Exhibit 10(fg)3
AMENDMENT AND WAIVER
TO
MASTER DISTRIBUTOR AGREEMENT
(for Puerto Rico and The Caribbean)
This Amendment and Waiver to Master Distributor Agreement ("Amendment") is dated
as of August 1, 2004 between Artera Group, Inc., a Delaware corporation
("Artera"), and Spyder Technologies Group, LLC, a Connecticut limited liability
company ("Distributor"). Capitalized terms used herein without definition shall
have the meaning ascribed to such terms in the Distributor Agreement, as defined
below.
WHEREAS, Artera and Distributor are parties to that certain Master Distributor
Agreement for Puerto Rico and the Caribbean, dated as of October 1, 2003, as
affected by letter agreement dated December 10, 2003 (as so amended, the
"Distributor Agreement");
WHEREAS, the parties wish to waive and amend certain of the terms and conditions
of the Distributor Agreement, as more fully described herein.
NOW, THEREFORE, in consideration of the mutual covenants contained herein, as
well as other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:
1. Avaya Inc. If, under a grant of right from Artera, Avaya Inc. or its
resellers distribute the Service in the Territory to Subscribers in a manner
that is inconsistent with the exclusive license granted to Spyder under Section
2.1 of the Distributor Agreement ("Avaya Distribution"), Distributor hereby
waives the exclusivity of such license to the extent necessary to permit the
Avaya Distribution. In consideration for such waiver, Artera hereby agrees to
pay to Distributor a monthly fee equal to 5% of Net Revenues (as defined below)
actually received by Artera that arise out of any Avaya Distribution. For
purposes hereof, "Net Revenues" shall mean royalties received by Artera from
Avaya Inc. arising solely out of any Avaya Distribution. Each month's fee to
Distributor shall be payable 30 days after the end of the calendar month in
which Artera receives the Net Revenues giving rise to the fee.
2. Cable and Wireless Jamaica. Notwithstanding the provisions of Section
2.2 of the Distributor Agreement to the contrary, in the event that Artera
irrevocably converts Distributor's rights under the Distribution Agreement to
non-exclusive rights as of February 28, 2005 pursuant to such Section 2.2,
Distributor shall nonetheless continue to have the right to grant Cable and
Wireless plc ("C&W") the exclusive right to sub-distribute the Service in
Jamaica until the earlier of (a) one year after Distributor's initial grant of
such rights to C&W or (b) February 28, 2006.
3. Notices. Article 8 of the Distributor Agreement is hereby amended to
replace Distributor's contact information set forth thereunder with the
following:
"If to Distributor: Spyder Technologies Group, LLC
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
X.X.X. [if from outside U.S.A.]
Attn: President
Facsimile: 000-000-0000"
4. Royalty Schedule. Schedule 3.2 to the Distributor Agreement is hereby
amended to read in its entirety as set forth in Schedule 3.2 to this Amendment.
5. Billing, Collections and Payments Schedule. Schedule 3.3 to the
Distributor Agreement is hereby amended to read in its entirety as set forth in
Schedule 3.3 to this Amendment.
Except as expressly modified or amended by this Amendment, the Distributor
Agreement will remain in full force and effect. This Amendment may be executed
in one or more counterparts. Each counterpart will be deemed an original, but
all counterparts together will constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Amendment to be signed by their
duly authorized representatives.
ARTERA GROUP, INC. SPYDER TECHNOLOGIES GROUP, LLC
By: /s/ Xx X. Xxxxxxx By: /s/ Xxxxxxxx Xxxxxxxx
----------------------- -------------------------
Xx X. Xxxxxxx Xxxxxxxx Xxxxxxxx
Treasurer President
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Schedule 3.2
------------
ROYALTY
The Royalty is payable in U.S.A. dollars. The monthly Royalty amounts, per End
User, are as follows:
1. Single User Residential Subscribers. The monthly Royalty amount for each
residential Subscriber is based on whether Artera or the Reseller associated
with such Subscriber provides and operates the Data Center serving such
Subscriber, as described in this Agreement, as provided in the table below.
------------------------------ -----------------------------
Reseller Data Center Artera Data Center
------------------------------ -----------------------------
$0.75 $1.00
------------------------------ -----------------------------
2. Small Business and Government Entity Subscribers. The monthly Royalty
amount for each End User of a Small Business or Government Entity Subscriber is
based on the number of End Users within the applicable Subscriber and on whether
Artera or the Reseller associated with such End User provides and operates the
Data Center serving such End User as described in this Agreement, as provided in
the table below. Small Business or Government Entity Subscribers with fewer than
five End Users shall be treated as if they had five End Users, with a Royalty
that is five times the amount in the table.
-------------------------- -------------------------- --------------------------
Number of End Users Reseller Artera
Within Subscriber Data Center Data Center
-------------------------- -------------------------- --------------------------
1-9 $2.50 $3.00
-------------------------- -------------------------- --------------------------
10-24 $2.38 $2.85
-------------------------- -------------------------- --------------------------
25-49 $2.25 $2.70
-------------------------- -------------------------- --------------------------
50-250 $2.00 $2.40
-------------------------- -------------------------- --------------------------
Road Warrior* $2.50
-------------------------- -----------------------------------------------------
* "Road Warrior" refers to a version of the Service used with mobile computers
that at times may be connected to the Internet through a local area network
(LAN), and at other times may be connected to the Internet on a standalone
basis. The monthly Royalty for a Road Warrior End User is the sum of (a) the
applicable ordinary Royalty amount described above plus (b) the applicable Road
Warrior amount described above.
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Schedule 3.3
------------
BILLING, COLLECTIONS AND PAYMENTS
Reseller shall perform Service Fee billing and related services, as follows:
1. Billing:
(a) The Reseller shall xxxx the Subscriber each month. Upon receipt of the
Service Fee, the Reseller shall deduct and retain any amount due to it
under its Reseller Agreement. The Reseller shall pay the remainder of
such Service Fee to Distributor (directly or via additional levels of
Resellers). From such amount received, Distributor shall pay Artera
the Royalty. Payments by the Resellers to Distributor shall be made by
the end of the calendar month, for Service Fees received by the
Resellers from Subscribers during the previous calendar month, by wire
transfer to an account specified by Distributor. Payments by
Distributor to Artera shall be made by the 15th day of the calendar
month, for amounts received by Distributor from the Resellers during
the previous calendar month, by wire transfer to an account specified
by Artera.
(b) To further assist Artera in calculating the Royalty and to enable
Resellers to activate and de-activate End Users, the Reseller shall
implement an electronic interface, as reasonably agreed upon by Artera
and the Reseller, between the Reseller's back office and the CRM
System. Such interface shall be via the Service's application program
interface (the "API") and shall pass to the CRM System, at a minimum,
the End User's (or prospective End User's) name, e-mail address and
unique identifier number from the Reseller, the Reseller's unique
identifier number from Artera and the Artera product identification
number. The Reseller shall also establish a non-public Web page and
provide its address and access to it to Artera, so that Artera may
report Service activations, de-activations and similar transactions
with Subscribers as described in the API documentation. Distributor
shall take reasonable steps to evaluate the creditworthiness of a
prospective Reseller prior to authorizing it to resell the Service.
2. Subscription Periods Greater Than One Month: Notwithstanding the foregoing,
Subscription periods may be greater than one month (e.g., annual
Subscriptions). In such event, (a) the Royalty shall be based on the number
of months within the Subscription period notwithstanding any discount given
by the Reseller to the Subscriber (unless Artera agrees otherwise in
writing in advance); and (b) the Royalty for the entire Subscription period
shall accrue to Artera in the first month of such Subscription period.
3. Miscellaneous: Royalty payments shall be based on subscriptions to the
Service, irrespective of actual Service Fee collections and irrespective of
amounts paid by the Reseller to Distributor. The Reseller shall (a) collect
and pay to the appropriate governmental authorities all sales, use, VAT,
excise and similar taxes due with respect to the Service Fees so processed
and satisfy all reporting and filing requirements associated therewith; and
(b) keep records of all such billing, collection, payment and tax
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transactions in sufficient detail to demonstrate compliance with the
procedures set forth herein. Artera and Distributor may agree in writing
from time to time, generally or in connection with specified Resellers, to
modify the procedures set forth herein, consistent with the overall
purposes and intent of this Agreement. Reseller Agreements shall require
such Reseller to take the actions described for it herein.
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