5YCMhO30Be s/pN14UACq+qdDc8Kbky4w== 0001021435-01-500011.txt : 20010724 0001021435-01-500011.hdr.sgml : 20010724 ACCESSION NUMBER: 0001021435-01-500011 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20010930 ITEM INFORMATION: FILED AS OF DATE: 20010723 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GRAPHON CORP/DE CENTRAL INDEX KEY: 0001021435 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 133899021 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-21683 FILM NUMBER: 1686201 BUSINESS ADDRESS: STREET 1: 400 COCHRANE CIRCLE CITY: MORGAN HILL STATE: CA ZIP: 95037 BUSINESS PHONE: 4087763232 MAIL ADDRESS: STREET 1: 40O COCHRANE CIRCLE CITY: MORGAN HILL STATE: CA ZIP: 95037 FORMER COMPANY: FORMER CONFORMED NAME: UNITY FIRST ACQUISITION CORP DATE OF NAME CHANGE: 19960823 8-K 1 form8k.txt GRAPHON FORM 8K MENTA SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 --------------- CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report: July 20, 2001 GRAPHON CORPORATION (Exact name of Registrant as specified in Charter) Delaware 0-21683 13-3899021 (State or other jurisdiction of (Commission File No.) (IRS Employer incorporation Identification Number) 400 Cochrane Circle, Morgan Hills, California 95037 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (408) 201-7100 Item 5. Other Events On July 17, 2001, we acquired a perpetual, fully paid-up, exclusive license from Menta Software Ltd., an Israeli corporation, to use and exploit Menta's proprietary "thin" client and web-based applications management software, in exchange for 2,500,000 shares of our common stock. We have granted Menta certain registration rights under the Securities Act of 1933 with respect to these shares. Menta has agreed to limit its sales of these shares of common stock to no greater than 62,500 shares in each of the first six months following effectiveness of such registration and to no greater than 10% of its remaining shares in each of the next six months thereafter. We also acquired the exclusive right, exercisable at our option at any time up to and through July 17, 2002, to acquire the software we licensed from Menta, together with all related intellectual property rights, for an additional 440,000 shares of our common stock. In the event we exercise our purchase right, we have the right, but not the obligation, to hire any of Menta's then or former employees. In a contemporaneous transaction, we granted Menta a non-exclusive license to use and exploit our U.S. Patent No. 5,831,609 entitled "Method and System for Dynamic Transaction between Different Graphical User Interface Systems." Item 7. Financial Statements, Proforma Financial Information and Exhibits. (c)(i) Share Purchase Agreement dated as of May 31, 2001 between Graphon Corporation and Menta Software Ltd. (ii) Technology License Agreement dated as of May 31, 2001 between Graphon Corporation and Menta Software Ltd. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized. Dated: July 20, 2001 GRAPHON CORPORATION (Registrant) By: /s/William Swain -------------------- William Swain Chief Financial Officer EX-99 2 form8kattach1.txt GRAPHON FORM 8K MENTA SHARE PURCHASE AGREEMENT dated as of this 31st day of May, 2001 between GRAPHON CORPORATION, a Delaware corporation (the "Company"), and MENTA SOFTWARE LTD., an Israeli corporation (the "Purchaser") ----------------- The Company and the Purchaser are simultaneously herewith entering into a Technology License Agreement (the "Technology License Agreement") whereby the Purchaser may acquire up to 2,940,000 shares of the Common Stock of the Company (the "Shares"). The Company and the Purchaser wish to set forth certain terms and conditions for the Purchaser's acquisition of the Shares. NOW, THEREFORE, in consideration of the premises and the mutual covenants hereafter set forth, the parties hereby agree as follows: 1. PURCHASE OF SHARES 1.1 ___ Subject to the terms and conditions hereinafter set forth, the Purchaser hereby subscribes for and agrees to purchase from the Company, and the Company agrees to issue and sell to the Purchaser, 2,500,000 shares of Common Stock of the Company as the "License Fee" pursuant to the Technology License Agreement, upon satisfaction of the terms and conditions provided in the Technology License Agreement; provided that such number of shares shall be equitably adjusted to reflect any stock dividend, stock split, combination or exchange of shares, merger, consolidation or recapitalization of the Company after the date hereof, such adjustment to be made by the Board of Directors of the Company in its reasonable discretion. 1.2 ___ Subject to the terms and conditions hereinafter set forth, the Purchaser hereby subscribes for and agrees to purchase from the Company, and the Company agrees to issue and sell to the Subscriber, 440,000 shares of Common Stock of the Company (the "Additional Shares") as the "Acquisition Fee" pursuant to the Technology License Agreement, upon satisfaction of the terms and conditions provided in the Technology License Agreement; provided that such number of shares shall be equitably adjusted to reflect any stock dividend, stock ___ split, ___ combination ___ or exchange of shares, ___ merger, consolidation or recapitalization of the Company, such adjustment to be made by the Board of Directors of the Company in its reasonable discretion. 1.3 ___ Each date upon which the Purchaser purchases Shares pursuant to this Agreement is referred to herein as a "Closing Date." 1.4 ___ The Company shall deliver to the Purchaser a certificate or certificates evidencing that Shares purchased on a Closing Date as soon as practicable after the Closing Date, but in no event later than seventy five (75) days after such Closing Date. 2. REPRESENTATIONS AND COVENANTS OF THE PURCHASER 2.1 ___ The Purchaser represents and warrants that it has all requisite corporate power and authority to enter into this Agreement and perform its obligations hereunder. All necessary corporate action on the part of the Purchaser in connection with the execution, delivery and performance of this Agreement by the Purchaser has been taken. 2.2 ___ The Purchaser represents that the Shares are being purchased for its own account, for investment and not for distribution or resale to others, other than as a dividend or other distribution to its shareholders and others, in connection with the liquidation or dissolution of the Purchaser; provided however that no dividend or other distribution of the Shares shall be made prior to August 15, 2001 or until registration of the Shares in accordance with Section 5(a) of Schedule 2.4. 2.3 ___ The Purchaser ___ acknowledges ___ that it has been afforded the opportunity to make, and has made, all inquiries as it deemed appropriate with respect to the Company's affairs and prospects. 2.4 ___ The Purchaser agrees to be bound by the restrictions on transfer, and the procedures for registration of the Shares and the other agreements applicable to the Purchaser set forth in Schedule 2.4 hereto; provided, however, that the Purchaser and its successors and permitted assigns agree, notwithstanding the registration of the Shares under the Act, as contemplated by Section 5 of Schedule 2.4, not to sell, transfer or dispose of in a public transaction, (a) more than two and one-half (2 1/2 %) percent of the Shares then owned by the Purchaser during each of the first six (6) months after the first Closing Date and (b) more than ten (10%) per cent of the Shares then owned by the Purchaser during each month of the following six (6) months. The Purchaser further consents that the certificates representing the Shares may bear a restrictive legend to such effect. 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY 3.1 ___ The Company represents and warrants that it has all requisite corporate power and authority to enter into this Agreement and perform its obligations hereunder. All necessary corporate action on the part of the Company in connection with the execution, delivery and performance of this Agreement by the Company has been taken. This Agreement, when executed and delivered by or on behalf of the Company, shall constitute the valid and legally binding obligations of the Company, legally enforceable against the Company in accordance with its respective terms. 3.2 ___ The Shares and the Additional Shares, when issued and allotted in accordance with this Agreement, will be duly authorized, validly issued, fully paid, non-assessable, and free of any preemptive rights, liens, claims, encumbrances or third party rights of any kind and duly registered in the name of each Purchaser in the Company's share transfer register. 3.3 ___ The Company agrees that it will be bound by the provisions of Schedule 2.4 hereto, with respect to registration rights for the Common Stock. 4. MISCELLANEOUS 4.1 ___ Any notice, request, advice, consent or other communication given hereunder shall be given in writing and sent by overnight delivery service or registered or certified mail, return receipt requested, and addressed as follows: if to the Company, to it at 400 Cochrane Circle, Morgan Hill, California 95037, Attention: ___ Chief Financial Officer, with a copy to Sonnenschein Nath & Rosenthal, 1221 Avenue of the Americas, New York, New York 10020, Attention, Ira I. Roxland, Esq.; and if to the Purchaser, to it at 13 Gush Etzion Street, Givat Shmuel 54030, Israel, Attention: Mr. Shai Beilis. Notice so given shall be deemed to have been given on the earlier to occur of actual receipt or five business days after the date of such mailing, except for notices of change of address, which shall be deemed to have been given when received. 4.2 ___ This Agreement shall not be changed, modified or amended except by a written agreement signed by all the parties hereto. 4.3 ___ This Agreement shall be binding upon and inure to the benefit of the parties hereto and to their respective heirs, legal representatives, successors and assigns. This Agreement and the Technology License Agreement set forth the entire agreement and understanding between the parties as to the subject matter thereof and merge and supersede all prior discussions, agreements and understandings of any and every nature among them. 4.4 ___ This Agreement shall be governed in all respects by the law of the State of New York, without regard to its principles of conflicts of law. 4.5 This Agreement may be executed in counterparts. 4.6 ____ This Agreement is subject to the approval of the Board of Directors and the Shareholders of the Purchaser. If such approval has not been obtained on or before June 18, 2001, this Agreement shall not take effect ab initio. 4.7 ___ This Agreement or any portion hereof, including the registration rights granted by the Company to the Purchaser herein, may be transferred or assigned by the Purchaser to any of its Affiliates, shareholders and Directors, including by way of liquidation or dissolution of the Company. IN WITNESS WHEREOF, the parties have executed this Share Purchase Agreement as of the day and year first written above. GRAPHON CORPORATION By: ------------------------------- Name: Title: MENTA SOFTWARE LTD. By: ------------------------------- Name: Title: 2.4.9 17095480\V-1 SCHEDULE 2.4 REGISTRATION RIGHTS, PROCEDURES AND RESTRICTIONS UPON TRANSFER ------------------- 1. ____ Restriction ___ on ___ Transfer. ___ The ___ Restricted ___ Securities ___ (as hereinafter defined), and any shares of capital stock received in respect thereof, whether by reason of a stock split or share reclassification thereof, a stock dividend thereon or otherwise, shall not be transferable except upon the conditions specified in this Schedule, which conditions are intended to insure compliance with the provisions of the Securities Act in respect of the transfer thereof. 2. Definitions. As used in this Schedule, the following terms shall ----------- have the following respective meanings: "Commission" shall mean the Securities and Exchange Commission, or any other Federal agency at the time administering the Securities Act. "Common Stock" shall mean the Common Stock of the Company, together with any other equity securities that may be issued by the Company in addition thereto or in substitution therefor. "Company" shall mean GraphOn Corporation, a Delaware corporation, and its successors and assigns. "Closing Date" shall mean each date on which shares of Common Stock are sold to the Purchaser pursuant to the Share Purchase Agreement to which this Schedule is attached (the "Share Purchase Agreement"). "Person" shall mean and include an individual, a Company, a partnership, a trust, an unincorporated organization and a government or any department, agency or political subdivision thereof. "Purchaser" shall mean Menta Software Ltd., an Israeli corporation, and its permitted successors or assigns. "Restricted Securities" shall mean the shares of Common Stock issued pursuant to the Share Purchase Agreement. "Securities Act" shall mean the Securities Act of 1933, as amended, or any similar Federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time. "Transfer" ___ shall include any disposition of any Restricted Securities or of any interest therein which would constitute a sale thereof within the meaning of the Securities Act. 3. ____ Restrictive ___ Legend. ___ Each ___ certificate ___ for the ___ Restricted Securities and any shares of capital stock received in respect thereof, whether by reason of capital stock received in respect thereof, a stock dividend thereon or otherwise, and each certificate for any such securities issued to subsequent transferees of any such certificate shall (unless otherwise permitted by the provisions of Sections 4 or 11 hereof) be stamped or otherwise imprinted with a legend in substantially the following form: "The shares of common stock represented by this certificate have not been registered under the Securities Act of 1933, as amended, ___ and may not be sold, offered for sale, assigned, transferred or otherwise disposed of, unless registered pursuant to the provisions of that Act or such disposition is in compliance with an available exemption from such registration." 4. ____ Notice of Transfer. The holder of any Restricted Securities, by acceptance thereof ___ agrees, ___ prior to any transfer of any Restricted Securities, to give written notice to the Company of such holder's intention to effect such transfer and to comply in all other respects with the provisions of this Section 4. Each such notice shall describe the manner and circumstance of the proposed transfer and shall be accompanied by the written opinion, addressed to the Company, of counsel for the holder of Restricted Securities, as to whether in the opinion of such counsel (which opinion shall be reasonably satisfactory to counsel for the Company) such proposed transfer involves a transaction requiring registration of such Restricted Securities under the Securities Act; provided, however, that no such opinion shall be required in connection with a transaction complying with the requirements of Rule 144, promulgated under the Securities Act, or successor Rule thereto ("Rule 144"). If in the opinion of such counsel (if such opinion is required hereunder), the proposed transfer of Restricted Securities may be effected without registration under the Securities Act, the holder of Restricted Securities shall thereupon be entitled to transfer Restricted Securities in accordance with the terms of the notice delivered by it to the Company. Each certificate or other instrument evidencing the securities issued upon the transfer of any Restricted ___ Securities (and each certificate or other instrument evidencing any untransferred balance of such securities) shall bear the legend described in Section 3 hereof unless (a) in the opinion of such counsel ___ registration of future transfer is not required by the applicable provisions of the Securities Act or (b) the Company shall have waived the requirement of such legend; provided, however, that such legend shall not be required on any certificate or other instrument evidencing the securities issued upon such transfer in the event such transfer shall be made in compliance with the requirements of Rule 144. The holder of Restricted Securities shall not transfer such Restricted Securities until such opinion of counsel has been given to the Company (unless waived by the Company or unless such opinion is not required in accordance with the provisions of this Section 4) or until registration of the Restricted Securities involved in the above-mentioned request has become effective under the Securities Act. In addition to the above provisions of this Section 4, ___ transfer of the Restricted Securities is also subject to the restriction contained in Section 2.4 to the Share Purchase Agreement. 5. ____ Registration. (a) ______ No later than 30 days after each Closing Date, the Company shall file a registration statement on Form S-3 (or other then available form) under the Securities Act covering the Restricted Securities purchased on such Closing Date and will thereafter exert its best efforts to promptly effect the registration of the Restricted Securities under the Securities Act. The Company may include in such registration statement any of its securities for its own account or for the respective accounts of others. (b) ___ Whenever the Company ___ proposes to file a registration statement (other than a registration statement on Form S-8 or Form S-4, or their successors, or any other form for a similar limited purpose, or any registration statement covering only securities proposed to be issued in exchange for securities or assets of another corporation or business entity), it will prior to such filing, give written notice to each holder of Restricted Securities of its intention to do so and, upon the written request of the holders of no less than 20% of the then issued and outstanding Restricted Securities given within thirty (30) days after the Company provides such notice (which request shall state the intended method of disposition of such Restricted Securities), the Company shall use its best efforts to cause all Restricted Securities which the Company has been requested to register to be registered under the Securities Act to the extent necessary to permit their sale or other disposition in accordance with the specified intended methods of distribution, provided that the Company shall have the right to postpone or withdraw any registration effected pursuant to this Section 5(b) without obligation to such holders. The Company shall not be required to effect more than two (2) registrations pursuant to this Section 5(b). (c) ___ In connection with any registration under Section 5(b) involving an underwritten offering, the Company shall not be required to include any Restricted Securities in such registration unless the holders of such Restricted Securities accept the terms of the underwriting as agreed upon between the Company and the underwriters selected by it, subject to the provisions of the last sentence of Section 7 of this Schedule. If in the opinion of the managing underwriter it is desirable because of marketing factors to limit the number of Restricted Securities to be included in the offering, then the Company shall be required to include in the registration only that number of Restricted Securities, if any, which the managing underwriter believes should be included therein; provided that no persons or entities other than the Company, the holders of Restricted Securities and other persons or entities holding registration rights shall be permitted to include securities in the offering. If the number of Restricted Securities to be included in the offering in accordance with the foregoing is less than the total number of shares which the holders of Restricted Securities have requested to be included, then such holders and other holders of securities entitled to include them in such registration shall participate in the registration pro rata based upon their total ownership of shares of Common Stock (giving effect to the conversion into Common Stock of all securities convertible thereinto). If any holder would thus be entitled to include more securities than such holder requested to be registered, the excess shall be allocated among other requesting holders pro rata in the manner described in the preceding sentence. (d) ___ Notwithstanding the foregoing, the Company shall not be required, pursuant to this Section 5(b), to include any Restricted Securities in a registration statement if such Restricted Securities can then be sold pursuant to Rule 144(k) under the Securities Act and represent less than 1% of the then outstanding shares of Common Stock. 6. Preparation and Filing. If and whenever the Company is under an ----------------------- obligation pursuant to the provisions of this Schedule to use its best efforts to effect the registration of any Restricted Securities, the Company shall, as expeditiously as practicable: (a) ___ Prepare and file with the ___ Commission a ___ registration statement with respect to such securities and use its best efforts to cause such registration statement to become and remain effective; (b) ___ Prepare and file with the Commission such amendments and supplements to such registration statements and the prospectus used in connection therewith as may be necessary to keep such registration statement effective for a period of two years from the Closing Date and to comply with the provisions of the Securities Act with respect to the sale or other disposition of all Restricted ___ Securities covered by such registration statement and will furnish to each selling stockholder prior to the filing thereof a copy of any amendment or supplement to such registration statement to which any such selling stockholder shall have reasonably objected on the grounds that such amendment or supplement does not comply in all material respects with the requirements of the Securities Act or the rules and regulations thereunder; (c) ___ Furnish to each selling stockholder such number of copies of such registration statement and of each such amendment or supplement thereto (in each case including all exhibits) a summary prospectus or other prospectus, including a preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents as such seller may reasonably request in order to facilitate the public sale or other disposition of such Restricted Securities; (d) ___ Use its best efforts to register or qualify the Restricted Securities covered by such registration statement under the securities or blue sky laws of such states or jurisdictions as each such seller shall reasonably request ___ but in no event ___ more than three (3) states or jurisdictions in the aggregate (provided, however, that the Company shall not be required to consent to general service of process for all purposes in any state or jurisdiction where it is not then qualified) and do any and all other acts or things which may be necessary or advisable to enable such seller to consummate the public sale or disposition in such jurisdictions of such securities; (e) ___ Notify each seller of Restricted Securities covered by such registration statement, at any time when a prospectus relating thereto covered by such registration statement is required to be delivered under the Securities Act within the appropriate period mentioned in clause (b) of this Section 6, ___ of the happening of any event as a result of which the Registration Statement, the prospectus or any document incorporated therein by reference, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading and at the request of such seller, prepare and furnish to such seller a post-effective amendment or supplement to the registration statement or the related prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of such shares, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; (f) ___ Otherwise ___ use its best ___ efforts to comply ___ with all applicable rules and regulations of the Commission, and make generally available to its securities holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve months, but not more than eighteen months, beginning with the first month of the first fiscal quarter after the effective date of such registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act; and (g) Notify each selling stockholder and the managing underwriter or underwriters, if any, promptly, and confirm such advice in writing (i) ___ when ____ the ____ registration ____ statement, ____ any pre-effective amendment, ___ the ___ prospectus or any prospectus supplement or ___ post-effective ___ amendment to the registration statement has been filed, and, with respect to the registration statement or any post-effective amendment, when the same has become effective; (ii) of the issuance by the Commission of any stop order suspending the effectiveness of the registration statement or the initiation of any proceedings for that purpose; (iii) of ___ the ___ receipt ___ by the ___ Company ___ of any qualification of the Restricted Securities for sale under the securities or "Blue Sky" laws of any ___ jurisdiction or the initiation or threatening of any proceeding for such purpose; and (iv) of the existence of any fact which results in the registration statement, ___ the prospectus or any document incorporated therein by reference containing an untrue statement of material fact or omitting to state a material fact required to be stated therein or necessary to make the statements therein not misleading. (h) ___ Make every reasonable effort to obtain the withdrawal of any order suspending the effectiveness of the registration statement at the earliest possible moment; (i) ___ Use its best efforts to cause all Restricted Securities covered by the registration statement to be listed on each securities exchange on which the Company's Common Stock is listed, if any; and (j) ___ Provide and cause to be maintained a transfer agent for all Restricted Securities covered by such registration statement from and after a date not later than the effective date of such registration statement. 7. ____ Underwritten Offerings. If requested by the underwriters for any underwritten offering of Restricted Securities pursuant to this Schedule, the Company will enter into an underwriting agreement with such underwriters for such offering, such agreement to contain such representations and warranties by the Company and such other terms and provisions as are customarily contained in underwriting agreements with respect to secondary distributions, including, without limitation, indemnities as to the effect and to the extent provided in Section 10 hereof. The holders of Restricted Securities on whose behalf Restricted Securities are to be distributed by such underwriters shall be parties to any such underwriting agreement and the representations and warranties by, and the other agreements on the part of, the Company to and for the benefit of such underwriters, shall also be made to and for the benefit of such holders of Restricted Securities. Such holders of Restricted Securities shall not be required by the Company to make any representations or warranties to or agreements with the Company or the underwriters other than reasonable representations, warranties or agreements regarding such holder, such holder's Restricted Securities and such holder's intended method or methods of disposition as are customarily contemplated by underwriting agreements with ___ respect ___ to ___ secondary ___ distributions ___ and any other representation required by law. 8. ____ Preparation; Reasonable Investigation. In connection with the preparation and filing of each registration statement including Restricted Securities under the Securities Act, the Company will give the holders of Restricted Securities on whose behalf such Restricted Securities are to be so registered and their underwriters, if any, and their respective counsel and accountants, the opportunity to participate in the preparation of such registration statement, each prospectus included therein or filed with the Commission, each document incorporated by reference therein or filed with the Commission, each document ___ incorporated by reference therein and each amendment thereof or supplement thereto, and will give each of them such access to its books and records and such opportunities to discuss the business of the Company with its officers and the independent public accountants who have certified its financial ___ statements as shall be necessary, in the opinion of such holders and such underwriters or their respective counsel, to conduct a reasonable investigation within the meaning of the Securities Act. 9. ____ Expenses. All expenses incurred by the Company in complying with its obligations under Section 5 hereof, including, without limitation, all registration and filing fees, fees and expenses of complying with securities and blue sky laws, printing expenses and fees and disbursements of counsel to the Company and of independent certified public accountants shall be paid by the Company; provided, however, that fees and disbursements of counsel to the Purchaser shall be paid by the Purchaser and all underwriting discounts and selling commissions and stock transfer taxes applicable to the Restricted Securities covered by the registration effected pursuant to Section 5 hereof shall be borne by the seller or sellers thereof in proportion to the number of Restricted Securities sold by such seller or sellers. 10. Indemnification. --------------- (a) ___ In the event of any ___ registration ___ of any Restricted Securities under the Securities Act pursuant to this Schedule, the Company shall indemnify and hold harmless the seller of such shares, each underwriter of such shares, if any, each broker or any other person acting on behalf of such seller and each other person, if any, who controls any of the foregoing persons, within the meaning of the Securities Act, against any losses, claims, damages or liabilities, joint or several, to which any of the foregoing persons may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any registration statement under which such Restricted Securities were registered under the Securities Act, final prospectus contained therein, any document incorporated by reference therein or any amendment or supplement thereto, or any document prepared and/or furnished by the Company incident to the registration of any Restricted Securities pursuant to Section 5 hereof, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading or, with respect to any prospectus, necessary to make the statements therein in light of the circumstances under which they were made, not misleading, or any violation by the Company of the Securities Act or state securities or blue sky laws applicable to the Company and relating to action or inaction ___ required of the Company in connection ___ with such registration or qualification under such state securities or blue sky laws; and shall reimburse such seller and each such controlling person for any legal or any other expenses reasonably incurred by any of them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the Company shall not be liable in any such case to the extent that such loss, claim, damage or liability arises out of or is based upon an untrue statement or omission made in said registration statement, said prospectus or said amendment or supplement or any document incident to the registration of any Restricted Securities pursuant to Section 5 hereof in reliance upon and in conformity with written information furnished to the Company through an instrument duly executed by such seller or such underwriter specifically for use in the preparation thereof. (b) ___ Before Restricted Securities held by any prospective seller shall be included in any registration statement pursuant to this Schedule, such prospective seller and any underwriter acting on its behalf shall have agreed to indemnify and hold harmless (in the same manner and to the same extent as set forth in the preceding paragraph (a) of this Section 10) the Company, each director of the Company, each officer of the Company who shall sign such registration statement and any person who controls the Company within the meaning of the Securities Act, with respect to any untrue statement or omission from such registration statement, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereto, if such untrue statement or omission was made in reliance upon and in conformity with written information furnished to the Company through an instrument duly executed by such seller or such underwriter specifically for use in the preparation of such registration statement, final prospectus or amendment or supplement; provided, however, that the maximum amount of liability in respect of such indemnification shall be limited, in the case of each prospective seller of Restricted Securities, to an amount equal to the gross proceeds actually received by such prospective seller from the sale of Restricted Securities effected pursuant to such registration. (c) ___ Promptly after receipt by an indemnified party of notice of the commencement of any actions involving a claim referred to in paragraph (a) or (b) of this Section 10, such indemnified party will, if a claim in respect thereof is made against an indemnifying party, give written notice to the latter of the commencement of such action. In case any such action is brought against an indemnified party, the indemnifying party will be entitled to participate in and to assume the defense thereof, jointly with any other indemnifying party similarly notified to the extent that it may wish, with counsel reasonably satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be responsible for any legal or other expenses subsequently incurred by the indemnified party in connection with the defense thereof; provided, however, that if any indemnified party shall have reasonably concluded that there may be one or more legal defenses available to such indemnified party which are differed from or additional to those available to the indemnifying party, or that such claim or litigation involves or could have an effect upon matters beyond the scope of the indemnity ___ agreement ___ provided in this ___ Section 10, ___ the indemnifying party shall reimburse such indemnified party for that portion of the fees and expenses of any counsel retained by the indemnified party which are reasonably related to the matters covered by the indemnity agreement provided in this Section 10. (d) ___ The failure to notify an indemnifying party promptly of the commencement of any such action, if materially prejudicial to the ability of the indemnifying party to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section 10, but the omission so to notify the indemnifying party will not relieve the indemnifying party of any liability that it may have to any indemnified party otherwise than under this Schedule. (e) ___ The indemnifying party shall not make any settlement of any claims indemnified against hereunder without the written counsel of the indemnified party or parties, which consent shall not be unreasonably withheld. (f) ___ If the indemnification ___ provided for in Section 10 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received from the offering by the Company, the holders of Restricted Securities and any underwriter; but if such allocation is not permitted by applicable law or if the indemnified party failed to give the notice required under paragraph (c) above, each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportions as are appropriate to reflect not only such relative benefits but also relative fault of the Company, the holders of Restricted Securities and any underwriter in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The parties agree that the relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged untrue statement of a material fact relates to information supplied by the Company, the holders of Restricted Securities or underwriter and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission; that it would not be just and equitable if contribution pursuant to such agreement were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable consideration referred to above in this paragraph (e) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim; that the holders of Restricted Securities shall not be required to contribute any amount in excess of the dollar amount by which the proceeds to be received by such holders from the sale of their respective Restricted Securities exceeds the amount of damages such holders of Restricted Securities would have otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission, and no underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the shares of securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission; and that no person guilty of fraudulent ___ misrepresentation ___ (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. 11. ___ Removal of Legends. Whenever the restrictions imposed by this Schedule shall terminate, as herein provided, the holder of any Restricted Securities as to which such restrictions have terminated shall be entitled to receive from the Company, without expense, a new certificate not bearing the restrictive legend referred to in Section 3 hereof and not containing any other reference to the restrictions imposed by this Schedule. EX-99 3 form8kattach2.txt GRAPHON FORM 8K MENTA 1 Technology License (5) Final TECHNOLOGY LICENSE AGREEMENT This Technology License Agreement (the "Agreement") is entered into as of May 31, 2001 (the "Effective Date"), by and between Menta Software Ltd., a corporation organized under the laws of Israel with an office at 13 Gush Etzion Street, ___ Givat Shmuel, ___ 54030, Israel ("Company"), ___ and GraphOn Corporation, a Delaware corporation, with an office at 400 Cochrane Circle, Morgan Hill, CA 95037 USA ("Licensee"). RECITALS WHEREAS, Company has expended considerable time, effort and resources in the development of certain proprietary software; and WHEREAS, Licensee desires to obtain an exclusive license to the proprietary software on the terms and conditions contained herein. NOW THEREFORE, in consideration of the mutual promises contained herein, the parties agree to the following: 1. Definitions. The following terms shall have the following meanings. 1.1 ___ "Company Software" means the proprietary software as described in Exhibit A, as it exists on the Effective Date together with all add-ons, supplements, bug fixes, new versions, updates, and the like which Company is obliged to or does deliver to Licensee under this Agreement. Company Software includes and shall be delivered in both in commented Source Code and Object Code form, together with all Documentation. 1.2 ___ "Confidential Information" means (i) the Company Software; (ii) any enhancements, modifications and derivative works of or to the Company Software, made by Company or Licensee; (iii) the terms and conditions of this Agreement; and (iv) all non-public information provided by one party to the other under this Agreement that is identified as proprietary or confidential. 1.3 ___ "Intellectual Property Rights" means all worldwide copyright, trademark, trade secret, and all rights related to issued and pending patents, and all copyright, ___ trademark and patent ___ registrations ___ and applications for registrations ___ (including ___ patent reissues, ___ divisions, continuations, continuations-in-part, renewals and extensions) in or related to the Company Software. 1.4 ___ "Documentation" means all user manuals, comments on source code, schematics, and other documents as may exist that pertain to the use, performance, capabilities and compatibility, installation, maintenance, or development (coding) of the Company Software. 1.5 ___ "Development ___ Tools" ___ means all software ___ tools, ___ libraries, proprietary development environments, APIs, and other software necessary or convenient to the development of derivative works of the Company Software, or the maintenance and improvement of the Company Software, which are under the control of Company. 1.6 ___ "Deliverables" means all things, including the Company Software, and Documentation, that Company is obliged to deliver to Licensee under this Agreement. 1.7 ___ "Exclusivity Period" mans a period of time commencing on the Effective Date and lasting one year. 1.8 "Term" means the term of this Agreement as set out in Section 9. 2. License & Ownership. 2.1 ___ License. Company grants to Licensee a perpetual, fully paid-up, exclusive (as defined below), nontransferable, irrevocable worldwide license to (i) use, reproduce, modify and create derivative works of the Company Software, Documentation and Development Tools, and to distribute, license, and perform all these; and to (ii) license and sublicense the Company Software in Object Code form, together with anything (including Intellectual Property Rights) owned by the Company in any derivative works of the Company Software. 2.2 ___ Exclusivity. ___ The license ___ granted in Section 2.1 above is exclusive in that Company shall not grant any of the same rights to any other party. Company retains the sole right to sublicense the Company Software and any derivatives that Company makes to end users. 2.3 ___ Ownership. ___ Company retains all right, ___ title and interest, including all Intellectual Property Rights, in the Company Software and any part thereof and any subsequent versions, modifications or enhancements of or to the Company Software created by or on behalf of Company. Licensee shall own all right, title and interest, including all Intellectual Property Rights, in any derivative works including but not limited to any subsequent versions, modifications or enhancements of or to the Company Software created by or on behalf of Licensee. For avoidance of doubt, it is the intention of the parties that Licensee shall own the entire and sole copyright in any derivative works it makes of Company Software, without regard to the original authorship of any portion of such derivative work and Licensee hereby grants Company a perpetual fully paid license to use any such derivative works. 2.4 ___ Support Services. ___ For a period of one (1) year from the Effective Date, Company shall provide Developer Support Services to Licensee via telephone, email or in person on customary terms. Developer Support Services are defined as providing Licensee with (i) any and all updates, bug fixes, upgrades, new versions, and new features of the Company Software in electronic format, including commented source code and (ii) technical contact persons for providing Licensee, among other things, answers to questions regarding the development of the Company Software. 2.5 ___ Acquisition Option. During the Exclusivity Period, ___ Licensee shall have the exclusive right, but not the obligation, to acquire the Company Software, together with all Intellectual Property Rights pertaining to and inhering in it, in exchange for the fee specified in Exhibit A ("Acquisition Fee"). To perfect its rights under this Section, Licensee must within the Exclusivity Period provide notice to Company of its intention to make the acquisition. During the Exclusively Period, and except licenses to end users, Company will not sell, transfer, license, assign, burden, pledge, or otherwise diminish its ownership interest in the Company Software. Licensee shall have forty five (45) days (which in this event may expire after the Exclusivity Period) in which to provide effective notice of its exercise, or not, of the option. If Licensee elects to exercise its Acquisition Option, Company will transfer ownership in the Company Software (together with the Intellectual Property Rights inhering in it) to Licensee and the Company shall use commercially reasonable efforts to assist Licensee in the assignment and transfer any and all ownership interest, including any Intellectual Property Rights, it may have in the Company Software to Licensee. If Licensee elects to exercise its Acquisition Option, Licensee shall also have the right, but not the obligation, to hire any current or former employee of the Company. 3. Fees & Taxes. 3.1 License Fees. Licensee will pay to Company the license fees specified in Exhibit A ("License Fees"). 3.2 ___ Payment. Licensee will pay all fees under this Agreement in accordance with Exhibit A and upon the delivery of the Company Software, Documentation and Development Tools pursuant to Section 4. 3.3 ___ Taxes. Licensee is responsible for the payment of all taxes in connection with the payments hereunder other than those taxes based on the income of the Company. 4. Delivery. Company shall deliver the Deliverables to Licensee via electronic data transfer on the Effective Date. 5. Representations and Warranties. 5.1 ___ Licensee represents and warrants that it has all requisite corporate power and authority to enter into this Agreement and perform its obligations hereunder. INCLUDING IN CONNECTION WITH ANY SOFTWARE LICENSEE MAY DELIVER TO COMPANY, LICENSEE EXPRESSLY DISCLAIMS ANY IMPLIED WARRANTY OF MERCHANTABILITY OR SUITABILITY FOR PARTICULAR ___ PURPOSE, ___ TITLE, OR ANY WARRANTY, AND GIVES NO OTHER WARRANTIES OR REPRESENTATIONS. 5.2 ___ Each party is responsible for compliance with US export control laws and the import laws of any other country. 5.3 Company represents and warrants that, as of the Effective Date, (a) It has all requisite corporate power and authority to enter into this Agreement and perform its obligations hereunder; (b) ___ It owns all Intellectual Property Rights in the Company Software and that it has not granted and will not grant to any other party rights to the Company Software that are inconsistent with the rights granted to Licensee under this Agreement as set forth in Section 2.2; (c) It has the technical expertise and resources to fulfill its obligations under this Agreement; (d) All services will be performed in a professional manner by qualified personnel; (e) ___ Any information or materials in the Company Software are either original with it in the public domain, or it is licensed to dispose of them as contemplated by this Agreement; (f) ___ The Company Software, and its contemplated disposition and use under this Agreement, do not infringe anywhere in the world any person's or entity's rights including without ___ limitation, ___ patents, ___ copyrights including rights in a joint work, trademarks, trade dress, rights of publicity, privacy, moral rights, literary rights, trade secret, libel, other Intellectual Property Right, or contractual rights pertaining to Confidential Information; (g) ___ There is no claim, action, suit or proceeding relating to the rights granted to Licensee herein pending or threatened before any court, Examiner, Board, tribunal, arbiter, or other adjudicatory entity; (h) It will comply with all applicable laws and regulations. 5.4 ___ Other than those warranties expressly made in this Agreement, COMPANY MAKES NO OTHER WARRANTIES, ___ EXPRESS OR IMPLIED, AND EXPRESSLY DISCLAIMS THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. 6. Indemnification. 6.1 ___ Company shall indemnify, defend and hold Licensee harmless from any and all liability, loss, cost, damage, judgment or expense (including reasonable attorneys' and experts' fees and costs) resulting from or arising out of any claim by a third party that the Company Software itself or any part thereof, unmodified by Licensee or any third party, infringes any Intellectual Property Rights for a period of two (2) years from the Effective Date. This obligation is subject to Licensee notifying Company promptly in writing of the claim, giving Company exclusive control of the defense and settlement thereof, and providing reasonable assistance and authority as requested by Company. If use of the Company Software becomes the subject of any claim of infringement, Company will promptly, and its option and sole expense: (i) obtain the continuing right to use the Company Software for Licensee; (ii) modify the Company Software so that it no longer infringes; or (iii) replace it with a functional ___ equivalent product that does not infringe. If Company selects options (ii) or (iii), the modification or replacements shall continue to comply with all representations and warranties herein, and shall not diminish the functionality or performance, ___ nor adversely affect the compatibility, of the Software. 7. Limitation Of Liability. Except for the enforcement of or pursuant to Section 8 (confidentiality): 7.1 ___ To the maximum extent permitted by law, Company shall not be liable to Licensee for any consequential or incidental damages, including any lost profits or lost savings arising out of the Company Software, even if Company has been advised of the possibility of such damages. 7.2 ___ (i) In no event shall either party's total liability for all damages or losses, whether in contract, tort (including negligence) or otherwise as a result of any infringement of any Intellectual Property Rights, exceed two million ($2,000,000) US dollars; and (ii) In no event shall either party's total liability for all damages or losses, whether in contract, tort (including negligence) or otherwise, other than as a result of any infringement of any Intellectual Property Rights, exceed one million ($1,000,000) US dollars. 8. Confidential Information. 8.1 ___ Confidential Information. By virtue of this Agreement, either party may have access to the other party's Confidential Information. Each party agrees to use the other party's Confidential Information solely for purposes of this Agreement and will hold the other party's Confidential Information in confidence during the term of this Agreement and after termination. Each party further agrees that it will not make the other party's Confidential Information available in any form to any third party except its own employees and/or contractors who need to know or use such Confidential Information for purposes of implementing this Agreement and who have agreed in writing to be bound by a confidentiality agreement with terms not less restrictive than those in this Section. Each party shall ensure that Confidential ___ Information ___ of the other party is not disclosed, distributed, or used by its employees, agents, or contractors in violation of the terms of this Agreement. 8.2 ___ Exclusions. ____ Confidential ____ Information ____ does ___ not ___ include information that (i) is or becomes publicly available through no act or omission of the receiving party; (ii) is rightfully received by the receiving party from a third party without restriction on disclosure and without breach of a nondisclosure obligation; (iii) is independently developed by the receiving party without ___ reference ___ to, or use of, the ___ Confidential Information; or (iv) is previously rightfully known to the receiving party. 8.3 ___ Confidential Information may be communicated in response to a valid order by a court or other governmental body, or as otherwise required by law, or as necessary to establish the rights of either party under this Agreement, but only provided that the party so disclosing has provided the other party with notice as soon as practicable of the order, motion, subpoenas, or equivalent request so as to provide a reasonable opportunity to seek protective legal treatment for such Confidential Information. 9. Term & Termination. 9.1 ___ Term. This Agreement begins on the Effective Date and continues in perpetuity unless and until it is terminated pursuant to Section 9.2 below. 9.2 ___ Termination for Material Breach. Either party may terminate this Agreement upon thirty (30) days written notice of a material breach of this Agreement by the other party if such breach is not cured within such thirty (30) day period. ___ Notwithstanding any other provision, ___ any party may terminate the Agreement immediately for a material breach of Section 8 (confidentiality). 9.3 ___ Rights Upon Termination. In the event Company terminates this Agreement, in accordance with this Article 9, Licensee agrees to cease all use of the Company Software, and Licensee will destroy all copies of the Company Software in the Licensee's possession or under its control within ten (10) days following the termination date. 9.4 Survival. The following provisions shall survive termination of this Agreement: Section 2.3 and Articles 5 through 10. 10. General. 10.1 Notice. Any notice or communication required or permitted in this Agreement shall be in writing and shall be deemed to have been duly given on the day of service if served personally or personally delivered by a major rapid delivery courier service with tracking capabilities or three (3) days after mailing if mailed by first class mail, registered or certified, postage pre-paid, to the address shown in the opening paragraph of this Agreement, or such other address as a party may indicate by notice hereunder. 10.2 Amendment and Waiver. This Agreement may only be amended, and the observance of any provision of this Agreement may be waived (either generally or any ___ particular ___ instance ___ and either ___ retroactively ___ or prospectively), only with the written consent of the parties. However, it is the intention of the parties that this Agreement be controlling over additional or different terms of any order, confirmation, invoice or similar document, even if accepted in writing by both parties, and that waivers and amendments shall be effective only if made by a non-pre-printed agreement which expressly states that it is an amendment or waiver and that expressly refers to this Agreement. 10.3 Headings. Headings are used in this Agreement for convenience only and shall not affect any construction or interpretation of this Agreement. 10.4 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York and the United States, without regard to conflicts of laws provisions thereof and without regard to the United Nations Convention on Contracts for the International Sale of Goods. 10.5 Assignment. Licensee shall not assign this Agreement or any portion hereof without Company's prior written consent, which shall not be unreasonably withheld. ___ Any attempted assignment in violation of this provision shall be void. Licensee, however, may assign this Agreement to a purchaser of all or substantially all of the assets or to a successor corporation in the event of a merger or other reorganization. The Company shall be entitled to assign this Agreement or any portion hereof to any third party, including its Affiliates, shareholders and Directors, and including by way of liquidation or dissolution of the Company. 10.6 Publicity. ___ Except to its counsel and outside ___ accountants, neither party may disclose the terms of this Agreement or the subject matter thereof without the prior written consent of the other party. 10.7 Severability. If any provision of this Agreement is held to be illegal, invalid or unenforceable, that provision shall be limited or eliminated to the minimum extent necessary so that this Agreement shall otherwise remain in full force and effect and enforceable. 10.8 Entire Agreement. This Agreement supersedes all proposals, oral or written, all negotiations, conversations, or discussions between or among parties relating to the subject matter of this Agreement and all past dealing or industry custom. 10.9 Personal ___ Jurisdiction. ___ The parties submit to the personal jurisdiction of the state and federal courts located in the Southern District of New York and waive any right to file suit elsewhere, or make a motion to transfer or dismiss for any reasons, including personal jurisdiction, venue, or the convenience of any party of witness. 10.10 Attorneys Fees. In any dispute in court or before an arbitrary arising under this agreement the losing party shall pay the reasonable attorneys fees, testifying (including by declaration) expert fees, and costs of the prevailing party, but not fees solely attributable to consultants and investigators. 10.11 Non ___ Solicitation. ___ Except for the ___ rights ___ granted in the Acquisition Option, neither party will directly or indirectly encourage or solicit any employee of the other party to leave their company and to accept employment with other company for fifteen (15) months after the date hereof. For a period of one (1) year from the Effective Date, if Licensee employs any employee of the Company that is employed with the Company on or after the Effective Date, then Licensee will exercise its Acquisition Option rights as described in Section 2.5 above. CONTINUED ON THE FOLLOWING PAGE 10.12 Approvals. This Agreement is subject to the approval of the Board of Directors and the Shareholders of the Company. If such approval has not been obtained on or before June 18, 2001, this Agreement shall not take effect ab initio. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives as of the Effective Date. Company: Licensee: - --------------------------------------- -------------------------------------- - --------------------------------------- -------------------------------------- By By - --------------------------------------- -------------------------------------- - --------------------------------------- -------------------------------------- Name Name - --------------------------------------- -------------------------------------- - --------------------------------------- -------------------------------------- Title Title - --------------------------------------- -------------------------------------- Date Date EXHIBIT A Company Software. The Company Software are the following technologies: - HTTP Tunneling - Local File Sharing - Local Printing - Proxy server - Session reconnect (suspend and resume) - Session shadowing - SSL encryption - LDAP and Active Directory - XML based portal integration - Web-tier based user and application management - API trapping - OLE / RPCSS - Multi-user kernel and application extensions - Win32 GDI implementation - Software Development Kit (SDK) - Local clipboard - Drag-and-drop application deployment - Adaptive GUI - Java client with local desktop integration - Protocol drivers - Compression support - Multi-user session management - Windows emulation - GDI object table extensions - GDI performance enhancements - Desktop heap extensions - Driver letter mappings - Development, debugging, and diagnostic tools - Testing tools and scripts - Support and logging tools - Web publishing License Fees. Licensee agrees to pay a license fee of two million five hundred thousand (2,500,000) shares of GraphOn common stock for the license granted in Section 2 of this Agreement for the Company Software on the terms and conditions provided in the Share Purchase Agreement, dated the date hereof, between Company and Licensee. Acquisition Fee: Licensee agrees to pay an acquisition fee of four hundred forty thousand (440,000) shares of GraphOn common stock for all Intellectual Property Rights and ownership in the Company Software granted in Section 2.5 of this Agreement. -----END PRIVACY-ENHANCED MESSAGE-----