CANEUM, INC.
AMENDMENT NO. 3
TO
CONSULTING AGREEMENT
This Third Amendment (the "Amendment"), entered into this 25th day of
September 2008, is to the Consulting Agreement effective December 31, 2006,
as amended April 4, 2007, and April 23, 2007, (the "Agreement") by and
between CANEUM, INC., a Nevada corporation, ("Caneum") and BURDOCK INC., a
Saint Xxxxxxx & the Grenadines company ("Consultant").
RECITALS:
WHEREAS, the parties desire to amend the compensation arrangements under
the Agreement; and
WHEREAS, the parties desire to amend the Agreement as provided herein;
NOW, THEREFORE, pursuant to section 15 of the Agreement, the parties
hereto mutually agree to amend the Agreement as follows:
1. Amendment to Provide for Annual Bonuses. Section 8.4 is hereby
added to the Agreement to read as follows:
8.4 Annual Bonuses.
(i) Consultant will be eligible for an annual bonus tied to
performance as measured by the net profit generated by Caneum India Pvt Ltd,
formerly known as Continuum Systems Pvt Ltd and a wholly owned subsidiary of
Caneum ("Caneum India"), which will include all of the Application Services
business of Caneum India. The bonus will be a percentage of the net profit
generated and will be payable from Caneum with 50% of the bonus payable in
stock under Caneum's 2002 Stock Option/Stock Issuance Plan (the "Plan") and
50% payable in cash (USD). At the end of each year, the bonus formula will
be adjusted for the subsequent year based on both the Caneum and Caneum India
operating plans for the upcoming year. Consultant shall be eligible for such
annual bonuses for fiscal years commencing the current fiscal year ending
December 31, 2008.
(ii) For the fiscal year ending December 31, 2008, the bonus
formula shall be calculated as follows:
(a) 10% of the first US$100,000 of net profit (up to
US$100,000), which would amount to US$10,000 if the net profit is
US$100,000;
(b) 15% of the next US$100,000 of Net Profit
(US$101,000-US$200,000), which would be US$25,000 at a total net
profit of US$200,000; and
(c) 20% of everything above US$200,000 in Net Profit
(US$201,000+), which would be US$45,000 if Caneum India achieves a
total net profit of US$300,000.
Solely as an example, if Consultant had been eligible to receive an
annual bonus for 2007, it would have received the following compensation:
For achieving the current level of US$150,000 in net profit, Consultant would
have received total compensation computed as follows: US36,000 (current
base) + US$17,500 = US$52,500. For 2008, the stretch goal will be US$300,000
in net profit generated by Caneum India which, if achieved, would increase
Consultant's annual compensation to US$81,000.
(iii) The following provisions shall be used by the
parties in connection with the net profit calculation formula:
(a) Application development revenue shall consist of the
worldwide revenue resulting from business fulfilled in India, which
shall include all of the revenue recorded on Caneum India's books
as well as application development revenue recorded on Caneum's
books on an unconsolidated basis. All revenue shall be recorded in
accordance with U.S. GAAP standards. All intercompany revenue
shall be eliminated and all pre-billed revenue shall be deferred
until earned.
(b) Application development expenses shall consist of
the worldwide expenses incurred to send/fulfill business in India,
which shall include all the expenses recorded on Caneum India's
books as well as expenses related to application development
recorded on Caneum's books on an unconsolidated basis. All
expenses shall be recorded in accordance with U.S. GAAP standards.
All intercompany expenses shall be eliminated. Examples of
expenses recorded on Caneum's books to send/fulfill business in
India shall include:
* The proportion of salaries of U.S. service
providers utilized to send/fulfill business in India,
such as Nambi;
* Current base payments (but not including any
bonus payments) made out of the U.S. to other service
providers, such as Consultant and Xact Ltd; and
* Other payments made out of the U.S. directly
related to the Caneum India subsidiary, such as for
audit, legal and incorporation fees.
(iv) Caneum shall make cash bonus payments on a quarterly
basis in USD by wire transfer to an account designated by Consultant. Stock
certificates representing the stock portion of the bonus payments shall be
mailed to Consultant at the address set forth in the
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Agreement. Consultant shall execute and furnish to Caneum a Stock Grant Form
used in connection with the Plan as a condition to delivery of each stock
certificate to Consultant.
(v) Bonus payments shall be made within 45 days from end of
each calendar quarter, that is, the bonus earned for first quarter each year
shall be paid on or before May 15th of such year, the bonus earned for second
quarter shall be paid on or before August 15th of such year, the bonus earned
for third quarter shall be paid on or before November 15th of such year, and
the bonus earned for fourth quarter shall be paid on or before February 15th
of the following year; provided, that if the due date for any payment shall
occur on a non-business day in the State of California, the payment shall be
due and payable not later than the next business day.
(vi) Caneum Accounting shall make the calculations each
quarter based on the provisions set forth herein and required input from
Caneum and shall submit such calculations to Caneum's president for approval
not less than 10 business days prior to the bonus payment due date.
(vii) Any excess bonus payment on an annual calendar basis
shall be adjusted against future monthly consultancy fees payable pursuant to
this Agreement and/or quarterly bonuses payable pursuant to this Section 8.4.
2. Remainder of Agreement. Except as amended hereby, the Agreement
shall continue to be, and shall remain, in full force and effect. Except as
provided herein, this Amendment shall not be deemed (i) to be a waiver of, or
consent to, or a modification or amendment of, any other term or condition of
the Agreement or (ii) to prejudice any right or rights which Caneum may now
have or may have in the future under or in connection with the Agreement or
any of the instruments or agreements referred to therein, as the same may be
amended, restated, supplemented or otherwise modified from time to time.
3. Incorporation by Reference. The terms of the Agreement are
incorporated herein by reference and shall form a part of this Amendment as
if set forth herein in their entirety.
IN WITNESS WHEREOF, each of the parties hereto has executed this
Amendment the respective day and year set forth below to be effective as of
the day and year first written above.
CANEUM: CANEUM, INC.
Date: September 20, 2008 By: /s/ Suki Mudan
Name: Suki Mudan
Title: President
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CONSULTANT: BURDOCK INC.
Date: September 29, 2008 By: /s/ Scapa Directors Inc.
Name: Scapa Directors Inc.
Title: Director, BURDOCK INC
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