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EXHIBIT 10.15
ADDENDUM TO 1999 CLIENT/AGENCY PROPOSAL
BETWEEN FUTURELINK DISTRIBUTION CORP. ("FUTURELINK")
AND SICOLAMARTIN ("SICOLAMARTIN") DATED AUGUST 7, 1999
AS REVISED SEPTEMBER 8, 1999, and OCTOBER 22, 1999 (THE "AGREEMENT")
This addendum ("Addendum"), effective September 8, 1999, replaces and
supercedes (i) the compensation provisions set forth in the Agreement, and (ii)
the addendum by and between FutureLink and SicolaMartin dated as of November 4,
1999, and October 28, 1999, respectively. Notwithstanding any term or provision
of the Agreement to the contrary, in consideration of the Agreement and of the
mutual premises set forth herein, FutureLink and SicolaMartin agree as follows:
1. For services to be provided by SicolaMartin pursuant to the
Agreement, FutureLink agrees to (i) pay to SicolaMartin cash compensation of Six
Hundred Thousand and NO/100 Dollars ($600,000.00) (the "Cash Compensation"), and
(ii) other compensation, including stock, a stock warrant and certain contract
rights, as set forth below (the "Other Compensation").
2. The Cash Compensation shall be payable as follows:
A. Months 4 through 11 of the Agreement - FutureLink will pay
SicolaMartin Sixty-Six Thousand Six Hundred Sixty-Six and 66/100 Dollars
($66,666.66) per month for a total of Five Hundred Thirty-Three Thousand Three
Hundred Thirty-Three and 28/100 Dollars ($533,333.28).
B. Month 12 of the Agreement - FutureLink will pay
SicolaMartin Sixty-Six Thousand Six Hundred Sixty-Six and 72/100 Dollars
($66,666.72).
All Cash Compensation will be invoiced at the beginning of the month in which
services will be provided and will be due and payable in thirty days. Past due
Cash Compensation will bear interest at the rate of 12% interest per annum from
the date due until paid.
3. The Other Compensation shall be payable as follows:
A. Common Stock of FutureLink - As compensation for services
rendered during months 1 through 3, in lieu of paying Agreement fees in cash, on
execution hereof FutureLink will issue and deliver, 53,552 shares of its common
stock (the "Monthly Shares") to SicolaMartin. The value per Monthly Share is
agreed to be $7.47, which value represents the Current Market Price (as defined
below), and the effective date of issue, and the date the Monthly Shares are
deemed due and payable, is agreed to be October 15, 1999. There shall be no
adjustment in the Current Market Price with respect to the Monthly Shares. The
Monthly Shares, when issued, shall have been duly and validly issued, fully paid
and nonassessable, will not have been issued in violation of or subject to any
preemptive rights and will be free and clear of all liens, claims and
encumbrances. FutureLink represents to SicolaMartin that it has reserved a total
of 53,552 Monthly Shares for issuance and delivery as of October 15, 1999, as
provided herein and that such shares, when issued, shall, to the extent
applicable, be issued
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subject to the provisions of the warrant agreement attached hereto as Exhibit
"A", including, without limitation, the representations and warranties set forth
therein.
For the purposes of this subsection, "Current Market Price" has been
determined by the Board of Directors to be $7.47, which price represents the
average of the closing bid and ask prices of FutureLink's common stock for the
five business days ended September 7, 1999. Such valuation was made in good
faith, and such determination, in the absence of fraud or bad faith, shall be
binding upon FutureLink.
B. Warrants - Upon execution of this Addendum, FutureLink
shall deliver to SicolaMartin an executed warrant agreement (and associated
warrant(s) ["Warrant"]) in substantially the same form as Exhibit "A" attached
hereto and incorporated herein by reference. The Warrant, which shall be
effective as of September 7, 1999, and expire as of 11:59 P.M. on August 7,
2000, shall grant SicolaMartin the right to purchase up to 33,467 shares of
FutureLink's common stock (the "Warrant Shares") at an exercise price per share
price of $7.47. The Warrant shall be exercisable in whole or in part. FutureLink
represents to SicolaMartin (i) that it has reserved a total of 33,467 Warrant
Shares for issuance upon exercise of the Warrant, and (ii) such reserved shares,
when issued in accordance with the terms hereof, will be duly and validly
issued, fully paid and nonassessable, will not have been issued in violation of
or subject to any preemptive rights and will be free and clear of all liens,
claims and encumbrances.
C. FutureLink Board Authorization - Upon execution of this
Addendum, FutureLink shall deliver to SicolaMartin a resolution of its Board of
Directors authorizing the payment of the Other Compensation as provided herein.
D. Registration Rights - SicolaMartin shall have registration
rights with respect to the Monthly Shares and the Warrant Shares, as set forth
in the Registration Rights Agreement attached hereto.
E. Remedy - In addition to all remedies available at law and
equity, the parties agree that SicolaMartin shall have the right of specific
performance with respect to the issuance and delivery of the Other Compensation.
4. Subject to the parties mutual agreement on the terms of service,
SicolaMartin agrees to engage FutureLink as its full-service Application Service
Provider during the term of the Agreement.
5. FutureLink and SicolaMartin acknowledge and agree that FutureLink
has deposited cash consideration with SicolaMartin in advance payment for Cash
Compensation due hereunder. FutureLink and SicolaMartin further acknowledge and
agree that (i) as of the date hereof, some, but not all, of such sums have been
earned by SicolaMartin, and (ii) SicolaMartin will, upon FutureLink's written
request, return any unearned Cash Compensation on deposit with SicolaMartin.
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Except as provided herein, all terms and provisions of the Agreement
shall remain in full force and effect.
This Addendum may be executed in any number of counterparts by
facsimile, each of which when so executed and delivered shall be deemed an
original but such counterparts shall together constitute one and the same
instrument.
FutureLink Distribution Corp. ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇, Inc.
By: /s/ By: /s/
-------------------------- -------------------------------
Name: Name:
------------------------ -----------------------------
Title: Title:
----------------------- ----------------------------
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ADDENDUM TO 1999 CLIENT/AGENCY PROPOSAL
BETWEEN FUTURELINK DISTRIBUTION CORP. ("FUTURELINK") AND SICOLAMARTIN ("SM")
DATED AUGUST 7, 1999 AS REVISED SEPTEMBER 8, 1999 (THE "AGREEMENT")
This addendum ("Addendum") is meant to replace and supercede the compensation
terms as set out in the Agreement. By entering into this Addendum the parties
agree as follows:
A. Compensation:
1. FutureLink agrees to pay to SM for services to be provided by
▇▇ as set out in the Agreement, a fee of $1,000,000 (one
million dollars) (the "Compensation")
2. The Compensation shall consist of:
(a) $600,000 (six hundred thousand dollars) in cash
consideration; and
(b) $400,000 (four hundred thousand dollars) in stock in
FutureLink to be issued at $7.47 per share, being the
average of the closing bid and ask prices of the
FutureLink common stock for the five business days
ended September 7, 1999.
3. The Compensation will be paid according to the following
schedule:
(a) Months 1-3 of the Agreement - FutureLink will pay ▇▇
▇▇▇▇ consideration of $125,000 (one hundred
twenty-five thousand dollars) per month for a total
of $375,000 (three hundred seventy-five thousand
dollars) for months 1-3
(b) Months 4-12 of the Agreement - FutureLink will pay
SM:
(i) Cash consideration of $25,000 (twenty five
thousand dollars) per month for a total of
$225,000 (two hundred twenty five thousand
dollars) for months 4-12; and
(ii) Stock consideration of stock in FutureLink
at $7.47 per share of 6,694 shares per month
for a total of 53,552 shares worth $400,000
(four hundred thousand dollars) for months
4-12.
B. Other Conditions:
1. FutureLink shall also issue to SM, a warrant to purchase an
additional $250,000 (two hundred-fifty thousand dollars) of
FutureLink common stock at $7.47 per share (a total of 33,467
shares) expiring August 7, 2000 and SM agrees that it shall
exercise same prior to expiry.
2. SM agrees to engage FutureLink as its full-service Application
Service Provider for 80 to 100 seats.
3. FutureLink agrees to register the stock to be paid as
consideration and the stock underlying the warrants in
conjunction with the registration of stock issued by the
FutureLink to acquire Executive LAN Management, Inc. dba Micro
Visions.
This Addendum may be executed in any number of counterparts by facsimile, each
of which when so executed and delivered shall be deemed an original but such
counterparts shall together constitute one and the same instrument.
FUTURELINK DISTRIBUTION CORP. ▇▇▇▇▇▇ ▇▇▇▇▇▇
By: /s/ By: /s/
--------------------------- ------------------------------
Title: Title:
------------------------ ---------------------------
Date: Date:
------------------------- ----------------------------
By:
---------------------------
Title:
------------------------
Date:
-------------------------
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[SICOLAMARTIN LOGO]
1999 CLIENT/AGENCY
PROPOSAL
Prepared for
[FUTURELINK LOGO]
August 7, 1999
As revised 10/22/99
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CONTENT OUTLINE
o Overview
o Company Goals
o Relationship Proposal
o Proposed Services
o Account Team
o Professional Fees
o Terms and Conditions
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OVERVIEW
A new category of service provider has emerged within the IT market. This is the
Application Service Provider (ASP) category. Simply stated, ASP's deliver
applications to any desktop of any type via WAN/LAN connectivity. The key
benefits to the customer of this emerging technology are the ability to:
o Simplify IT within the organization
o Rapidly deploy applications and upgrades to users in any location
around the world
o Eliminate the budget and costs associated with application deployment
and maintenance
o Focus on strategic use of information, not on maintaining the
underlying IT and application infrastructure
o Budget against predictable costs
o Ensure a guaranteed level of service, including levels of network
performance and the end-user experience
FutureLink is a pioneer in the ASP arena, and has potential to be the dominant
provider in the category. FutureLink is completing its acquisition of Micro
Visions, the leading Citrix reseller, and will leverage Micro Visions
competencies and experience in server-based computing to achieve a leadership
position in the ASP category.
FutureLink has requested that SicolaMartin offer strategic marketing and
creative services to achieve the following key goals:
o MIND SHARE - Develop dominant brand awareness and preference among key
target audiences to ensure that FutureLink is recognized as and
considered the leader in the ASP market
o CHANNEL DEVELOPMENT - Develop channel recruitment, support and
opportunity-driving programs to maximize market reach
o OPPORTUNITY - Generate sales opportunities as a key element of the
channel support program and to achieve the company's sales and share
of market goals
o Partnership - Attract world class alliance partners
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RELATIONSHIP PROPOSAL
SicolaMartin proposes a retainer-based relationship in which the agency will
support FutureLink's marketing and communications department. This approach
will allow SicolaMartin to:
o Offer unbiased, strategically sound counsel that will assist
FutureLink in meeting its business and marketing objectives during
the initial planning and strategic development stage
o Plan and align ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ efforts to maximize the company's
return on investment while simultaneously meeting specific business
requirements
o Meet immediate and ongoing needs of the company
o Create marketing communication materials to help support and improve
relationships with prospective resellers, customers, alliance
partners, investors and employees
The scope of this proposal is for the time period of August 15, 1999 through
August 31, 2000. Strategic marketing consultation, communications planning,
market research recommendations, creative strategy documents, creative
services, art direction, copywriting, proofreading and account management are
covered under this proposal.
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PROPOSED SERVICES
PROGRAM OVERVIEW
In order to support the company's immediate and long-term goals, SicolaMartin
has developed this proposal to cover the following key areas of strategic
marketing planning and creative services:
o Positioning and messaging and near-term marketing strategy
o Corporate and brand identity system
o Immediate creative deliverables for 1999
o Strategic marketing planning and execution for 2000
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PROPOSED SERVICES
POSITIONING AND MESSAGING AND NEAR-TERM STRATEGY
This effort is to develop the strategic foundation for all programs and
communications deliverables. It will provide the framework necessary to
differentiate the company from its competitors, and is based on a level of
understanding and development of the company's Unique Selling Proposition (USP).
The result will be a clearly defined company and brand positioning platform.
This platform will enable FutureLink to deliver consistent, high-impact
messages to well defined target audiences, across the complete spectrum of
communication vehicles, from public relations through brochures, from
advertising to trade shows -- whatever medium might be employed. The specific
deliverables are:
o Near-term strategic planning -- further definition of company goals and
marketing communications objectives, near-term requirements and actions
to develop immediate mind share and to support the launch of the
company's channel program beta
o Target audience definition and refinement in order to pinpoint the best
prospects for the company's offerings
o Management team interviews and work session to identify immediate
requirements, plan for support of near-term milestones, and develop
preliminary positioning and messaging solutions.
o Positioning and messaging. Development of positioning and messaging
platform from which all creative strategies are developed, for all
communications vehicles. Deliverables include a positioning sentence,
paragraph and description as well as a benefit-oriented key message map.
o Competitive assessment in order to assure that the positioning and
messaging has a unique position within the competitive landscape.
o Brand personality attribute assessment and recommendations in order to
agree upon and develop the ideal visual personality traits of the
company
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PROPOSED SERVICES
CORPORATE AND BRAND IDENTITY SYSTEM
A company's brand identity should reflect and visually communicate the
Company's positioning, unique selling proposition and desired personality
attributes. In order to maximize impact, this identity should be developed
and managed through all communications media from the company's logo and
paper system to its website.
While the FutureLink name appears to be well suited for the business in
which the company in engaged, SicolaMartin recommends an assessment and
research of the logo as to its ability to communicate the desired company
personality and uniquely differentiate the company. Based upon this
assessment, SicolaMartin will develop brand identity system concepts that
would include the following:
- Corporate logo (if a change is appropriate)
- Corporate paper system (letterhead, envelopes, business cards,
mailing labels, fax forms, press release format, internal forms
such as a reseller application, pocket folder)
- Graphic standards development, writing, design and production of
a design standards guide to provide methodologies and resources
for global design management. Scope includes delivery of an
original master document and files. This will be developed upon
completion of the logo and paper system.
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PROPOSED SERVICES
CORPORATE AND BRAND IDENTITY SYSTEM (CONT.)
Using the brand identity positioning and messaging as the foundation,
SicolaMartin will develop three (3) brand identity concepts.
Recommendations will include hierarchical collateral formats,
photo/illustration styles, typography, color, graphics, copy tone and
design methodologies. (Not included: Actual design implementation, draft
or final copy, actual photography or actual illustrations, production of
mechanical art.)
Design deliverables include the following potential deliverable (final
list to be developed in conjunction with FutureLink.
- Corporate overview/capabilities brochure
- End-customer capabilities and service overview brochure
- Service offering spec sheets
- White paper
- Presentation template
- Pocket folder
- Case study template
- Branded environment (trade show/event/seminar graphics)
- Top-level web-site design concepts (brand identity concepts only)
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PROPOSED SERVICES
IMMEDIATE MARKETING DELIVERABLES
FutureLink has indicated the need to maximize mind share and support several
key milestones including the launch of its channel beta program and numerous
industry events such as iForum. SicolaMartin proposes to work with FutureLink
to identify immediate support requirements, partner with FutureLink's PR
agencies to align efforts and coordinate messages, and develop appropriate
marketing support materials for the near-term. These materials may include:
o Company overview brochure
o Company presentation
o Recruitment deliverables
o Additional items as determined via discussions
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PROPOSED SERVICES
STRATEGIC MARKETING PLANNING AND EXECUTION FOR 2000
In order to meet FutureLink's long-term mind share, channel development
opportunity-generation and sales goals, SicolaMartin recommends the following
key activities and deliverables:
o Development and production of agreed-to brand identity system
elements and creative deliverables, including
Reseller overview brochure
Reseller sales toolkit
Multimedia presentation
Technical spec sheets
Customer case studies
Interactive CD-Rom
Technical white papers
o Development of a mind share execution and creative concepts plan to
achieve the company's awareness and preference goals against key
target audiences
o Development of a comprehensive channel recruitment and support
program and sales enablement tools
o Assessment of the company's website and development of an interactive
strategy in support of FutureLink's mind share, channel program and
opportunity-generation programs
o Development of an opportunity-generation program and creative
concepts to generate qualified selling opportunities for FutureLink
reseller
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FUTURELINK ACCOUNT TEAM
SicolaMartin is pleased to be given the opportunity to work with FutureLink. We
recognize that the company is a leader in the emerging ASP marketplace and we
welcome the opportunity to assist the company establish a dominant worldwide
marketplace position. The agency team outlined below is a best of breed team
that have the extensive experience required to achieve FutureLink's goals and
objectives as they are known today. The type and level of personnel assigned to
FutureLink is subject to change as the relationship between SM and FutureLink
matures and as needs and requirements grow and change over time.
CONSULTING AGENCY PARTNER
Executive strategy and creative consultation and direction
- ▇▇▇ ▇▇▇▇▇▇, President (15%)
MARKETING AND ACCOUNT PLANNING SERVICES
Strategic planning, positioning & messaging, research supervision and marketing
consultation
- ▇▇▇ ▇▇▇▇▇▇▇, VP Marketing Services (10%)
- ▇▇▇ ▇▇▇▇▇▇▇▇, Account Planning Director (15%)
ACCOUNT MANAGEMENT
Account direction, strategy development, relationship management and ongoing
project management
- ▇▇▇▇▇ ▇▇▇▇▇, Account Director/Marketing Consultant (50%)
- ▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Account Supervisor (50%)
- ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Account Manager (50%)
- To be assigned, Account Manager (50%)
- To be assigned, Account Coordinator (50%)
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ACCOUNT TEAM
CREATIVE AND PRODUCTION SERVICES
Creative direction and supervision, brand identity development, design, concept
and layout
- ▇▇▇▇▇▇ ▇▇▇▇▇▇, Vice President, Creative Services (5%)
- ▇▇▇▇ ▇▇▇▇▇▇, Creative Director (30%)
- ▇▇▇▇▇ ▇▇▇▇, Senior Graphic Designer (30%)
- To Be Assigned, Graphic Designer (30%)
- To Be Assigned, Copywriter (30%)
- ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Print Production Manager (20%)
- ▇▇▇▇▇ ▇▇▇▇, Graphics Department Director (10%)
- To Be Assigned, Graphic Artist (20%)
- ▇▇▇▇ ▇▇▇▇▇▇, Presentations Department Manager (5%)
- ▇▇▇▇ ▇▇▇▇▇▇, Proofreader (10%)
WEB STRATEGY AND DEVELOPMENT
Web assessment, strategy and implementation plan development, including
high-level design concepts
- ▇▇▇▇ ▇▇▇▇▇, VP, Interactive Services (5%)
- ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, Executive Producer, Interactive Services (10%)
- ▇▇▇▇▇ ▇▇▇▇▇▇, Senior Technical Developer (5%)
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PROFESSIONAL FEES
SicolaMartin proposes the following compensation.
A two-part compensation plan, which recognizes that the strategic development,
brand shaping, and the underlying strategies for the initial brand promotion
efforts are front loaded in terms of workload. Thus, we propose an initial fee
of $125,000/month for the first three months (8/15-11/15), and $61,885/month
retainer for the next 9 months, ending 8/31/2000 (in actuality, 9 1/2 months).
The total compensation under this arrangement is $931,965 for a total of 12 1/2
months.
The compensation covers all staff time, for developing all materials detailed
in this proposal. It does not include hard production costs, such as printing
of the brochures) our out-of-pocket expenses for travel. Included in the fee
are the normal expenses required to run the account on a day to day basis, such
as telephone, faxes, deliveries, and normal copies of day to day documents.
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INDEMNIFICATION
FUTURELINK shall be responsible for the accuracy, completeness and propriety of
information concerning its organization, products, competitors' products and
services which FUTURELINK furnishes to SM in connection with the performance of
this Agreement. Accordingly, FUTURELINK shall indemnify and hold SM harmless
from and against any loss, damage, liability, claim, demand, suit and expense
(including reasonable attorneys' fees) ("Loss") which may be incurred by SM as
the result of any claim, suit or proceeding made or brought against SM based
upon any advertising or other services which SM prepared or performed for
FUTURELINK and which was approved by FUTURELINK.
FUTURELINK shall also similarly indemnify and hold SM harmless in respect of
any Loss which SM may sustain resulting from any claim, demand, suit or
proceeding made or brought against it arising out of the nature or use of any
of FUTURELINK's products or services.
SM will defend and indemnify FUTURELINK from any action, suit or proceeding
(including reasonable attorney's fees) based upon or arising out of any final
judgment for money damages resulting from:
1. ▇▇▇▇▇, slander, defamation or
2. Any infringement of copyright or of title or slogan, or
3. Piracy, plagiarism, or unfair competition or idea
misappropriation under implied contract, or
4. Any invasion of privacy committed or alleged to have been
committed in any advertisement, publicity article, broadcast or
telecast and arising our of SM's services to FUTURELINK
hereunder, except to the extent that such claims arise from
information or materials provided by or through FUTURELINK.
FUTURELINK agrees to defend and hold SM harmless for
infringement or claim of infringement arising out of SM's
adherence to FUTURELINK's instructions or directions which do
not involve items of SM's origin, design or selection.
Upon the assertion of any claim or the commencement of any suit or proceeding
against an indemnitee by any third party that may give rise to liability of an
indemnitor hereunder, the indemnitee shall promptly notify the indemnitor of the
existence of such claim and shall give the indemnitor reasonable opportunities
to defend and/or settle the claim at its own expense and with counsel of its own
selection. Indemnitee shall at all times have the right to fully participate in
any settlement which it reasonably believes would have an adverse effect on its
business. The indemnitee shall make available to the indemnitor all books and
records relating to the claim, and the parties agree to render to each other
such assistance as may reasonably be requested in order to ensure a proper and
adequate defense. An indemnitee shall not make any settlement of any claims
which might give rise to liability of an indemnitor hereunder without the prior
written consent of the indemnitor.
This paragraph, insofar as it applies to work undertaken while this Agreement
is in effect, shall survive the termination of this Agreement.
CONSTRUCTION
This Agreement shall be construed in accordance with the governed laws of the
State of Texas for contracts made and to be performed entirely in Texas.
ATTORNEY'S FEES
In the event that any action or proceeding is brought in connection with this
Agreement, the prevailing party shall be entitled to recover its costs and
reasonable attorney's fees.
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TERMS & CONDITIONS
The stated fees include all elements as outlined in this proposal. The budget
does not include sales tax.
a) For projects that are outside the scope of work as defined in this
proposal, our terms are 50% of cost upon approval of the estimate or proposal
that is submitted in advance for each project. Once the first billing amount is
incurred, the second half of the proposal or estimate will be billed. Monthly
professional fees are billed in advance at the beginning of each month for that
month of service. Accounts payable are due within 30 days of invoicing.
b) Hard costs incurred on behalf of FutureLink, such as photography, printing,
film, etc., will be billed at a discounted agency markup of 10%. Media placed on
behalf of FutureLink will be billed to include the standard agency fee of 15%
which covers the cost of buying and serving the media program. 100% of the media
cost will be billed upon approved estimate for the month that the media runs.
Copyright of all creative, copywriting and development services performed will
transfer to FutureLink upon payment of final billing. SicolaMartin retains the
right to show names and designs created for our own literature or promotional
purposes.
Agency and client may terminate this relationship at any time upon 60 days
written notice given by either party to the other. In no event may this
agreement be terminated by FutureLink before November 15, 1999.
In the event the relationship is terminated by either party:
a) Both parties shall continue to observe and perform their obligations to the
fullest, pursuant to the terms of this agreement for 60 days from the date of
the notice of termination.
b) If the notice of termination is given by either party during the middle of
a month, the fees payable by the client shall be pro-rated to a daily rate and
will be collectible for 60 days from the date of notice.
c) Once the notice of termination has been given, the Agency shall not procure
any further hard costs on behalf of the client, except those hard costs which
have been previously authorized by the client for projects which have been
initiated by the Agency and which the client desires to have completed.
SicolaMartin agrees to provide its services for FutureLink on an exclusive
basis. During the term of this agreement, SicolaMartin will not perform the same
or substantially the same services for any person or entity which is involved in
the Application Service Provider or Server Based Computing business which may,
directly or indirectly become a competitor of FutureLink. The definition of
whether such person or entity is in fact a direct or indirect competitor to
FutureLink will be determined by agreement between SicolaMartin and FutureLink.
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