THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

ePresence, Inc. (Retired) (EPRE.X)

Employment Arrangements

Pursuant to the terms of an employment agreement between the Company and Mr. Ferry, as amended, Mr. Ferry is employed by the Company as its Chairman of the Board, President and Chief Executive Officer, and currently is paid a minimum annual salary of $550,000, and is eligible to earn an annual minimum bonus of $350,000 based upon the achievement of certain performance objectives determined by the Board. $120,000 of such bonus is paid to Mr. Ferry as a non-recoverable advance against his bonus in quarterly installments. The agreement also contains confidentiality and non-competition provisions. The agreement also provides for the forgiveness over a five year period of any loans made to Mr. Ferry, plus accrued interest, for the purpose of satisfying his federal, state and local tax obligations with respect to the issuance or vesting of shares of Restricted Stock, subject to his continued employment with the Company on each applicable annual anniversary date. See "Other Related Transactions" for a further discussion regarding loans to Mr. Ferry. Upon Mr. Ferry's death or disability, 50% of any unvested shares of Restricted Stock will vest.

The Company may terminate the Agreement upon sixty days written notice to Mr. Ferry, and Mr. Ferry may terminate the agreement for good reason with 60 days' notice upon the occurrence of certain specified events generally relating to diminished responsibility with the Company. In the event of a termination by the Company or Mr. Ferry for good reason, as the case may be, Mr. Ferry will be entitled to receive: (i) benefits for two years, (ii) continued option vesting for one year and (iii) a cash payment from the Company equal to the sum of two times his annual base salary and target bonus.

The Company has entered into Executive Retention Agreements with Messrs. Spaulding and Bellantuoni, that provide, in part, for six months of severance pay (including bonuses) and benefits upon the termination of employment (other than relating to a change in control) by the Company other than for death, disability or cause or by such executive officer for a material reduction in responsibilities. These agreements also provide for the forgiveness over a five year period of any loans made to each such executive officer for the purpose of satisfying his federal, state and local tax obligations with respect to the issuance or vesting of shares of Restricted Stock, subject to his continued employment with the Company on each applicable annual anniversary date. See "Other Related Transactions" for a further discussion regarding loans to these executive officers.

The Company has also entered into employment letter agreements with Messrs. Kitlinski and Silk, that provide that if the Company terminates such executive officer's employment for any reason other than for cause each will receive: (i) his base salary for a maximum of six months, (ii) all accrued bonuses, and (iii) medical and dental benefits for up to six months. Mr. Silk's agreement also provides for the forgiveness over a five year period of any loans made to him for the purpose of satisfying his federal, state and local tax obligations with respect to the issuance or vesting of shares of Restricted Stock, subject to his continued employment with the Company on each applicable annual anniversary date. See "Other Related Transactions" for a further discussion regarding loans to executive officers. In addition, Mr. Kitlinski will receive accelerated vesting of any stock options that would vest within the six-month period following the termination date. Mr. Kitlinski and the Company must each provide 30 days prior notice to the other to terminate the employment arrangement. Mr. Silk and the Company must each provide 60 days prior notice to the other to terminate the employment arrangement.

The Company eliminated the position held by Mr. Jackson and terminated his employment in December 2002. Pursuant to the terms of his employment letter agreement, Mr. Jackson's severance arrangement consisted of (i) base salary and medical and dental benefits continuance for a maximum of six months, (ii) payment of his accrued fourth quarter 2002 bonus, and (iii) accelerated vesting of any stock options that would vest within the six month period following the termination date.

Change in Control Arrangements

The Company has entered into arrangements with certain members of senior management including Messrs. Bellantuoni, Ferry, Kitlinski, Silk and Spaulding that include terms with respect to a change in control.

Upon a change in control of the Company, the Company will forgive any outstanding loans from the Company to Messrs. Bellantuoni, Ferry, Silk and Spaulding, plus accrued interest, in order to pay federal, state and local tax obligations with respect to the vesting or issuance of shares of Restricted Stock. See "Other Related Transactions" for a further discussion regarding loans to executive officers.

Upon the occurrence of a change in control (as defined in Mr. Ferry's Employment Agreement), (i) all of Mr. Ferry's unvested stock options will become 100% vested and exercisable, (ii) his Restricted Stock will become 100% vested and no longer subject to a right of repurchase by the Company, and (iii) he will receive a lump sum payment in cash equal to the sum of 2.99 times his annual base salary and target bonus.

The agreements with Messrs. Spaulding and Bellantuoni provide that upon a change in control of the Company, 50% of all unvested stock options held by each such executive officer will vest and 100% of all shares of Restricted Stock held by each such executive officer will vest and no longer be subject to the Company's right of repurchase. In addition, if subsequent to a change in control, such executive officer is terminated by the Company without cause or resigns for good reason, such executive officer will receive a minimum of one year of severance pay (including bonuses calculated at a level assuming achievement of targets) and a minimum of one year of continuation of benefits, and the remainder of his stock options will vest. Additionally, Messrs. Spaulding and Bellantuoni agreed to remain in the employ of the Company upon certain events relating to a change in control.

If the Company terminates Mr. Silk within twelve months after a change in control, he will receive twelve months of base salary and his target bonus. The employment letter agreement with Mr. Silk provides that upon a change in control of the Company, 50% of all unvested stock options held by him will vest. The restricted stock agreement dated December 1, 2000 between Mr. Silk and the Company also provides that upon a change in control of the company, 100% of all restricted shares held by him will vest and no longer be subject to the Company's right of repurchase.

If the Company terminates Mr. Kitlinski in the event of a change in control, 50% of all unvested stock options held by him will vest.

Other Related Transactions

Each of Messrs. Ferry, Spaulding, Bellantuoni and Silk have borrowed money from the Company in order to pay federal, state and local tax obligations with respect to the vesting or issuance of shares of Restricted Stock. In 2001, Messrs. Ferry, Spaulding and Bellantuoni issued consolidated promissory notes for such borrowings in the principal amounts of $1,063,941.33, $101,727.84 and $85,065.96, respectively. In 2001, Mr. Silk issued two separate promissory notes for such borrowings in the amounts of $28,219.48 and $15,495.68. All of the loans bear simple interest at the applicable federal rate. Except in the case of a change in control or with respect to any portion of the principal or interest forgiven, all principal and accrued interest must be repaid in full 90 days after the termination date of the respective executive officer's employment with the Company. On each anniversary date of the making of the aforementioned loans on which the respective executive officer is an employee of the Company, the Company will forgive 20% of the principal amount of the loans, plus accrued interest during each such annual period. If a change in control should occur during the employment of any of the respective executive officers, the Company will forgive the outstanding principal amount of his loan plus accrued interest. With respect to any amounts forgiven on an anniversary date or upon a change in control, a gross-up amount to satisfy applicable income taxes on such debt forgiveness income to any such executive officer shall be included.

Mr. Kitlinski also borrowed money from the Company in order to pay federal, state and local tax obligations with respect to the vesting of Restricted Stock in 2001 and issued a promissory note for such borrowings in the principal amount of $10,330.45. Mr. Kitlinski repaid this loan in full plus applicable accrued interest in 2002. Mr. Jackson had no borrowings from the Company.

During 2002, the largest aggregate amount of indebtedness outstanding by Messrs. Ferry, Spaulding, Bellantuoni, Silk and Kitlinski in connection with the above described loans was $1,096,548.65, $104,853.20 $87,679.42 $43,973.03, and $10,620.57, respectively. As of April 1, 2003, the total amount outstanding under each of the above loans, including interest, was $851,153.06, $81,382.27, $68,052.77, $22,575.58 and $12,396.54, and $0, for each of Messrs. Ferry, Spaulding, Bellantuoni, Silk and Kitlinski, respectively. In addition, in connection with these loans, Messrs. Spaulding, Bellantuoni and Silk have pledged a total of 27,200, 24,000 and 30,000 shares of Common Stock owned by them, respectively, as collateral.