Exhibit 10.8
March 24, 2000
Xxxxxxx X. Xxxxx Xx.
Click Commerce, Inc.
000 Xxxxx Xxxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
RE: Long Term Business Relationship
Dear Xx. Xxxxx:
Xxxxxxxx Consulting LLP ("Xxxxxxxx Consulting") is pleased to enter into this
letter agreement relating to a future long term business relationship between
Xxxxxxxx Consulting and Click Commerce, Inc. ("Click"). This letter will
confirm our agreement to negotiate further mutually acceptable arrangements
("Arrangements"), including the pursuit of the additional business objectives
more specifically discussed below.
The Arrangements contemplated in this letter shall be subject to (1) Xxxxxxxx
Consulting obtaining all internal Xxxxxxxx Consulting and Xxxxxxxx Worldwide
approvals (if necessary) for the Arrangements, (3) Click obtaining all corporate
and shareholder approvals and consents required for the Arrangements, and (3)
the execution of various definitive agreements ("Definitive Agreements")
mutually agreeable to the parties (such Definitive Agreements to be on terms
consistent with this letter).
These Arrangements have five components: (1) a "marketing alliance component",
whereby we will seek mutual and independent success in the marketplace (the
"Alliance"); (2) an "initial equity component", whereby Xxxxxxxx Consulting (or
an affiliate) will purchase common stock of Click (the "Equity Investment"); (3)
a "solution launch assessment", whereby Xxxxxxxx Consulting and Click will
jointly assess the capabilities of Click and its products, and the parties will
agree upon a joint marketing strategy and various project related initiatives
(the "Assessment"), (4) a project based engagement by Click of Xxxxxxxx
Consulting for the performance of certain project based consulting activities as
agreed by the parties, and (5) a "warrant component", whereby Xxxxxxxx
Consulting (or an affiliate) will receive warrants to purchase Click common
stock, with the vesting of such warrants contingent upon Xxxxxxxx Consulting (or
its affiliates or third parties agreed to by the parties acting on Xxxxxxxx
Consulting's behalf) satisfying certain Click revenue targets (the "Warrant
Arrangement").
This letter describes the broad terms of these elements to ensure both
organizations have a common understanding. We each agree to enter into good
faith negotiations to finalize the specific terms of the contemplated future
agreements and to take all necessary steps to obtain the necessary board,
management and shareholder approvals, as the case may be.
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COMPONENT #1: THE MARKETING ALLIANCE
Click and Xxxxxxxx Consulting are entering into a "Marketing Alliance" to
achieve mutual and independent success in the marketplace through the promotion
of Click products and related services and Xxxxxxxx Consulting services. This
Marketing Alliance shall be based on the following basic principles:
. We will jointly develop specific objectives, targets and plans for business
development for the benefit of both parties, including joint support for
marketing, investments, target segments and specific named accounts.
. Each party will promptly evaluate which of its existing customers and
prospects may provide marketing opportunities for the products and services
of the other party. The parties will thereafter exchange such information and
begin appropriate marketing activities.
. Each party will provide for active management for its participation and each
party will promptly designate an executive sponsor and a team leader for this
relationship.
. The parties will jointly manage the Marketing Alliance, but the parties will
remain independent, and neither party shall have the right to speak for, or
enter into binding legal commitments on behalf of, the other party.
. The parties will mutually agree on each party's use of the other's name,
logos and other intellectual property in marketing activities.
. Each party will identify one highly qualified account for initial joint
marketing activities. Any revenue generated for Click from the Xxxxxxxx
Consulting account shall be considered as satisfying a portion of the revenue
targets under the Warrant Arrangement.
. As of the date of the joint marketing alliance agreement and continuing
during the term of the joint marketing alliance agreement, Click shall
designate Xxxxxxxx Consulting as a "Click Preferred Systems Integrator" on a
global basis, and except for its strategic alliances existing prior to the
date hereof, Click shall not designate more than one other Click Preferred
Systems Integrator. The joint marketing alliance agreement shall define the
meaning of a Click Preferred Systems Integrator and describe the marketing
activities of Click associated with such a designation. Except for certain
marketing activities as provided in the joint marketing alliance agreement,
Click shall not be precluded from working with any other systems integrator
in any manner.
The parties will enter into a further joint marketing alliance agreement that
will contain more detailed terms and conditions as agreed to by the parties.
COMPONENT #2: XXXXXXXX CONSULTING'S EQUITY INVESTMENT IN CLICK
Xxxxxxxx Consulting (or an affiliate) will purchase shares of Click common stock
for $10 million in cash, with the number of shares acquired equaling a 2%
interest in Click, post-investment, on a fully diluted basis (i.e., after the
exercise of all warrants and preferred stock) at a valuation of $500 million.
Xxxxxxxx Consulting will purchase the common stock from certain existing
stockholders of Click. Xxxxxxxx Consulting (or an affiliate) shall have the
right to introduce a qualified senior executive of Xxxxxxxx Consulting (or an
affiliate) for consideration by Click as a nominee to the board of directors of
Click, subject to Click's chief executive officer approving the qualifications
of such member.
The stock purchase will be pursuant to a stock purchase agreement in form and
substance mutually satisfactory to the parties. Xxxxxxxx Consulting shall
become a party to the existing Click stockholders'
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agreement (which includes certain registration rights for Xxxxxxxx Consulting).
The shares so purchased may be subsequently transferred only in compliance with
applicable laws, rules and regulations, the purchase agreement and the
applicable provisions of the Click stockholders' agreement.
COMPONENT #3: SOLUTION LAUNCH ASSESSMENT
On or about May 15, 2000, Xxxxxxxx Consulting and Click will jointly commence
the Assessment. Xxxxxxxx Consulting will dedicate a team of personnel to the
Assessment for approximately six weeks. The team is contemplated to include one
alliance executive, two managers and two consultants, with individual
participation as agreed by the parties. Click shall pay Xxxxxxxx Consulting's
reasonable out-of-pocket expenses, but no professional services fees for the
services performed for conducting the Assessment.. The Assessment work would be
specified in mutually agreed arrangement letters and covered by a mutually
agreed consulting services agreement (the "CSA").
COMPONENT #4: PROJECT BASED ARRANGEMENT
Click and Xxxxxxxx Consulting will enter into additional arrangement letters
under the CSA for the provision of additional services that Click requests to
implement the Assessment. Xxxxxxxx Consulting will xxxx Xxxxx, and Click will
pay, for these services at 75% of Xxxxxxxx Consulting's standard rates. The CSA
will have a term of three years (the "CSA Term"). The parties will work
together to determine the specific nature of these services. While the parties
have discussed a team composition of approximately ten appropriately skilled
Xxxxxxxx Consulting personnel for approximately six months, the final term and
composition of the team will be as agreed by the parties. Click agrees that
during the CSA Term, no potential competitor of Xxxxxxxx Consulting shall be
paid more in fees for consulting services associated with Click's internal
infrastructure than Xxxxxxxx Consulting. "Click's internal infrastructure" as
referenced in the proceeding sentence shall be further defined by the parties in
the CSA.
COMPONENT #5: WARRANT ARRANGEMENT
At the time of the Equity Investment and commencement of the Marketing Alliance,
Click shall grant, pursuant to a mutually-agreed Warrant Agreement, to Xxxxxxxx
Consulting (or an affiliate) warrants to purchase a number of shares of common
stock of Click equivalent to the number of shares purchased by Xxxxxxxx
Consulting (or an affiliate) in the Equity Investment. The warrants shall have
an exercise price equal to the price per share paid by Xxxxxxxx Consulting (or
an affiliate) in the Equity Investment. The warrants shall vest based on the
recognition by Click of certain revenue levels from clients acquired based on
the activities of Xxxxxxxx Consulting (i.e., each $4 million of aggregate Click
revenue will vest 10% of such warrants, with an aggregate target of $40 million
over the three years following the granting of the warrants). A mutually
agreeable penalty shall apply in the event Xxxxxxxx Consulting fails to generate
any revenue which shall decrease proportionally as the warrants vest. The
revenue shall be deemed recognized based upon the amount of fees indicated to be
received by Click in executed contracts.
DISCLOSURE OF ARRANGEMENTS
Prior to the closing of the stock purchase, and except as provided in this
paragraph, Click may not use Xxxxxxxx Consulting's name, logo or other
intellectual property in any communication, release or otherwise without the
prior written consent of Xxxxxxxx Consulting. Following the closing of the
stock purchase, Click may only use Xxxxxxxx Consulting's name, logo or other
intellectual property as provided in the joint marketing alliance. Click may
disclose its business relationship with Xxxxxxxx Consulting, this letter and any
associated contracts only to the extent appropriate or required under applicable
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securities laws and regulations, provided that Click will use its reasonable
efforts to give Xxxxxxxx Consulting as much prior written notice of such
disclosure as possible and Click shall use commercially reasonable efforts to
summarize and/or redact any terms of such business relationship and contracts
that are deemed confidential by Xxxxxxxx Consulting. Subject to the reasonable
approval of Click's legal counsel, Click will allow Xxxxxxxx Consulting to
participate in and to assist Click in preparing any documentation necessary to
summarize and/or redact such confidential information from securities filings.
MISCELLANEOUS
In the event that either party should become liable to the other in conducting
the activities contemplated in this letter, neither party will be liable to the
other for any indirect, special, incidental, consequential, exemplary or
punitive damages or for any form of damages other than direct damages.
Prior to entering into any of the Definitive Agreements contemplated by items
(1) through (5) above, this letter shall terminate upon written notice (1) from
Click to Xxxxxxxx Consulting that Click will not be able to obtain all corporate
and shareholder approvals or consents required for the Arrangements, (2) from
Xxxxxxxx Consulting to Click that Xxxxxxxx Consulting will not be able to obtain
all internal Xxxxxxxx Consulting and Xxxxxxxx Worldwide approvals required for
the Arrangements, (3) from either party to the other that, after good faith
negotiations, the notifying party does not anticipate the execution of any of
the Definitive Agreements, or (4) by either party of the occurrence of a
material adverse change in the affairs of Click. This letter shall also
terminate on April 30, 2000 (or such later date mutually agreed by the parties)
if no Definitive Agreement has been entered into by such date.
This letter shall be governed by and construed in accordance with the laws of
Illinois, without giving effect to conflict of law rules.
Nothing contained in this letter is intended to confer on any party other than
the parties hereto any rights, benefits or remedies of any kind or character
whatsoever and no person shall be deemed a third-party beneficiary under or by
reason of this letter.
Click acknowledges that Xxxxxxxx Consulting LLP is a partnership formed under
the laws of the State of Illinois. Click expressly agrees that Click shall look
solely to Xxxxxxxx Consulting LLP and its property for satisfaction of any claim
under this letter and that no partner of Xxxxxxxx Consulting shall be personally
liable for any obligation of Xxxxxxxx Consulting under this letter or any
Definitive Agreement and no recourse may be had against any such partner's
private property in order to satisfy any of the obligations of Xxxxxxxx
Consulting under this letter or any Definitive Agreement.
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Please indicate your agreement with the foregoing terms by signing this letter
where indicated and returning it to Xxx X. Xxxxxx.
Very truly yours,
XXXXXXXX CONSULTING LLP
By /s/ Xxx X. Xxxxxx
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Title Partner
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Date 3/24/00
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ACKNOWLEDGED AND ACCEPTED:
CLICK COMMERCE, INC.
By ___________________________
Title ___________________________
Date ___________________________
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