Exhibit 10.9
PROTEGE CONFIDENTIAL
NETGRAVITY Inc. PROFESSIONAL SERVICES AGREEMENT
This PROFESSIONAL SERVICES AGREEMENT (the "Agreement") is made this 27th day of
March 1997 between PROTEGE SOFTWARE (HOLDINGS) LIMITED of Xxxxxxxx Xxxxx, Xx
Xxxx'x Xxxxx, Xx. Xxxxx Port, Guernsey, GY1 2NV Channel Islands (the
"Contractor") and NETGRAVITY Inc. of Delaware, USA ("the Company") who agree as
follows:
1. TERM
The initial term of this Agreement shall begin at the date of signing by
the later of the two parties to sign (the "Effective Date"), and shall end
on the termination of the Agreement by either party in accordance with
Paragraph 7.
2. PROFESSIONAL SERVICES
(a) The Contractor agrees to act as General Manager for the Company and
perform the Professional Services specified in the Work Assignment
Schedule contained in Schedule A, as modified from time to time by
mutual agreement of the parties (the "Professional Services")
including:
(i) to set up a wholly owned subsidiary company of the Company
(subject to local approval) to be called NetGravity Europe
Ltd.;
(ii) to set up such other corporation or entities, or in furtherance
of distribution, marketing or agency relationships with third
parties as the Company and Contractor agree to establish in
the Territory (as defined in Schedule A).
(b) The Contractor shall perform the Professional Services for Company,
and shall in all cases act in a professional manner and such services
shall conform to the standards, specifications and other reasonable
requirements agreed between the parties.
(c) The Contractor agrees to submit monthly progress reports to the
Company.
3. CONTRACTOR'S REWARD
The Company shall reward the Contractor for its activities as contained in
Schedule A.
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4. PROPRIETARY INFORMATION
(a) Each party acknowledges that it may be furnished or may otherwise
receive or have access to confidential or proprietary information
which relates to the other party's business, including (without
limitation) past, present or future business plans, marketing plans,
products, software, research, development, inventions, processes,
techniques, design or other technical information and data, etc. (the
"Proprietary Information"). Each party further acknowledges that all
intellectual property rights residing in the other party's
Proprietary Information are and will remain the exclusive property
of the other party.
(b) Each party agrees to preserve and protect the confidentiality of
the Proprietary Information and all forms thereof, whether
disclosed to it before this Agreement is signed or afterwards. In
addition, it shall not disclose or disseminate the Proprietary
Information to any third party and shall not use the Proprietary
Information for its own benefit (other than in furtherance of the
goals of the other party) or for the benefit of any third party
(other than in furtherance of the goals of the other party).
(c) The foregoing obligations shall not apply to any information which
the recipient can prove (i) is previously publicly known at the
time of receipt from the other party or which subsequently becomes
publicly known through no act or fault of the recipient; (ii) is
given to it by a third party who is not obligated to maintain
confidentiality; or (iii) was independently developed by it without
resort to the Proprietary Information or other resources of the
other and not in the course of performance of the Professional
Services, and not for the other party, (unless the parties have
otherwise agreed that the specific information was to be governed
by this Agreement).
(d) Within three days after the termination of this Agreement (or any
other time at the other party's request), each party shall return
to the other all copies of Proprietary Information in tangible form
in its possession or control. The Contractor hereby assigns to the
Company all its intellectual and other property rights in its work
product performed pursuant to this Agreement, and waives its moral
rights to or in same, and shall require each of its employees (if
any are so permitted by the Company pursuant to Schedule A) working
on this project to sign the Company's standard independent
contractor confidentiality agreement, and assignment of
intellectual property rights and waiver of moral rights.
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(e) Section 4 of this Agreement shall survive the expiry or termination of
the Agreement.
5. WARRANTIES AND COVENANTS
A. THE CONTRACTOR WARRANTS AND COVENANTS THAT:
(i) it is able to perform the Professional Services, as set out in
the agreed business plan;
(ii) that any service it provides and information or materials it
develops for or discloses to the Company shall not in any way
be based upon any confidential or proprietary information
derived from any source other than the Company, unless the
Contractor is specifically authorised in writing by such
source to use such proprietary information and the Contractor
agrees it shall not knowingly furnish or use any such
information in the performance of this Agreement, without the
prior written consent of the Company provided that the
Company agrees the Contractor can use commercially available
software development tools;
(iii) in performance of its obligations hereunder it shall not
infringe any intellectual property right, or trade secret of
any third party;
(iv) it shall perform all work in a professional manner to the best
of its ability; and
(v) that if the Company incurs any liability or expense outside
of the agreed business plan, as a result of any warranty that
the Contractor makes in this Agreement not being true, the
Contractor shall indemnify the Company and hold it harmless
against all such liability or expense, including reasonable
attorney/solicitor fees, provided that the Company notifies
the Contractor of the claim and co-operates with the
Contractor in defending against the claim. Each party shall
notify the other if it ever becomes aware of any such claim.
B. THE COMPANY WARRANTS AND COVENANTS THAT:
(i) it is entitled to appoint the Contractor to perform the
Professional Services in the Territory;
(ii) that any information or materials it discloses to the
Contractor shall not in any way be based upon any confidential
or proprietary information
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derived from any source other than the Contractor or the
Company, unless the Company is specifically authorised in
writing by such source to use such proprietary information;
(iii) in performance of its obligations and the provision of
information to the Contractor hereunder it will not infringe
any intellectual property right, or trade secret of any
third party;
(iv) if the Contractor incurs any liability or expense as a result
of any warranty the Company makes in this Agreement not being
true, the Company shall indemnify the Contractor and hold it
harmless against all such liability or expense, including
reasonable attorney/solicitor fees, provided that the
Contractor notifies the Company of the claim and cooperates
with the Company in defending against the claim. Each party
shall notify the other if it ever becomes aware of any such
claim; and
(v) it will sell it's products and services in the Territory only
through NetGravity Europe Ltd. In respect of any sales
received by the Company and its Group generated on a world-wide
basis, the parties agree that 30% - 50% of the European
revenues will be included in the calculation of Net Revenue for
the purposes of the Schedule. The precise figure will be
mutually agreed by both parties acting in good faith.
6. LOANED EQUIPMENT
If the Company loans the Contractor any item, the Contractor shall sign the
Company's standard equipment loan agreement and return the loaned equipment
promptly on termination of this Agreement. The same shall apply to any
item loaned by the Contractor to the Company or NetGravity Europe.
7. TERMINATION AND RENEWAL
(a) The Initial Term shall be for a 12 month period from the Effective
Date (the "Initial Term").
(b) This Agreement shall automatically continue, following the expiry of
the Initial Term for subsequent periods of 12 months ("Renewal Terms")
each unless terminated in accordance with the terms set out below.
(c) This Agreement may be terminated by either party, as follows:
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(i) without cause, after the Initial Term, on at least 3 months
written notice, provided that if the Company fails to renew any
Renewal Term, it shall provide at least 3 months notice or
payment in lieu thereof.
(ii) during the Initial Term, or any Renewal Term, if the other party
has not performed any material covenant when performance was
due or has otherwise breached any material term of this
Agreement, the following procedures shall apply:
(A) the non-defaulting party shall provide written notice
of the event or circumstances representing such breach
or non-performance together with a demand that such
breach or non-performance be cured immediately;
(B) if the breach or non-performance has not been cured (or
other arrangements satisfactory to the non-defaulting
party have not been agreed to) within 30 days from the
date of the notice delivered under clause (A) above,
immediately upon delivery of a second written notice
terminating this Agreement.
8. MISCELLANEOUS
(a) The laws of England and Wales shall govern this Agreement and the
parties hereby submit to the exclusive jurisdiction of the English
Courts.
(b) This Agreement, including Schedule A attached hereto, is the entire
agreement between the parties. Any change in the Agreement must be
made in writing and signed by both the Company and the Contractor.
(c) If either party cannot perform of its respective obligations due to
causes beyond its reasonable control which shall not include the
reward to the Contractor under Schedule A, then the non-performing
party shall (i) notify the other party, (ii) take reasonable steps to
resume performance as soon as possible, and (iii) not be considered in
breach during the period performance is beyond the party's reasonable
control.
(d) If any provision of this Agreement shall be deemed by a court to be
too broad, the court is hereby authorised to limit any scope,
duration or area of applicability, or all of them, so such provision
is no longer overly broad and to enforce the same as so limited.
Subject to the prior sentence, if any part of this Agreement is held
unenforceable for any reason, such unenforceability shall
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void only such part and shall not render unenforceable any other part
of this Agreement.
(e) Either party's waiver of a default by the other does not constitute a
waiver of future or other defaults.
(f) The parties shall not, for 12 months after the Agreement ends,
directly solicit for employment or any other engagement for work, any
employee or any employee of any affiliate of the other party. In this
Agreement, Affiliate means a company under the ultimate common control
of the other party of which the party has been notified.
(g) The Contractor shall not assign its rights or obligations under this
Agreement unless it first obtains the prior written agreement of the
Company.
(h) Any notice or other communication required or permitted to be given by
his Agreement (including the signing of this Agreement) shall be in
writing and shall be effectively given if delivered personally, by
facsimile confirmed received, or by registered mail to the party at
the relevant party's address below.
Dated at San Mateo, CA, USA this 27 day of March 1997
/s/ Xxxxxxx X. Xxxxx
-----------------------------------
duly authorised for and on behalf of
NETGRAVITY INC. of
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Dated at San Mateo, this 27 day of March 1997
/s/ Xxxxx Xxxx
-----------------------------------
duly authorised for and on behalf of
PROTEGE SOFTWARE (HOLDINGS) LIMITED
of Richmond House, Xx. Xxxx'x Xxxxx, Xx. Xxxxx Xxxx,
Xxxxxxxx, XX0 0XX, Channel Islands
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SCHEDULE A
WORK ASSIGNMENT SCHEDULE
Territory - For purposes of this Agreement, Territory means Europe, Africa and
the Middle East, subject to then prevailing export regulations in Canada, the
United States or countries in which NetGravity Europe resides. Europe means
those countries set out in Schedule B. Middle East means all Arab League
countries, Turkey and Israel.
Analysis and Recommendations re:
* Marketing positioning;
* Presentation;
* Technical Support;
* Competitiveness;
* Localisation
Implementation of approved Recommendations:
* Sales,
* Marketing,
* Technical Support,
* Production,
* Finance and Administration
all for operations, in the Territory, as more particularly set out in the annual
business plans (including budgets) of the Company as said plans and budgets
relate to its operations implemented directly or through:
* NetGravity Europe, and/or
* such other corporations or entities, or in furtherance of distribution,
marketing or agency relationships with such third parties, as the Company
and the Contractor agree to establish in the Territory;
The business plan and budgets shall be mutually agreed upon by Contractor and
Company.
This implementation will include, but not necessary be limited to, the
following:
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SCOPE OF ACTIVITIES
During the term, Contractor shall perform the following activities in the
Territory:
* Establishment of an organisation for the Territory, to complement the
current resources, technology and economic considerations of the Company,
and the circumstances that prevail in the Territory.
* Achieving this by the setting up of NetGravity Europe Ltd to initially be a
UK based wholly owned subsidiary of the Company, to serve as the
Territorial headquarters so that Company may professionally provide the
following:
(a) solicitation of sales orders;
(b) provision of support for Company's distributors and dealers in the
Territory;
(c) co-ordination of product and warranty service between NetGravity
Europe and such other affiliated or third party, arms length
corporations or entities, and licensees and distributors/VARs etc.
of the Company's products, located in the Territory;
(d) provision of product technical support services;
(e) the conducting of periodic training courses and seminars regarding
applications and operations of the products in major marketing centres
located in the Territory for the benefit of distributors and dealers
etc.;
(f) development of business plans for the Territory;
(g) management and co-ordination of the implementation of the Company's
marketing strategy in the Territory (for the products of Company
handled by Contractor);
(h) localisation of products;
(i) set up of systems (such as accounting legal and human resources
consistent with those set-up by the Company); the Contractor shall
assist NetGravity Europe (and other related entities as agreed
following Company's request) with implementation and administration of
all general, administrative and financial systems as requested by
Company; and
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SOLICITATION OF CONTRACTS
(a) NetGravity Europe shall solicit orders for product only at such current
prices as may be periodically established in writing by the Company and
notified to the Contractor.
(b) All orders solicited by NetGravity Europe from customers in the Territory
are subject to acceptance or rejection by an officer or other authorised
person at the principal office of the Company, which approval or rejection
shall in all cases be in writing, and no order shall be binding upon
NetGravity Europe until so accepted. The Company and NetGravity Europe
reserve the right to refuse any order originating in the Territory, either
for lack of credit of the customer or for any other reason which, in the
judgement of the Company or NetGravity Europe is reasonable grounds for
refusal. The Contractor agrees to cause NetGravity Europe to fully inform
all customers it solicits of the substance of this sub-paragraph and to
furnish NetGravity Europe and the Company with such periodic reports of its
activity and other information as the Company may reasonably request.
(c) The Contractor agrees to dispatch all inquiries received by it, applicable
to the Company or the products of the Company, from points or sources
outside the Territory promptly to the Company for attention and handling.
(d) Neither NetGravity Europe nor the Company is under any obligation to the
Contractor to continue its business or to manufacture, sell or supply, or
to continue to manufacture, sell or supply any of the products nor shall
any warranty of any nature as to any products run from NetGravity Europe,
the Company, or their affiliates to the Contractor, and neither the Company
nor its affiliates are under any obligations to the Contractor to continue,
discontinue, or change any model or type of any of the products.
(e) All invoices in connection with sales to customers in the Territory shall
be rendered by NetGravity Europe to such customers. It is expressly
understood that full power by and such authority for all collections rest
with NetGravity Europe and the Company, which exercises complete control
over the approval of all customers' credit, orders, and contracts. The
Contractor agrees to protect NetGravity Europe and the Company, as far as
is reasonable by reporting adverse credit information of which it is aware
with respect to customers in the Territory.
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CONTRACTOR REWARD SCHEDULE
1. MONETARY FEE
A. Contractor shall be paid a commission equal to 5% of annual Net
Revenue NetGravity Europe, subject to a minimum of 75,000 Pounds ("the
minimum commission") and a maximum of 150,000 Pounds in each year of
the Initial Term and any Renewal Term.
B. In this Agreement, the currency is in UK pounds sterling.
C. Payment of commission shall be made to Contractor as follows:
(i) monthly in arrears, on the basis of estimated commission
subject to an annual adjustment and repayment of any over
payment
(ii) within 30 days after the end of each calendar quarter, the
parties shall calculate the actual commission due to
Contractor, and the balance due shall be paid or repaid before
the end of said 30th day.
D. Net Revenue means gross revenue from licenses of NetGravity Europe
product, net of returns, allowances, credits, discounts (based on
volume or otherwise), RMAs and net of any bad debt reserve or actual
bad debts. All reserves will be calculated on a consistent basis in
accordance with generally accepted accounting principles.
2. BONUS
A. In addition to the commission referred to above, Contractor shall also
be paid a bonus, calculated as set out below.
B. The bonus shall be calculated as a percentage of revenue, as defined
in the Table below, of one times the Annualised Net revenue of
NetGravity Europe. Annualised Net Revenue means Net Revenue for the
12 months immediately prior to the date on which the bonus payment
obligation is triggered.
C. TERM OF SERVICE % BONUS
0-12 months 20%
GREATER THAN 12-18 months 15%
GREATER THAN 18 months 10%
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D. The bonus payment can be triggered either:
(a) by the Contractor at any time after the date 24 months after
the Effective Date
(a) on termination of the agreement as defined in paragraph 7
(c) change of control of the Company.
E. Triggering by the Contractor of the bonus payment shall constitute an
event which entitles (but does not require) Company to terminate this
Agreement without payment of additional compensation to Contractor.
F. Company may, at its option, pay the bonus in either cash or in shares
of the Company or any successor company.
3. EXPENSE REIMBURSEMENT
The Company will reimburse Contractor within thirty (30) days after the end
of each fiscal month an amount equal to one hundred per cent (100%) of all
costs approved within the agreed business plan or otherwise agreed to by
the Company, and reasonably incurred by Contractor in good faith and
reasonable fulfilment of Contractor's obligations under this Agreement.
For the avoidance of doubt, the cost and expense of the provision of a
managing director by the Contractor shall not be recharged to the Company
and shall be treated as comprised in commission. The Contractor will keep
records of (and receipts for) all costs in incurs in its performance of the
services and will provide copies of such records to the Company upon
reasonable request.
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SCHEDULE B
EUROPE MEANS
Such of the countries listed below, except to the extent that Sales of the
Company's products are prohibited pursuant to the laws of the United States or
other jurisdiction applicable to the Company's operations.
Albania Liechtenstein
Andorra Lithuania
Armenia Luxembourg
Austria Macedonia
Azerbaijan Malta & Gozo
Belarus Moldova
Belgium Monaco
Bosnia The Netherlands
Bulgaria Norway
Byclorussia Poland
Croatia Portugal
Cyprus Romania
Czech Republic Russia Federation
Denmark San Marino
Estonia Serbia
Federal Republic of Yugoslavia Slovak Republic
Finland Slovenia
France Spain
Germany Sweden
Gibraltar Switzerland
Greece Tajikistan
Hungary Turkey
Iceland Turkmenistan
Republic of Ireland Ukraine
Italy United Kingdom
Kazakhstan Uzbekistan
Kyrgyzstan Vatican City State
Latvia
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PROTEGE CONFIDENTIAL
AMENDMENT TO THE PROFESSIONAL SERVICES AGREEMENT
This Amendment To The Professional Services Agreement dated 27 March 1997
between PROTEGE SOFTWARE (HOLDINGS) LIMITED of Xxxxxxxx Xxxxx, Xx Xxxx'x
Xxxxx, Xx. Xxxxx Port, Guernsey, GY1 2NV Channel Islands (the "Contractor")
and NETGRAVITY INC of Delaware United States of America ("the Company") (the
"Agreement") is made this day of 13 May 1998 who agree as follows:
1. TERMINATION
1.1 The parties have agreed that the Agreement shall terminate with effect
from 30 September 1998, subject always to the terms of this Amendment to the
Professional Services Agreement.
1.2 The parties have agreed to use reasonable endeavours to co-operate to
achieve the assumption by the Company of the Professional Services with
effect from 30 September 1998 save that the Contractor has agreed to continue
to provide back office functions for the Company to 30 October 1998 for the
purpose of assisting the Company in collating financial information in
relation to activities in the Territory during the financial quarter of the
Company ending 30 September 1998.
2. BONUS AND AMENDMENT
2.1 The parties have agreed that the bonus payable to the Contractor shall be
calculated as 12.5% of the Bookings of NetGravity Europe for the 12 month
period ending 30 September 1998.
Bookings means Licence bookings, First year subscription bookings, Second year
subscription bookings, consulting revenues and support revenues.
2.2 On or before 15 May 1998, the Company shall pay the Contractor the sum of
L100,000 (one hundred thousand pounds sterling) as part payment of the
anticipated bonus payable to the Contractor. The balance of the bonus shall
be paid in cash by the Company to the contractor on or before 30 October 1998.
2.3 The Company agrees and undertakes to use its best efforts to have the
Contractor participate in the forthcoming sale of shares in the Company to
the public by being granted the right to subscribe for approximately 10,000
transferable voting shares in the Company, or as many as are allocated by the
underwriters, at the offering price to the public.
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3. XXXXXXXX XXXXXX
Subject to compliance by the Company with the terms of this Amendment to the
Professional Services Agreement, the Contractor confirms that the Company may
offers terms of employment to Xxxxxxxx Xxxxxx.
4. AGREEMENT OTHERWISE UNAFFECTED
Save as amended and varied by this Amendment to the Professional Services
Agreement, the terms and obligations of the Agreement are otherwise
unaffected.
/s/ Xxxxxxx X. Xxxxx CFO
-------------------------------
duly authorised for and on behalf of
NETGRAVITY INC
Dated at San Mateo, CA, USA this 13 day of May 1998
--------------------- ---- ---------
/s/ Xxxxx Xxxx
-------------------------------
duly authorised for and on behalf of
PROTEGE SOFTWARE (HOLDINGS) LIMITED
of Richmond House, Xx Xxxx'x Xxxxx, Xx. Xxxxx Xxxx,
Xxxxxxxx, XX0 0XX, Channel Islands
Dated at London, England this 13th Day of May 1998.
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