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REVENUE SHARING AGREEMENT

Consulting Services Agreement

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ELCOM INTERNATIONAL INC

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Title: REVENUE SHARING AGREEMENT
Date: 8/18/2005
Industry: Software and Programming    

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<PAGE>

 

                                                                    Exhibit 10.2

 

DATED                                                       AUGUST 12, 2005

 

(1)    Elcom Systems Limited

 

(2)    IMPAQ Business Solutions Limited

 

(3)    PA Consulting Services Limited

 

(4)    @UK plc

 

(5)    PA Shared Services Limited

 

                            REVENUE SHARING AGREEMENT

 

                                     - 1 -

<PAGE>

 

                                                                    Exhibit 10.2

 

                                     CONTENTS

 

<TABLE>

<CAPTION>

CLAUSE                                                                      PAGE

<S>                                                                         <C>

1.   INTERPRETATION.......................................................     4

2.   COMMENCEMENT AND TERM................................................     8

3.   OBLIGATION OF PASSL..................................................     9

4.   OBLIGATIONS OF THE CONSORTIUM MEMBERS................................     9

5.   THE STEERING COMMITTEE AND AUTHORISED REPRSENTATIVES.................    10

6.   COSTS RECOVERABLE THROUGH AGREED MECHANISM...........................    11

7.   PSB SET UP COSTS.....................................................    12

8.   VALUE ADDED SERVICES.................................................    12

9.   SET OFF..............................................................    13

10. INTEREST ON LATE PAYMENT.............................................    13

11. NO PARTNERSHIP AGENCY OR EMPLOYMENT..................................    13

12. BANK ACCOUNT.........................................................    14

13. ACCOUNTS AND FINAL RECONCILIATION....................................    14

14. LIABILITY OF THE PARTIES.............................................    16

15. EXPELLED PARTIES.....................................................    18

16. CONFIDENTIALITY......................................................    19

17. TAXATION.............................................................    19

18. DISPUTES.............................................................    20

19. GENERAL..............................................................    20

20. NOTICES..............................................................    21

21. AMENDMENTS...........................................................    23

22. CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999.........................    24

23. GOVERNING LAW AND JURISDICTION.......................................    24

</TABLE>

 

                                     - 2 -

<PAGE>

 

                                                                    Exhibit 10.2

 

THIS AGREEMENT is made the 12th day of August 2005

 

BETWEEN:

 

      1      Elcom Systems Limited (registered number 2838561) whose registered

            office is at Forest House , 3-5 Horndean Road, Bracknell,RG12 0XQ;

            ("ELCOM")

 

      2      IMPAQ Business Solutions Limited (registered number 03800294) whose

            registered office is at Lantern House, Walnut Tree Close, Guildford,

            Surrey, GU1 4TX; ("IMPAQ")

 

      3      PA Consulting Services Limited (registered number 00414220) whose

            registered office is at 123 Buckingham Palace Road, London SW1W 9SR;

            ("PACS") also the ("GUARANTOr").

 

      4      @UK plc (registered number 03732253) Unit 5 Jupiter House Calleva

            Park Aldermaston Reading RG7 8NN;("@UKPLC")

 

      5      PA Shared Services Limited (registered number 05234104) whose

            registered office is at 123 Buckingham Palace Road, London SW1W

            9SR;("PASSL")

 

BACKGROUND:

 

(A)    PASSL has signed or is due to sign a Framework Agreement with OGC which

      obliges PASSL to provide and maintain an e-procurement system called the

      Zanzibar System;

 

(B)    PASSL has requested the assistance of various sub-contractors (the other

      parties to this Agreement) to assist in the provision of the Zanzibar

      System and to ensure compliance with their respective duties and

      obligations under the Framework Agreement and other associated agreements;

 

(C)    In consideration of PASSL signing the Framework Agreement and the

      Consortium agreeing to provide certain services to PASSL, PASSL agrees,

      subject to the terms of the Agreement, to reimburse each Consortium Member

      certain defined set up costs and value added costs as incurred, and to

      share Annual Subscriptions in agreed proportions; and

 

(D)    The Guarantor has agreed to provide a performance guarantee in favour of

       OGC and PSB's for PASSL's obligations under the Framework Agreement and

      its associated agreements.

 

                                     - 3 -

<PAGE>

 

OPERATIVE PROVISIONS

 

1.     INTERPRETATION

 

1.1    In this Agreement the following expressions shall have the following

      meanings unless inconsistent with the context:

 

      "ACCOUNTING PERIOD"                  Means the most recent quarter within a

                                          financial year at any given time. For

                                           the avoidance of doubt, the relevant

                                          quarter end dates are the last Friday

                                          in March, June, September and on the

                                           31st December and the first Accounting

                                          Period shall run from the Effective

                                          Date to the first quarter end date to

                                          occur following the Effective Date;

 

      "ADDITIONAL RISK PREMIUM"            Has the meaning set out in Schedule

                                          ERROR! REFERENCE SOURCE NOT FOUND.;

 

      "AFFILIATE"                          Means in relation to a company, any

                                          holding company, subsidiary,

                                          subsidiary undertaking or fellow

                                          subsidiary or subsidiary undertaking

                                           or any other subsidiaries or

                                          subsidiary undertakings of any such

                                          holding company. For the purposes of

                                          this definition the words "subsidiary"

                                          and "holding company" shall have the

                                          same meaning as in the Companies Act

                                          1985;

 

      "AGREED MECHANISM"                   Has the meaning set out in Schedule

                                          ERROR! REFERENCE SOURCE NOT FOUND.;

 

      "AGREED PROPORTION"                  Has the meaning set out in Schedule

                                          ERROR! REFERENCE SOURCE NOT FOUND.;

 

      "BUSINESS DAY"                       Means any day other than a Saturday or

                                          Sunday or a public or bank holiday in

                                          England;

 

      "CENTRAL MANAGEMENT COSTS"           Has the meaning set out in Schedule

      OR "CMC"                             ERROR! REFERENCE SOURCE NOT FOUND.;

 

      "COLLECTION ACCOUNT"                 Means the current or deposit accounts

                                           to be

 

                                  Page 4 of 25

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                                          opened by PASSL pursuant to

                                          clause 12.1;

 

      "CONSORTIUM MEMBER(s)"               Means the individual parties that make

                                          up the Consortium and such Consortium

                                          Members are PACS, @UKplc, ELCOM and

                                          IMPAQ;

 

      "CONSORTIUM"                         Means those parties that on or around

                                          the date of this Agreement have

                                          entered into Sub-Framework Agreements

                                           of even date for the purpose of

                                          supplying and delivering the Zanzibar

                                          System and associated services via

                                          PASSL;

 

      "CORE SET-UP COSTS" OR "CSUC"        Has the meaning set out in Schedule

                                          ERROR! REFERENCE SOURCE NOT FOUND.;

 

      "COSTS"                              Means the Core Set Up Costs, PSB

                                           Hosting Costs, and Central Management

                                          Costs;

 

      "DEVELOPMENT POOL"                   Means the development pool specified

                                          in section 5 of Schedule 4 of the

                                           Framework Agreement;

 

      "DIRECT COSTS" OR "DC"               Means the direct costs as set out in

                                          Schedule ERROR! REFERENCE SOURCE NOT

                                          FOUND.;

 

      "DISPUTE RESOLUTION PROCEDURE"       Means the procedure contained in

                                          Schedule ERROR! REFERENCE SOURCE NOT

                                          FOUND.;

 

      "EFFECTIVE DATE"                     Means the date of the last signature

                                          to this Agreement;

 

      "FRAMEWORK AGREEMENT"                Means the Framework Agreement entered

                                          into between PASSL and OGC of even

                                           date;

 

      "INTEREST INCOME"                    Means interest received or credited to

                                          the Collection Account;

 

      "LOAN"                               Means an intra-group loan facility

                                          made by PACS to PASSL;

 

      "OGC CHARGE"                         2.5% of any amount invoiced by PASSL

                                          to a PSB under any Service Provision

                                           Agreements in any given Accounting

                                          Period;

 

                                  Page 5 of 25

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      "OGC"                                Means the counterparty to the

                                           Framework Agreement, namely the Lords

                                          Commissioners of Her Majesty's

                                          Treasury as represented by

                                          OGCbuying.solutions and includes its

                                          successors or assigns;

 

      "OTHER INCOME" OR "OE"               Has the meaning set out in Schedule

                                          ERROR! REFERENCE SOURCE NOT FOUND.;

 

      "PERFORMANCE GUARANTEE"              Means the performance guarantee to be

                                          provided by PACS in favour of OGC

                                          guaranteeing the obligations of PASSL

                                           under the Framework Agreement and

                                          Service Provisions Agreements;

 

      "PERFORMANCE INCENTIVES"             Means the amounts payable to PSB's in

                                          respect of service level breaches

                                          pursuant to the Service Provision

                                          Agreements;

 

      "PSB HOSTING COSTS" OR "PSBHC"       Has the meaning set out in Schedule

                                           ERROR! REFERENCE SOURCE NOT FOUND.;

 

      "PSB SET-UP COSTS"                   Means the fees chargeable by a

                                          Consortium Member for the set - up and

                                          initial configuration of the Zanzibar

                                          System for a PSB;

 

      "PSB"                                Means any public sector body, buying

                                          organisation or other body that has a

                                           right to use the Zanzibar System with

                                          whom PASSL enters into a Service

                                          Provision Agreement;

 

      "RELEVANT FUNDS"                      Has the meaning set out in Clause 7.2;

 

      "RISK PREMIUM"                       Has the meaning set out in Schedule

                                          ERROR! REFERENCE SOURCE NOT FOUND.;

 

      "SERVICE PROVISION AGREEMENT"        Has the same meaning as is defined in

                                          the Framework Agreement;

 

      "SERVICES"                           Means the services to be provided to

                                          OGC or a

 

                                   Page 6 of 25

<PAGE>

 

                                          PSB or supplier under the Framework

                                          Agreement, Service Provision Agreement

                                          or Supplier Agreement as the case may

                                          be;

 

      "STEERING COMMITTEE"                 Means the committee formed pursuant to

                                          Clause 5;

 

      "SUB-FRAMEWORK AGREEMENT"            Means the framework agreements entered

                                          into individually between each member

                                          of the Consortium and PASSL of even

                                          date which enable PASSL to provide the

                                           Services;

 

      "SUBSCRIPTION REVENUE" OR "SR"       Means the revenue received by PASSL

                                          from a PSB for use of the Zanzibar

                                          System derived from the Annual

                                          Subscription Charges as defined in the

                                          Framework Agreement;

 

      "SUPPLIERS"                          Has the same meaning as it is defined

                                           in the Framework Agreement;

 

      "SUPPLIER AGREEMENT"                 Has the same meaning as it is defined

                                          in the Framework Agreement;

 

      "VALUE ADDED RELEVANT FUNDS"         Has the meaning set out in Clause 8.2;

 

      "VALUE ADDED SERVICE"                Has the meaning specified in Schedule

                                          4 of the Framework Agreement;

 

      "VOLUME DISCOUNT"                    Has the meaning specified in Schedule

                                          4 of the Framework Agreement;

 

      "WARRANTY RETENTION"                 Means a percentage of the revenue from

                                          the Services that is received by PASSL

                                           which is retained to cover potential

                                          warranty or indemnity claims more

                                          particularly described in Schedule

                                           ERROR! REFERENCE SOURCE NOT FOUND.;

                                          and

 

      "ZANZIBAR SYSTEM"                    Has the same meaning as it is defined

                                          in the

 

                                   Page 7 of 25

<PAGE>

 

                                          Framework Agreement.

 

1.2    Any reference to a statute or statutory provision shall be construed as a

      reference to the same as from time to time amended, modified, extended,

      re-enacted, consolidated, or replaced.

 

1.3    The headings to the clauses and Schedules of this Agreement are for

      convenience only and shall not affect its construction or interpretation.

 

1.4    In this Agreement the masculine includes the feminine and the neuter, and

      the singular includes the plural and vice versa as the context shall admit

      or require.

 

1.5    References to "parties" are references to the parties to this Agreement as

      may be varied from time to time, and the expression "person" means any

      individual, firm, body corporate, unincorporated association, partnership,

      government, state or agency of a state or joint venture.

 

1.6    Any obligations on a party not to do or omit to do anything includes an

      obligation not to allow that thing to be done or omitted.

 

1.7    References to "consent" or words to similar effect mean a consent given in

      advance in writing signed by or on behalf of the party whose consent is to

      be given.

 

1.8    References to "goods" include any plant, tools or equipment.

 

2.     COMMENCEMENT AND TERM

 

2.1    This Agreement shall commence on the Effective Date and shall expire when

      the Framework Agreement and Service Provision Agreements terminate, expire

      or are novated to OGC (or any third party other than an Affiliate of

      PASSL) whichever is the later and when all Subscription Revenue, Risk

      Premium and Additional Risk Premium and any interest thereon have been

      distributed that arise from the Framework Agreement and its associated

      documents.

 

2.2    The provisions of Clauses 11, 13, 14, 14.9, 16, 18 19, 20, 21, 22 and 23

      shall continue to bind the parties following expiration of this Agreement

      or expulsion of any party pursuant to Clause 14.9 or otherwise and all

      other clauses in this Agreement which expressly or impliedly have effect

      after termination shall continue to be enforceable notwithstanding

      termination.

 

                                  Page 8 of 25

<PAGE>

 

3.     OBLIGATION OF PASSL

 

3.1    PASSL shall at all times comply with the Framework Agreement, the

      Sub-Framework Agreements and the Service Provision Agreements.

 

3.2    PASSL has agreed to be the counterparty to all agreements with the OGC,

      PSB's and Suppliers in reliance upon the commitments of Consortium Members

      set out in the Sub-Framework Agreements.

 

3.3    In consideration of the Consortium Members providing the Services in

      accordance with the Sub-Framework Agreements, PASSL shall:

 

       3.3.1 Pay each of the Consortium Members the PSB Set Up Costs and costs

            for the Value Added Services subject to the terms of this Agreement;

            and

 

      3.3.2 Share a proportion (if any is applicable under the Agreed Mechanism)

             of the Subscription Revenue, Risk Premium and Additional Risk

            Premium and any Other Income in accordance with the terms of this

            Agreement.

 

3.4    In consideration of PACS providing the Performance Guarantee, PASSL shall

       indemnify and hold harmless PACS against all claims under the Performance

      Guarantee.

 

4.     OBLIGATIONS OF THE CONSORTIUM MEMBERS

 

4.1    The Consortium Members shall at all times comply with their Sub-Framework

      Agreement, and shall co-operate with PASSL, under the terms of the

      Sub-Framework Agreement, to enable PASSL to comply with its obligations

      under Clause 3.1 above.

 

4.2    PACS agrees to provide a Loan, on demand of PASSL, to PASSL. PACS will

      charge PASSL interest on the Loan calculated monthly and at an interest

      rate set monthly. Interest shall accrue until it is repayable under

      Clauses 4.4 and 4.5. The Loan will be provided on similar terms to other

      loans provided within the PA Group of companies or such other rate as the

      Inland Revenue determine should properly be chargeable under schedule 28AA

      Taxes Act 1988. At the date of this Agreement those terms provide for

      interest to be charged at the LIBOR rate rounded up to the nearest 0.25%

      plus 1%. At the start of each calendar month PACS will advise PASSL of the

      interest rate for that

 

                                  Page 9 of 25

<PAGE>

 

      month. Advances made within the month will accrue interest at the market

      rate applicable for the remaining part of that month

 

4.3    PASSL agrees that the aggregate of all advances made by PACS under the

      Loan shall not exceed (pound)300,000 (three hundred thousand pounds)

      (excluding interest) except in the absolute discretion of PACS.

 

4.4    Subject to clause 4.5, each advance of the Loan will be repayable and all

      interest accrued but unpaid will be payable on the 31st of December in the

      year that the advance was made.

 

4.5    Advances made during and up to the end of the first calendar year of this

      Agreement will be repayable on the 31st of December in the following year.

      The interest accrued on advances made up to 31st of December in the first

      calendar year of this Agreement will be payable by PASSL on the 31st

      December 2005.

 

4.6    PASSL shall use Subscription Revenue to pay the accrued interest and repay

      the Loan advances when due.

 

4.7    If PASSL has insufficient Subscription Revenue from which to pay the

      accrued interest and/or Loan advances when due, then each Consortium

      Member agrees to meet the Loan obligations of PASSL to the extent of their

      Agreed Proportion as at the date the Loan advances and any accrued

      interest are due. In order to ensure that all Consortium Members pay the

      costs of the loan in their cumulative Agreed Proportion over the life of

      the Agreement, any amounts repaid in prior years will be recalculated at

      the end of each subsequent year based on the latest Agreed Proportion for

      each Consortium Member and any changes will be reflected in the following

      settlement to that Consortium Member from Subscription Revenue. In this

      event, PASSL will render an invoice to each Consortium Member which will

      be payable on within 10 Business Days of receipt of the invoice.

 

4.8    PASSL shall inform the Steering Committee of the amount of the Loan

      outstanding on a monthly basis.

 

5.     THE STEERING COMMITTEE AND AUTHORISED REPRSENTATIVES

 

5.1    The parties shall form a Steering Committee for the purpose of

      co-ordinating delivery of the Services. Each party shall appoint one

      representative to the Steering Committee.

 

                                 Page 10 of 25

<PAGE>

 

5.2    Individuals who are members of the Steering Committee may be replaced at

      the discretion of the party appointing them.

 

5.3    The parties shall forward details of any request for Services to the

      Steering Committee who shall make a decision as to which Consortium Member

      should undertake or offer to undertake the service in question. In the

      absence of agreement the matter shall be decided by PASSL taking into

      account any representations made by the Steering Committee.

 

5.4    Each Consortium Member shall appoint an authorised representative who may

      approve any aggregation discounts as set out in Schedule 4 of the

      Framework Agreement. A Consortium Member may change the authorised

      representative on written notice to all parties to this Agreement.

 

5.5    Where any matter is stated in this Agreement to be decided by the Steering

      Committee then the Steering Committee's decision must be a unanimous

      decision unless expressly stated otherwise.

 

6.     COSTS RECOVERABLE THROUGH AGREED MECHANISM

 

6.1    Each member of the Consortium will bear its own Core Set Up Costs, PSB

      Hosting Costs and Central Management Costs and will not invoice PASSL for

      any of these costs.

 

6.2    At the date of signature of this Agreement each Consortium Member will

      provide accurate details of all Costs incurred to the date of signature

      and each month thereafter will provide accurate details of all Costs

      incurred in the previous calendar month not less than 10 days after the

      end of a calendar Month.

 

6.3    Each Consortium Member can only recover their Costs through the Agreed

      Mechanism.

 

6.4    If a component has been substituted in the Zanzibar System because it was

      supplied by a Consortium Member other than in accordance with the

      Sub-Framework Agreement and the overriding requirements set out in the

      Framework Agreement then the Costs of that Consortium Member will be

      reduced pro rata by the Steering Committee and in the absence of unanimous

      agreement as to the reduction, by the directors of PASSL considering any

      representations of the Steering Committee. The pro rata reduction will

 

                                 Page 11 of 25

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      be calculated by taking the cost of the component substituted, dividing it

      b


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