MEMORANDUM OF UNDERSTANDING

The following represent the agreed terms with respect to the licensing
agreement (“The Agreement”) between G-Form LLC and Forward Inc
August 26, 2011

 

 1. ALL G-FORM PRODUCTS THAT CURRENTLY EXIST AND ALL FUTURE PRODUCTS WITH THE
    G-FORM LOOK WILL BE SOLD UNDER THE G-FORM BRANDING.

 2. FORWARD BRANDED PRODUCTS INCORPORATING G-FORM TECHNOLOGY (HEREINAFTER “THE
    TECHNOLOGY”) WILL GENERALLY BE DISTINGUISHED BY A MORE OFFICE-ORIENTED
    LOOK.  THEY WILL INCLUDE SUCH THINGS ALREADY BEING WORKED ON AND NEW
    PRODUCTS DEVELOPED AT FORWARD’S DIRECTION AND WILL CONTINUE TO HAVE A
    DISTINCTLY DIFFERENT LOOK FROM THE G-FORM BRANDED PRODUCTS.

 3. FORWARD PRODUCTS INCORPORATING THE TECHNOLOGY WILL INCLUDE MUTUALLY
    AGREEABLE G-FORM CO-BRANDING AS PREVIOUSLY ENVISIONED (E.G., “POWERED BY
    G-FORM”).

 4. JOINT IP CAN BE USED BY FORWARD IN FORWARD BRANDED PRODUCTS AND MAY ALSO BE
    USED BY G-FORM IN G-FORM BRANDED PRODUCTS; THE LOOKS NEED TO BE MADE
    DISTINCT PER THE ABOVE GENERAL GUIDELINES.

 5. G-FORM WILL BEAR ALL COSTS ON ITS IP.  FORWARD AND G-FORM WILL SHARE [*] IN
    COSTS RELATING TO JOINT P. FORWARD WILL BEAR ALL COSTS ON ITS OWN IP.

 6. FORWARD’S LICENSED TERRITORY TO SELL ITS PRODUCTS WILL BE THE FOLLOWING:

 a. THE SALE OF FORWARD BRANDED PRODUCTS INCLUDING THE TECHNOLOGY TO ANY IT
    FOCUSED STORE IN ANY COUNTRY BUT SPECIFICALLY EXCLUDING SPORT RELATED OR
    LIFESTYLE STORES THAT LACK IT FOCUS.

 b. THE SALE OF FORWARD BRANDED PRODUCTS INCLUDING THE TECHNOLOGY TO ANY B TO B
    OPPORTUNITIES SUCH AS HP, LENOVO, AND ANY CORPORATE OPPORTUNITIES THAT ARE
    NOT CONSUMER MARKET OUTLETS HOWEVER SPECIFICALLY EXCLUDING SALES TO MILITARY
    OR THROUGH MILITARY CHANNELS.

 c. THE SALE OF CURRENT G-FORM BRANDED ELECTRONIC PROTECTION PRODUCTS TO ANY IT
    FOCUSED STORE OR B TO B OPPORTUNITY IN ANY COUNTRY UNTIL SUCH TIME WHEN
    FORWARD IS ABLE TO LAUNCH ITS OWN FORWARD-BRANDED PRODUCT LINE.  FOR SUCH
    SALE OF G-FORM BRANDED PRODUCT PRIOR TO SUCH LAUNCH, G-FORM AND FORWARD WILL
    SPLIT [*] THE CONTRIBUTION MARGIN (DEFINED AS NET SALES LESS ALL DIRECT
    VARIABLE COSTS, INCLUDING COST OF GOODS SOLD, SALES COMMISSIONS, AND
    DELIVERY CHARGES) OF THESE G-FORM BRANDED PRODUCTS SALES AND THE ROYALTY
    RATE IN BULLET #10 WILL NOT APPLY TO THESE SALES.

 

[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission.  Confidential treatment has been
requested with respect to the omitted portions.

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 d. AFTER FORWARD LAUNCHES ITS OWN FORWARD-BRANDED PRODUCT LINE, FORWARD MAY
    SELL G-FORM BRANDED ELECTRONIC PROTECTION PRODUCTS TO ANY B TO B OPPORTUNITY
    IN ANY COUNTRY, BUT THE COMPENSATION FOR SUCH SALES WILL BE BY MUTUAL
    AGREEMENT, ON A CASE BY CASE BASIS, AND THE ROYALTY RATE IN BULLET #10 WILL
    NOT APPLY.

 7.  G-FORM MAY SELL ITS OWN BRANDED PRODUCTS IN ANY AREA, HOWEVER ANY SALES BY
     G-FORM INTO US IT FOCUSED RETAIL STORES (E.G., STAPLES, BEST BUY) SHALL BE
     CREDITED TOWARDS FORWARD’S ROYALTY (I.E. G--FORM NET SALES MULTIPLIED BY
     [*] (FORWARD’S ROYALTY RATE IN BULLET #10 BELOW)).

 8.  FORWARD WILL HAVE THE EXCLUSIVE RIGHT TO USE THE TECHNOLOGY IN FORWARD’S
     TERRITORY OTHER THAN SPORT RELATED OR LIFESTYLE STORES THAT LACK IT FOCUS. 
     THIS INCLUDES THE RIGHT TO SELL TO SUB-DISTRIBUTORS, WHOLESALERS AND
     RESELLERS THAT ARE PART OF FORWARD’S DISTRIBUTION CHANNEL.

 9.  FORWARD WILL NOT SELL PRODUCTS INCORPORATING ANY OTHER EXTREME PROTECTION
     TECHNOLOGY DURING THE TERM OF THE AGREEMENT WITHOUT THE CONSENT OF G-FORM. 
     THIS INCLUDES THINGS SUCH AS ZOOMBANG AND D30 OR ANY OTHER MATERIAL KNOWN
     FOR EXTREME IMPACT PROTECTION.  NO OTHER EXTREME IMPACT PROTECTION
     TECHNOLOGY CAN BE NOTED OR FEATURED ON FORWARD PRODUCTS DURING THE TERM OF
     THE AGREEMENT.  G-FORM WILL ALSO MAKE AVAILABLE TO FORWARD WHATEVER
     RELEVANT AGREEMENTS AND EXCLUSIVES THAT G-FORM CURRENTLY HAS OR MAY OBTAIN
     IN THE FUTURE (DURING THE TERM OF THE AGREEMENT) FROM POLYWORKS, ROGERS
     CORPORATION OR ANY OTHER ENTITY AS THEY PERTAIN TO THE PROTECTION OF
     ELECTRONIC DEVICES.  FURTHER, G-FORM WILL REPRESENT AND WARRANTY TO FORWARD
     THAT IT HAS EXCLUSIVE RIGHTS, ACCESS, AND INTELLECTUAL PROPERTY ASSOCIATED
     WITH THE TECHNOLOGY.

 10. FORWARD WILL PAY TO G-FORM A ROYALTY EQUAL TO [*] OF THE NET SALES PRICE
     (DEFINED AS GROSS SALES LESS; CO-OP ADVERTISING PROGRAMS AND OTHER CASH
     INCENTIVES, CASH DISCOUNTS, RETURNS AND WARRANTIES, AND ALLOWANCES FOR
     DAMAGES OR MISSING GOODS) OF ANY FORWARD-BRANDED PRODUCT SALES
     INCORPORATING THE TECHNOLOGY.  THE FIRST TWELVE-MONTH ROYALTY PERIOD SHALL
     COMMENCE WHEN FORWARD SHIPS ITS FIRST LICENSED PRODUCT (“INITIAL SHIP
     DATE”).

 11. UPON EXECUTION OF THIS MEMORANDUM OF UNDERSTANDING, FORWARD WILL PAY AN
     ADVANCE AGAINST ROYALTIES IN THE AMOUNT OF $500,000, WHICH SHALL BE
     CREDITED TOWARDS THE FIRST YEAR’S ROYALTY PAYMENTS.  UNLESS FORWARD MAKES
     PAYMENT IN ANOTHER FORM, UPON EXECUTION OF THIS MEMORANDUM OF UNDERSTANDING
     A CREDIT BY G-FORM OF THE $500,000 ROYALTY ADVANCE WILL BE TAKEN AGAINST
     THE OUTSTANDING SHORT TERM PROMISSORY NOTES CURRENTLY IN PLACE BETWEEN THE
     COMPANIES TOTALING $490,000 AND ANY ROYALTY ADVANCE BALANCE DUE THEREAFTER
     WILL BE PAID WITHIN 30 DAYS.  IF FORWARD DOES NOT MEET ANY YEAR’S MINIMUM
     SALES LEVEL, IT MAY SUPPLEMENT ITS ROYALTY PAYMENTS TO REACH REQUIRED
     LEVELS THAT WOULD HAVE BEEN DUE AT THE SALES LEVEL TO MAINTAIN
     EXCLUSIVITY.  THE FOLLOWING ARE THE MINIMUM NET WHOLESALE LEVELS THAT
     FORWARD NEEDS TO REACH IN ORDER TO MAINTAIN EXCLUSIVITY AND THE G-FORM
     LICENSE:

 

 

[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission.  Confidential treatment has been
requested with respect to the omitted portions.

 

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 a. [*] during the first 12 months from Initial Ship Date

 b. [*] during the second 12 months from Initial Ship Date

 c. [*] during the third 12 months from Initial Ship Date

 12. G-FORM WILL SUPPLY PARTS CONTAINING THE TECHNOLOGY TO FORWARD AT G-FORM’S
     COST FROM POLYWORKS, ROGERS CORPORATION OR ANY OTHER G-FORM SUPPLIER. 
     FORWARD WILL PAY G-FORM’S INVOICES FOR THESE PARTS IN 15 DAYS FROM INVOICE
     DATE.  G-FORM WILL ACQUIRE FORWARD’S PARTS ON THE SAME COST BASIS AS IT
     ACQUIRES ITS OWN.

 13. FORWARD WILL BEAR THE COSTS FOR DEVELOPMENT OF FORWARD BRAND PRODUCTS. 
     IMMEDIATELY UPON EXECUTION OF THIS MEMORANDUM OF UNDERSTANDING, FORWARD MAY
     DRAW ON G-FORM’S DEVELOPMENT SERVICES, AND TO THE EXTENT G-FORM PROVIDES
     DEVELOPMENT, G-FORM WILL CHARGE ON A PROJECT BY PROJECT OR HOURLY RATE AS
     AGREED BETWEEN THE PARTIES.

 14. IMMEDIATELY UPON EXECUTION OF THIS MEMORANDUM OF UNDERSTANDING, FORWARD MAY
     BEGIN SELLING G-FORM BRANDED PRODUCTS INCORPORATING THE TECHNOLOGY IN
     ACCORDANCE WITH SECTION 6C.

 15. AFTER THE FIRST YEAR, THE AGREEMENT MAY BE TERMINATED AT ANY TIME BY
     FORWARD WITH SIX MONTHS NOTICE AND ALL ROYALTIES AND OTHER OUTSTANDING
     CHARGES DUE PAID.  THE AGREEMENT MAY BE TERMINATED BY G-FORM IF THERE IS AN
     UNCORRECTED, MATERIAL BREACH BY FORWARD OF THE TERMS OF THE AGREEMENT. 
     FOLLOWING TERMINATION, THERE WILL BE A WIND-DOWN PERIOD FOR FORWARD TO
     DISPOSE OF INVENTORY, SUBJECT TO AN ONGOING DUTY TO PAY ROYALTIES TO
     G-FORM.

 16. THIS MEMORANDUM OF UNDERSTANDING IS A BINDING AGREEMENT BETWEEN THE
     PARTIES.  WITHIN 30 DAYS OF SIGNING THIS MEMORANDUM OF UNDERSTANDING OR
     SOONER, G-FORM AND FORWARD WILL USE COMMERCIALLY REASONABLE EFFORTS TO
     REPLACE THIS MEMORANDUM OF UNDERSTANDING WITH A MUTUALLY AGREEABLE LICENSE
     AGREEMENT THAT WILL INCLUDE THE ABOVE POINTS AND SUCH OTHER TERMS AND
     PROVISIONS AS ARE GENERALLY NECESSARY AND APPROPRIATE FOR SUCH AN
     AGREEMENT.

 

 

 

 

 

[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission.  Confidential treatment has been
requested with respect to the omitted portions.

 

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Accepted by:

 

/s/ Brett M. Johnson

Signature

 

Brett M. Johnson  CEO  8/30/2011

Name/Forward/ Title/Date

 

 

 

/s/ Daniel Wyner

Signature

 

Daniel Wyner  CEO  8/29/2011

Name/G-Form/ Title/Date

 

 

 

 

[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission.  Confidential treatment has been
requested with respect to the omitted portions.

 

 

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