EXHIBIT 10.2
Critical Path, Inc. 415.451.2500 (Main)
350 The Embarcadero 000.000.0000 (Fax)
Xxx Xxxxxxxxx, XX 00000-0000 xxx.xx.xxx
August 27, 2002
THE XXXXX GROUP
000 00xx Xx. XX Xxxxx 000
Xxxxxxxxxx, XX 00000-0000
Re: Letter Agreement for Consulting Services
Dear Sirs:
This letter shall set forth the terms and conditions under which Critical Path
("CP") is contracting for services with The Xxxxx Group ("TCG").
1. ENGAGEMENT: TCG shall generally provide strategic and sales transactional
consulting services to CP (the "Engagement") as follows, and as further
mutually developed and agreed between the parties.
2. SERVICES AND FEES: CP shall pay a one-time retainer fee of one Hundred and
Fifty Thousand Dollars (US $150,000) ("Retainer") as a draw against variable
performance-based consulting and transactional services provided and earned
against such Retainer as follows:
a. Referrals: TCG shall receive an earned fee, credited against the
Retainer, of 2% of any executed license revenue sales agreement
resulting from simple referrals of entities by TCG to CP. Maintenance,
support and professional services revenues generated shall not be
considered for purposes of the earned credit. No credit will be earned
for entities already in discussions with or contracted with CP and no
credits shall be earned on contract renewals, unless CP requests TCG to
work on such matters, in which event the credits will reflect the
increase in sales to the existing client or the sales made pursuant to
such renewal, as applicable, and the fee will be as set forth in Section
2(b) below.
b. Direct Sales: TCG shall receive an earned fee, credited against the
Retainer, of 10% of any executed license revenue sales agreement that is
substantially negotiated by TCG or where direct substantial involvement
with the entity is undertaken. Maintenance, support and professional
services revenues generated shall not be considered for purposes of the
earned credit. No credit will be earned for entities already in
discussions with or contracted with CP and no credits shall be earned on
contract renewals, unless CP requests TCG to work on such matters, in
which event the credits will reflect the increase in sales to the
existing client or the sales made pursuant to such renewal, as
applicable, and the fee will be as set forth in this Section 2(b). TCG
will be entitled to receive the 10% fee set forth herein during the life
of each new agreement and any renewals thereof, as well as with respect
to any renewals or
expansions of agreements with existing CP clients where TCG qualifies
for such fee, as provided in the previous sentence.
c. Marketing Efforts: TCG shall receive an earned fee, credited against the
Retainer, in an amount to be agreed upon by the parties on a case by
case basis, for undertaking specific marketing activities at the request
of CP. TCG will furnish CP with an invoice reflecting the agreed-upon
fee.
d. Strategic Analyses: TCG shall receive and earned fee, credited against
the Retainer in an amount to be agreed upon by the parties on a case by
case basis, for undertaking specific projects requested by CP including,
without limitation, business growth plans, identifying prospective
business partners, political and industry analyses, and other strategic
consulting projects at the request of CP. TCG will furnish CP with an
invoice reflecting the agreed-upon fee.
e. Other Fees: TCG shall receive a mutually agreed earned fee, credited
against the Retainer, upon the occurrence of other mutually agreed
objectives or transactions (e.g., introductions to strategic partners
and alliances, etc.) as determined by CP and TCG during the course of
the Engagement.
f. Other Payment Terms. The Retainer shall be paid upon the execution of
this letter agreement, and shall be credited upon provision of the
performance-based services as described above. Amounts earned in excess
of the Retainer will be payable net forty-five (45) days after the
execution of the sales agreement, renewal, or receipt by CP of TCG's
invoice, as applicable. By agreement of the parties, fees may be paid in
a combination of cash and warrants to purchase common stock of CP, the
terms of which will be agreed at the time of issuance of such warrant,
if ever. Fees will be payable on applicable contracts during the term of
the Engagement and for a period of 12 months following any termination
of the Engagement, provided that the obligation to pay with respect to
any particular contract shall terminate upon the termination of such
contract.
3. NO RESELLER: TCG's lines of business do not include acting as a reseller of
goods and services and, accordingly, TCG shall not act as a reseller of CP's
products and services.
4. EXPENSES: CP shall reimburse TCG for reasonably incurred out-of-pocket
actual expenses related to the provision of services hereunder. Such
expenses shall be capped at and shall not exceed 5% of the Retainer, or
$7,500 during the Engagement, without the prior written consent of CP or
they shall not be reimbursed. Expenses shall be invoiced monthly to CP,
payable net forty-five (45) days after receipt of invoice.
5. TERM AND TERMINATION: This Agreement shall terminate upon the expiration of
one (1) year from the effective date hereof. To the extent TCG has not
earned the Retainer this Agreement shall remain in place until such time as
the aggregate fee is earned and shall thereafter automatically terminate.
Any nonbreaching party may terminate this Agreement (1) at any time on 30
business days' prior written notice to the other party and (2) if the other
party has breached any of the provisions of the Agreement, on 5 business
days' prior written notice to the breaching party unless such breach shall
have been cured to the reasonable satisfaction of the nonbreaching party
within such 5 days. In the event of any such termination, TCG will make
reasonable efforts to bring closure to any in-process work prior to the
effective date of termination of the engagement and will be paid earned
professional fees to the effective date of termination. All out-of-pocket
expenses reasonably incurred, in accordance with the terms and conditions of
the Agreement, up to the effective date of termination shall also be
reimbursed if submitted within thirty (30) days of termination.
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6. NON-DISCLOSURE AGREEMENT: The parties shall enter into a Non-Disclosure
Agreement immediately following the execution of this Agreement.
7. INDEMNIFICATION: CP will indemnify TCG for any third party claims made
against TCG during the term hereof or for twelve (12) months thereafter
arising in connection with the provision of consulting services by TCG under
this Agreement, except to the extent that such claim arises from the gross
negligence or willful wrongdoing of TCG. TCG will indemnify CP for any third
party claims made against CP during the term hereof or for twelve (12)
months thereafter arising in connection with the provision of consulting
services by TCG under this Agreement to the extent such claim arises from
the gross negligence or willful wrongdoing of TCG. The foregoing
indemnification by each party shall be subject to the following: The party
seeking indemnification hereunder (the "Indemnitee") (i) shall provide
prompt written notice of such claim to the party from whom indemnification
is sought (the "Indemnitor"); and (ii) shall allow the Indemnitor to defend
any such claim using counsel of its choice. The Indemnitor shall not settle
any such claim without the express written consent of the Indemnitee, such
consent not to be unreasonably withheld.
8. MISCELLANEOUS: This Agreement may not be assigned by either party without
the express written consent of the other party. If any provision of this
Agreement is found to be illegal or invalid, the remaining provisions shall
remain in full force and effect in accordance with their terms. No delay or
omission by either party in exercising any right under this Agreement shall
operate as a waiver of that or any other right. This Agreement constitutes
the entire agreement between the parties relating to the subject matter
herein and supersedes all prior agreements and understandings between the
parties, whether written or oral. This Agreement may be amended or modified
only by a written instrument executed by both parties. This Agreement shall
be governed by California law, without regard to its conflict of law
provisions.
If the scope and terms of this Engagement are acceptable, please acknowledge
your acceptance by signing the confirmation attached, returning the enclosed
copy of this Letter to as at the above address.
If there any questions, please do not hesitate to contact me.
CRITICAL PATH, INC.
BY: /s/ XXXXXXX X. XXXXXXXXX, XX.
NAME: XXXXXXX X. XXXXXXXXX, XX.
Chief Executive Officer
ACKNOWLEDGED AND AGREED:
THE XXXXX GROUP
BY: /s/ XXXXX X. XXXXXX
NAME: Xxxxx X. Xxxxxx, Senior Vice President
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