Exhibit 10.32

 

Rainmaker/IBM Confidential

 

STATEMENT OF WORK

for

IBM ServicePac Sales

Under

IBM Non-Technical Service Agreement #4901AD0002

 

This Statement of Work (“SOW”) adopts and incorporates by reference the terms
and conditions of Non-Technical Services Agreement #4901ADOO2 (“Agreement”)
between International Business Machines Corporation (herein identified as “IBM”)
and Rainmaker Systems, Inc, (herein identified as “Outsource Provider”). This
SOW is effective upon its signing by both parties (the “Effective Date”) and
will remain in effect for 1 year, unless earlier terminated in accordance with
Section 9 hereof. Transactions performed under this SOW will be conducted in
accordance with and be subject to the terms and conditions of this SOW, the
Agreement and any applicable Work Authorizations (“WAs”). This SOW is a WA.

 

Confidential treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated “***”. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.

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Rainmaker/IBM Confidential

 

1.   Scope Of Work

 

Under this SOW, Outsource Provider will market and sell IBM’ s ServicePacs to
Customers.

 

More specifically, Outsource Provider will direct marketing services towards
prospective Customers as provided by IBM in the Customer Data who either: (i)
own IBM hardware whose warranty has expired, or will expire in the Near Future,
(ii) have an existing repair service agreement which expires in the Near Future,
(iii) recently purchased IBM hardware without any service upgrades, or (iv) have
an expired repair service agreement.

 

Outsource Provider will also provide to IBM the Deliverables and Services
described in Sections 2.0 and 3.0 of this SOW.

 

Outsource Provider’s Services under this SOW do not include any additional
rights to renew or sell other IBM or third party products.

 

1.0   DEFINITIONS

 

The following terms contained in quotations shall have the following meanings
for purposes of this Agreement. Additional terms may be defined in the body of
this SOW.

 

1.1   “Customer Data” means, collectively, any and all (i) information contained
in each data download delivered by IBM to Outsource Provider; (ii) any and all
data derived by Outsource Provider based on such data download, including the
lists of Customers and machines or equipment and information permitted to be
collected by Outsource Provider under Section 3.1, and (iii) any and all
information contained in any status reports delivered to IBM by Outsource
Provider hereunder.

 

1.2   “Customer” means existing customers of IBM identified by IBM as a
prospective purchaser of an IBM ServicePac.

 

1.3   “IBM Retained Amount” means the percentage of the List Price retained by
IBM of each ServicePac, in accordance with the terms and conditions set forth in
the IBM Business Partner Agreement for Resellers, currently ***.

 

1.4   “List Price” means the non-discounted price set forth by IBM for the
ServicePacs.

 

1.5   “Outsource Provider’s Commission” means the difference between the IBM
Retained Amount and the price paid by each Customer for each ServicePac
purchased.

 

1.6   “Product” means any IBM ServicePac available for purchase or renewal by
any Customer.

 

1.7   “Programs” means Outsource Provider’s offerings with respect to the
relevant Target Market as set forth under Section 3.6 below.

 

1.8   “ServicePac” refers to IBM electronic agreements for repair services.

 

Confidential treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated “***”. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.

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Rainmaker/IBM Confidential

 

1.9   “Services” shall mean, collectively, Outsource Provider’s sales,
marketing, invoicing, credit and collections of ServicePacs to Customers and all
associated activities and efforts required to accomplish the same, as more fully
set forth under this SOW.

 

1.10   “Target Market” means Customers whose information is included in the
Customer Data provided by IBM to Outsource Provider.

 

1.11   “Near Future” is the timeframe that Outsource Provider determines is the
most effective to begin marketing to Customers in each Program.

 

1.12   “Program Execution” means the first day that Outsource Provider begins
sales and marketing communications to Customers for the Programs.

 

2.0   DESCRIPTION OF DELIVERABLES AND SERVICES

 

2.1   OVERVIEW

 

Outsource Provider shall contact Customers, through various media (eg.
teleservices, facsimile, direct mail, electronically), for the purpose of
selling IBM ServicePacs to those Customers. For each Customer to whom Outsource
Provider sells ServicePacs, Outsource Provider will place an electronic order,
and complete IBM’s registration process. Outsource Provider will also provide
periodic reports that reflect Outsource Provider’s performance of its sales
activities and other sales data. In addition, Outsource Provider will create and
maintain various databases that contain the information that Outsource Provider
and IBM agree are necessary under this SOW.

 

Outsource Provider’s sales team that is dedicated to the IBM account will not
work on other accounts. Outsource Provider will hire, assign, train and support
the necessary individuals to perform the Services hereunder. These resources
will support both inbound and outbound telesales.

 

2.2   DATABASES

 

IBM shall retain ownership over and own any and all Customer Data, including
Customer Data contained in any database created by Outsource Provider under
Section 3.5 below. Outsource Provider’s activities with respect to any databases
are further addressed in Section 3.0, “Outsource Provider’s Responsibilities”.

 

Any and all Customer Data shall be considered “Confidential Information” and
governed by the Agreement for Exchange of Confidential Information # RAIN702
signed on 07/16/2002 between IBM and Outsource Provider (“AECI”).

 

2.3   DATA REPORTING

 

IBM shall retain ownership over and shall own any data prepared by Outsource
Provider for IBM as part of the Services under this SOW, including, but not
limited to, such data

 

Confidential treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated “***”. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.

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Rainmaker/IBM Confidential

 

found in each Status Report. Outsource Provider’s activities with respect to any
such data reports are further addressed in Section 3.0 “Outsource Provider’s
Responsibilities”.

 

Any reported data shall be considered IBM’s “Confidential Information” and
governed by the AECI.

 

2.4   PERFORMANCE REVIEW

 

During the Term of this Agreement, IBM shall have the right to review Outsource
Provider’s performance on a quarterly basis based on the Quality Measurements,
as such term is defined under Section 5 below; in the event IBM reasonably
determines that Outsource Provider is not expending commercially reasonable
efforts to meet such Quality Measurements, IBM shall be entitled to terminate
this Agreement effective ninety (90) days after Outsource Provider’s receipt of
IBM’s notice thereof.

 

3.0   OUTSOURCE PROVIDER’S RESPONSIBILITIES

 

Outsource Provider has the following responsibilities associated with this SOW:

 

3.1   DATA AND SYSTEM INTEGRATION

 

Upon receipt of Customer Data, Rainmaker will begin integration of Services for
this SOW. The objective of the integration is to create a transparent extension
of IBM for the purpose of sales and marketing of ServicePacs as outlined in this
SOW. The primary activities of the integration are as follows:

 

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Confidential treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated “***”. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.

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Rainmaker/IBM Confidential

 

Outsource Provider is responsible for the provision of its own equipment and
software applications required to access, and interface with, IBM’s electronic
ServicePac order fulfillment and ServicePac registration systems.

 

3.2   TELESALES ACTIVITIES

 

Outsource Provider’s telesales professionals will use Outsource Provider’s sales
force automation systems to manage ServicePac sales opportunities. Outsource
Provider shall only contact Customers to perform the Services necessary to sell
ServicePacs within the Programs as outlined in this SOW. If a Customer declines
to purchase ServicePacs for certain machine(s) or equipment, Outsource Provider
agrees to make no further contact with such Customer regarding such machines or
equipment. If Customer requests that no further communications take place
regarding all of Customer’s eligible machines and equipment, such Customer will
be flagged for discontinuation of future marketing. Notwithstanding the
foregoing, Outsource Provider’s telesales professionals may request the
following information from those Customers they contact: names of primary
contact(s), configuration of Customer’s machines and equipment, phone number,
mailing address, facsimile number, and e-mail address. All telesales materials
are subject to IBM’s reasonable approval before being used by Outsource Provider
to perform the Services hereunder.

 

All telesales scripts are subject to IBM’s reasonable approval before being used
by Outsource Provider to perform the Services hereunder.

 

3.3   MARKETING ACTIVITIES

 

Outsource Provider will create IBM-specific marketing strategies based on
Outsource Provider’s expertise and IBM business objectives.

 

After analyzing, segmenting and profiling Customer Data, Outsource Provider
executes specialized programs to cost-effectively deliver sales of ServicePacs.
The program may leverage email, direct mail, fax and phone communications, as
well as customer relationships that lead to renewed contracts and acceptance of
Up-Sell and Attach offers.

 

3.4   All marketing materials are subject to IBM’s reasonable approval before
being used by Outsource Provider to perform the Services hereunder. During the
term hereof, IBM shall use commercially reasonable efforts to notify Outsource
Provider of its approval or rejection of such materials within ten (10) days of
receipt.

 

3.5   DATABASE SERVICES

 

Outsource Provider will create and maintain a secure database of Customer Data
provided by IBM, Customer profile updates gathered through telesales and
marketing efforts and other Customer information related to the Services under
this SOW. If requested by IBM, Outsource Provider will provide IBM the Customer
Data contained in any such data bases to IBM within ten (10) business days of
the date of receipt of IBM’s

 

Confidential treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated “***”. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.

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Rainmaker/IBM Confidential

 

written request therefore. IBM and Outsource Provider will mutually agree on the
format and transfer method of such Customer Data within 5 business days of
Effective Date.

 

IBM will provide Outsource Provider with Customer Data that IBM, in its sole
discretion, deems necessary for Outsource Provider to provide the Services
hereunder including, but not limited to, the Customer Data as described in
paragraph 3.6, SCOPE OF SERVICES, below.

 

Outsource Provider will integrate such Customer Data into Outsource Provider’s
sales and marketing systems. Outsource Provider’s access to, and use of, this
information from IBM is restricted to Outsource Provider’s performance of
Services under this SOW (the “Permitted Purpose”), and such shall be the
Permitted Purpose under the AECI.

 

3.6   SCOPE OF SERVICES

 

Outsource Provider may provide Services only to those Customers in the Target
Market. During the term hereof, IBM and Outsource Provider shall cooperate and
pursue sales to Customers in relevant Target Markets as follows:

 

PROGRAMS

 

1) Attach Program - The sale of ServicePacs within the first 90 days of the
Customer’s purchase, as an upgrade to the Customer’s current level of support
within the existing warranty period. For this Program Outsource Provider will
require regular data feeds of current sales data. The content, schedule and
transfer method for these feeds will be mutually agreed upon by IBM and
Outsource Partner.

 

2) Warranty Conversion Program - The sale of ServicePacs to Customers whose
warranty is expiring in the Near Future. For this Program Outsource Provider
will require a minimum of 1 year’s worth of warranty expiration data going
forward from the Effective Date. The content, schedule and transfer method for
these feeds will be mutually agreed upon by IBM and Outsource Provider.

 

3) ServicePac Renewal Program - The sale of ServicePacs as renewal of support
for an existing ServicePac that will expire in the Near Future. The content,
schedule and transfer method for these feeds will be mutually agreed upon by IBM
and Outsource Provider.

 

ServicePac Reactivation Program - The sale of ServicePacs to re-instate support
for Customers whose warranty has already expired. The content, schedule and
transfer method for these feeds will be mutually agreed upon by IBM and
Outsource Provider.

 

4) Upsell Activities - For each Program Outsource Provider may identify, through
communications with the Customer, opportunities to upgrade a Customer’s service
to a higher level or sell ServicePacs for machines or equipment identified by
the Customer that may not appear in the Customer Data.

 

Confidential treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated “***”. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.

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Rainmaker/IBM Confidential

 

For all Programs described above, Outsource Provider reserves the right to limit
sales and marketing activities to those Customers for which sufficient Customer
contact data is provided by IBM. IBM and Outsource Provider will mutually agree
to the specific lines of business that will be targeted for the Programs based
on Outsource Provider’s analysis of the Customer Data provided by IBM.

 

IBM and Outsource Provider will mutually agree upon the format and
delivery/transfer method of Customer Data.

 

3.7   CUSTOMER CONTACT CENTER

 

Outsource Provider will provide a Customer contact center for Customers to
contact Outsource Provider by phone, fax, or e-mail to purchase IBM ServicePacs,
or to obtain more information about purchasing IBM ServicePacs.

 

3.8   STANDARD SUPPORT HOURS

 

Outsource Provider’s support staff will be available from 6 a.m. -5 p.m. (PST)
to answer Customer inquiries, provide sales support, take orders, process
payments, and register the purchased ServicePacs. Outsource Provider’s objective
is to register a minimum of *** of the ServicePacs sold within 3 business days
of sale.

 

3.9   ONLINE CONTRACT VIEWING

 

Outsource Provider will deploy its online contract viewing and renewal tools
specific to the ServicePac offers outlined in this SOW. This IBM-branded web
site, using Outsource Provider’s standard web template, is the destination for
Customers under Outsource Provider’s marketing for the ServicePac programs,
allowing on-line viewing of current service information related to the
ServicePac offers.

 

Customers shall have the ability to view machines and equipment eligible for
Programs within each Customer’s Data provided by IBM, initiate a quote, update
Customer profile information, such as ship-to, bill-to, and contact information,
accept ServicePac terms and conditions, and order online via credit card or
purchase order. Purchase orders are accepted on purchases over ***. All Customer
online transactions must be secure and password protected.

 

3.10   CUSTOMER ROUTING

 

Outsource Provider’s customer contact center staff will provide Customer
transfers to a toll free number provided by IBM to IBM’s Customer Support
Operations (CSO) at each Customer’s request or if Outsource Provider is
restricted from processing the order for any reason.

 

3.11   REPORTING

 

Confidential treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated “***”. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.

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Rainmaker/IBM Confidential

 

Outsource Provider will provide to IBM monthly reports of Quality Measurements
as specified in Section 5.0. In addition, Outsource Provider will provide
monthly and quarterly business unit reports incorporating the performance
measurements along with summaries of database building and ServicePac sales
activities as mutually agreed to by the Parties.

 

3.12   ADMINISTRATIVE SUPPORT

 

Outsource Provider will handle payment processing/tracking/verification of
purchase orders, process credit card orders, invoicing and collection payment on
accounts receivables (subject to Section 3.13 of the SOW) and entitlement
fulfillment. Outsource Provider’s staff will utilize IBM’s ServicePac
registration system to register all ServicePac purchases within 3 business days
of such purchases.

 

Within thirty (30) days of signing this SOW, Outsource Provider must open and
maintain in good standing an account with IBM Global Financing (IGF) to receive
IBM’s consolidated invoices based on orders placed by Customers. Payment terms
are net *** days from date of invoice.

 

3.13   PAYMENTS BY CUSTOMERS

 

In the event any Customer fails to remit payment to Outsource Provider,
Outsource Provider is responsible for collection. IBM has no obligation to
assist Outsource Provider in collection of outstanding debts owed to Outsource
Provider by Customers, provided that IBM shall immediately terminate any
ServicePac with respect to any Customer upon receipt of notice from Outsource
Provider that such Customer has not paid for the relevant ServicePac within
forty-five (45) days of Outsource Provider’s invoice therefor.

 

3.14   SUPPLIER REPRESENTATION TO CUSTOMERS

 

Outsource Provider’s sole purpose for contacting Customers under this SOW is to
sell IBM ServicePacs. Outsource Provider will not represent itself as IBM or
International Business Machines Corporation or any other entity. Outsource
Provider may represent itself only as “Extended Service Sales for IBM.”
Outsource Provider shall not make any false, misleading or derogatory statements
regarding IBM or IBM’s businesses.

 

4.0   OUTSOURCE PROVIDER’S USE OF SUBCONTRACTORS

 

Outsource Provider may subcontract Services to be performed hereunder.
Notwithstanding this subsection, Outsource Provider’s use of subcontractors does
not relieve Outsource Provider of the responsibility for the subcontractor’s
performance, and Outsource Provider’s obligations’ and responsibilities assumed
under this SOW will be made equally applicable to subcontractors. IBM reserves
the right to reject Outsource Provider’s use of any subcontractor in performance
of this SOW for any valid reason.

 

Confidential treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated “***”. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.

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Rainmaker/IBM Confidential

 

5.0   QUALITY MEASUREMENTS

 

Outsource Provider shall deliver to IBM, no later than thirty (30) days after
the end of each quarter, a written report to IBM containing the following
information: Sales results, performance against forecast, attainment rates vs.
opportunity, marketing delivery metrics, response rates, non-renewal reasons
captured by percent of base contacted, customer feedback (collectively the
“Quality Measurements”), recommendation for improvement, and next quarter
forecast and initiatives.

 

Outsource Provider shall deliver to IBM, no later than fifteen (15) business
days after the end of each fiscal month, a written report to IBM setting forth
Outsource Providers sales performance.

 

6.0   IBM’S RESPONSIBILITIES

 

IBM has the following responsibilities associated with this SOW:

 

6.1   SET-UP OF SUPPLIER AT BUYER

 

IBM’s ServicePac support organization will assign a resource to act as the focal
point for Outsource Provider. The focal point will be responsible for assisting
the Outsource Provider with use of IBM ServicePac registration process and will
provide general administrative advice and guidance.

 

6.2   DATA FEEDS TO SUPPLIER

 

All Customer Data supplied by IBM to Outsource Provider or from Outsource
Provider to IBM shall be considered Confidential Information pursuant to AECI.

 

IBM reserves the right to provide the data feeds delivered to Outsource Provider
hereunder to other sales entities in its sole discretion. Outsource Provider
shall have the right to terminate this Agreement effective upon 30 days written
notice upon learning of IBM sharing such data with such similar sales entities.

 

6.3   PRICES

 

IBM will provide Outsource Provider with List Prices for ServicePacs. As updates
occur to any such List Prices, IBM will provide Outsource Provider with those
updates.

 

Outsource Provider shall provide IBM with a consolidated purchase order on a
monthly basis representing the relevant Retention Amount for each ServicePac
purchased by Customers during such month. IBM shall invoice Outsource Provider
on the fifteenth (15th) day after of the end of the relevant month to which the
purchase order pertains. Outsource Provider shall pay each such IBM invoice
within *** days of receipt thereof. All invoices from IBM shall be sent to the
following address:

 

Confidential treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated “***”. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.

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Rainmaker/IBM Confidential

 

Rainmaker Systems, Inc.

1800 Green Hills Road

Scotts Valley, CA 95066

Attn: Accounts Payable

 

6.4   PRE-SALES TECHNICAL SUPPORT AND TRAINING

 

IBM shall provide to Outsource Provider’s designated instructors, at Outsource
Provider’s expense (including all travel expenses), pre-sales training on IBM
ServicePacs. Such training will be conducted at IBM’s site. Due to the
substantial experience Outsource Provider has with sales of similar services,
the content of the training will be primarily an overview and introduction of
the ServicePac portfolio and its associated registration process by IBM.
Outsource Provider agrees to utilize the trained instructors to train its
broader sales force on ServicePac offerings and registration processes.

 

7.0   MUTUAL RESPONSIBILITIES

 

Any operational issues or rules of engagement requiring additional definition or
clarification relevant to fulfilling the Services identified under this SOW
shall be addressed in a separate operational document which will be established
soon after the Effective Date and maintained throughout the term of this SOW.

 

8.0   CONFIDENTIALITY

 

Disclosure of confidential information will be governed by the terms of the
AECI.

 

9.0   TERMINATION

 

Either party may terminate this SOW if the other party is in material breach
under this SOW and the default continues for thirty (30) days after receipt of
written notice of such default from the non-defaulting party.

 

Either party may terminate this SOW without penalty upon 90 days written notice
to the other party except that IBM shall not serve any notice, other than for
material breach, to Outsource Provider at any time within the first ninety (90)
days from Program Execution.

 

IBM may terminate this SOW if Outsource Provider fails to pay IBM any undisputed
fees within thirty (30) days after receipt of written notice, other than
invoice, thereof from IBM.

 

Outsource Provider may terminate this SOW upon thirty (30) days prior written
notice to IBM (i) during the first three (3) months after the Effective Date of
this SOW based on Outsource Provider’s determination that the Customer Data
received from IBM or (ii) any “updates” to the Price List of ServicePacs
hereunder, in either case, renders, in

 

Confidential treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated “***”. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.

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Rainmaker/IBM Confidential

 

Outsource Provider’s sole discretion, performance of the Services hereunder
commercially unviable.

 

Accepted on behalf of Rainmaker

    

Accepted on behalf of ***

Name: Martin Hernandez

    

Name: ***

Position: Chief Operating Officer

    

Position: IBM Service Brand Executive

Signature:  /s/ Martin Hernandez

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Signature:  /s/ ***

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Date:  06/11/03

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Date:  06/16/03

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Confidential treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated “***”. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.