EXHIBIT 10.02
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "Agreement") is made as of January
15, 2002, by and between NIIT (USA), Inc., a Georgia corporation ("NIIT"), and
Click2Learn, Inc., a Delaware corporation ("CLKS").
RECITALS:
WHEREAS, CLKS wishes to sell, and NIIT wishes to buy, certain assets
used by CLKS to provide custom e-learning content development services upon the
terms and conditions set forth below.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereby agree as follows:
1. PURCHASE AND SALE OF SELECTED ASSETS:
1.1 Subject to the terms and conditions of this Agreement, on or
before January 31, 2002 ("Closing"), CLKS will sell, transfer,
assign and convey to NIIT, and NIIT will purchase and accept from
CLKS, all right, title and interest in and to the assets of the
Business described on Exhibit "A" attached hereto, free and clear
of any and all liens, charges, security interests and
encumbrances (collectively, the "Purchased Assets"). As used
herein the "Business" means the custom e-learning content
development business currently conducted by CLKS, other than
business with the Washington National Guard.
1.2 Subject to the terms and conditions of this Agreement, NIIT will
pay CLKS at the Closing as follows:
1.2(a) One Million U.S. Dollars (US $1,000,000) on the date
thereof by check.
1.2(b) If applicable, the contingent payments described on
Schedule 1.2(b) attached hereto.
1.2(c) If applicable, the commission described on Schedule
1.2(c) attached hereto.
1.3 As of the Closing, CLKS will grant to NIIT an exclusive,
royalty-free, perpetual license to use the software developed by
CLKS and identified on Exhibit "A" attached hereto in both
executable object code and source code format ("CLKS Software")
as necessary to allow NIIT to conduct the Business in
substantially the same manner as CLKS has previously conducted
the Business (the "CLKS Software License"). CLKS will not be
responsible for support and maintenance of the CLKS Software, and
NIIT may make such modifications or enhancements to the CLKS
Software as it sees fit for the exercise of the license granted
hereby.
Any modifications to the CLKS Software created by NIIT will be
NIIT's exclusive property. NIIT agrees that it shall not disclose
any of the source code for the CLKS Software to any third party
other than employees, consultants or independent contractors of
NIIT who have signed confidentiality agreements with respect to
the CLKS Software at least as protective of CLKS's rights as this
Agreement or to customers receiving portions of the source code
in connection with services deliverables created by NIIT using
the CLKS Software, with respect to such portions.
CLKS will use CLKS Software only in the context of other CLKS
products and in the conduct of business with the Washington
National Guard.
CLKS Software used predominately in the Business ("Business
Software") will be transferred to NIIT and included in the
definition of "Purchased Assets".
1.4 NIIT will not acquire and CLKS will not transfer to NIIT the
personnel and assets used to provide custom e-learning content
development services to the Washington National Guard ("WNG"),
which personnel and assets are identified on Exhibit "A". CLKS
shall be free to continue to provide custom e-learning content
development services to WNG following the Closing. This
disclosure will not in any way restrict CLKS' ability to make
changes to the personnel and asset structure of its WNG business
from that set forth on Exhibit A.
1.5 NIIT will attempt to enter into a service agreement directly with
each current CLKS Business client after the date hereof ("CLKS
Client"). CLKS will use best efforts to introduce NIIT to all
CLKS Clients and prospects listed on Exhibit "B" at mutually
acceptable times as soon as possible hereafter. NIIT will cause
appropriate personnel to be timely available for such
introductions.
1.6 All employees of the Business are identified on Exhibit "C"
("Business Employees"). NIIT will identify up to fifteen (15) key
employees of CLKS ("Key Employees") listed on Exhibit "C" whose
continued employment is, in the opinion of NIIT, critical to the
success of the Business. NIIT will offer employment to the Key
Employees shortly after Closing. NIIT shall offer such Key
Employees a salary with NIIT that is at least equal to the salary
such Key Employees are currently being paid by CLKS. Each Key
Employee will be required to sign NIIT's standard noncompetition,
non-solicitation and confidentiality agreement. Those Business
Employees not hired by NIIT may not be retained or rehired by
CLKS in any capacity for a period of three months after Closing.
Any Key Employee who does not accept NIIT's offer of employment,
any amount will not be retained or rehired by CLKS in any
capacity for a period of three years after Closing.
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1.7 NIIT is not assuming any liabilities or obligations of CLKS with
respect to the Business, all of which will be retained by CLKS
("Excluded Liabilities"), other than the obligation to comply
with the license agreements for third party software licenses
transferred.
2. REPRESENTATIONS OF CLKS
CLKS hereby represents and warrants to NIIT as follows:
2.1 CLKS is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Delaware, and has
the corporate power and authority to carry on its business as
presently conducted, to own, lease and operate its properties,
and to enter into and perform its obligations under this
Agreement.
2.2 The execution, delivery and performance of this Agreement has
been duly approved by all necessary corporate action of CLKS.
This Agreement has been duly executed and delivered by CLKS and
constitutes the legally valid and binding obligation of CLKS,
enforceable against CLKS in accordance with its terms.
2.3 CLKS owns all of the Purchased Assets and the CLKS Software free
and clear of any and all liens, charges, security interests and
encumbrances.
2.4 There is no litigation pending, or to the knowledge of CLKS,
threatened against CLKS or with respect to the Purchased Assets
or the CLKS Software (and CLKS has no knowledge of any basis for
any such litigation) which, if determined adversely to CLKS,
might individually or in the aggregate (a) prevent the
consummation of the transactions contemplated hereby, (b) have a
material adverse effect upon the Purchased Assets, or the CLKS
Software or (c) give rise to any lien, charge, security interest
or encumbrance on or against the Purchased Assets or the CLKS
Software.
2.5 CLKS has provided NIIT with true and complete copies of the
agreements in effect on the date hereof with the CLKS Clients set
forth on Schedule 3.5 hereto (collectively, the "Client
Contracts"). Except as set forth on Schedule 3.5 hereto, (a) no
dispute exists under any Client Contract, and (b) neither CLKS
nor to the best of CLKS' knowledge any other party to any of the
Client Contracts is in material default of any Client Contract
and to the best of CLKS' knowledge there is no basis therefor.
2.6 To the best of its knowledge, CLKS has not violated, infringed
upon or unlawfully used the intellectual property of any other
entity or person in connection with the provision of any services
pursuant to the Client Contracts; provided that CLKS makes no
such warranty with respect to any materials provided by CLKS
Clients in connection with such services.
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2.7 CLKS will transfer title to NIIT of all Business Software and, in
accordance with the terms thereof, the licenses for the third
party-owned computer software set forth on Exhibit "A".
2.8 The warranties expressly set forth in this agreement are the only
warranties made by CLKS, and CLKS expressly disclaims any implied
warranties and conditions whatsoever, including any implied
warranties of merchantability or fitness for a particular
purpose.
3. REPRESENTATIONS OF NIIT
NIIT hereby represents and warrants to CLKS as follows:
3.1 NIIT is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Georgia, and has the
corporate power and authority to carry on its business as
presently conducted, to own, lease and operate its properties,
and to enter into and perform its obligations under this
Agreement.
3.2 The execution, delivery and performance of this Agreement has
been duly approved by all necessary corporate action of NIIT.
This Agreement has been duly executed and delivered by NIIT and
constitutes the legal valid and binding obligation of NIIT,
enforceable against NIIT in accordance with its terms.
3.3 The warranties expressly set forth in this agreement are the only
warranties made by NIIT, and NIIT expressly disclaims any implied
warranties and conditions whatsoever.
4. ADDITIONAL COVENANTS OF THE PARTIES
4.1 CLKS covenants and agrees that it will not, directly or
indirectly, during the period commencing on the date hereof and
ending on the third anniversary of the Closing, (a) except as
otherwise herein provided regarding WNG, compete with NIIT with
respect to the Business, including performing for any party
services similar to those provided by CLKS in its conduct of the
Business, (b) operate any entity that competes with the Business,
(c) solicit CLKS' or NIIT's clients with respect to the Business
except to solicit business for NIIT. These covenants shall remain
effective for an additional two (2) years unless terminated by
either party which may be done upon ninety (90) days written
notice. Notwithstanding the foregoing, CLKS may acquire a company
that performs custom e-learning content development services,
provided such services are not the primary business of such
company, in addition to marketing other products or services that
do not compete with the Business. In such case, immediately upon
such acquisition, NIIT will have the right of first refusal to
take over the custom e-learning content development services
business for a pro rated portion of the purchase price paid by
CLKS or such other lesser consideration as may be
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agreed. In the event NIIT determines, in its sole discretion, not
to takeover, CLKS will close down or otherwise dispose of the
custom e-learning content development services operation of the
acquired company in its entirety within six months of the
acquisition. CLKS will not enter any new contracts for further
custom development work following such acquisition. During this
period, any positive gross margin from this operation will be
split between the parties 75% to NIIT and 25% to CLKS.
4.2 CLKS covenants and agrees that it will not, directly or
indirectly, during the period commencing on the date hereof and
ending on the fifth anniversary of the Closing, solicit or
recruit on CLKS' behalf or behalf of any other entity, any
employee, contractor, or agent of NIIT. NIIT covenants and agrees
that it will not, during the period commencing on the date hereof
and ending on the fifth anniversary of the Closing, directly or
indirectly solicit or recruit, on NIIT's own behalf or on the
behalf of any other entity, any employee, contractor or agent of
CLKS except for the Key Employees or as hereafter agreed in
writing by the parties.
4.3 Each party recognizes that the breach or threatened breach of any
of its obligations under sections 1.3, 4.1 or 4.2 may give rise
to irreparable injury to the other party and that such injury
will not be adequately compensable through the payment of
monetary damages. Accordingly, each party agrees that upon any
such breach or threatened breach by such party, the other party
may obtain injunctive relief to end or prevent such breach or
threatened breach, in addition to any available remedies at law.
4.4 Each party hereto will pay its own expenses (including attorney's
fees) with respect to this Agreement.
4.5 At any time and from time to time after the Closing, CLKS will,
at the request of NIIT, take any and all actions reasonably
necessary to fulfill its obligations hereunder to put NIIT in
actual possession and operating control of the Purchased Assets
and the CLKS Software License. At any time and from time to time
after the Closing, CLKS agrees that it will execute and deliver
such additional documents as may be reasonably necessary to
finalize and perfect the transfer of the Purchased Assets to NIIT
and the CLKS Software License to NIIT.
4.6 For a period commencing on the Closing and ending on the third
anniversary thereof, NIIT will be CLKS' exclusive premier
strategic partner (and NIIT will have a right of first refusal)
for custom e-learning content development for CLKS' customers and
partners, and CLKS will not introduce parties other than NIIT to
its customers and partners, except in the following
circumstances: (a) such customers/partners have indicated to CLKS
that they have a relationship with another party to provide such
services or that they do not want NIIT to provide such services
(although CLKS will first introduce NIIT to such
customers/partners) or (b) CLKS is brought into contact with a
potential
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customer/partner by a third party that provides such services
itself or through other partners. Prior to the Closing, each
party will identify a relationship manager who will be
responsible for overseeing the strategic alliance described
herein.
5. CLOSING
5.1 CLKS will deliver to NIIT at the Closing: (a) a closing
certificate signed by the President of CLKS certifying that the
representations and warranties of CLKS contained herein are true
and correct at the Closing with the same effect as though such
representations and warranties had been made on and as of the
date of Closing, and certifying that CLKS has performed and
complied with all agreements, obligations and conditions
contained in this Agreement required to be performed by it prior
to Closing, (b) a Xxxx of Sale in the form of Exhibit "D"
attached hereto, (c) a sales incentive plan for its sales force,
which will provide for targets and incentives based on sales of
content development projects, and (d) provide up to date
information to the schedules and exhibits to this Agreement
(including without limitation an updated list of the assets to be
acquired by NIIT).
5.2 NIIT shall deliver to CLKS at the Closing: (a) a closing
certificate signed by the President of NIIT certifying that the
representations and warranties of NIIT contained herein are true
and correct at the Closing with the same effect as though such
representations and warranties had been made on and as of the
date of Closing, and certifying that NIIT has performed and
complied with all agreements, obligations and conditions
contained in this Agreement required to be performed by it prior
to Closing.
5.3 It shall be a condition to NIIT's obligation to consummate the
transactions contemplated herein that CLKS provides the
information set forth on Schedule 5.3 hereof.
6. SURVIVAL OF WARRANTIES AND INDEMNIFICATION
6.1 All representations and warranties contained in this Agreement,
and the indemnification obligations contained herein, will
survive the Closing until the first (1st) anniversary of the
Closing except that the obligation of the indemnifying party with
respect to any claim, demand, action or proceeding for which
indemnification notice has been given during such one-year period
will survive until the indemnity obligation is satisfied.
Notwithstanding the foregoing, covenants which continue after the
Closing will survive for a period ending one year after such
covenants are required to be satisfied hereunder and the
indemnification provided for in Sections 6.2(c) and 6.3(b) shall
survive the Closing indefinitely.
6.2 CLKS hereby indemnifies and holds NIIT, and its affiliates,
directors, officers, employees and agents, harmless from and
against all claims, liabilities, lawsuits,
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costs, damages or expenses (including, without limitation,
reasonable attorneys' fees and expenses incurred in litigation or
otherwise) arising out of and sustained by any of them due to or
relating to (a) any misrepresentation or breach of any
representation or warranty, or breach, nonfulfillment of, or
failure to perform, any covenant, obligation or agreement of CLKS
contained in this Agreement; or (b) any of the Excluded
Liabilities; or (c) the acts or omissions of CLKS in the
operation of the business prior to Closing.
6.3 NIIT hereby indemnifies and holds CLKS and CLKS's affiliates,
directors, officers, employees and agents harmless from and
against all claims, liabilities, lawsuits, costs, damages or
expenses (including without limitation reasonable attorneys fees
and expenses incurred in litigation or otherwise) arising out of
and sustained by any of them due to or relating to any
misrepresentation or breach of any representation or warranty, or
breach, nonfulfillment of, or failure to perform any covenant,
obligation or agreement of NIIT contained in this Agreement; or
(b) the acts or omissions of NIIT in the operation of the
business after Closing.
6.4 If one party (the "Indemnitee") receives any notice of a claim or
other allegation with respect to which the other party (the
"Indemnitor") has an obligation of indemnity hereunder, then the
Indemnitee will, within 15 days of receipt of such notice, give
the Indemnitor written notice of such claim or allegation setting
forth in reasonable detail the facts and circumstances
surrounding the claim. The Indemnitee will not make any payment
or incur any costs or expenses with respect to such claim, except
as requested by the Indemnitor or as necessary to comply with
this procedure. The Indemnitee will not make any admission of
liability or take any other action that limits the ability of the
Indemnitor to defend the claim. The Indemnitor shall immediately
assume the full control of the defense or settlement of such
claim or allegation, including the selection and employment of
counsel, and shall pay all authorized costs and expenses of such
defense. The Indemnitee will fully cooperate, at the expense of
the Indemnitor, in the defense or settlement of the claim. The
Indemnitee shall have the right, at its own expense, to employ
separate counsel and participate in the defense or settlement of
the claim. The Indemnitor shall have no liability for costs or
expenses incurred by the Indemnitee, except to the extent
authorized by the Indemnitor or pursuant to this procedure.
6.5 NIIT's only remedies for a third party claim described in Section
6.2 shall be the indemnity set out in this Section 6. CLKS only
remedies for a third party claim described in Section 6.3 shall
be the indemnity set out in this Section 6.
6.6 Except as provided under its indemnities in Sections 6.2(b),
6.2(c) and 6.3(b) of this Agreement, or with respect to breaches
of its obligations of non-competition and non-solicitation, NIIT
shall not be liable for any consequential or indirect loss
incurred by CLKS or its affiliates due to any omission or
commission of NIIT, and CLKS shall not be liable for any
consequential or indirect loss incurred by NIIT or its affiliates
due to any omission or commission of CLKS.
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6.7 Except for claims described in Section 6.2(b) and (c), CLKS's
liability under this provision shall in no event exceed an amount
equal to the total amount actually payable to CLKS pursuant to
Section 1.2. Except for claims described in Section 6.3(b),
NIIT's liability under this provision shall in no event exceed an
amount equal to the total amount actually payable to CLKS
pursuant to Section 1.2.
7. MISCELLANEOUS
7.1 No finder, agent, broker or other person acting pursuant to
authority of either party is or will be entitled to any
commission, agent's, finder's or broker's fee in connection with
the transactions contemplated by this Agreement.
7.2 This Agreement will be governed by, and construed and enforced in
accordance with the substantive laws of the State of Georgia.
7.3 Except as otherwise provided in Section 4.3 hereof, all disputes,
differences or disagreements arising out of, in connection with
or in relation to this Agreement if not settled amicably shall be
finally decided by arbitration to be held in accordance with the
provisions of the Commercial Arbitration Rights of the American
Arbitration Association (the "Rules"). The venue of arbitration
shall be Atlanta, Georgia and the language of arbitration shall
be English. The arbitration shall take place before a single
arbitrator to be appointed by mutual consent of the parties
hereto or in accordance with the Rules. The award shall be
rendered in the English language, shall be final and binding on
parties, and may be entered into judgment and enforced in any
court of competent jurisdiction.
7.4 This Agreement may be executed in two (2) or more counterparts,
each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
7.5 This Agreement (a) states the entire agreement between CLKS and
NIIT relating to the subject matter hereof and supercedes all
prior discussions or writings with respect to such subject
matter, (b) may only be amended by a written document signed by
the parties hereto, and (c) will be severally binding upon and
inure to the benefit of the parties hereto and their respective
successors and assigns. Any notice that may be required to be
sent to any party to this agreement will be sent to such party at
the address of such party set forth below and will be effective
upon receipt.
7.6 No delay or omission to exercise any right, power or remedy
accruing to any party under this Agreement, upon any breach or
default of any other party under this Agreement, will impair any
such right, power or remedy of such non-breaching or
non-defaulting party nor will it be construed to be a waiver of
any such breach or default, or an acquiescence therein, or of or
in any similar breach or default thereafter occurring; nor will
any waiver of any single breach or default be deemed a waiver of
any other breach or default theretofore or thereafter
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occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any party of any breach or default under
this Agreement, or any waiver on the part of any party of any
provisions or conditions of this Agreement, must be in writing
and will be effective only to the extent specifically set forth
in such writing. All remedies, either under this Agreement or by
law or otherwise afforded to any party, will be cumulative and
not alternative.
7.7 If any provision of this Agreement is held to be unenforceable
for any reason, it will be adjusted rather than voided, if
possible, in order to achieve the intent of the parties to the
extent possible. In any event, all other provisions of this
Agreement will be deemed valid and enforceable to the full extent
possible.
7.8 The signatories hereto each represent and warrant that he or she
is authorized to sign this Agreement on behalf of the indicated
party and that this Agreement will, by his or her signature, be a
binding and an enforceable obligation of the indicated party.
The undersigned have executed this Asset Purchase Agreement as of the day and
year first above written.
NIIT USA, INC. Click2learn, Inc.
1050 Crown Pt. Pkwy. 000 -- 000xx Xxxxxx XX
#000 Xxxxx 000
Xxxxxxx, Xxxxxxx 00000 Xxxxxxxx, XX 00000
By:____________________________ By:____________________________
Name:__________________________ Name:__________________________
Title:___________________________ Title:___________________________
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EXHIBIT `A'
PURCHASED ASSETS, CLKS SOFTWARE LICENSED AND THIRD PARTY COMMERCIAL
SOFTWARE LICENSES ASSIGNED
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EXHIBIT `B'
CLKS CLIENTS AND PROSPECTS
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EXHIBIT `C'
BUSINESS EMPLOYEES AND KEY EMPLOYEES
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EXHIBIT `D'
FORM OF XXXX OF SALE
SEE ATTACHED.
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SCHEDULE 1.2(b)
Payment schedule for contingent payment to CLKS:
Contingent payments are based on total revenues to NIIT from any of the
following ("Qualified Revenue"): (a) custom content development projects
referred, outsourced or subcontracted to NIIT by CLKS; (b) consulting,
implementation or integration projects referred, outsourced or subcontracted to
NIIT by CLKS; and (c) payments made by CLKS to NIIT for contract Research and
Development services. Qualified Revenues are deemed to be earned when the
revenue is under contract to be delivered within 24 months from the contract
date, i.e., when an order for the work to be delivered within 24 months has been
placed with NIIT and accepted by them. However in the case of Research and
Development work assigned to NIIT by CLKS, Qualified Revenues are deemed to be
earned when the revenue is under contract to be delivered within the year, and a
sum not exceeding $0.5M beyond the year. Contingent payments are based on
cumulative Qualified Revenues during 2002 and 2003 and are due as follows:
December 31, 2002:
If Qualified Revenue is: Contingent Payment* is:
----------------------- ----------------------
Less than $4,000,000 None
$4,000,000 to $8,599,999 $500,000 + $1.00 for every $9.00 of Qualified Revenue over $4,000,000
$8,600,000 and over $1,000,000
*December 31,2002 contingent payment may rollover into 2003 as described below.
December 31, 2003:
If Qualified Revenue is: Contingent Payment is:
----------------------- ---------------------
Less than $12,600,000 None other than 2002 rollover payment (if applicable)
$12,600,000 to $17,099,999 $500,000 + $1.00 for every $9.00 of Qualified Revenue over $12,500,000
$17,100,000 and over $1,000,000
Rollover of December 31, 2002 payment:
If the December 31, 2002 contingent payment is less than $1,000,000, then the
contingent payment may rollover into 2003 and will come due at the following
times:
- If there was no contingent payment due at December 31, 2002, then
$500,000 becomes due when cumulative Qualified Revenue equals $4,000,000
and an additional $500,000 when cumulative Qualified Revenue equals
$8,600,000; provided that if at December 31, 2003 the cumulative
Qualified Revenue is between $4,000,000 and $8,600,000, then the
contingent payment due at December 31, 2003 will be $1.00 for every
$9.00 of cumulative Qualified Revenue over $4,000,000.
- If there was a contingent payment due at December 31, 2002 but such
payment was less than $1,000,000, then the difference between $1,000,000
and the contingent payment actually made on December 31, 2002 becomes
due when cumulative qualified revenue equals $8,600,000; provided that
if at December 31, 2003 the cumulative Qualified Revenue is between
$4,000,000 and $8,600,000, then the contingent payment due at December
31, 2003 will be $1.00 for every $9.00 of cumulative Qualified Revenue
received during 2003.
Any rollover payment will be due 30 days from the date the Qualified Revenue
target at which such payment is earned is achieved.
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Records and Audit. NIIT shall keep accurate records and books of account
concerning the calculation of contingent payments (or, as to Schedule 1.2(c),
commission) due to CLKS as may be required to adequately determine and verify
the amounts owed CLKS hereunder, which records shall be preserved by NIIT in a
safe place for a period of two years following the applicable report date.
During such time, CLKS or its independent certified public accountants shall
have the right, at CLKS expense, to audit during NIIT's regular business hours
and upon reasonable notice to NIIT, NIIT's records concerning the calculation of
contingent payment (or, as to Schedule 1.2(c), commission) for the purpose of
verifying the amount of the payments due to CLKS hereunder. If an audit reveals
that NIIT has underpaid the amounts due to CLKS, NIIT shall promptly pay to CLKS
the amount of the underpayment together with any late fees from the date or
dates any unpaid amounts would originally have become due. If such underpayment
exceeds 5% of the total amount actually owed, NIIT shall promptly reimburse CLKS
for its costs and expenses in performing such audit. If such audit reveals that
NIIT has overpaid, CLKS shall refund the amount of the overpayment or provide
NIIT with a credit on its account in the amount of the overpayment, which shall
be applied against the next contingent payments (or, as to schedule
1.2(c),commissions) becoming due.
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SCHEDULE 1.2(c) - COMMISSION PLAN
All Business revenue to NIIT through CLKS's relationships including (a) current
clients; (b) strategic partnerships transferred to NIIT; and (c) introductions
made by CLKS and accepted by NIIT will be counted toward fulfilling the
Commission Plan obligations ("Revenue").
YEAR TARGET QUALIFIED REVENUE COMMISSION PAYABLE
---- ------------------------ ------------------
2002 $2M None
$2M - $8.60M 5% for content development
10% for implementation services
Beyond $8.60M 10% for content development
15% for implementation services
2003 Up to $8.5 M 5% for content development
10% for implementation services
Beyond $8.5 M 10% for content development
15% for implementation services
2004 Any new business 10% for content development
15% for implementation services
2005-2006* Any new business 10% for content development
15% for implementation services
Terms
- CLKS may choose to roll over revenue beyond $8M in the first year to the
second year. In that case, the additional commission will not be payable
for the revenue rolled over in the 1st year
- Commission will be paid upon collection, but accrues at time of contract
execution, i.e, if a contract on which commission is payable is signed
during 2006 but payment is not collected until 2007, commission is still
payable
- Contract Research and Development services and other such CLKS work
contracted to NIIT will not be eligible for commissions but will count
as Qualified Revenue.
- All revenue counts as Qualified Revenue for contingent payments, even if
no commission is payable.
* The extension to years 2005-2006 is subject to continuance of the
non-compete for content development
Payments and Reporting. NIIT shall make quarterly payments of
commissions in accordance with the reports described below. Reports and payment
are due 30 days following the end of each calendar quarter. All payments
hereunder shall be in United States dollars. NIIT shall pay CLKS a finance
charge of 1.5% per month on all amounts which are past due.
Reports. NIIT will furnish CLKS with quarterly reports containing
information sufficient for CLKS to determine the amount of commission due and
shall be in a format mutually agreed by the parties. Such reports shall be in
provided electronically in Microsoft Excel spreadsheet format suitable for use
on Windows based personal computers.
THE SECTION ON SCHEDULE 1.2(b) ENTITLED "RECORDS AND AUDIT" SHALL APPLY TO THE
COMMISSION PLAN SET FORTH HEREIN.
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NIIT Entities. NIIT and CLKS acknowledge and agree that the contracts on
which commissions are payable may be entered by NIIT or a party controlling,
controlled by or under common control with NIIT ("NIIT Companies") in the
discretion of the NIIT Companies. Notwithstanding which of the NIIT Companies is
the party to a contract on which commissions are payable, NIIT shall be
responsible for the payment and reporting of such commissions to CLKS.
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SCHEDULE 2.5
LIST OF CLIENT CONTRACTS, SIGNIFICANT DISPUTES AND CERTAIN DEFAULTS
List of Client Contracts:
Significant disputes under any Client Contracts:
Clients in material default under Client Contracts:
Claim or possible claim of Client of a material default by CLKS:
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