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EXHIBIT 10.9
MASTER CONSULTING SERVICES AGREEMENT
THIS MASTER CONSULTING SERVICES AGREEMENT (this "Agreement"), made and entered
into this 21 day of December, 1999 ("Effective Date"), by and between SeraNova,
Inc. and Intelligroup, Inc. collectively (hereinafter "SeraNova"), New Jersey
corporations, and Xxxxxxx/Xxxxxxx (hereinafter "Consultant"), a California
corporation:
Recitals:
Consultant represents that it has expertise in the area of sales, marketing,
training, and strategic planning, and is ready, willing, and able to provide
consulting assistance to SeraNova on the terms and conditions set forth herein;
and
SeraNova, in reliance on Consultant's representations, is willing to engage
Consultant as an independent contractor, and not as an employee, on the terms
and conditions set forth herein;
NOW THEREFORE, in consideration of the obligations herein made and undertaken,
the parties, intending to be legally bound, hereby agree as follows:
SECTION 1. SCOPE OF SERVICES
1.1 Consultant shall provide consulting services (the "Services") as set
forth in the Intelligroup, Inc. Integrated Sales and Marketing Program
for NewCo Proposal Version 2.4 dated October 12, 1999 (the "Proposal")
and submitted by Consultant to SeraNova. Consultant shall render such
Services and deliver the required reports and other deliverables
("Deliverables") in accordance with the timetable and milestones set
forth in Exhibit A and the Proposal. In the event Consultant
anticipates at any time that it will not reach one or more milestones
or complete one or more assignments within the prescribed timetable,
Consultant shall immediately so inform SeraNova by written notice,
submit proposed revisions to the timetable and milestones that reflect
Consultant's best estimates of what can realistically be achieved, and
continue to work under the original timetable and milestones until
otherwise directed by SeraNova. Consultant shall also prepare and
submit such further reports of its performance and its progress as set
forth in the Proposal and as SeraNova may reasonably request from time
to time.
1.2 Consultant shall provide and make available to SeraNova such resources
as shall be necessary to perform the Services called for by this
Agreement. Such resources shall include the key employees (Key
employees) named by the parties and listed in Exhibit B, as amended in
writing by the parties from time to time. If any such Key Employee
leaves the employ of Consultant during the term of this Agreement for
any reason or is unavailable to continue work at the specified level of
commitment (full-time, X number of hours/week, etc.) called for herein,
and if substitute individuals acceptable to SeraNova are not available
to continue the work within 5 business days, SeraNova shall have the
right to terminate this Agreement pursuant to Section 2.2 hereof.
1.3 SeraNova shall, within 10 business days of receipt of each Deliverable
submitted to SeraNova, advise Consultant of SeraNova's acceptance or
rejection of such Deliverable. Any rejection shall specify the nature
and scope of the deficiencies in such Deliverable. Consultant shall,
upon receipt of such rejection, act diligently, but in no event later
than 10 business days to correct such deficiencies.
1.4 All work shall be performed in a workmanlike and professional manner by
employees of Consultant having a level of skill and experience in the
area commensurate with the requirements of the scope of
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work to be performed. Consultant shall make sure its employees at all
times observe security and safety policies of SeraNova while on
SeraNova's site.
1.5 SeraNova and Consultant shall develop appropriate administrative
procedures to apply to Consultant's personnel. SeraNova shall
periodically prepare an evaluation of the performance of Consultant's
personnel.
1.6 SeraNova may interview the Consultant's personnel assigned to
SeraNova's work. Consultant shall have the right, at any time, to
request removal of any employee(s) of Consultant whom SeraNova deems to
be unsatisfactory. Upon such request, Consultant shall use its best
efforts to promptly replace such employee(s) with substitute
employee(s) having appropriate skills and training within two business
days.
1.7 Anything herein to the contrary notwithstanding, the parties hereby
acknowledge and agree that SeraNova shall have no right to control the
manner, means, or method by which Consultant performs the Services
called for by this Agreement. Rather, SeraNova shall be entitled only
to direct Consultant with respect to the elements of Services to be
performed by Consultant and the results to be derived by SeraNova, to
inform Consultant as to where and when such Services shall be
performed, and to review and assess the performance of such Services by
Consultant for the limited purposes of assuring that such Services have
been performed and confirming that such results were satisfactory.
SECTION 2. TERM OF AGREEMENT
2.1 This Agreement shall commence on the Effective Date, and unless
modified by mutual agreement of the parties or terminated earlier
pursuant to the terms of this Agreement, shall continue until the
satisfactory completion of the Services.
2.2 This Agreement may be terminated by either party upon sixty (60)
business days' prior written notice, if the other party breaches any
term hereof and the breaching party fails to cure such breach within
such sixty (60) business day period.
2.3 This Agreement may be terminated by SeraNova at its discretion upon
thirty (30) business days' prior written notice.
2.4 Upon termination of this Agreement for any reason, SeraNova shall pay
the Consultant for all services performed in accordance with the
Milestone Payment Schedule as well as the Cancellation Fee specified in
Exhibit A. Consultant shall promptly return to SeraNova all copies of
any SeraNova data, records, or materials of whatever nature or kind,
including all materials incorporating the proprietary information of
SeraNova and all work for hire pursuant to this Agreement. Consultant
shall furnish to SeraNova all works in progress or portions thereof,
including all incomplete work.
2.5 In the event of termination, Consultant will assist SeraNova in the
orderly termination of the Services and/or any applicable attachments
hereto, and the transfer of all items and Work Product (defined below),
tangible and intangible, as may be necessary for the orderly,
non-disrupted business continuation of Consultant; and shall promptly
deliver to SeraNova, upon the expiration or termination of all or part
of the Services, complete and correct copies of all Work Product
(including any related source code) in the form and on the media in use
as of the date of such expiration or termination.
2.6 Upon termination by SeraNova, SeraNova shall have no liability for any
payments accruing for Services performed after the termination date.
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SECTION 3. FEES, EXPENSES AND PAYMENT
3.1 In consideration of the Services to be performed by Consultant,
SeraNova shall, within thirty (30) days of receipt of an invoice for
each milestone, as set forth in the Milestone Payment Schedule in
Exhibit A attached hereto, pay Consultant the fees due pursuant to such
Milestone Payment Schedule, as well as provide the Shared Risk/Shared
Reward Compensation and Stock Options in Exhibit A.
3.2 In the event Consultant terminates this Agreement because of a material
breach by SeraNova, Consultant shall be entitled to a pro rata payment
for work in progress based on the percentage of work then completed as
well as the Cancellation Fees in Exhibit A. No such pro rata payment
shall be made if SeraNova terminates this Agreement because of a breach
of Consultant.
3.3 Consultant agrees that the fees and charges for any follow-on or
additional work not included in the Proposal attached hereto shall be
performed at the lesser of (1) Consultant's then-current rates for such
work as charged to Consultant's most favored customer receiving similar
services, or (2) the rates applicable to the scope of work fixed by
this Agreement, including any discount previously applied to the work
set forth in the proposal. In the event any payment is delinquent under
this Agreement, all amounts due and owing shall accrue interest at
eight percent per annum.
SECTION 4. CONSULTANT PERSONNEL
4.1 Consultant shall bear sole responsibility for payment of compensation
to its personnel. Consultant shall pay and report, for all personnel
assigned to SeraNova's work, federal and state income tax withholding,
social security taxes, and unemployment insurance applicable to such
personnel as employees of Consultant. Consultant shall bear sole
responsibility for any health or disability insurance, retirement
benefits, or other welfare or pension benefits (if any) to which such
personnel may be entitled. Consultant agrees to defend, indemnify and
hold harmless SeraNova, SeraNova's officers, directors, employees and
agents, and the administrators of SeraNova's benefit plans from and
against any claims, liabilities or expenses relating to such
compensation, tax, insurance or benefit matters; provided that SeraNova
shall promptly notify Consultant of each such claim when and as it
comes to SeraNova's attention. SeraNova shall cooperate with Consultant
in the defense and resolution of such claims, and SeraNova shall not
settle or otherwise dispose of such claims without Consultant's prior
written consent; such consent not to be unreasonably withheld.
4.2 Notwithstanding any other workers' compensation or insurance policies
maintained by SeraNova, Consultant shall procure and maintain workers'
compensation coverage sufficient to meet the statutory requirements of
every state where Consultant's personnel assigned to SeraNova's work
are located.
4.3 Consultant shall obtain and maintain in effect written agreements with
each of its personnel who participate in any of SeraNova's work
hereunder. Such agreements shall contain terms sufficient for
Consultant to comply with all provisions of this Agreement.
4.4 As neither Consultant nor its personnel are SeraNova's employees,
SeraNova shall not take any action or provide Consultant's personnel
with any benefits or commitments inconsistent with any of such
undertakings by Consultant. In particular, SeraNova will not withhold
FICA (Social Security) from Consultant's payments; make state or
federal unemployment insurance contributions on behalf of Consultant or
its personnel; withhold state and federal income tax from payment to
Consultant; make disability insurance contributions on behalf of
Consultant; and obtain workers' compensation insurance on behalf of
Consultant or its personnel.
SECTION 5. INTELLECTUAL PROPERTY RIGHTS
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5.1 All rights, titles and interests in and to the programs, systems, data,
reports, audio and video materials, databases, or other materials used
or produced by Consultant in the performance of the Services called for
in this Agreement, including any modifications, enhancements, or
derivative works thereof, shall remain or become the property of
Consultant.
5.2 All rights, titles and interests in and to all Deliverables and other
materials provided pursuant to this Agreement, including all rights in
copyrights, research, databases created specifically for SeraNova,
domain names and internet addresses, or other intellectual property
rights pertaining thereto ("Work Product"), shall be held by SeraNova,
and all Work Product shall, to the extent possible, be considered works
made by Consultant for hire for the benefit of SeraNova. Consultant
shall xxxx all Work Product with SeraNova's copyright or other
proprietary notices as directed by SeraNova and shall take all actions
deemed necessary by SeraNova to protect SeraNova's rights therein. In
the event that the Work Product does not constitute work made by
Consultant for hire for the benefit of SeraNova under applicable law,
or in the event that Consultant otherwise retains any rights to any
Work Product, Consultant agrees to assign, and upon creation thereof
hereby automatically assigns, all rights, titles, and interests in and
to such Work Product to SeraNova, without further consideration.
Consultant agrees to execute any documents of assignment or
registration of copyright requested by SeraNova respecting any and all
Work Product.
5.3 All rights, titles and interests in and to any programs, systems, data,
and materials furnished to Consultant by SeraNova are and shall remain
the property of SeraNova.
5.4 Notwithstanding the above, neither party shall be prevented from making
use of know-how and principles learned or experience gained of a
non-proprietary and non-confidential nature.
SECTION 6. CONFIDENTIAL INFORMATION
6.1 Consultant acknowledges that in order to perform the Services called
for in this Agreement, it shall be necessary for SeraNova to disclose
to Consultant certain trade secret(s) or other confidential and
proprietary information that has been developed by SeraNova at great
expense and that required considerable effort of skilled professionals
("Confidential Information"). As used herein, the term Confidential
Information shall mean any scientific or technical data, marketing or
strategic business information, design, process, procedure, formula,
methodology, or improvement that is commercially valuable to SeraNova
and not generally known in the industry. Confidential Information shall
not include information which is:
a. independently developed by Consultant or already
known by Consultant prior to Consultant's receipt of
Confidential Information and without violating its
obligations hereunder or any of SeraNova's
proprietary rights;
b. publicly known (other than through unauthorized
disclosure by Consultant);
c. disclosed by SeraNova to a third party without any
obligation of confidentiality; or
d. required to be disclosed by Consultant pursuant to
any applicable law or order of court (provided that
consultant shall provide reasonable prior written
notice to SeraNova of such disclosure).
Consultant agrees that it shall not disclose, transfer, use, copy, or
allow access to any such Confidential Information to any employees or
to any third parties, except for those who have a need to know such
Confidential Information in order to accomplish the requirements of
this Agreement and who are bound
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by contractual obligations of confidentiality and limitation of use
sufficient to give effect to this Section 6. Consultant further
acknowledges that the Work Product will of necessity incorporate such
Confidential Information. In no event shall Consultant disclose any
such Confidential Information to any competitors of SeraNova or to
third parties generally.
6.2 The parties agree to hold the nature and terms of this Agreement as
Confidential Information and Consultant shall not disclose the nature
of the effort undertaken for SeraNova or the terms of this Agreement to
any other person or entity, except as may be necessary to fulfill
Consultant's obligations hereunder, or as required by law.
6.3 Consultant shall not at any time use SeraNova's name or any SeraNova
trademark(s) or trade name(s) in any advertising or publicity without
the prior written consent of SeraNova.
6.4 The obligations set forth in this Section shall survive termination of
this Agreement and continue for so long as the relevant information
remains proprietary or Confidential Information.
SECTION 7. WARRANTIES
7.1 Consultant warrants that:
a. Consultant's performance of the Services called for
by this Agreement do not and shall not violate any
applicable law, rule, or regulation; any contracts
with third parties; or any third-party rights in any
patent, trademark, copyright, trade secret, or
similar right; and
b. Consultant is the lawful owner or licensee of any
software programs or other materials used by
Consultant in the performance of the Services called
for in this Agreement and has all rights necessary to
convey to SeraNova the unencumbered ownership of Work
Product.
b. Consultant warrants that all SeraNova data and
information in Consultant's possession or accessible
by Consultant are and shall remain the property of
SeraNova. The SeraNova data and information shall not
be: (i) used by Consultant other than in connection
with providing the Services; (ii) disclosed, sold,
assigned, leased or otherwise provided to third
parties by Consultant; or (iii) commercially
exploited by or on behalf of Consultant or any other
third party.
d. Consultant warrants that it shall establish and
maintain safeguards against the destruction, loss,
alteration or unauthorized disclosure of the SeraNova
data and information in Consultant's possession in
accordance with SeraNova's security standards as
notified by SeraNova to Consultant from time to time,
including use of secure passwords and login IDs.
SECTION 8. INDEMNIFICATION AND EXCLUSION OF DAMAGES
8.1 Consultant hereby indemnifies and agrees to hold harmless SeraNova from
and against any and all claims, demands, and actions, and any
liabilities, damages, or expenses resulting therefrom, including court
costs and reasonable attorney fees, arising out of or relating to the
Services performed by Consultant hereunder or any breach of the
warranties made by Consultant pursuant to Section 8 hereof.
Consultant's obligations under this Section 9.1 shall survive the
termination of this Agreement for any reason. SeraNova agrees to give
Consultant prompt notice of any such claim, demand, or action and
shall, to the extent SeraNova is not adversely affected, cooperate
fully with Consultant in defense and settlement thereof.
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8.2 EXCEPT IN THE EVENT OF BREACH OF SECTIONS 5, 7, 8, OR 9.1, NEITHER
PARTY SHALL BE LIABLE FOR ANY INDIRECT, CONSEQUENTIAL, INCIDENTAL,
SPECIAL, PUNITIVE OR EXEMPLARY DAMAGES WHETHER ARISING UNDER CONTRACT,
WARRANTY, OR TORT (INCLUDING NEGLIGENCE OR STRICT LIABILITY) OR ANY
OTHER THEORY OF LIABILITY, REGARDLESS OF WHETHER SUCH PARTY KNEW OR
SHOULD HAVE KNOWN OF THE POSSIBILITY OF SUCH DAMAGES.
SECTION 9. NON-COMPETITION
9.1 Consultant hereby agrees that during the term of this Agreement and for
a period of twelve (12) months thereafter it will not directly or
indirectly offer substantially similar services to another entity that
develops, offers, or provides Internet or Enterprise Information Portal
("EIP") services to substantially the same or similar markets as
SeraNova, as described in the Proposal, without SeraNova's prior
written consent.
SECTION 10. MISCELLANEOUS
10.1 Consultant shall not assign, transfer, or subcontract this Agreement or
any of its obligations hereunder without the prior written consent of
SeraNova; provided, however, that Consultant may assign its right to
receive payments hereunder to such third parties as Consultant may
designate by written notice to SeraNova.
10.2 This Agreement shall be governed and construed in all respects in
accordance with the laws of the State of New Jersey as they apply to a
contract executed, delivered and performed solely in such State.
10.3 The parties are and shall be independent contractors to one another,
and nothing herein shall be deemed to cause this Agreement to create an
agency, partnership, or joint venture between the parties. Nothing in
this Agreement shall be interpreted or construed as creating or
establishing the relationship of employer and employee between SeraNova
and either Consultant or any employee or agent of Consultant.
10.4 Consultant shall, at is sole expense, obtain and carry in full force
and effect, during the term of this Agreement, insurance coverage of
the types and in the amounts listed in Exhibit A. Upon the request of
SeraNova, Consultant shall provide SeraNova with evidence satisfactory
to SeraNova of such insurance.
10.5 All remedies available to either party for one or more breaches by the
other party are and shall be deemed cumulative and may be exercised
separately or concurrently without waiver of any other remedies. The
failure of either party to act in a breach of this Agreement by the
other shall not be deemed a waiver of such breach or a waiver of future
breaches, unless such waiver shall be in writing and signed by the
party against whom enforcement is sought.
10.6 All notices required or permitted hereunder shall be in writing
addressed to the respective parties as set forth below, unless another
address shall have been designated, and shall be delivered by hand or
by registered or certified mail, postage prepaid.
10.7 This Agreement constitutes the entire agreement of the parties hereto
and supersedes all prior representations, proposals, discussions, and
communications, whether oral or in writing. This Agreement may be
modified only in writing and shall be enforceable in accordance with
its terms when signed by the party sought to be bound.
10.8 The parties covenant and agree that, subsequent to the Effective Date
and without any additional consideration, each of the parties shall
execute and deliver any further legal instruments and perform any acts
which are or may become necessary to effectuate the purposes of this
Agreement.
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10.9 In the event of a conflict or an inconsistency between this Agreement,
the Proposal, and any Exhibit attached hereto, the Exhibit shall govern
this Agreement and this Agreement shall govern the Proposal.
10.10 Any dispute or controversy arising under or relating to this Agreement
or the relationship between the parties created by this Agreement shall
be resolved by final and binding arbitration under the auspices of the
American Arbitration Association. The parties shall have the right to
conduct reasonable discovery and the hearing shall be held as promptly
as possible. In the event any legal action is necessary to enforce or
interpret this Agreement, the prevailing party shall recover all costs
and attorneys' fees.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives, on the date and year first above written.
[SeraNova] [Xxxxxxx/Xxxxxxx]
By: /s/ Xxx Xxxxxx By: /s/ Xxxxxxx X. Xxxxxxx
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Xxx Xxxxxx Xxxxxxx X. Xxxxxxx
Title: Title: CEO, Xxxxxxx/Xxxxxxx
CEO, SeraNova, Inc.
Address for correspondence: Address for correspondence:
000 Xxxxxxxx Xxxxxx 00000 Xxxxx Xxxxxxx
Xxxxxx, XX 00000 Building 100
Xxxxxx, XX 00000
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EXHIBIT A - DELIVERABLES
MONTH SCHEDULE OF WORK
October 1999 - Kickoff meeting
- Assign M/S team members
- Develop and finalize the research strategy and questionnaire
- Start research interviews
- Develop Class "A" lead definition, lead distribution protocol, lead
form, and lead generation questionnaire
- IT setup for marketing database
- List purchase and prospect database build
- Weekly reporting
November 1999 - Continue with research questionnaire interviews
- Data entry of research interviews
- Begin the development of the sales training program
- Interim market research analysis and report
- Begin development on corporate brochure
- Begin creative development for corporate identity program
- Begin creative development for marketing programs (direct mail, seminar
program, and advertising)
- Begin the telecontact demand generation program
- Monthly review meeting
- Develop lead tracking/pipeline report and system
December 1999 - Complete research questionnaire interviews and data entry
- Code, tabulate, and analysis market data
- Develop market research report and recommendations
- Present market research findings
- Complete creative development of corporate identity program
- Finalize copy for corporate brochure
- Begin development of planning guide
- Develop initial creatives for the marketing programs and begin the
market testing
- Begin the prospect database build for the seminar and direct marketing
programs
- Final selection of seminar sites
- Continue development of the sales training program
- Continue the telecontact demand generation program
- Continue lead tracking/pipeline report
- Program management
- Weekly reporting
- Monthly status review meeting
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MONTH SCHEDULE OF WORK
January 2000 - Finalize planning guide
- Print corporate brochure
- Develop the collateral carrier and envelope
- Begin development of data sheets
- Begin development
of proposal template program
- Complete the sales
training materials
- Continue development of the
sales training program
- Complete market testing of
creatives and finalize the creatives
- Review creatives for the marketing programs (direct mail, advertising,
and seminar programs)
- Finalize the prospect database build for seminar and direct mail
programs
- Continue the telecontact demand generation program
- Continue lead tracking/pipeline report
- Program management
- Weekly reporting
- Monthly status review meeting
February 2000 - Print the planning guide
- Print the collateral carrier and envelope
- Finalize copy and creative for data sheets
- Complete development of the white papers
- Complete development of proposal template program
- Develop and finalize telecontact scripts for the direct marketing and
seminar programs
- Continue development of the sales training program
- Finalize all creatives for marketing programs
- Mail invitations for the first seminar
- Begin telecontact program in support of the seminar program
- Begin seminar confirmation and reminder programs
- Trade show consulting
- Implement wave 1A of direct marketing program
- Begin telecontact program in support of the direct marketing program
- Develop and implement collateral fulfillment program
- Begin lead qualification, distribution, and reporting
- Continue lead tracking/pipeline report
- Program management
- Weekly reporting
- Monthly status review meeting
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MONTH SCHEDULE OF WORK
March 2000 - On-site management and setup of first seminar
- First seminar held
- Qualify and distribute all leads from the seminar
- Mail invitations for the second seminar
- Continue telecontact program in support of the seminar program
- Continue seminar confirmation and reminder programs
- Continue telecontact program in support of the direct marketing program
- Continue collateral fulfillment program
- Continue lead qualification, distribution, and reporting
- Continue lead tracking/pipeline report
- Deliver first sales training class
- Program management
- Weekly reporting
- Monthly status review meeting
April 2000 - On-site management and setup of second seminar
- Second seminar held
- Qualify and distribute all leads from the seminar
- Mail invitations for the third seminar
- Continue telecontact program in support of the seminar program
- Continue seminar confirmation and reminder programs
- Implement wave 1B of direct marketing program
- Continue telecontact program in support of the direct marketing program
- Continue collateral fulfillment program
- Continue lead qualification, distribution, and reporting
- Continue lead tracking/pipeline report
- Program management
- Weekly reporting
- Monthly status review meeting
May 2000 - On-site management and setup of third seminar
- Third seminar held
- Qualify and distribute all leads from the seminar
- Mail invitations for the fourth seminar
- Continue telecontact program in support of the seminar program
- Continue seminar confirmation and reminder programs
- Continue telecontact program in support of the direct marketing program
- Continue collateral fulfillment program
- Continue lead qualification, distribution, and reporting
- Continue lead tracking/pipeline report
- Program management
- Weekly reporting
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MONTH SCHEDULE OF WORK
- Monthly status review meeting
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MONTH SCHEDULE OF WORK
June 2000 - Implement wave 2A of direct marketing program
- On-site management and setup of fourth seminar
- Fourth seminar held
- Qualify and distribute all leads from the seminar
- Continue seminar confirmation and reminder programs
- Continue telecontact program in support of the direct marketing program
- Continue collateral fulfillment program
- Continue lead qualification, distribution, and reporting
- Conduct sales training course
- Program management
- Weekly reporting
- Monthly status review meeting
July 2000 - Continue telecontact program in support of the direct marketing program
- Continue collateral fulfillment program
- Continue lead qualification, distribution, and reporting
- Continue lead tracking/pipeline report
- Program management
- Weekly reporting
- Monthly status review meeting
August 2000 - Continue telecontact program in support of the direct marketing program
- Continue collateral fulfillment program
- Continue lead qualification, distribution, and reporting
- Continue lead tracking/pipeline report
- Program management
- Weekly reporting
- Monthly status review meeting
September 2000 - Implement wave 2B of direct marketing program
- Continue telecontact program in support of the direct marketing program
- Continue collateral fulfillment program
- Conduct sales training course
- Continue lead qualification, distribution, and reporting
- Continue lead tracking/pipeline report
- Conduct sales training course
- Program management
- Weekly reporting
- Monthly status review meeting
October 2000 - Conduct sales training course
- Continue telecontact program in support of the direct marketing program
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MONTH SCHEDULE OF WORK
- Continue collateral fulfillment program
- Continue lead qualification, distribution, and reporting
- Continue lead tracking/pipeline report
- Program management
- Weekly reporting
- Monthly status review meeting
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MONTH SCHEDULE OF WORK
November 2000 - Continue telecontact program in support of the direct marketing program
- Continue collateral fulfillment program
- Conduct sales training course
- Continue lead qualification, distribution, and reporting
- Continue lead tracking/pipeline report
- Program management
- Weekly reporting
- Monthly status review meeting
December 2000 - Continue telecontact program in support of the direct marketing program
- Continue collateral fulfillment program
- Conduct sales training course
- Continue lead qualification, distribution, and reporting
- Continue lead tracking/pipeline report
- Program management
- Weekly reporting
- Monthly status review meeting
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SERANOVA MILESTONE PAYMENT SCHEDULE
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MILESTONE PAYMENT SCHEDULE
------------------------------- -------------------------------- ---------------------------
INVOICE DATE PAYMENT DUE MONTHLY MILESTONE PAYMENT
SCHEDULE
------------------------------- -------------------------------- ---------------------------
October 1, 1999 Deposit Due Upon Receipt $294,905
------------------------------- -------------------------------- ---------------------------
November 1, 1999 November 30, 1999 $503,630
------------------------------- -------------------------------- ---------------------------
December 1, 1999 December 31, 1999 $401,465
------------------------------- -------------------------------- ---------------------------
January 15, 2000 February 15, 2000 $520,000
------------------------------- -------------------------------- ---------------------------
February 1, 2000 February 29, 2000 $520,000
------------------------------- -------------------------------- ---------------------------
March 1, 2000 March 31, 2000 $560,000
------------------------------- -------------------------------- ---------------------------
April 15, 2000 May 15, 2000 $644,714
------------------------------- -------------------------------- ---------------------------
May 1, 2000 May 31, 2000 $573,915
------------------------------- -------------------------------- ---------------------------
June 1, 2000 June 30, 2000 $232,041
------------------------------- -------------------------------- ---------------------------
July 1, 2000 July 31, 2000 --
------------------------------- -------------------------------- ---------------------------
August 1, 2000 August 31, 2000 --
------------------------------- -------------------------------- ---------------------------
September 1, 2000 September 30, 2000 --
------------------------------- -------------------------------- ---------------------------
October 1, 2000 October 31, 2000 --
------------------------------- -------------------------------- ---------------------------
November 1, 2000 November 30, 2000 --
------------------------------- -------------------------------- ---------------------------
December 1, 2000 December 31, 2000 --
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TOTAL PROGRAM INVESTMENT $4,250,670
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SHARED RISK/SHARED REWARD COMPENSATION
Xxxxxxx/Xxxxxxx will receive additional compensation based on the actual
quarterly revenues generated in the United States by SeraNova according to the
schedule below.
The quarterly revenue goals (generated in the United States) on which this
compensation will be based:
Q1 2000 $12,070,000
Q2 2000 $15,964,000
Q3 2000 $19,345,000
Q4 2000 $23,821,000
The compensation that Xxxxxxx/Xxxxxxx will receive for each quarter is:
- If the actual quarterly revenue is less than 80% of the goal of that
quarter, Xxxxxxx/Xxxxxxx will receive no compensation for that quarter.
- The compensation for the quarter will be 3.1% of the actual incremental
revenue over 80% of the quarterly revenue goal.
- If the actual revenue achieved is over 100%, Xxxxxxx/Xxxxxxx will
receive an additional 5% of the actual incremental revenue over 100% of
the quarterly revenue goal.
- The compensation will not exceed $150,000 for each quarter.
Examples of how the compensation would be calculated are included in the
following table
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Quarter Actual Revenue Achieved Total Compensation
--------------------------- ------------------------------ ----------------------
Q1 2000 $12,000,000 $73,000
--------------------------- ------------------------------ ----------------------
X0 0000 $16,000,000 $101,000
--------------------------- ------------------------------ ----------------------
X0 0000 $20,000,000 $150,000
--------------------------- ------------------------------ ----------------------
X0 0000 $24,000,000 $150,000
--------------------------- ------------------------------ ----------------------
The calculated compensation will be paid within the 30 days after a quarter is
completed. Example, the Q1 2000 payment would be due on April 30, 2000.
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A. Stock Options
Xxxxxxx/Xxxxxxx is hereby granted options to buy 15,000 shares of SeraNova
common stock, at a strike price of $6.66 per share exercisable after January 1,
2000. The rights to exercise these options will expire on December 31, 2000.
In addition, Xxxxxxx/Xxxxxxx will be granted options to buy 5,000 additional
shares of SeraNova common stock on July 15, 2000 if SeraNova meets 80% of its
cumulative Q1 2000 and Q2 2000 revenue targets or $22,427,000. The strike price
of these 5,000 shares will be the market price on July 1, 2000 exercisable until
June 30, 20001.
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CANCELLATION FEES
If the contract is terminated for any reason, Xxxxxx/Xxxxxxx will be paid a
cancellation fee as detailed in the following table. These cancellation fees are
in addition to the fees specified in the Milestone Payment Schedule.
---------------------------------------------------- --------------------
Month of Notice of Contract Termination Cancellation Fee
---------------------------------------------------- --------------------
October 1999 to January 1999 $0
---------------------------------------------------- --------------------
February 2000 $267,000
---------------------------------------------------- --------------------
March 2000 $534,000
---------------------------------------------------- --------------------
April 2000 $800,000
---------------------------------------------------- --------------------
May 2000 $400,000
---------------------------------------------------- --------------------
June 2000 to December 2000 $0
---------------------------------------------------- --------------------
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EXHIBIT B: KEY EMPLOYEES
SeraNova shall have ready and unencumbered access during regular business hours
to the following Consultant personnel:
1. Xxxxxxx Xxxxxxx
2. Xxxxx Xxxxxxx
3. Xxxx Xxxxxxxx
4. Xxxxxxx Xxxxxxxx
The following employees shall be deemed Key Employees pursuant to the terms of
the Agreement:
--------------------------------------------------------------------------------------------------
Name Minimum Hours per Week/Month on SeraNova Project
--------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxxxxxx 15 per week/60 per month
--------------------------------------------------------------------------------------------------
Xxxxx Xxxxx 10 per week/45 per month
--------------------------------------------------------------------------------------------------
Xxxx Xxxxxx 5 per week/20 per month
--------------------------------------------------------------------------------------------------
Xxxxx Xxxxx 10 per week/45 per month
--------------------------------------------------------------------------------------------------
Xxxx Xxxxx 40 per week/175 per month
--------------------------------------------------------------------------------------------------
Xxxxx Xxxxxxx 10 per week/45 per month
--------------------------------------------------------------------------------------------------
Xxxx Xxxxxxxx 40 per week/175 per month
--------------------------------------------------------------------------------------------------
Xxxxxxxx Xxxxxx 10 per week/45 per month
--------------------------------------------------------------------------------------------------
Xxxx Xxxxxxx 10 per week/45 per month
--------------------------------------------------------------------------------------------------
Xxxxx Xxxxxxxxx 40 per week/175 per month
--------------------------------------------------------------------------------------------------
Xxxx Xxxxxxx 40 per week/175 per month
--------------------------------------------------------------------------------------------------
Xxxxx Xxxxxx 5 per week/20 per month
--------------------------------------------------------------------------------------------------
Xxxxx Xxxxx 5 per week/20 per month
--------------------------------------------------------------------------------------------------
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