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Exhibit 10.6
AMENDMENT TO THE
DEVELOPMENT AND MARKETING AGREEMENTS
BETWEEN
MOMENTUM AND PEOPLESOFT
THIS AMENDMENT ("Amendment") is made by and between MOMENTUM BUSINESS
APPLICATIONS, INC., a Delaware corporation, with its principal place of business
located at 0000 Xxxxxxxx Xxxxx, Xxxxx 000 Xxxxxxxxxx, XX 00000 ("Momentum") and
PEOPLESOFT, INC., a Delaware corporation, with its principal place of business
located at 0000 Xxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxxxx 00000 ("PeopleSoft").
WHEREAS, the parties entered into a Development and License Agreement, a
Marketing and Distribution Agreement, and numerous letter agreements setting
forth various development project plans contemplated by the Development and
License Agreement, and amendments modifying terms in all such agreements (all
such agreements, including exhibits and schedules thereto, are referred to as
the "Development and Marketing Agreements"); and
WHEREAS, pursuant to the Restated Certificate of Incorporation of Momentum (the
"Restated Certificate"), PeopleSoft has the right to purchase all of the
outstanding shares of Momentum common stock not already owned by it (the
"Purchase Option") at an exercise price based upon a formula set forth in the
Restated Certificate (the "Purchase Option Exercise Price"); and
WHEREAS, the parties desire to modify the Development and Marketing Agreements
as described below.
NOW THEREFORE, in consideration of the covenants and conditions contained
herein, the parties agree as follows:
1. PRE-RELEASE TERM: The definition of "Pre-Release Term" in the Marketing
and Distribution Agreement is changed to mean: "the period of time from
which a work plan for a product is approved by Momentum pursuant to the
Development Agreement until the earlier to occur of: (i) July 1, 2002,
or (ii) sixty (60) days following Momentum's notification to PeopleSoft
that, as of the end of any calendar month, there are less than Two
Million Five Hundred Thousand Dollars ($2,500,000) of Available Funds
remaining."
2. LICENSE OPTION TERM: The definition of "License Option Term" in the
Marketing and Distribution Agreement is changed to mean: "the period of
time from which a work plan for a product is approved by Momentum
pursuant to the Development Agreement until the thirtieth day after the
time the Pre-Release Term ends."
3. NET REVENUES: The definition of Net Revenues in the Marketing and
Distribution Agreement is changed, effective as of April 1, 2001, as
follows. Net Revenues means the sum of (i) the aggregate amount of Net
License Fees (as defined in the Marketing and Distribution Agreement)
received by PeopleSoft during any given calendar quarter, plus (ii) the
aggregate amount of any imputed fees for maintenance and support of a
Momentum Product or Licensed Product, which are deducted in determining
Net License Fees, plus (iii) the aggregate amount of maintenance and
support fees received by PeopleSoft other than amounts described in (ii)
above, in each case either from an End User or from a third party
reseller, for an End User's use of a Momentum Product or Licensed
Product.
4. PRE-RELEASE ROYALTY: The Pre-Release Royalty amount for the period of
time commencing April 1, 2001, and continuing thereafter, would be
changed from a flat six percent (6%) of Net Revenues (as defined in the
Marketing and Distribution Agreement) to a flat one percent (1%) of Net
License Fees (as defined in the Marketing and Distribution Agreement).
5. PRODUCT PAYMENTS:
5.1. Except for the Grandfathered Royalty Amounts (defined below in
Section 5.2), the Product Payment royalties for the period of
time commencing April 1, 2001, and continuing thereafter, are
changed from the current formula set forth in Exhibit A (Pricing
Addendum) to the Marketing and Distribution Agreement, as it may
have been amended from time to time by the parties, to a flat ten
percent (10%) of Net Revenues (as defined in Section 3 above).
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5.2. The Product Payments for the following Licensed Products are not
affected by this Amendment, and are grandfathered in under the
Product Payment formula defined in Exhibit A (Pricing Addendum)
to the Marketing and Distribution Agreement and the subsequent
license option exercise letters: Grants Administration,
eBenefits, Mobile Time and Expense, Stock Administration, Time
and Labor, and Deductions (the "Grandfathered Royalty Amounts").
For purposes of clarification, such Product Payments will be
computed by applying the following respective rates to the Net
License Fees for the applicable product:
Grants Administration 1.2%
EBenefits 5.1%
Mobile Time and Expense 2.0%
Stock Administration 1.5%
Time and Labor 1.8%
Deductions 1.3%
5.3 All Product Payments (including the Grandfathered Royalty
Amounts) shall be payable until ten (10) years after the later of
(i) the end of the Pre-Release Term or (ii) when such Licensed
Product shall have become a Generally Available Product;
provided, however, that the obligation to pay such Product
Payments shall be extinguished immediately following the
consummation of the purchase of all shares of Momentum capital
stock by PeopleSoft pursuant to the exercise of the Purchase
Option.
6. PRODUCT PAYMENT BUYOUT OPTION: The Product Payment Buyout Option
described in Exhibit A (Pricing Addendum) to the Marketing and
Distribution Agreement, as it may have been amended from time to time by
the parties, is changed such that PeopleSoft cannot exercise its right
to buy-out Momentum's right to receive Product Payments for any Licensed
Product until PeopleSoft has incurred twelve (12) months of Product
Payments due and owing to Momentum for such Licensed Product. To the
extent that any Product Payment Buyout Options were previously suspended
under any of the various letter agreements executed by the parties, it
is the express intent of the parties not to reinstate such Product
Payment Buyout Options pursuant to this Section 6 or this Amendment.
7. EFFECTIVE DATE. This Amendment is effective as of the Effective Date.
For purposes of this Amendment, "Effective Date" means the later of (i)
the date on which the Board of Directors approve the Restated
Certificate or (ii) the date on which the stockholders of Momentum
approve the Restated Certificate. In the event the Effective Date does
not occur on or prior to September 30, 2001, then the modifications
agreed to herein shall not become effective and the current Development
and Marketing Agreements shall continue in full force and effect.
8. NO OTHER CHANGES. Terms not otherwise defined in this Amendment shall
have the meaning given to them in the Development and Marketing
Agreements. As modified by this Amendment, the Development and Marketing
Agreements remain in full force and effect. In the event of any conflict
between the Development and Marketing Agreements and this Amendment, the
terms of this Amendment shall prevail.
IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by
their duly authorized representatives.
MOMENTUM BUSINESS APPLICATIONS, INC. PEOPLESOFT, INC
/s/ Xxxxxx X.X. Xxxx /s/ Xxxxx Xxxxxx
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Signature Signature
Xxxxxx X.X. Xxxx Xxxxx Xxxxxx
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Name Name
President and Chief Executive Officer Chief Financial Officer
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Title Title
July 23, 2001 July 23, 2001
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Date Date
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