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EXHIBIT 10.21
Novo Mediagroup, Inc.
000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
March 1, 2000
BDM, Inc.
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Gentlemen:
This letter is to memorialize our agreements concerning certain matters
relating to our relationship. For the purposes of this letter agreement,
references to "NOVO" will refer to Novo Mediagroup, Inc. and references to BDM
will refer to BDM, Inc. For good and valuable consideration, we have agreed as
follows:
1. Novo is a preferred provider of Internet professional services to The
MacManus Group's operating companies and their clients under that certain
Acknowledgment dated August 31, 1999 (the "Acknowledgment"). BDM, as the parent
company of The MacManus Group, has agreed to further define and develop the
"preferred provider" relationship with NOVO, and in doing so give NOVO certain
assurance that it will obtain a minimum level of revenue from BDM clients over
the next several years, as described below:
(a) BDM will use its best efforts to refer to and maintain at NOVO
BDM Client relationships sufficient to generate at least $30,000,000 of total
revenue for NOVO (the "Base Revenue Amount") during the period from January 1,
2000 through December 31, 2002 (the "Measuring Period"). A "BDM Client" refers
to an entity that retains NOVO to provide services (i) at time when such
entity is also a client of BDM or any BDM affiliated companies (i.e., entities
controlled by, controlling or under common control with BDM), or (ii) as a
direct result of an introduction made to NOVO by BDM or any BDM affiliated
companies. In no event will "BDM Client" include any client who was a client of
NOVO within the one year period prior to such entity first becoming a client of
BDM or its affiliated companies. It is understood in any case that each of the
clients listed on Annex A hereto constitute BDM Clients for purposes of this
agreement.
(b) If, during the Measuring Period, (i) a BDM Client terminates its
relationship with NOVO for any reason related to NOVO's failure to provide
services to that client's satisfaction, as determined in the client's sole
discretion, or (ii) NOVO terminates its relationship with a BDM Client for any
reason, the Base Revenue Amount will be reduced by the greater of (x) the
revenue projected in good faith to be earned by NOVO from such BDM Client
through the then remaining portion of the Measuring Period (based on client
budgets, project proposals and/or other objective criteria), and (y) the
average monthly revenue actually generated by such BDM Client for NOVO during
the 12-month period immediately preceding such termination multiplied by the
number of months then remaining until the end of the
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Measuring Period. If the BDM Client relationship is terminated in part and not
in its entirety, such as with respect to only a particular project or projects,
the foregoing adjustment in the Base Revenue Amount will be calculated on a
proportionate basis, using the greater of the projected or actual revenue (as
described above) generated in respect of the portion of the relationship so
terminated. In addition, if during the Measuring Period a bona fide client
project or relationship is referred to NOVO by BDM or any BDM affiliated
company, or from any then existing BDM Client, and such project or relationship
is declined by NOVO, the Base Revenue Amount will be reduced by the amount of
revenue which could reasonably be expected to be earned by NOVO from such client
project or relationship through the then remaining portion of the Measuring
Period. (It is understood that NOVO's declining an invitation to submit a
request for proposal for a prospective client project, where NOVO would be
competing against several other agencies for such project, will not, in and of
itself, result in an adjustment of the Base Revenue Amount under the
immediately preceding sentence.)
(c) If the total amount of revenue generated from BDM Clients during
the Measuring Period is less than the Base Revenue Amount, as computed under
(a) and (b) above, BDM will pay NOVO an amount equal to 15% of the amount by
which such cumulative revenue is less than $30,000,000. Such payment, if any,
will be due on March 31, 2003, and will represent satisfaction in full of any
and all obligations of BDM under paragraph 1 of this letter agreement, and the
sole recourse of NOVO for any violation by BDM of this letter agreement.
(d) Each time NOVO is retained by a BDM Client, NOVO will provide BDM
the identity of the BDM Client and the expected revenue to be generated from
such client. NOVO will provide BDM with a report within 30 days after the end
of each calendar quarter during the Measuring Period showing the amount of
revenue earned by NOVO from BDM Clients during the quarter then ended, and on a
cumulative basis since the commencement of the Measuring Period.
2. In connection with NOVO's anticipated reincorporation to Delaware and
possible Initial Public Offering, NOVO anticipates adopting a Board structure
involving three year staggered terms. In such event, NOVO covenants that BDM's
current two Board representatives will be installed in the last to expire Board
terms. In any case, should BDM cease, without its consent, to have two
representatives on the Company's Board at any time during the three-year period
commencing as of the date of this agreement, BDM shall have the right to
terminate this agreement upon written notice to NOVO (it being understood that
should a BDM Board representative cease to be a director due to his death,
disability or resignation from the Board, BDM's right to so terminate this
agreement will not come into effect unless a new BDM Board representative shall
not have been elected or appointed to the Board within 30 days following such
vacancy).
3. NOVO will permit BDM and its representatives, at BDM's expense, to
visit and inspect NOVO's properties, to examine its books of account and
records (including but not limited to all such records relating to NOVO's
servicing of BDM Clients) and to discuss NOVO's affairs, finances and accounts
with its officers, all at such reasonable times as may be requested by BDM
(it being understood that any material non-public information concerning
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NOVO or its operations shall be subject to the existing non-disclosure
undertakings of the parties).
4. This letter agreement is intended to be a legally binding
agreement. The provisions of Section 5 of the Acknowledgment are incorporated
into this letter agreement. Nothing herein shall be deemed to modify the terms
of the Acknowledgment, which remains in effect.
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5. Each of the parties agrees to execute such additional documents and
take such further actions as may be reasonably requested by the other party to
effectuate the provisions of this letter agreement.
Very truly yours,
NOVO MEDIAGROUP, INC.
By: /s/ XXXXX XXXXXXXXX
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Its: CEO
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Agreed and Acknowledged:
BDM, INC.
By: /s/ XXXXX X. XXXXX
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Its: Chief Operating Officer
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ANNEX A
BDM CLIENTS
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AN ASTERISK [ * ] INDICATES THAT CERTAIN
CONFIDENTIAL INFORMATION CONTAINED IN THIS
DOCUMENT, HAS BEEN OMITTED, PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT, AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.
