Exhibit 10.23
CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE COMMISSION.
AMENDMENT ONE
TO
SALE AND LICENSE AGREEMENT
This Amendment Number One ("First Amendment") to that certain Sale and License
Agreement dated March 20, 2000 ("Agreement"), by and between NoWonder, Inc.
("Company") and Xxxxxxx.xxx, Inc., and its affiliates ("Xxxxxxx.xxx") is made
effective as of June 14, 2000 ("Amendment Effective Date"), and is incorporated
into and made a part of the Agreement. Capitalized terms used but not defined
herein shall have the meaning ascribed to them in the Agreement.
The following Sections of the Agreement are hereby modified as follows:
1. The first sentence of Section 2.5 (Maintenance of Trio Source Code) is
amended and restated as follows:
"During the Option Period, Company shall provide maintenance and support
for the Trio Source Code as originally provided to Xxxxxxx.xxx, and for Upgrades
or New Versions, if any created by Company during the Option Period."
2. Section 3.1 (Option Period) is amended and restated in its entirety as
follows:
"3.1 Option Period. During the period beginning on the Effective Date and
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ending on June 20, 2003 or earlier in the event Xxxxxxx.xxx fails to timely pay
the Quarterly License Payment (as defined in Section 3.1.2) (the "Option
Period"), Xxxxxxx.xxx shall have an exclusive option to exercise its right to
purchase and obtain all of the Trio Code (the "Option to Purchase").
Xxxxxxx.xxx shall exercise this option by providing notice to Company as
specified in Section 12.10 ("Notices"). If Xxxxxxx.xxx does not exercise the
option stated in this Section 3 before the end of the Option Period, then the
option shall expire and be of no further effect. During the Option Period,
Company shall not assign, transfer, pledge or otherwise encumber any Trio Code
or agree to do so. Notwithstanding the foregoing and except with respect to
Section 3.3.3 or Netscape exercising its source code escrow option under the
existing agreement between Netscape and Company, Company shall not license the
Trio Code to any third party during the Option Period.
3.1.1 Distribution License. Notwithstanding anything to the contrary
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in Section 2.1, during the Option Period and subject to the terms and conditions
of this Agreement, Company hereby grants to Xxxxxxx.xxx a royalty-bearing,
limited, exclusive (except as provided below), world-wide, nontransferable
(except as provided below and in Section 12.2 "Assignment") license to reproduce
and sublicense, in Object Code format only, Trio (as a stand-alone product) or
Trio (as licensed in combination, or incorporated, or integrated with
Xxxxxxx.xxx products) to all customers except for the Restricted Customers
listed in Section 3.6 ("Distribution License"). Such Distribution License
specifically includes the right for Xxxxxxx.xxx to use or sublicense to
subdistributors, resellers, outsource service providers, and other agents to
exercise the rights set forth herein. Such Distribution License is an exclusive
license, subject only to Company's rights to sublicense Trio provided that the
same restrictions as set forth in Section 3.3 shall apply to Company. Each
customer sublicense shall be pursuant only to a license agreement at least as
restrictive as the End User License Agreement attached as Exhibit G (except that
use shall not be restricted to just one (1) computer). Xxxxxxx.xxx shall be
responsible for any assistance needed by customers to install the Trio at
customer sites, for providing customers with initial training and for direct
technical support.
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3.1.2 Distribution License Payments for Distribution License. In
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consideration for the Distribution License set forth in Section 3.1.1,
Xxxxxxx.xxx hereby agrees to pay Company a quarterly license payment of
$1,000,000 ("Quarterly License Payment") for each three (3) month period
beginning on June 20, 2000 and continuing until the earliest to occur of
Xxxxxxx.xxx exercising the Option to Purchase, Xxxxxxx.xxx terminating the
Distribution License as set forth herein, or the expiration of the Option
Period; such Quarterly License Payment shall be payable thirty (30) days after
the beginning of each such three-month period except for the first Quarterly
License Payment which shall be payable ninety (90) days after the beginning of
the first three-month period. Notwithstanding the foregoing, Xxxxxxx.xxx shall
have the right to terminate the Distribution License after the fourth Quarterly
License Payment upon ten (10) days advance written notice; such termination
shall be effective as of the end of the applicable three (3) month period."
3. Section 3.3.7 (Option Price) is deleted in its entirety.
4. The first sentence of Section 3.4 (Existing Customer Transition) is amended
and restated as follows:
"Beginning on the Amendment Effective Date, Company shall use commercially
reasonable efforts to transition Company's Non-Web-Based customers for Trio,
except Microsoft Corporation, to Xxxxxxx.xxx."
5. The first sentence of Section 3.5 (Prospective Customer Transition) is
amended and restated as follows:
"During the six (6) month period beginning on the Amendment Effective Date,
the parties shall use commercially reasonable efforts to transition leads
regarding prospective customers from the Company marketing team to the
Xxxxxxx.xxx marketing team."
6. The first two paragraphs of Section 3.7 (Future Payments) are amended and
restated in its entirety as follows:
"3.7 Future Payments.
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(a) In the event that Xxxxxxx.xxx exercises its Option to Purchase,
Xxxxxxx.xxx agrees to pay Company in accordance with Attachment 1, attached
hereto.
(b) Beginning on the Amendment Effective Date, and regardless of whether or
not Xxxxxxx.xxx has exercised the Option to Purchase, for each agreement
Xxxxxxx.xxx enters into with the companies listed on Exhibit C ("Company
Customer"), that includes Trio, during the twelve (12) months following the
Amendment Effective Date, Xxxxxxx.xxx agrees to pay Company (a) eighty percent
(80%) of the total Net License Revenue (defined below) of agreements that
Xxxxxxx.xxx enters into with Company Customers with respect to Trio as a stand-
alone product; and (b) twenty percent (20%) of the total Net License Revenue
(defined below) of the agreements that Xxxxxxx.xxx enters into with the Company
Customers with respect to Trio, as licensed in combination or incorporated with
Xxxxxxx.xxx products, provided, however, total payments to Company pursuant to
this Section 3.7 shall not exceed $2,500,000. As used in this Agreement, "Net
License Revenue" means the license fees plus professional services fees (but not
support and maintenance fees) for licenses of Trio either as a stand-alone
product or as incorporated into Xxxxxxx.xxx products, received from such Company
Customers during the term of such agreement with Company Customers. Within
thirty (30) days after the Amendment Effective Date and until the expiration of
the twelve (12) month period following the Amendment Effective Date, Xxxxxxx.xxx
agrees to appoint at least three (3) full time equivalent employees responsible
for the marketing, sales, support, maintenance, or distribution of Trio.
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3.7.1 Microsoft Corporation. During the period beginning on the
Amendment Effective Date and continuing through one (1) year after the exercise
of the Option to Purchase, in no event may Xxxxxxx.xxx license Trio on a stand-
alone basis to Microsoft Corporation. During the period beginning on the
Amendment Effective Date and continuing through one (1) year after the exercise
of the Option to Purchase, in the event Xxxxxxx.xxx licenses Trio as integrated
with Xxxxxxx.xxx products, Xxxxxxx.xxx shall pay Company twenty-five percent
(25%) of Net License Revenue."
7. Section 5.1 (Press Announcement) is deleted in its entirety.
8. Section 5.5 (Joint Marketing and Sales Incentives) is amended and restated
in its entirety as follows:
"5.5 Joint Marketing and Sales Incentives. Beginning on the date
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Xxxxxxx.xxx exercises the Option to Purchase, Company agrees to pay Xxxxxxx.xxx
up to one million dollars ($1,000,000) to be used for sales incentives, joint
marketing programs, and any other purpose that the parties use commercially
reasonable efforts to mutually agree in writing in advance for a three (3) year
period beginning on the date that Xxxxxxx.xxx exercises the Option to Purchase.
Within forty-five (45) days after Xxxxxxx.xxx exercises the Option to Purchase,
the parties shall (i) develop marketing plan that will describe positioning of
the companies' relationship and how the payments from Company shall be allocated
between joint marketing, sales incentives and any other purposes, and (ii)
finalize a mutually agreeable joint press release regarding this Agreement. In
the event both parties agree that Company shall expend dollars for sales
incentives or joint marketing programs prior to the date Xxxxxxx.xxx exercises
the Option to Purchase, such dollars shall be counted towards the above-
mentioned one million dollars ($1,000,000|)."
9. In Section 7.1 (Company Proprietary Rights Indemnity), "For three (3) years
after the date that Xxxxxxx.xxx exercises the Option to Purchase," shall be
replaced with: "Beginning on the Amendment Effective Date and for three (3)
years after the date that Xxxxxxx.xxx exercises the Option to Purchase,".
10. In Section 7.2 (Xxxxxxx.xxx Indemnity), "For three (3) years after the date
that Xxxxxxx.xxx exercises the Option to Purchase," shall be replaced with:
"Beginning on the Amendment Effective Date, and for three (3) years after the
date that Xxxxxxx.xxx exercises the Option to Purchase".
11. Except as amended herein, the remaining terms and conditions of the
Agreement remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this First Amendment
as of the Amendment Effective Date.
NOWONDER, INC. XXXXXXX.XXX, INC.
By: /s/ [ILLEGIBLE] By: /s/ Xxxxx X. Xxxx
________________ _____________________
Title: CFO Title: President & CEO
_____________ ___________________
Date: 6/15/00 Date: June 15, 2000
______________ ____________________
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Attachment 1
Pricing for Option to Purchase
_____________________________________________________________________________
Date by which Xxxxxxx.xxx exercises Price for the transfer and assignment
its Option to Purchase ("Purchase") as set forth in Section
3.2 ("Source Code Transfer")
_____________________________________________________________________________
September 20, 2000 [***]
_____________________________________________________________________________
December 20, 2000 [***]
_____________________________________________________________________________
March 20, 2001 [***]
_____________________________________________________________________________
June 20, 2001 [***]
_____________________________________________________________________________
September 20, 2001 [***]
_____________________________________________________________________________
December 20, 2001 [***]
_____________________________________________________________________________
March 20, 2002 [***]
_____________________________________________________________________________
June 20, 2002 [***]
_____________________________________________________________________________
September 20, 2002 [***]
_____________________________________________________________________________
December 20, 2002 [***]
_____________________________________________________________________________
March 20, 2003 [***]
_____________________________________________________________________________
June 20, 2003 [***]
_____________________________________________________________________________
In the event Xxxxxxx.xxx exercises its Option to Purchase, it shall owe to
Company the corresponding Price as set forth above depending on the date by
which Xxxxxxx.xxx exercises its Option to Purchase. Xxxxxxx.xxx shall pay fifty
percent (50%) of the applicable Price set forth above within thirty (30) days
after exercise of the Option to Purchase. Xxxxxxx.xxx shall pay the remaining
fifty percent (50%) in equal installments on the dates, following the exercise
of the Option to Purchase, when the Quarterly License Payments would have
otherwise been due, ending on June 20, 2003.
[***] CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.
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