EXHIBIT 10.23
November 7, 2001
Primus Knowledge Solutions, KK
Ebisu Prime Sq. Tower
1-1-39 Hiroo, Shibuya-ku
Tokyo, Japan 150
Re: Addendum One to Amended and Restated Distribution Agreement
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("Agreement"), effective March 31, 2000, between Primus Knowledge
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Solutions, Inc. ("Primus") and Primus Knowledge Solutions, KK.
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("Distributor")
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Dear Sasaki-san:
We have recently discussed a number of issues with respect to our Agreement.
This Addendum One will clarify and memorialize our agreement on these points.
Except as otherwise expressly defined in this Amendment, capitalized terms shall
have the meanings ascribed to them in the License Agreement.
Therefore, we hereby agree to amend our Agreement as follows:
1. All references to KBI products are hereby deemed removed from the Agreement
and Distributor shall not promote or distribute any KBI products under this
Agreement.
2. Footnote 1 to Table A shall be revised to read,
Primus(R) eServer is formerly known as SolutionSeries(TM) Server,
SolutionBuilder(R) and SolutionExplorer(R). In the event that Primus
provides Distributor, any Subdistributor or any End User with
Chili!Soft(TM) ASP software, Distributor shall ensure that such
Chili!Soft(TM) ASP software is only used in connection with the Primus(R)
eServer software and will pay Primus an additional US$1,000 Licensee Fee
for each production copy of the Chili!Soft(TM) ASP software distributed to
an End User. With respect to any End User who receives such Chili!Soft(TM)
ASP software in connection with this Agreement and whose total initial
acquisition equals or exceeds twenty-five (25) seats (license type
regardless) of Primus eServer and/or Primus eSupport, Primus will waive the
US$1,000 licensee fee with respect to one (1) production copy of
Chili!Soft(TM) ASP software provided to such End User, providing that the
End User is not charged a distribution fee, license fee or the like for the
one (1) free production copy of Chili!Soft(TM) ASP software. The foregoing
provision of one (1) production copy of Chili!Soft(TM) ASP software shall
not apply to any current End Users or any End Users who initially acquire
less than 25 seats of Primus eServer and/or Primus eSupport. Primus will
notify Distributor of any change in the pricing of ChiliSoft ASP software
and such price changes will be effective when the same are effective for
Primus with respect to its use of ChiliSoft ASP software.
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3. The "Support and Maintenance Fees" for Primus(R) eServer and Primus(R)
eSupport set forth in Table B is hereby revised from "50%" to "53%".
4. The reference to "Seagate Crystal Info v.6" in Table A shall be revised to
read, "Seagate Crystal Info v.7.0 and v.7.5".
5. Note 3 to Table A shall be replaced in its entirety with the following:
End User's rights are limited to "Client licenses" (no OLAP or
Report/Query) for use only in conjunction with the Primus software licensed
by the End User and subject to the licensing and other restrictions set
forth in the Seagate Crystal Info shrink-wrap agreement provided with the
Seagate Crystal Info software. In no event shall Distributor or any
Sub-Distributor distribute any Seagate Crystal Info software in any form
other than the unopened shrink-wrapped packages in which such software is
initially shipped.
6. The Price Per Unit of Seagate Crystal Info Set under Table B shall be
revised to read, "$1,500 per Seagate Crystal Info Set" and the Support and
Maintenance Fees of "18%" shall be replaced by "See Note 4".
7. Note 3 to Table B shall be replaced in its entirety with the following:
Seagate Crystal Info Set refers to a set of five (5) licenses of Seagate
Crystal Info. V.7.0 or v.7.5 software. Table B notwithstanding, in the
event that Distributor enters into a License Agreement with an End User for
a total initial acquisition of twenty-five (25) seats (license type
regardless) or more of Primus eServer and/or Primus eSupport, Primus will
waive the US$1,500 licensee fee with respect to the one (1) Seagate Crystal
Info Set provided by Distributor to such End User, providing the End User
is not charged a distribution fee, license fee or the like for the free
single Seagate Crystal Info Set. The foregoing provision of a free Seagate
Crystal Info Set shall not apply to any current End Users or any End Users
who initially acquire less than 25 seats of Primus eServer and/or Primus
eSupport. Primus will notify Distributor of any change in the pricing of
Seagate Crystal software and such price changes will be effective when the
same are effective for Primus with respect to its use of Seagate Crystal
software.
8. A new Note 4 to Table B shall be added as follows:
Primus' support obligations relating to the Seagate Crystal Info v.7.0 and
v.7.5 shall be limited only to Secondline Support for the standard reports
that are provided by Primus as a part of such software and for only as long
as Primus is generally making support available for such Seagate version in
connection with the English language version of the applicable Primus
Product. No upgrades or updates are provided to Seagate Crystal products.
9. Section 1.2 is hereby revised by the addition of the following at the end
of the section:
Any revision to an existing Applicable List Price shall take effect at the
end of the calendar quarter following the calendar quarter in which Primus
provides notification to Distributor of such revision. Any Applicable List
Price added hereunder shall take effect immediately upon notification by
Primus.
10. Section 2.2 is hereby revised by the addition of the following new section
0.0.0.:
2.2.5. Right To Modify Portions of the Software When Installing and
Implementing the Software for End User: A non-exclusive, limited,
non-transferable license to modify that portion of the Software comprising
ASP Code. "ASP Code" shall mean that code identified in the Documentation
as "active server pages code" or "ASP code". In addition, Distributor may
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create enhancements, integrations or new applications utilizing the open
API's contained within the Software and may permit Sub-Distributors and End
Users to do the same, provided that in each case such enhancements,
integrations or new applications may only be distributed and used in
connection with use of the Software. Distributor may sublicense to
Sub-Distributors and End Users the right to modify only those portions of
the Documentation consisting of the training manuals, by modifying Primus'
generic content standard and process documents as necessary to meet such
End User's internal training needs. Section 2.3.1. notwithstanding,
Distributor is not required to obtain Primus' consent to create or to
permit Sub-Distributors or End Users to create the modifications,
enhancements, integrations or new applications (collectively, "Distributor
Modifications") that are expressly permitted in this Section 2.2.5.
Distributor assumes full responsibility for any Distributor Modifications
to the Software. Distributor hereby releases Primus from all liability and
waives all rights, claims and remedies against Primus, for any and all loss
and damages of any kind or nature, solely to the extent that they arise out
of any such Distributor Modifications and shall defend Primus against any
claim by an unaffiliated third party that Distributor has misappropriate a
third party's trade secret or the Distributor Modifications infringe the
third party's copyright, patent, trademark or other intellectual property
right and pay the amount of any final judgment or settlement to which
Distributor consents with respect to such claim. Primus shall have no
support and maintenance obligations whatsoever with respect to Distributor
Modifications.
11. Section 2.2 is hereby revised by the addition of the following new section
0.0.0.:
2.2.6. Distributor's Obligation to Distribute Current Versions: In the
event that Primus furnishes Distributor a new version of any of the
Software products for general commercial distribution (as indicated by
Primus), including all Updates and changes in performance specifications of
the Software, Distributor must commence distributing the most recent
version of such Software within 180 days of Distributor's receipt of the
new version and thereafter shall not distribute any previous versions of
such Software.
12. Section 4.3 is hereby replaced in its entirety with the following:
4.3 Secondline Support. For the lesser of the Term or for so long as Primus
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is generally making support available to its end users of the applicable
English language version of the Software, Primus shall provide Distributor
with Secondline Support for such equivalent version existing in the
Japanese language. Primus will provide Distributor with Secondline Support
for a minimum of twelve (12) months after the initial release of a new
version of a Primus Product for the Territory. Primus shall have no
obligation to directly support End Users or Sub-Distributors. Primus shall
not be obligated to provide Secondline Support to Distributor in the event
that Distributor requests such support with respect to any Sub-Distributor
or End User that has a total of less than ten (10) licenses of the
Software. In the event that Primus, in its sole discretion, provides
support to Distributor with respect to any End User or Sub-Distributor who
has less than ten (10) licenses of the Software, Primus may limit such
support as Primus, in its sole discretion, deems appropriate.
Notwithstanding the foregoing limit on Secondline Support with respect to
any End User that has a total of less than ten (10) licenses of the
Software, Primus will provide Secondline Support to up to five (5) such
small end user accounts, provided Distributor identifies each such account
as strategic in that it has opportunity for significant additional licenses
of Software (each, a "Strategic Account"). Primus may, in its discretion,
cease supporting a Strategic Account if such account has not acquired more
than ten (10) licenses in the 12 months following the initial sale by
Distributor.
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13. Section 7.1 is hereby replaced in its entirety with the following:
Distributor shall pay Primus Software license fees and Primus Maintenance
fees on Software sub-licensed to End Users and End User Maintenance
purchased by End Users in accordance with the payment terms of Section 7.7.
Distributor shall pay Primus (i) the Software license fees for such order
at the Applicable List Price, less Distributor's Discount in accordance
with Table B, (ii) the Support and Maintenance fees for each such order,
calculated by the Support and Maintenance fee (percentage) set forth in
Table B multiplied by the amount of support and maintenance fees actually
invoiced by Xxxxxx XX and (iii) all related shipping charges, taxes and
duties. License fees payable or owed to Primus by Distributor shall be paid
in U.S. Dollars ("Dollars"); provided that the parties may mutually agree
otherwise in writing on a case by case basis. Primus Maintenance fees
payable or owed to Primus by Distributor shall be paid in Japanese Yen
("Yen"); provided that the parties may mutually agree otherwise in writing
on a case by case basis.
14. Section 7.7 is hereby replaced in its entirety with the following:
7.7. Payment Terms. Unless another date is specified in this Agreement, all
Primus Software license fee and Primus Maintenance fee payments by
Distributor to Primus shall be due and payable upon the earlier of (a) the
fifteenth (15/th/) day of the month following the month in which
Distributor is actually paid and (b) seventy-five (75) days from the date
of Primus' invoice. Payment for all other amounts due Primus, if any, shall
be due within thirty (30) days of Primus' invoice date, unless otherwise
expressly stated herein. Overdue payments shall accrue interest at the
lesser of U.S. prime rate on the day of the invoice plus five percent (5%)
per annum, or the maximum rate permitted by applicable law. Additionally,
with respect to any amounts to be paid to Primus in Yen, if Distributor
fails to timely pay an invoice hereunder and if the "Noon Buying Rate" (per
the then-current Yen-Dollar rate, as quoted by the Federal Reserve Bank of
New York (12 Noon Foreign Exchange Rates) for the Effective Date of the
relevant License Agreement (if no rate is published for such day, the next
day on which the rate is published) provides for more Dollars than on the
date the invoice is actually paid (the "Currency Exchange Shortfall"),
Licensee shall pay Primus additional Yen on the actual payment date to make
up the Currency Exchange Shortfall.
15. Section 8.1 is hereby replaced in its entirety with the following:
8.1 License To Use Trademarks. Primus hereby grants Distributor a non-
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exclusive license, with right to sub-license to Sub-Distributors and End
Users, to use the Trademarks in the Territory during the Term, solely in
connection with: (i) the promotion, marketing, licensing, distribution and
use of the Software; and (ii) the provision of End User Maintenance and of
implementation and training services related to the Software. Primus
reserves all other rights to the Trademarks. Distributor shall ensure that
all use of the Trademarks by Sub-Distributors and End Users complies with
this Section 8.1 and that Sub-Distributors and End Users comply with the
obligations of Distributor and the requirements set forth in this Section 8
in general. Distributor shall, on a quarterly basis, provide Primus with a
list of all Sub-Distributors and End Users actually using the Trademarks.
16. No Split on Historical Deals With No New Revenue. Notwithstanding Section
7.3 of the Agreement or any other provision calling for the payment of a
portion of license or support and maintenance fees to Distributor, if (1)
Primus provides Primus Products to an End User located within the Exclusive
Territory that is a subsidiary or branch office of a Parent Company which
is a licensed End User located outside the Exclusive Territory pursuant to
a license agreement or arrangement entered into between Primus and such
Parent Company
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before September 30, 2001, including without limitation, Primus'
arrangements with Compaq, Hewlett Packard and Oracle Corporation (a
"Subsidiary License Transfer") and (2) there is no new or additional
license fee paid to Primus at the time of and in connection with such
Subsidiary License Transfer, then there shall be no obligation for Primus
to pay any amount to Distributor in connection therewith. If there is any
new or additional license fee paid to Primus at the time of and in
connection with such Subsidiary License Transfer, then Primus will make the
payments required under Section 7.3 applicable to such new or additional
payments and Primus will provide Distributor with a statement showing the
calculation of the payment and the basis thereof. Primus will use its
commercially reasonable efforts to direct the applicable subsidiary or
division to Distributor to obtain Japanese language support, if requested,
in connection with a Subsidiary License Transfer.
17. Under Section 5.4 and Section 10.1 (if Performance Goals are once again to
be measured as described therein), the Performance Goals referenced therein
shall be equal to 5% of Primus United States Recognized Revenue for each
calendar year throughout the Term hereof, even extending beyond the Initial
Term. Section 1.38, "Primus Recognized Revenue" is hereby replaced in its
entirety to read:
1.38 "Primus United States Recognized Revenue" means the actual
calendar year recognized revenue for Primus derived from Primus
Product licenses originated in the United States (i.e., credited to a
U.S. based sales person or a U.S. based distributor/reseller), which
revenue is accounted for in accordance with United States "Generally
Accepted Accounting Principles".
18. Section 10.1 Term and Automatic Renewal is amended and replaced in its
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entirety to read:
10.1 Term. This Agreement and licenses granted hereunder will commence on
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the Effective Date and continue in full force and effect perpetually
unless earlier terminated by mutual agreement of the parties or
pursuant to this Section 10 (the "Term"). Notwithstanding the
foregoing sentence, if Distributor has not completed the listing of
its common stock on a recognized public stock exchange by December
31, 2004, then Section 10.1 as it exists before this amendment shall
replace the foregoing sentence as Section 10.1, except the initial
"Term" will expire on March 31, 2006. Primus will provide Seagate
Crystal software hereunder only for so long as the terms of its
agreement with Seagate permits the same.
Section 10.1.2 (iv) is hereby deleted.
19. The following sentence of Section 3.1.1 Performance Goals is deleted in its
entirety: "Without limiting Primus' other remedies, if Distributor fails to
meet any of the Performance Goals, then Primus may, after consultation with
Distributor, but in Primus' sole and absolute discretion, change any
exclusive appointment or license grant to a non-exclusive appointment or
license grant." The foregoing sentence shall, however, become a part of the
Agreement (and shall apply with respect to all prior years) without further
action of the parties if Distributor has not completed the listing of its
common stock on a recognized public stock exchange by December 31, 2004.
20. Section 2.3.4 is hereby amended by adding the following new sentence
thereto: Distributor will not enter into any Sub-Distributor arrangement
with a term of greater than two (2) years without Primus' prior written
approval.
21. Paragraphs 18 and 19 of this Amendment shall not be effective unless
Distributor pays all currently outstanding Primus invoices, whether or not
currently due by their terms
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(including invoice # INV004458 in the amount of $69,496.59) on or before
November 20, 2001.
22. The following new Section 5.5 shall be added to the Agreement:
"5.5 Source Code Escrow and Release. In order to ensure that Distributor
remains able to enjoy its license rights, and to meet its maintenance
obligations, as stated under this Agreement, Primus shall maintain the
source code for the Primus Products in escrow. Licensee shall be named as a
FlexSAFE beneficiary in accordance with Article 2 of the FLEX-SAFE Escrow
Agreement that Primus has entered into with Data Securities International,
a copy of which is attached hereto as Schedule 1 (the "Escrow Agreement").
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Primus shall enroll Licensee as a FlexSAFE beneficiary within thirty (30)
business days of the Effective Date. Primus shall deposit all source code
for the Primus Products into the escrow account, as called for in the
Escrow Agreement. Licensee shall reimburse Primus for fees paid by Primus
with respect to Licensee's subscription to the escrow account. Primus will
deposit with the escrow agent a full copy of the computer source code for
all Primus Products then licensed to Distributor. Such deposit shall be
updated by Primus within a reasonable time of each commercially released
Update. If any of the following conditions exists uncorrected for more than
thirty (30) days: (a) entry of an order for relief against Primus under
Title 11 of the United States Code; (b) Primus' making a general assignment
for its creditors; or (c) the appointment of a general receiver or trustee
in bankruptcy of Primus' business or property; then Primus shall grant
Licensee a limited, non-exclusive, non-transferable license to copy and use
the source code for the versions of the Primus Products for which it was
receiving support immediately prior to such cessation, solely for the
purpose of distributing, supporting and maintaining the Primus Products
under the terms, conditions and restrictions of this Agreement, including
without limitation the payment obligations to Primus hereunder. Licensee
shall treat the source code with the same degree of care and security as it
treats its own commercially valuable source code, and at least a reasonable
standard of care. Any license granted pursuant to this subsection shall
terminate and Licensee shall return the source code and all copies thereof
to Primus in the event that Primus or another entity resumes the technical
support services to which Licensee would have been entitled under this
Agreement with respect to the Primus Products. THE SOURCE CODE WILL BE
PROVIDED TO DISTRIBUTOR ON AN AS IS BASIS, AND PRIMUS EXPRESSLY DISCLAIMS
ALL AND ANY EXPRESS OR IMPLIED WARRANTIES RELATING TO THE SOURCE CODE. If
Primus becomes unable or unwilling to perform any of its material
obligations to Distributor under this Agreement after the expiration of any
applicable cure period, Primus will provide to Distributor the computer
source code for all Primus Products then licensed to Distributor under the
above stated license and use terms and the terms and conditions of this
Agreement (as such breach by Primus will not be a release condition under
the above described escrow agreement).
Except as expressly stated above, this letter addendum provides no other
consent, express or implied, to materially modify the License Agreement.
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Please indicate your agreement to this letter by executing the enclosed
duplicate in the space provided below. This Addendum One shall be effective as
of August 1, 2001 (the "Effective Date").
Sincerely, Agreed and Accepted:
Primus Knowledge Solutions, Inc. Primus Knowledge Solutions, KK
/s/ Xxxxxxx X. Xxxxxx
By: /s/ Xxxxxxxx Xxxxxx
Xxxxxxx X. Xxxxxx Name: Xxxxxxxx Xxxxxx
President and Chief Executive Officer Its: CEO and President
Date: November 7, 2001
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