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EXHIBIT 10.56    
  

 
 

STOCK PURCHASE AGREEMENT    
  

        THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made as of the 19th day of July, 2002, by and between Cisco Systems, Inc., a California
corporation, and its wholly owned subsidiary, Cisco Systems Investments Ltd., a Nevada corporation (collectively, the "Seller"), and Liberate Technologies, a Delaware corporation (the
"Purchaser" or the "Company"). 

        WHEREAS,
the Seller is the beneficial owner of certain shares of the common stock of the Company; 

        WHEREAS,
the Seller desires to sell an aggregate of 3,963,780 shares of the Company's common stock beneficially owned by the Seller and registered in the name of its nominee,
Cactusback & Co., (the "Shares") to the Purchaser, on the terms and subject to the conditions set forth herein; and 

        WHEREAS,
the Purchaser desires to acquire all of the Seller's right, title and interest to the Shares, on the terms and subject to the conditions set forth herein. 

        NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: 

        1.    Purchase and Sale of the Shares.    At the Closing (as defined below), the Purchaser shall purchase, and the
Seller shall sell to the Purchaser, the Shares for a per share price equal to the Discounted Average Stock Price (as defined below), for an aggregate sale price equal to the product of
(i) 3,963,780 and (ii) the Discounted Average Stock Price (such aggregate sale price, the "Purchase Price"). For purposes of this Agreement, the term "Discounted Average Stock Price"
shall mean the product of (i) 98% and (ii) the average of the closing prices for a share of the Company's common stock as quoted on the Nasdaq National Market for the ten consecutive
trading days ending on the last trading day prior to July 18, 2002. At the Closing, the Seller shall execute and deliver a stock assignment separate from certificate, in the form attached
hereto as Exhibit A, selling, transferring and assigning to the Purchaser
the Shares, against payment by the Purchaser of the Purchase Price therefor by cashier's check, wire transfer of immediately available funds to the account of the Seller set forth on  Schedule 1 attached hereto or any combination thereof. The consummation of the sale and purchase of the Shares (the "Closing") shall occur at the
offices of Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP, 155 Constitution Drive, Menlo Park, California by 5:00 p.m. (Pacific Time) on July 25, 2002, or at such
other time and place as the Seller and the Purchaser may agree in writing (the "Closing Date"). Delivery to the Purchaser of the certificates representing the Shares shall be made on the Closing Date. 

        2.    Representations and Warranties of the Seller.    The Seller hereby represents and warrants to the Purchaser
that: 

        2.1    Authorization.    All corporate action on the part of the Seller and its nominees, officers, directors and
shareholders necessary for the authorization, execution and delivery of this Agreement and the performance of all obligations of the Seller hereunder has been taken or will be taken at or prior to the
Closing. This Agreement constitutes a valid and legally binding obligation of the Seller, enforceable in accordance with its respective terms. 

        2.2    Ownership of the Shares.    The Seller owns all right, title and interest (legal and beneficial) in and to all
of the Shares sold pursuant to this Agreement free and clear of all liens or other encumbrances. Upon payment for the Shares in accordance with this Agreement, the Purchaser will acquire such Shares
free and clear of all liens or other encumbrances. 

        2.3    No Conflict.    The execution and delivery of this Agreement and the consummation of the transactions
contemplated hereby will not result in a breach by the Seller or its nominees of, or constitute a default by the Seller or its nominees under, any agreement, instrument, decree, 

 

judgment or order to which the Seller or its nominees is a party, to which the properties of the Seller or its nominees may be subject or by which the Seller or its nominees may be bound. 

        2.4    Litigation.    There is no action, suit, proceeding or investigation pending or, to the Seller's knowledge,
currently threatened against the Seller or nominee that questions the validity of this Agreement or the right of the Seller to enter into this Agreement. 

        2.5    Disclosure of Information.    The Seller believes it has received all the information it has requested to
assist the Seller in deciding whether to sell the Shares to the Purchaser pursuant to this Agreement. The Seller has had an opportunity to ask questions and receive answers from the Purchaser
regarding the terms and conditions of the sale of the Shares pursuant to this Agreement and the business, properties, prospects and financial condition of the Purchaser. The Seller acknowledges that
it is aware of the confidential, non-public information of the Company set forth on Schedule 2.5 attached hereto. None of the
foregoing, however, limits or modifies the representations and warranties of the Purchaser made pursuant to Section 3 or the right of the Seller to rely thereon. 

        2.6    Nominees.    The Shares are currently registered in the name of Cactusback & Co. (the "Nominee"), which
holds the Shares as a nominee for the beneficial ownership of Seller. The Nominee has no power to vote, transfer, encumber, or enter into agreements regarding the Shares. The Nominee merely acts as
Seller's agent with respect to the Shares, for the limited purpose of facilitating transfers of the Shares, as directed by Seller. 

        2.7    Consents.    The Seller has received all consents, approvals, authorizations, permits and waivers of all
persons necessary for the Seller to consummate the transactions contemplated by this Agreement, including Coastdock & Co. and Cactusback & Co. 

        3.    Representations and Warranties of the Purchaser.    The Purchaser hereby represents and warrants to the Seller
that: 

        3.1    Authorization.    All corporate action on the part of the Purchaser and its officers, directors and
stockholders necessary for the authorization, execution and delivery of this Agreement and the performance of all obligations of the Purchaser hereunder has been taken or will be taken at or prior to
the Closing. This Agreement constitutes a valid and legally binding obligation of the Purchaser, enforceable in accordance with its respective terms. 

        3.2    Consents.    The Purchaser has received all consents, approvals, authorizations, permits and waivers of all
persons necessary for the Purchaser to consummate the transactions contemplated by this Agreement. 

        3.3    No Conflict.    The execution and delivery of this Agreement and the consummation of the transactions
contemplated hereby will not result in a breach by the Purchaser of, or constitute a default by the Purchaser under, any agreement, instrument, decree, judgment or order to which the Purchaser is a
party, to which the properties of the Purchaser may be subject or by which the Purchaser may be bound. 

        3.4    Litigation.    There is no action, suit, proceeding or investigation pending or, to the Purchaser's knowledge,
currently threatened against the Purchaser that questions the validity of this Agreement or the right of the Purchaser to enter into this Agreement. 

        3.5    Disclosure of Information.    The Purchaser believes it has received all the information it has requested to
assist the Purchaser in deciding whether to purchase the Shares from the Seller pursuant to this Agreement. The Purchaser has had an opportunity to ask questions and receive answers from the Seller
regarding the terms and conditions of the purchase of the Shares pursuant to this Agreement. None of the foregoing, however, limits or modifies the representations and warranties of the Seller made
pursuant to Section 2 or the right of the Purchaser to rely thereon. 

2

 

        4.    Miscellaneous.    

        4.1    Successors and Assigns.    Except as otherwise provided herein, the terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective successors and assigns of the parties hereto (including transferees of any Shares). Nothing in this Agreement, express or implied, is
intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement, except
as expressly provided in this Agreement. 

        4.2    Governing Law.    This Agreement shall be governed by and construed under the laws of the State of California
as applied to agreements among State of California residents entered into and to be performed entirely within the State of California. 

        4.3    Counterparts.    This Agreement may be executed in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same instrument. 

        4.4    Titles and Subtitles.    The titles and subtitles used in this Agreement are used for convenience only and are
not to be considered in construing or interpreting this Agreement. 

        4.5    Severability.    In the event that any provision of this Agreement, or the application thereof, becomes or is
declared by a court of competent jurisdiction to be illegal, void or unenforceable, the remainder of this Agreement shall continue in full force and effect and shall be interpreted so as reasonably to
effect the intent of the parties hereto. The parties hereto shall use their reasonable best efforts to replace such void or unenforceable provision of this Agreement with a valid and enforceable
provision that
shall achieve, to the extent possible, the economic, business and other purposes of such void or unenforceable provision. 

        4.6    Entire Agreement.    This Agreement and the documents referred to herein constitute the entire agreement
between the parties hereto and no party hereto shall be liable or bound to any other party in any manner by any warranties, representations or covenants except as specifically set forth herein or
therein. 

        4.7    Additional Instruments and Actions.    The parties hereto shall execute such additional instruments and take
such further action as may reasonably be necessary to carry out the intent of this Agreement. 

        4.8    Expenses.    Each party hereto shall pay all costs and expenses that it incurs with respect to the negotiation,
execution, delivery and performance of this Agreement. 

        4.9    Adjustments.    In the event of any stock split, reverse stock split, stock dividend (including without
limitation any dividend or distribution of securities convertible into capital stock), reorganization, reclassification, combination, recapitalization or other like change with respect to the
Company's common stock occurring on or after the first of the ten consecutive trading days referenced in the definition of the Discounted Average Stock Price and prior to the Closing, all references
in this Agreement to specified numbers of shares affected thereby, and all calculations provided for that are based upon numbers of shares (or trading prices therefor) affected thereby, shall be
equitably adjusted to the extent necessary to provide the parties hereto the same economic effect as contemplated by this Agreement prior to such stock split, reverse stock split, stock dividend,
reorganization, reclassification, combination, recapitalization or other like change 

[Signature
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3

        IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. 

	 	 	SELLER:
	

 	
 	

CISCO SYSTEMS INVESTMENTS LTD.
	

 	
 	

By:	

/s/ ROGER BISCAY

	 	 	Name:	Roger Biscay

	 	 	Title:	Director

	

 	
 	

CISCO SYSTEMS, INC.
	

 	
 	

By:	

/s/ LARRY R. CARTER

	 	 	Name:	Larry R. Carter

	 	 	Title:	CFO, Sr. VP Finance & Secretary

	

 	
 	
PURCHASER:
	

 	
 	

LIBERATE TECHNOLOGIES
	

 	
 	

By:	

/s/ KENT WALKER

	 	 	Name:	Kent Walker

	 	 	Title:	SVP

SIGNATURE PAGE TO

STOCK PURCHASE AGREEMENT  

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EXHIBIT 10.56

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EXHIBIT 10.57    
  

 
 

Employee Retention Agreement    
  

        This Employee Retention Agreement (the "Agreement") is entered into between Liberate Technologies, 2 Circle Star Way, San Carlos, California ("Liberate") and
[EXECUTIVE OFFICER] ("you") as of June    , 2002 (the "Effective Date"). 

        Payment Upon a Termination Event.    In order to secure your continued services, Liberate and you hereby
agree as follows: 

        If
upon a Termination Event, consisting of both: 

	(a)
	A
Change in Control (as defined in Exhibit A to this Agreement, which is hereby incorporated into this Agreement) that is
followed within one year by

	(b)
	your
termination (other than for Cause, as defined below) or resignation due to any of the following changes made without your written consent: (i) a reduction in the scope,
level, or nature of your responsibilities; (ii) a reduction in your title or the level of your reporting relationship; (iii) a reduction in your compensation or benefits; (iv) a
material change in or failure to maintain your office or office equipment and services; (v) a material reduction in the number or level of your staff (other than your pro rata share of
company-wide reductions); or (vi) the relocation of your principal place of employment beyond 30 miles from its current location ((a) and (b) together constituting a
Termination Event), 

you
receive total payments (including any salary, bonus, commission, loan forgiveness, or option benefits but excluding any payments under this Agreement) by reason of your actual or constructive
termination or resignation that are less than twice your total cash compensation (including salary, bonuses, and commissions) in Liberate's prior fiscal year, Liberate will, within 30 days, pay
you the difference up to a maximum of $750,000. 

        For
these purposes, the value of any option benefits for any given option grant will equal any positive amount by which the Fair Market Value of a share awarded under that grant exceeds
the Exercise Price of that share (each as defined in the Liberate Technologies 1999 Equity Incentive Plan) on the date of completion of a Termination Event, multiplied by the number of shares
accelerated under that option grant. 

        For
these purposes, "Cause" consists of: (i) reckless or willful misconduct in the performance of your duties to Liberate; (ii) repeated unexplained or unjustified absence
from Liberate; (iii) commission of any act of fraud, embezzlement, or dishonesty with respect to Liberate; (iv) unauthorized use or disclosure of confidential information or trade
secrets of Liberate (or any parent or subsidiary of Liberate); or (v) any other intentional misconduct that materially harms the business affairs of Liberate (or any parent or subsidiary).
These provisions do not constitute all of the acts or omissions that may be grounds for dismissal. 

        You
will be solely responsible for any taxes that may be incurred as a result of such payments and Liberate will withhold applicable taxes from them. 

        "Golden Parachute" Limitations on Accelerated Payments.    If Liberate determines that you would receive
a greater after-tax benefit if it reduced any amount payable under this Agreement (for example, due to application of Section 4999 of the Internal Revenue Code relating to "excess
parachute payments"), Liberate will pay you the reduced amount calculated to provide you with the maximum after-tax value. If Liberate subsequently determines that the correct amount
differs from the amount paid to you, any under- or over-payment will be treated as a loan between the parties, repayable within three months from the notice of the revised determination
and bearing interest at the applicable federal rate (provided in section 7872(f)(2) of the Internal Revenue Code of 1986, as amended) from the date of the under- or over-payment. 

 

        Arbitration.    The parties waive trial before a judge or jury and agree to arbitrate with the JAMS
arbitration service any dispute relating to this agreement or your recruitment, employment, or termination, except for claims relating to worker's compensation benefits, unemployment insurance, or
intellectual property rights. The arbitrator's decision will include written findings of fact and law and will be final and binding except to the extent that judicial review of arbitration awards is
required by law. JAMS procedural rules will govern the arbitration, except that the arbitrator will allow discovery authorized by the California Arbitration Act and any additional discovery necessary
to vindicate a claim
or defense. The arbitrator may award any remedy that would be available from a court of law. You may chose to hold the arbitration either in San Mateo County, California or the county where the you
worked when the arbitrable dispute first arose. The parties will share the arbitration costs equally (except that Liberate will pay the arbitrator's fee and any other cost unique to arbitration) and
will pay their own attorney's fees except as required by law or separate agreement. This Agreement is governed by the laws of the State of California without regard to its
conflict-of-law rules. 

        Mutual Release of Claims.    As a condition of entering into this agreement, each party releases the
other from any claims against the other or against any affiliated persons or entities. This release includes, but is not limited to, any claims related to your employment with Liberate, and any claims
under past or present laws or regulations, including original and amended versions of Title VII of the Civil Rights Act of 1964; the California Fair Employment and Housing Act; the Worker Adjustment
and Retraining Notification Act; the California Constitution; the California Worker's Compensation Act; the Age Discrimination in Employment Act, the Older Workers' Benefit Protection Act; the
Employee Retirement Income Security Act of 1974; the Family Medical Leave Act; the Americans with Disabilities Act; and the National Labor Relations Act. You confirm that you are not aware of any such
claims. 

        The
parties understand and acknowledge that they may not currently know of losses or claims or may have underestimated the severity of losses. Part of the consideration provided by this
Agreement was given in exchange for the release of such claims. The parties hereby waive any rights or benefits under California Civil Code Section 1542, which provides that: 

        A
general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have
materially affected his settlement with debtor. 

        Miscellaneous.    Should you die before receiving any payments otherwise earned under this agreement,
Liberate will make such payments to your estate. Other than specifically set forth above, nothing in this Agreement modifies your existing at-will employment relationship with Liberate or
otherwise changes the terms of your employment agreement. This Agreement will terminate three years after the Effective Date. 

	LIBERATE TECHNOLOGIES:	 	YOU:
	

  

 Mitchell Kertzman

Chief Executive Officer

Liberate Technologies	
 	

    
 [EXECUTIVE OFFICER]

[TITLE]

Liberate Technologies

2

 
 

EXHIBIT A
  DEFINITION OF "CHANGE IN CONTROL"    
  

        "Change in Control" means: 

	a)
	The
consummation of a merger or consolidation of Liberate with or into another entity or any other corporate reorganization, if persons who were not stockholders of Liberate
immediately prior to such merger, consolidation or other reorganization own immediately after such merger, consolidation or other reorganization 50% or more of the voting power of the outstanding
securities of each of (i) the continuing or surviving entity and (ii) any direct or indirect parent corporation of such continuing or surviving entity;

	b)
	The
sale, transfer or other disposition of all or substantially all of Liberate's assets;

	c)
	A
change in the composition of Liberate's Board of Directors (the "Board"), as a result of which fewer than 50% of the incumbent directors are directors who either (i) had been
directors of Liberate on the date 24 months prior to the date of the event that may constitute a Change in Control (the "original directors") or (ii) were elected, or nominated for
election, to the Board with the affirmative votes of at least a majority of the aggregate of the original directors who were still in office at the time of the election or nomination and the directors
whose election or nomination was previously so approved; or

	d)
	Any
transaction as a result of which any person is the "beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended
[the "Exchange Act"]), directly or indirectly, of securities of Liberate representing at least 50% of the total voting power represented by Liberate's then outstanding voting
securities. For purposes of this paragraph (d), the term "person" shall have the same meaning as when used in sections 13(d) and 14(d) of the Exchange Act but shall exclude (i) a trustee
or other fiduciary holding securities under an employee benefit plan of Liberate or of a Parent or Subsidiary (each as defined below), and (ii) a corporation owned directly or indirectly by the
stockholders of Liberate in substantially the same proportions as their ownership of the common stock of Liberate. 

        A
transaction shall not constitute a Change in Control if its sole purpose is to change the state of Liberate's incorporation or to create a holding company that will be owned in
substantially the same proportions by the persons who held Liberate's securities immediately before such transaction. A transaction shall not automatically be deemed a Change in Control if
(a) as a result of the transaction the percentage of ownership of Liberate by Oracle Corporation is reduced to below 50% of the total voting power represented by Liberate's then outstanding
voting securities or (b) as a result of the transaction Oracle Corporation's percentage of ownership of Liberate changes from less than 50% of the total voting power represented by Liberate's
then outstanding voting securities to at least 50% of the total voting power represented by Liberate's then outstanding voting securities; and with respect to these transactions the Board or its
Compensation Committee shall determine whether a Change in Control has occurred. 

        "Parent"
means any corporation (other than Liberate) in an unbroken chain of corporations ending with Liberate, if each of the corporations other than Liberate owns stock possessing 50%
or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. A corporation that attains the status of a Parent on a date after the effective date
of this Agreement shall be considered a Parent commencing as of such date. 

        "Subsidiary"
means any corporation (other than Liberate) in an unbroken chain of corporations beginning with Liberate, if each of the corporations other than the last corporation in the
unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. A corporation that attains the status of a
Subsidiary on a date after the effective date of this Agreement shall be considered a Subsidiary commencing as of such date. 

QuickLinks

EXHIBIT 10.57

Employee Retention Agreement

EXHIBIT A DEFINITION OF "CHANGE IN CONTROL"

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