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EXHIBIT 10.3
World Telehealth Inc.:
The Management Contract
Addendum No. 3 to MOU of July 6, 1998
between
ExpediaCom Global Inc. and World Telehealth Inc.
for
Board of Directors
World Telehealth Inc.
October 19, 1998
This document is confidential and restricted to the Management of
World Telehealth Inc. and ExpediaCom Global Inc. It is governed by the
mutual non-disclosure and non-circumvent agreement signed between the
above parties on August 10, 1998. Reproduction of this document is
prohibited without the written consent of ExpediaCom Global Inc.
ExpediaCom Global Inc.
communications systems solutions Xxxxxx X. Xxxxxx
President
4261-A14 Highway 7 0000 Xxxx Xxxxxx
Xxxxx 000 Xxxxx 000
Xxxxxxxxxx, Xxxxxxx Las Vegas, Nevada
Xxxxxx X0X 0X0 X.X.X. 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
E-mail: xxx.xxxxxx@xxxxxxxxx.xx
1.0 Background
With the Business Operations Plan (prepared by ExpediaCom)
submitted and under review by the Board of Directors of World
Telehealth, it is now time to address building the start up
organization, and transitioning this organization into a fully
functioning corporation that will successfully achieve the vision and
operating targets established in the Business Operations Plan.
Based on the Business Operations Plan (BOP), World Telehealth
(WTH) is forecasted to achieve $6.5 Million of revenue by November 1,
1999, $28.8 M in 2000, and $71.2 M in 2001. The product development
strategy for WTH is broad in scope, potentially complex, and very
aggressive. The company must also develop a strong international
flavor, and a significant number of alliances must be negotiated,
implemented and managed. These alliances will include major customers,
key technology suppliers, and government/non-government organizations
(such UNCTAD, WHO and SECA).
All of the above areas must be addressed in very short order, and
must be project managed with rigor in order to ensure the above revenue
targets are met and exceeded.
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ExpediaCom Global Inc. has extensive experience in establishing
and managing network centric companies. Our experience has also
focused on companies that provide a solutions oriented network service
(rather than simply providing hardware or software component products),
as evidenced by our Community of Interest Model. As an opportunity for
ExpediaCom, World Telehealth represents an extremely good fit.
Most importantly, we believe that ExpediaCom has demonstrated its
competencies through the following deliverables to WTH (some are still
in progress but have already produced positive results):
- WTH Business Operations Plan (BOP)
- ISETO Geneva Meeting Support Package
- Generic Term Sheet for Alliance Partners
- Celebration Health Term Sheet Value Proposition
- Loma Xxxxx Term Sheet Value Proposition
- Celebration Health MOU
- Lyon France Project Plan & Project Management
- Correspondence to Alliance Partners (Celebration)
- Strategy for UNCTAD, WHO, SECA relationships
- Processes for Financial Management (e.g. use of funds)
- General Business Coaching
- Opportunities to benefit from other ExpediaCom Projects
(Celebration Health involvement in Los Optimos Resort
Project)
This proposal identifies how ExpediaCom Global Inc. can assist
World Telehealth in the next phase of the project in three key areas:
- by providing the functionality of an operating senior
management team to transition the company to full operating
status
- to acquire an exclusive license to distribute WTH products
and services in Canada and two countries in the Caribbean (to
be determined)
- by acting as the longer term product development, technology
and network operations support prime
2.0 Proposed Functionality
The proposed management contract would address the following
functions and provide the following deliverables, in two phases:
- Phase 1: Start Up to Transition (Step 0 - Step 4 of schedule
in Section 3.0)
- Phase 2: Post Transition Support from ExpediaCom Global Inc.
(Step 5 of schedule in Section 3.0)
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Phase 1: Start Up to Transition
Functions Key Deliverables
COI Office - accountable leader for the company
- accountable interface on behalf of the company to
the Board of Directors
- accountable for performance measures (revenues,
cost management, customer satisfaction, employee
performance & satisfaction, etc.)
- develop and manage governance process with board
of directors
- seat on the Board of Directors for ExpediaCom
Executive
- seat on the Board of Directors for the COO office
(non-voting)
Financial Management
- design and implementation of financial systems &
processes (including management, investment,
reporting, procurement, etc.)
- liaison to the investment bankers regarding the
acquisition of funds per the Business Operations
Plan (BOP)
- liaison to the investor relations program
management
Administration - design and management of company office and
support infrastructure (including offices, IT
systems, telephony/communications systems,
facilities, utilities, etc.)
- establishment and management of human
resources/competency management process (in
conjunction with other functions)
- facilitate creation of operating processes
Marketing - complete strategic business plans and install an
"evergreen" process
- develop tactical plans for and manage ongoing
product development and research
- procure advertising, promotional material and
services, marketing collateral and design and
maintenance of the corporate Website
- develop distribution strategies and establish and
manage "non-in house" distribution channels
- work closely with operations and sales
organizations to ensure strategies and tactical
plans are being executed
- develop and manage the communications activities,
including Website
- develop and manage relationships with key
suppliers
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Phase 1: Start Up to Transition (Cont'd)
Functions Key Deliverables
Sales - prime interface with customers, particularly
Alliance Partners and Charter Members
- work with other distribution channels
- manage proposals to customers (with close
involvement of marketing function)
UN International Relations
- establish and manage the strategic alliances with
UNCTAD, other UN Agencies, WHO, SECA
- work with sales to manage the prime interfaces to
country prime contacts and governments
- establishment and management of out of country
offices per the BOP and planning function (e.g.
Geneva)
Technology - examine emerging technologies
- develop a technology strategy and plan
- work closely with marketing to select key
technology suppliers
- input to marketing strategies and product
development
Operations - establish the Program Management Office to manage
costs and events for infrastructure build and
ongoing operation
- ongoing outsourcing manager
- work with marketing and technology groups to
procure appropriate systems and technology on
behalf of the company and its customers (where
appropriate)
- develop management and measurement methods for
operations
- day to day interface to key suppliers
- ensure delivery based on marketing plans
Centres of Excellence
- establish a center of excellence for each of the
key Product & Service Areas: TeleMedicine,
TeleWellness, TeleCommerce, Telegistic and
TeleInformatics
- appoint a company prime from either the Board of
Directors or from within the company as the chair
for each working group as per the BOP and to
participate (on a compensatory basis)
- recruit distinguished, prominent and competent
individuals from outside of the company to
participate (on a compensatory basis) in the
working groups
- deliver a set of recommendations for the direction
of the specific area
- vet and feedback to marketing on the strategic and
tactical product and service plans
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Phase 1: Start Up to Transition (Cont'd)
Functions Key Deliverables
Co-operative Training Program
- business management training of appropriate WTH
designees to assume longer term roles in the
company after the transition from ExpediaCom is
complete
- will include "on the job" training, business
training with outside firms, executive technology
training with outside firms
- testing function to ensure competency levels
- coaching programs for designees
Transition - evolution plan for long term operation of the
company
- acquire the human resources for management of the
business
- transition period with the new management team
Phase 2: Post Transition Support by ExpediaCom Global Inc.
The costs for this phase have yet to be determined, and are
therefore not included in this proposal.
Functions Key Deliverables
Ongoing Product Development Support
- ongoing strategic business plan support
- ongoing product development and research
support
- ongoing support with key suppliers
- ongoing sales & distribution support
- ongoing communications / Website support
Ongoing Network Operations Support
- provide ongoing program management advise
- act as the ongoing outsourcing manager
- ongoing work with suppliers to ensure proper
delivery / deployment
- evolve management and measurement methods for
operations
Ongoing Distributor of WTH
- exclusive responsibility for Canada
- exclusive responsibility for a minimum of two
Caribbean nations (to be determined)
3.0 Project Schedule
The following is the proposed project schedule.
Step 0: World Telehealth Confirmation to Begin October 18, 1998
Step 1: Operations Program Outline (complete Schedule E) November 30, 1998
Step 2: Transition Plan Complete June 30, 1999
Step 3: Transition Begins September 1, 1999
Step 4: Transition Complete January 1, 2000
Step 5: Ongoing Support Functions Begin January 1, 2000
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4.0 Pricing
The pricing for the management functions described in section 2
is:
Monthly Fee $165,000.00 US
Any appropriate taxes are extra.
This fee includes salaries for the current full time employees of
World Telehealth (X. Xxxxx, X. Xxxxxx, and X. Xxxxxx) and retainer
agreements with other parties such as United Sources of America. In
addition, this fee includes the incentives paid to the chairpersons of
the five Centres of Excellence (including contributions made by WTH
Medical resources). It would be our intent to outsource as much of the
operation as is appropriate to achieve the best possible cost
structure, while first meeting the defined quality operational goals.
The following items are not included in the above fee and would be
addressed through the creation and normal management of a company
operating budget.
- Rent
- Telephones and communications costs
- Insurance (all types)
- Advertising, Branding, Promotional Materials, Collateral,
Trade Shows, etc.
- Website develop and operation
- Office Automation systems
- Product development costs other than the management functions
described above
- Expenses outside of the office location
- Special research outside of the strategies and tactical plans
described above
- Reasonable unforeseen costs
5.0 World Telehealth Concurrence on Contractual Documents
This section contains the following documents:
- Addendum 3 MOU Signature Sheet
- Schedule E: The Services for The Management Contract
- Schedule F: Consulting Fees & Cost Structure for WTH
Management Contract
ADDENDUM No. 3
IN WITNESS WHEREOF the parties have executed this Addendum of
Schedules for the World Telehealth Inc. Management Contract Schedule
E: The Services, Schedule F: Consulting Fees and Cost Structures - to
be attached to the Memorandum of Understanding (MOU) between World
Telehealth Inc. and ExpediaCom Global Inc., dated as of the 19th day of
October, 1998
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SIGNED, SEALED AND DELIVERED )
in the presence of: ) World Telehealth Inc..
) Per:
)
) ____________________________
)
------------------------------
) ExpediaCom Global Inc.
) Per:
)
) ___________________________
) Xxxxxx X. Xxxxxx, President
------------------------------
Schedule E: The Services for the Management Contract
The key responsibilities of the Company pursuant to this Addendum
No. 3 shall be to establish a management team and manage the day to day
operations of World Telehealth for a period as defined in section 3.0
Schedule of this MOU Addendum.
ExpediaCom's Service will be documented and the performance of this
Service will be measured as follows in the following "statement of
work". This table will be completed as part of the Operations
Program Outline by November 30, 1998 (Step 3 of the Schedule in Section
3.0).
Milestone Service/Result By When Measure
1.
2.
3.
4.
5.
Schedule F: Consulting Fees & Cost Structure for WTH Management
Contract
ExpediaCom's compensation and fee structure are as follows:
ExpediaCom Global Inc.
Consulting Fee & Cost Structure
World Telehealth Management Contract
Fixed Costs
Management Contract Phase 1 $165,000.00 ($US), plus taxes ($US)
Terms: payable at the beginning of
each month
Applicable State/Federal
/Other Taxes To Be Determined ($US)
Total Fixed Costs $165,000.00 ($US), plus taxes ($US)
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Variable Costs Accountable Expenses outside of Company
location
Invoice monthly
As incurred ($US)
Terms: payable net 10 days
Total Variable Costs TBD
Total Management Contract
Phase 1 Costs $165,000.00 ($US), plus
taxes ($US), plus reasonable approved
costs
ExpediaCom General Consulting Fees For World Telehealth
Personnel Per Diem Rates Executive Consultant $2500 ($US)
Senior Manager $1800 - $2000 ($US)
Middle Manager $1200 - $1500 ($US)
Junior Manager/Administrator
$750 - $1000 ($US)
Expenses Reimbursement
Accountable Expenses
(e.g. Hotels, Meals, Travel) Invoice monthly - As incurred ($US)
Terms: payable net 10 days
Other Fees
Fixed and/or Variable Fees
/Costs Special reports, studies, research,
presentation or promotional material,
and support personnel. To be
determined on a per request basis
(could be fixed and/or variable costs)
NOTE: Identification of resources applies only to resources,
capital or expense that is over an above the ExpediaCOm
Management Contract.
If the cost is included then an indication of "included in
the EXP Mgmt Contract" should be done.
Make sure that primes are identified and "put to work".
1. Chief Operating Officer / Corporate Leadership Function
Activity Due H.R.
No. Description Measure Prime Date Expense Capital
accountable leader for the company
accountable interface on behalf of the company to the Board of
Directors
accountable for performance measures (revenues, cost management,
customer satisfaction, employee performance & satisfaction,
etc.)
develop and manage governance process with board of directors
seat on the Board of Directors for ExpediaCom Executive
seat on the Board of Directors for the COO office (non-voting)
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Activity Due H.R.
No. Description Measure Prime Date Expense Capital
2. Financial Management Function
design and implementation of financial systems & processes
(including management, investment, reporting, procurement, etc.)
liaison to the investment bankers regarding the acquisition of
funds per the Business Operations Plan (BOP)
liaison to the investor relations program management
3. Administration
Activity Due H.R.
No. Description Measure Prime Date Expense Capital
design and management of company office and support
infrastructure (including offices, IT systems, telephony /
communications systems, facilities, utilities, etc.)
establishment and management of human resources / competency
management process (in conjunction with other functions)
facilitate creation of operating processes
4. Marketing
Activity Due H.R.
No. Description Measure Prime Date Expense Capital
complete strategic business plans and install an "evergreen"
process
develop tactical plans for and manage ongoing product
development and research
procure advertising, promotional material and services,
marketing collateral and design and maintenance of the corporate
Website
develop distribution strategies and establish and manage "non-in
house" distribution channels
work closely with operations and sales organizations to ensure
strategies and tactical plans are being executed
develop and manage the communications activities, including
Website
develop and manage relationships with key suppliers
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5. Sales Function
Activity Due H.R.
No. Description Measure Prime Date Expense Capital
prime interface with customers, particularly Alliance Partners
and Charter Members
work with other distribution channels
manage proposals to customers (with close involvement of
marketing function)
6. United Nations Liaison / International Relations
Activity Due H.R.
No. Description Measure Prime Date Expense Capital
establish and manage the strategic alliances with UNCTAD, other
UN Agencies, WHO, SECA
work with sales to manage the prime interfaces to country prime
contacts and governments
establishment and management of out of country offices per the
BOP and planning function (e.g. Geneva)
7. Technology Function
Activity Due H.R.
No. Description Measure Prime Date Expense Capital Capital
examine emerging technologies
develop a technology strategy and plan
work closely with marketing to select key technology suppliers
input to marketing strategies and product development
8. Operations Function
Activity Due Human
No. Description Measure Prime Date RES (EQE) Expense
establish the Program Management Office to manage costs and
events for infrastructure build and ongoing operation
ongoing outsourcing manager
work with marketing and technology groups to procure appropriate
systems and technology on behalf of the company and its
customers (where appropriate)
develop management and measurement methods for operations
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day to day interface to key suppliers
ensure delivery based on marketing plans
9. Centres of Excellence
Activity Due H.R.
No. Description Measure Prime Date Expense Expense
10. Co-operative Training Program
Activity Due H.R.
No. Description Measure Prime Date Expense Capital
11. Transition Program
Activity Due H.R.
No. Description Measure Prime Date Expense Expense
