Master Consulting Services Agreement - Intelligroup Inc. and Mueller/Shields
MASTER CONSULTING SERVICES AGREEMENT
THIS MASTER CONSULTING SERVICES AGREEMENT (this "Agreement"), made and entered
into this 4th day of February, 2000 ("Effective Date"), by and between
Intelligroup, Inc. (hereinafter "Intelligroup"), a New Jersey corporation, and
Mueller/Shields (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 Intelligroup on the terms and conditions set forth
herein; and
Intelligroup, 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 Proposal
- ESG Revision 2.4 dated October 12, 1999 (the "Proposal") and submitted
by Consultant to Intelligroup. 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
Intelligroup 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 Intelligroup.
Consultant shall also prepare and submit such further reports of its
performance and its progress as set forth in the Proposal and as
Intelligroup may reasonably request from time to time.
1.2 Consultant shall provide and make available to Intelligroup 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 Intelligroup are not available to
continue the work within 5 business days, Intelligroup shall have the
right to terminate this Agreement pursuant to Section 2.2 hereof.
1.3 Intelligroup shall, within 10 business days of receipt of each Deliverable
submitted to Intelligroup, advise Consultant of Intelligroup'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 work to be performed.
Consultant shall make sure its employees at all times observe security and
safety policies of Intelligroup while on Intelligroup's site.
<PAGE>
1.5 Intelligroup and Consultant shall develop appropriate administrative
procedures to apply to Consultant's personnel. Intelligroup shall
periodically prepare an evaluation of the performance of Consultant's
personnel.
1.6 Intelligroup may interview the Consultant's personnel assigned to
Intelligroup's work. Consultant shall have the right, at any time, to
request removal of any employee(s) of Consultant whom Intelligroup 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 Intelligroup shall have no right to control the
manner, means, or method by which Consultant performs the Services called
for by this Agreement. Rather, Intelligroup 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 Intelligroup, 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 Intelligroup at its discretion upon
thirty (30) business days' prior written notice.
2.4 Upon termination of this Agreement for any reason, Intelligroup shall pay
the Consultant for all services performed in accordance with the Milestone
Payment Schedule specified in Exhibit A. Consultant shall promptly return
to Intelligroup all copies of any Intelligroup data, records, or materials
of whatever nature or kind, including all materials incorporating the
proprietary information of Intelligroup and all work for hire pursuant to
this Agreement. Consultant shall furnish to Intelligroup all works in
progress or portions thereof, including all incomplete work.
2.5 In the event of termination, Consultant will assist Intelligroup 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 Intelligroup, 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 Intelligroup, Intelligroup shall have no liability for
any payments accruing for Services performed after the termination date.
-2-
<PAGE>
SECTION 3. FEES, EXPENSES AND PAYMENT
3.1 In consideration of the Services to be performed by Consultant,
Intelligroup 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 Intelligroup, Consultant shall be entitled to a pro rata payment
for work in progress based on the percentage of work then completed. No
such pro rata payment shall be made if Intelligroup 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 Intelligroup'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 Intelligroup,
Intelligroup's officers, directors, employees and agents, and the
administrators of Intelligroup's benefit plans from and against any
claims, liabilities or expenses relating to such compensation, tax,
insurance or benefit matters; provided that Intelligroup shall promptly
notify Consultant of each such claim when and as it comes to
Intelligroup's attention. Intelligroup shall cooperate with Consultant in
the defense and resolution of such claims, and Intelligroup 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 Intelligroup, Consultant shall procure and maintain workers'
compensation coverage sufficient to meet the statutory requirements of
every state where Consultant's personnel assigned to Intelligroup'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 Intelligroup'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 Intelligroup's employees,
Intelligroup 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, Intelligroup 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.
-3-
<PAGE>
SECTION 5. INTELLECTUAL PROPERTY RIGHTS
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 Intelligroup,
domain names and internet addresses, or other intellectual property rights
pertaining thereto ("Work Product"), shall be held by Intelligroup, and
all Work Product shall, to the extent possible, be considered works made
by Consultant for hire for the benefit of Intelligroup. Consultant shall
mark all Work Product with Intelligroup's copyright or other proprietary
notices as directed by Intelligroup and shall take all actions deemed
necessary by Intelligroup to protect Intelligroup's rights therein. In the
event that the Work Product does not constitute work made by Consultant
for hire for the benefit of Intelligroup 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 Intelligroup, without further consideration. Consultant
agrees to execute any documents of assignment or registration of copyright
requested by Intelligroup 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 Intelligroup are and shall remain
the property of Intelligroup.
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 Intelligroup to disclose to
Consultant certain trade secret(s) or other confidential and proprietary
information that has been developed by Intelligroup 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 Intelligroup 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 Intelligroup's
proprietary rights;
b. publicly known (other than through unauthorized disclosure by
Consultant);
c. disclosed by Intelligroup 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 Intelligroup of such disclosure).
-4-
<PAGE>
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 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
Intelligroup 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 Intelligroup 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 Intelligroup's name or any
Intelligroup trademark(s) or trade name(s) in any advertising or publicity
without the prior written consent of Intelligroup.
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 Intelligroup the unencumbered ownership of Work
Product.
b. Consultant warrants that all Intelligroup data and information in
Consultant's possession or accessible by Consultant are and shall
remain the property of Intelligroup. The Intelligroup 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 Intelligroup data and information in Consultant's possession
in accordance with Intelligroup's security standards as notified by
Intelligroup 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 Intelligroup
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. Intelligroup agrees to give Consultant prompt notice of any
such claim, demand, or action and
-5-
<PAGE>
shall, to the extent Intelligroup is not adversely affected, cooperate
fully with Consultant in defense and settlement thereof.
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 Intelligroup, as
described in the Proposal, without Intelligroup'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
Intelligroup; provided, however, that Consultant may assign its right to
receive payments hereunder to such third parties as Consultant may
designate by written notice to Intelligroup.
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 Intelligroup 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 Intelligroup,
Consultant shall provide Intelligroup with evidence satisfactory to
Intelligroup 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.
-6-
<PAGE>
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.
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.
[Intelligroup] [Mueller/Shields]
/s/ Arjun Valluri /s/ Stephen Hansmire
--------------------------------------------------------------------------------
By: By:
Arjun Valluri Stephen Hansmire
--------------------------------------------------------------------------------
Title: Title:
Chairman and Co-CEO Executive Vice President
--------------------------------------------------------------------------------
Address for correspondence: Address for correspondence:
499 Thornall Street 15225 Alton Parkway
Edison, NJ 08837 Building 100
Irvine, CA 92618
-7-
<PAGE>
EXHIBIT A
--------------------------------------------------------------------------------
MONTH SCHEDULE OF WORK
--------------------------------------------------------------------------------
October 1999 o Kick off meeting
o Assign M/S team members
o Develop and finalize the research strategy and
questionnaire
o Start research interviews
o Develop class "A" lead definition, lead distribution
protocol, lead form, and lead generation questionnaire
o IT set-up for marketing database
o List purchase and prospect database build
o Weekly reporting
--------------------------------------------------------------------------------
November 1999 o Continue with research questionnaire interviews
o Data entry of research interviews
o Begin the development of the sales training program
o Interim market research analysis and report
o Begin development on corporate brochure
o Begin creative development for marketing programs
(direct mail and advertising)
o Begin the telecontact demand generation program
o Monthly review meeting
o Develop lead tracking/pipeline report and system
--------------------------------------------------------------------------------
December 1999 o Complete research questionnaire interviews and data
entry
o Code, tabulate, and analysis market data
o Develop market research report and recommendations
o Present market research findings
o Finalize copy for corporate brochure
o Begin development of planning guide
o Develop initial creatives for the marketing programs
and begin the market testing
o Begin the prospect database build for the seminar and
direct marketing programs
o Final selection of seminar sites
o Continue development of the sales training program
o Continue the telecontact demand generation program
o Continue lead tracking/pipeline report
o Program management
o Weekly reporting
o Monthly status review meeting
--------------------------------------------------------------------------------
January 2000 o Finalize planning guide
o Print corporate brochure
o Develop the collateral carrier and envelope
o Begin development of data sheets
o Begin development of proposal template program
o Continue development of the sales training program
o Complete market testing of creatives and finalize the
creatives
o Review creatives for the marketing programs (direct
mail and advertising programs)
o Finalize the prospect database build for seminar and
direct mail programs
--------------------------------------------------------------------------------
-8-
<PAGE>
--------------------------------------------------------------------------------
MONTH SCHEDULE OF WORK
--------------------------------------------------------------------------------
o Continue the telecontact demand generation program
o Continue lead tracking/pipeline report
o Program management
o Weekly reporting
o Monthly status review meeting
--------------------------------------------------------------------------------
February 2000 o Print the planning guide
o Print the collateral carrier and envelope
o Finalize copy and creative for data sheets
o Complete development of the white papers
o Complete development of proposal template program
o Develop and finalize telecontact scripts for the direct
marketing programs
o Continue development of the sales training program
o Finalize all creatives for marketing programs
o Trade show consulting
o Implement wave 1A of direct marketing program
o Begin telecontact program in support of the direct
marketing program
o Develop and implement collateral fulfillment program
o Begin lead qualification, distribution, and reporting
o Continue lead tracking/pipeline report
o Program management
o Weekly reporting
o Monthly status review meeting
--------------------------------------------------------------------------------
March 2000 o Continue telecontact program in support of the direct
marketing program
o Continue collateral fulfillment program
o Continue lead qualification, distribution, and
reporting
o Continue lead tracking/pipeline report
o Delivery first sales training class
o Program management
o Weekly reporting
o Monthly status review meeting
--------------------------------------------------------------------------------
April 2000 o Implement wave 1B of direct marketing program
o Continue telecontact program in support of the direct
marketing program
o Continue collateral fulfillment program
o Continue lead qualification, distribution, and
reporting
o Continue lead tracking/pipeline report
o Program management
o Weekly reporting
o Monthly status review meeting
--------------------------------------------------------------------------------
May 2000 o Continue telecontact program in support of the direct
marketing program
o Continue collateral fulfillment program
o Continue lead qualification, distribution, and
reporting
o Continue lead tracking/pipeline report
o Program management
o Weekly reporting
o Monthly status review meeting
--------------------------------------------------------------------------------
-9-
<PAGE>
--------------------------------------------------------------------------------
MONTH SCHEDULE OF WORK
--------------------------------------------------------------------------------
June 2000 o Implement wave 2A of direct marketing program
o Continue telecontact program in support of the direct
marketing program
o Continue collateral fulfillment program
o Continue lead qualification, distribution, and
reporting
o Conduct sales training course
o Program management
o Weekly reporting
o Monthly status review meeting
--------------------------------------------------------------------------------
July 2000 o Continue telecontact program in support of the direct
marketing program
o Continue collateral fulfillment program
o Continue lead qualification, distribution, and
reporting
o Continue lead tracking/pipeline report
o Program management
o Weekly reporting
o Monthly status review meeting
--------------------------------------------------------------------------------
August 2000 o Continue telecontact program in support of the direct
marketing program
o Continue collateral fulfillment program
o Continue lead qualification, distribution, and
reporting
o Continue lead tracking/pipeline report
o Program management
o Weekly reporting
o Monthly status review meeting
--------------------------------------------------------------------------------
September 2000 o Implement wave 2B of direct marketing program
o Continue telecontact program in support of the direct
marketing program
o Continue collateral fulfillment program
o Conduct sales training course
o Continue lead qualification, distribution, and
reporting
o Continue lead tracking/pipeline report
o Conduct sales training course
o Program management
o Weekly reporting
o Monthly status review meeting
--------------------------------------------------------------------------------
October 2000 o Conduct sales training course
o Continue telecontact program in support of the direct
marketing program
o Continue collateral fulfillment program
o Continue lead qualification, distribution, and
reporting
o Continue lead tracking/pipeline report
o Program management
o Weekly reporting
o Monthly status review meeting
--------------------------------------------------------------------------------
-10-
<PAGE>
--------------------------------------------------------------------------------
MONTH SCHEDULE OF WORK
--------------------------------------------------------------------------------
November 2000 o Continue telecontact program in support of the direct
marketing program
o Continue collateral fulfillment program
o Conduct sales training course
o Continue lead qualification, distribution, and
reporting
o Continue lead tracking/pipeline report
o Program management
o Weekly reporting
o Monthly status review meeting
--------------------------------------------------------------------------------
December 2000 o Continue telecontact program in support of the direct
marketing program
o Continue collateral fulfillment program
o Conduct sales training course
o Continue lead qualification, distribution, and
reporting
o Continue lead tracking/pipeline report
o Program management
o Weekly reporting
o Monthly status review meeting
--------------------------------------------------------------------------------
-11-
<PAGE>
INTELLIGROUP MILESTONE PAYMENT SCHEDULE
---------------------------------------------------------------
MONTH MILESTONE PAYMENT SCHEDULE
---------------------------------------------------------------
INVOICE DATE PAYMENT DUE MONTHLY MILESTONE
PAYMENT SCHEDULE
---------------------------------------------------------------
October 1, 1999 Deposit Due Upon $141,403
Receipt
---------------------------------------------------------------
November 1, 1999 November 30, 1999 $241,483
---------------------------------------------------------------
December 1, 1999 December 31, 1999 $192,495
---------------------------------------------------------------
January 1, 2000 January 31, 2000 $150,000
---------------------------------------------------------------
February 1, 2000 February 29, 2000 $150,000
---------------------------------------------------------------
March 1, 2000 March 31, 2000 $100,000
---------------------------------------------------------------
April 1, 2000 April 30, 2000 $200,000
---------------------------------------------------------------
May 1, 2000 May 31, 2000 $200,000
---------------------------------------------------------------
June 1, 2000 June 30, 2000 $200,000
---------------------------------------------------------------
July 1, 2000 July 31, 2000 $214,490
---------------------------------------------------------------
August 1, 2000 August 31, 2000 $214,490
---------------------------------------------------------------
September 1, 2000 September 30, 2000 $272,240
---------------------------------------------------------------
October 1, 2000 October 31, 2000 $245,290
---------------------------------------------------------------
November 1, 2000 November 30, 2000 $214,490
---------------------------------------------------------------
December 1, 2000 December 31, 2000 $214,490
---------------------------------------------------------------
TOTAL PROGRAM INVESTMENT $2,950,871
---------------------------------------------------------------
-12-
<PAGE>
SHARED RISK/SHARED REWARD COMPENSATION
--------------------------------------
Mueller/Shields will receive additional compensation based on the actual
quarterly revenues achieved by Intelligroup according to the scheduled below.
The quarterly revenue goals that this compensation will be based are:
Q1 2000 $27,793,000
Q2 2000 $37,758,000
Q3 2000 $47,993,000
Q4 2000 $55,276,000
The compensation that Mueller/Shields will receive for each quarter is:
o If the actual quarterly revenue is less than 80% of the quarterly revenue
goal, Mueller/Shields will receive no compensation for that quarter.
o The compensation for the quarter will be 1.0% of the actual incremental
revenue over 80% of the quarterly revenue goal.
o If the actual revenue achieved is over 100%, Mueller/Shields will receive an
additional 2.0% of the actual incremental revenue over 100% of the quarterly
revenue goal.
o The compensation will not exceed $150,000 for each quarter.
Examples of how the compensation would be calculated are included in the
following table
----------------------------------------------------------
Quarter Actual Revenue Total
Achieved Compensation
----------------------------------------------------------
Q1 2000 $28,000,000 $60,000
----------------------------------------------------------
Q2 2000 $38,000,000 $80,000
----------------------------------------------------------
Q3 2000 $48,000,000 $96,000
----------------------------------------------------------
Q4 2000 $55,000,000 $100,000
----------------------------------------------------------
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.
-13-
<PAGE>
A. Stock Options
Within ten (10) business days after SeraNova becomes publicly traded,
Intelligroup shall grant Mueller/Shields fully vested options to buy
Intelligroup common stock at Twenty Dollars ($20) per share. The number of
shares covered by these options shall be 290,000 divided by the price of a June
2000 call option to buy Intelligroup stock at $20 per share on the Philadelphia
Stock Exchange.
-14-
<PAGE>
EXHIBIT B: KEY EMPLOYEES:
B. Key Employees:
Intelligroup shall have ready and unencumbered access during regular business
hours to the following Consultant personnel:
1. Phyllis Mueller
2. Craig Shields
3. Bill Thompson
4. Stephen Hansmire
The following employees shall be deemed Key Employees pursuant to the terms of
the Agreement:
--------------------------------------------------------------------------------
Name Minimum Hours /week/month on SeraNova Project
--------------------------------------------------------------------------------
Willie Bloomstein 15 per week/60 per month
--------------------------------------------------------------------------------
Chris Breakfield 40 per week/175 per month
--------------------------------------------------------------------------------
Paula Davey 10 per week/45 per month
--------------------------------------------------------------------------------
Scot Hansen 5 per week/20 per month
--------------------------------------------------------------------------------
Alain Jamar 10 per week/45 per month
--------------------------------------------------------------------------------
Jordan Maliwanag 40 per week/175 per month
--------------------------------------------------------------------------------
Sally Mikhail 10 per week/85 per month
--------------------------------------------------------------------------------
Jennifer Murray 10 per week/85 per month
--------------------------------------------------------------------------------
Robin O'Hanlon 40 per week/175 per month
--------------------------------------------------------------------------------
Gary Patrick 10 per week/45 per month
--------------------------------------------------------------------------------
Fred Roeschke 40 per week/175 per month
--------------------------------------------------------------------------------
Allen Stanfield 40 per week/175 per month
--------------------------------------------------------------------------------
Glenn Warren 5 per week/20 per month
--------------------------------------------------------------------------------
Robin Young 5 per week/20 per month
--------------------------------------------------------------------------------
-15-