EXECUTION COPY
AMENDMENT NO. 3 TO INTERWORLD SOFTWARE LICENSE AGREEMENT
This AMENDMENT NO. 3 ("AMENDMENT NO. 3"), dated as of July 8, 2003, by and
between IW Holdings, Inc.("HOLDINGS"), as successor to the business formerly
conducted by InterWorld Corporation ("INTERWORLD"), and eB2B Commerce, Inc. (the
"CLIENT"), formerly eChannel Ventures, Inc., amends and supplements that certain
InterWorld Corporation Software License Agreement (the "SOFTWARE LICENSE
AGREEMENT"), dated December 11, 1998, as amended by the addendum to the Software
License Agreement dated September 24, 1999 (the "1999 ADDENDUM"), the further
addendum dated September 30, 2000 (the "2000 ADDENDUM"), the Letter Agreement
amending the Software License Agreement and the 1999 Addendum and the 2000
Addendum (the "LETTER AGREEMENT"), dated February 21, 2001, Amendment No. 1 to
the Software License Agreement ("AMENDMENT NO. 1"), dated April 12, 2001,
Amendment No. 2 to the Software License Agreement ("AMENDMENT NO. 2"), dated
December 24, 2001, and the Clarification Agreement (the "CLARIFICATION
AGREEMENT"), dated March 19, 2002 (the Software License Agreement, the 1999
Addendum, the 2000 Addendum, the Letter Agreement, Amendment ▇▇. ▇, ▇▇▇▇▇▇▇▇▇
▇▇. ▇ and the Clarification Agreement are collectively referred to as the
"AMENDED SOFTWARE LICENSE AGREEMENT"). All capitalized terms not otherwise
defined herein shall have the meanings set forth in the Amended Software License
Agreement.
WHEREAS, the Client and Holdings have entered into the Amended Software
License Agreement in order to set forth the terms and conditions relating to the
License;
WHEREAS, the parties hereto wish to resolve any disputes over amounts
owed under the Amended Software License Agreement;
WHEREAS, the parties intend that this Amendment No. 3 shall have a term
beginning on the date hereof and ending two (2) years thereafter (the "TERM");
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein set forth, the parties hereby covenant and agree
as follows:
1. The terms and conditions of Section 2 of Amendment No. 2 (as amended by
the Clarification Agreement) are declared null and void and of no force
and effect and are deleted in their entirety.
2. The Client agrees to pay Holdings and Holdings agrees to accept payment
from the Client, within two (2) business days from the date hereof, an
amount equal to $20,000 in immediately available funds.
3. The Client shall reasonably promptly issue to Holdings, such number of
shares of its common stock, par value $.01 per share ("EB2B COMMON
STOCK"), which when added to the number of shares presently held by
Holdings and its affiliates will give it 9.9% of the presently
outstanding shares of eB2B Common Stock (excluding derivative
securities for the purposes of calculating outstanding shares). No
shares of eB2B Common Stock shall be issued to Holdings in the event
that Holdings and affiliates already own 9.9% or more of the presently
outstanding shares (excluding derivate securities). Holdings is
acquiring the shares of eB2B Common Stock for its own account without a
view to any distribution thereof in violation of the Securities Act of
1933, as amended (the "SECURITIES ACT"). Holdings represents that it
(i) is an "accredited investor," as that term is defined in Rule 501
under the Securities Act; (ii) has no contract, undertaking, agreement
or arrangement with any person or entity to sell, transfer or pledge to
such person or any other person or entity the shares of eB2B Common
Stock or any part thereof; (iii) has sufficient knowledge and
experience in business matters to evaluate the merits and risks of the
investment; (iv) has adequate means of providing for its current needs
and possible contingencies; and (v) has no need for liquidity of its
investment and would be able to bear the economic risk of a complete
loss of its investment hereunder. Holdings acknowledges that the
issuance of the shares of eB2B Common Stock have not been registered by
the Client under the Securities Act and agrees that the shares of eB2B
Common Stock may only be transferred if such transfer is registered
under the Securities Act or is effected pursuant to an exemption from
such registration requirements. Holdings agrees that a restrictive
legend may be placed on any certificate evidencing the shares of eB2B
Common Stock.
4. In addition to the amounts set forth in Section 2 above, the Client
hereby agrees to pay Holdings, during the Term, ten percent (10%) of
its annual Client Revenue (as defined in the 2000 Addendum), such
amount to be paid to Holdings quarterly on November 1, February 1, May
1 and July 1 during the Term.
5. Further, in addition to the amounts set forth in Section 2 and 4 above,
the Client agrees to pay Holdings during the Term an additional fee in
the amount of seven and one-half percent (7.5%) of Maintenance Fees
as hereinafter defined. For the purposes of this Amendment No. 3,
"MAINTENANCE FEES" shall mean any and all revenue (other than the Client
Revenue) received by the Client for or on account of the Software
licensed to the Client under the Amended Software License Agreement
and any derivative works thereof, including without limitation any
maintenance or other services performed by the Client for third parties,
and any sublicensing fees received for or account of the Software set
forth on Exhibit A of the 2000 Addendum, such amounts to be paid to
Holdings quarterly on November
1, February 1, May 1 and July 1 during the Term. In no event shall the
amounts payable to Holdings under Sections 4 and 5 exceed, during the
Term, an aggregate amount of $300,000, exclusive of the $20,000 paid
pursuant to Section 2 hereof.
6. During the Term and for a period of two (2) years thereafter, the
Client shall keep true and accurate books and records of account and
appropriate documentation of all transactions and matters relating to
the calculation of Client Revenues. Quarterly on November 1, February
1, May 1 and July 1 during the Term, the Client shall provide to
Holdings a written accounting of the Client Revenues for the relevant
period (whether or not any payments are then due to Holdings), which
written accounting shall be certified in writing as accurate by an
officer of the Client. Holdings and its duly authorized representatives
shall have the right upon reasonable notice and during normal business
hours at any time during the Term and for a period of two (2) years
thereafter, to audit and/or examine the relevant books, records, and
documentation kept by the Client, and to make copies and/or extracts
therefrom. In the event that an audit reveals underpayments to Holdings
of five percent (5%) or more for any quarterly period, the Client will
immediately pay, in addition to the amounts due: (i) an interest charge
per month, calculated at an annual rate of five percent (5%) over the
prime rate (as posted on the original due date in The Wall Street
Journal), or the maximum interest charge allowed by law, whichever is
greater (up to fifteen percent (15%) per annum), and (ii) the
reasonable fees incurred by Holdings in connection with such audit.
7. In the event of the Client's material breach of any term of this
Amendment No. 3, which material breach remains uncured after thirty
(30) days written notice by Holdings is received by a proper executive
officer of the Client, the Client shall immediately become obligated to
pay Holdings the amount of $300,000 (less amounts already paid
hereunder) as liquidated damages (and representing the maximum amount
of Client Revenues and Maintenance Fees payable hereunder), and in lieu
of any further amounts owing under this Amendment No. 3. The notice
shall not be required for the $20,000 payable pursuant to Section 2.
8. The consideration from the Client to Holdings in this Amendment No. 3
shall constitute all amounts and consideration owing by the Client
under the Amended Software License Agreement, as amended hereby.
9. In the event that any one or more provisions of this Amendment No. 3
shall conflict with any other provisions of the Amended Software
License Agreement, the provisions set forth in this Amendment No. 3
shall govern to the greatest extent possible.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 3
as of the date first written above.
IW HOLDINGS, INC.
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
EB2B COMMERCE, INC.
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman and CEO
