EXHIBIT 10.4.4
FOURTH AMENDMENT TO NETOBJECTS LICENSE AGREEMENT
Agreement Number: L97063
Fourth amendment, dated April 27, 1998 (the "Amendment) to the NetObjects
License Agreement, dated March 18, 1997, including all amendments thereto (the
"Agreement"), between NetObjects Corporation with an address at 000 Xxxxxxxxx
Xxxxx, Xxxxxxx Xxxx, Xxxxxxxxxx 00000 ("NETOBJECTS") and International Business
Machines Corporation with an address at Xxxxx 000, Xxxxxx, Xxx Xxxx 00000
("IBM"). All references herein to "LOTUS" shall mean Lotus Development
Corporation, an IBM subsidiary, with an address at 00 Xxxxxxxxx Xxxxxxx,
Xxxxxxxxx, Xxxxxxxxxxxxx 00000. All capitalized terms and definitions used in
this Amendment and not otherwise defined herein shall have the meanings given
them in the Agreement.
In consideration of the covenants and agreements contained herein, the
parties hereto agree to amend the Agreement as follows:
1. The following definition is hereby added to the Agreement as Section 1.15:
"Average Selling Price" or "ASP" is the average amount of net revenue
that IBM and LOTUS are able to recognize for the standalone license of
the Licensed Work over the course of a calendar quarter."
2. The following definition is hereby added to the Agreement as Section 1.16:
"Maintenance" is the right, at IBM'S or LOTUS'S option, to receive,
install and use commercially-available upgrades to the Licensed Work.
Maintenance is sold on an annual basis."
3. The first paragraph of Exhibit A is hereby deleted in its entirety and
replaced with the following:
"Object Code Licensed Work: NETOBJECTS Fusion ("Fusion"), NETOBJECTS
TeamFusion ("TeamFusion"), NETOBJECTS ScriptBuilder ("ScriptBuilder")
and all future updates, versions, successor products and derivative
works of each of the foregoing products."
4. The Royalty Rate table in Exhibit B, Section 3.2 is hereby deleted in its
entirety and replaced with the following:
"The Hard Bundle Royalty Rate is 37% of ASP of the Licensed Work."
5. The Royalty Rate table in Exhibit B, Section 3.3 is hereby deleted in its
entirety and replaced with the following:
"The Soft Bundle Royalty Rate is 69% of ASP of the Licensed Work."
6. Section 3.4 of Exhibit B is hereby deleted in its entirety and replaced with
the following:
"A. "The Royalty Rate for Licensed Works that are not Bundled with
any hardware or software, and for which NETOBJECTS provides level 3
support ("N.O. Package") is 75% of ASP for the Licensed Work.
NETOBJECTS shall include with each N.O. Package sufficient information
to inform end users of IBM'S contact information for Xxxxx 0 and Level
2 support, and IBM shall provide Level 1 and Level 2 support for the
N.O. Package.
B. The Royalty Rate for Volume N.O. Packages may be renegotiated, at
LOTUS'S and/or IBM'S option, three months after the date of execution
of this Amendment and thereafter whenever the pricing structure of
either the Licensed Work or LOTUS'S and/or IBM'S volume sales program
is adjusted."
C. The Royalty Rate for Maintenance of the Licensed Work is 25%
of the applicable Royalty Rate for such Licensed Work."
7. Section 3.5 of Exhibit B is hereby deleted in its entirety and replaced with
the following:
"A. IBM, LOTUS and NETOBJECTS agree to negotiate, in good faith,
separate royalty arrangements for special (e.g., OEM) or promotional
bundles.
B. In the event that IBM or LOTUS desire to materially discount the
price of the Licensed Work, IBM/LOTUS shall involve NETOBJECTS in
IBM/LOTUS'S applicable 'Pricing Exception Process' and the parties
agree to promptly negotiate in good faith an appropriate reduction in
the applicable Royalty Rate."
8. Section 3.7 of Exhibit B is hereby deleted in its entirety and replaced with
the following:
"SECTION 3.7 INTERNAL USE LICENSES.
3.7.1 "Internal Copies" shall have the following meaning:
* for IBM, copies of the Licensed Works which are provided to Employees
of IBM and IBM Subsidiaries, as well as agents and contractors working
for and on behalf of IBM or an IBM Subsidiary, where such copies are
intended for use by such persons to perform productive work on behalf
of IBM or any IBM Subsidiary, and not for resale; and
* for NETOBJECTS, copies of LOTUS SmartSuite, LOTUS Domino and LOTUS
Notes which are provided to Employees of NETOBJECTS, as well as agents
and contractors working for and on behalf of NETOBJECTS, where such
copies are
intended for use by such persons to perform productive work on behalf
of NETOBJECTS, and not for resale. NETOBJECTS agrees to use all such
Internal Copies in accordance with the LOTUS Software Agreement
governing the use of such LOTUS products.
3.7.2 In lieu of the Royalty Rates set forth in Sections 3.1 through
3.5 of this Exhibit B, IBM has paid NETOBJECTS a one time fee of four
hundred two thousand dollars ($402,000.00) for all Internal Copies of
NETOBJECTS Fusion 2.0 and all upgrades thereto which are made available
by NETOBJECTS through April 30, 1998. After April 30, 1998, at IBM'S
option, and subject to the most favored customer pricing terms contained
in Section 5.5 of the Agreement, IBM may elect 1) to pay for individual
Internal Copy upgrades at the per copy Royalty Rates set forth in
Sections 3.1 though 3.5 of this Agreement, or 2) to pay 25% of the
Internal License Fee, per annum, for upgrades for all of the Internal
Copies.
3.7.3 IBM has agreed, during the Term of this Agreement, to provide
to NETOBJECTS Internal Copies of LOTUS SmartSuite, LOTUS Domino and LOTUS
Notes in exchange for NetObject's agreement, during the Term of this
Agreement, to provide to IBM Internal Copies of TeamFusion and
Scriptbuilder. The Internal Copies for the products set forth in this
Section 3.7.3 include all Enhancements and Error Corrections thereto made
commercially available during the term of this Agreement. Support for the
LOTUS/IBM products set forth in this Section 3.7.3 is NOT included, and may
be separately acquired (for a fee) by NETOBJECTS. Either party may
terminate the license to these Internal Copies as follows: i) within
thirty days following notice of material breach given to licensee, provided
that such breach has not been cured within such thirty day period, or ii)
for convenience upon no less than ninety (90) days' prior written notice;
provided, however, that such termination shall apply solely to the
deployment of: i) new copies of the Internal Copies, and ii) any
Enhancements and/or Error Corrections to the Internal Copies.
9. Modify Section 5.0 of Exhibit B as follows: Delete the first paragraph in
its entirety, and delete and replace the first sentence of the second paragraph
with the following:
"During the period commencing with the Effective Time, and ending 12/31/98
(the "Initial Period"), IBM shall make the following nonrefundable payments
which shall be creditable against royalties and payments which become due
pursuant to this Agreement."
10. All changes to Royalty Rates made in this Amendment shall be deemed
effective as of September 1, 1997 and shall apply to all sales of the Licensed
Works made since that date.
The Agreement remains in full force and effect in accordance with its
terms, except as such terms have been expressly modified by this Amendment. In
the event of any conflict between the terms of this Amendment and the terms of
the Agreement, this Amendment shall control. This Amendment constitutes the
entire understanding of the parties with respect to its subject matter and
merges and supersedes all prior communications, understandings and agreements
between the parties concerning the subject matter hereof. This Agreement shall
not be modified except by a writing subsequently dated, signed on behalf of each
party by a duly authorized representative.
Executed by the authorized representatives of the parties as of the date
first set forth above.
NETOBJECTS, INC. INTERNATIONAL BUSINESS MACHINES
CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxxx By: /s/ X.X. XXXXXXXX
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Name: Xxxxxxx X. Xxxxxxxxx Name: XXXXXX X. XXXXXXXX
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Title: VP & CFO Title: ASSISTANT GENERAL COUNCIL
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Date: 4/27/98 Date: 12 MAY 1998
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