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Exhibit 10.36
CONFIDENTIAL MATERIALS OMITTED PURSUANT TO AN APPLICATION FOR CONFIDENTIAL
TREATMENT AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE OMISSIONS.
AGREEMENT
AGREEMENT (this "Agreement"), made effective September 1, 1998, between The
Educational and Professional Publishing Group, a unit of The XxXxxx-Xxxx
Companies, Inc., ("XxXxxx-Xxxx"), a New York corporation, with an office located
at 000 Xxxxxxxx Xxxxx, Xxxxxxxxxxx, XX 00000 ("EPG"), and the Princeton Review
Publishing L.L.C., a Delaware limited liability company with an office located
at 0000 Xxxxxxxx, 0xx Xxxxx, Xxx Xxxx, XX 00000 ("TPR").
WITNESSETH:
WHEREAS, EPG and TPR are each publishers of proprietary educational materials,
and
WHEREAS, EPG and TPR intend to establish a long-term relationship, in which TPR
provides consulting services and creative materials which help relate EPG's
textbooks to state and national exams through editing of those textbooks and
creation of workbooks, seminars, and possibly an online product under a separate
agreement.
NOW THEREFORE, EPG and TPR agree as follows:
I. DEFINITIONS
Any capitalized term (or grammatical variant) that appears in this Agreement is
defined as follows:
A. "Deliverable" means any item that a Project Agreement specifies that
TPR is required to deliver.
B. "Display," and "Work Made for Hire" have the same definitions that
those terms have in the U. S. Copyright Act, 17 U. S. C.Section 101,
as amended.
C. "Divisions" means the following divisions of EPG:
Glencoe/XxXxxx-Xxxx, SRA/XxXxxx-Xxxx, CTB/XxXxxx-Xxxx, and the
XxXxxx-Xxxx School Division.
D. "Educational Market" means educational institutions of all types,
public and private, at all grade levels, including pre-school,
elementary school, middle, junior and senior high school, and all
customer types located therein, including students "taught at home,"
and all K-12 marketing channels of distribution within which EPG
directs its marketing and selling efforts. The Educational Market
excludes
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the retail consumer market, the educational trade book market, the
2- and 4-year college market, and the professional book market
channels of distribution related to the foregoing markets.
E. "XxXxxx-Xxxx Materials" means all educational materials including
text, computer programs, pictorial or graphic works, know-how,
pedagogy, methods, and other works, which XxXxxx-Xxxx provides to
TPR for inclusion in a Textbook or Workbook.
F. "Textbook" means textbooks, both student and teacher editions, that
any EPG Division publishes for the Educational Market and which TPR
supports, e.g. the Textbook contains TPR Textbook Contributions or
any part of the Question Pool, has received TPR Editorial Review, or
contains any TPR Xxxx or a reference to the association with TPR or
it is sold using the association with TPR as part of the advertising
or promotional program; or EPG distributes a related Workbook; or
TPR provides a related Training Seminar or online product.
G. "TPR Materials" means all educational text, computer programs,
pictorial or graphic works, questions, know-how, pedagogy, methods,
and other creative works, which result from TPR's services under
this Agreement or the Project Agreements.
H. Each of the following terms is defined in the Section set forth next
to it:
Acceptance IV.E
Approval Period IV.E
Brand Fee V.C
Change Order IV. C
Confidential Information XVII.B
Derivative Questions II.B.4
Design Document III.A
Educational Publisher XVI.A.
EPG Marks IX.A
EPG Programs V.D.1
Net Sales V.D.6
North America VIII.C
Online Product III.B.6
Project IV.A
Project Agreement IV.A
Project Manager IV.B
Question Pool II.B.4
Specification IV.A
Third Party Materials VIII.A
TPR Editorial Review II.X.x
TPR Marks IX.A
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TPR Textbook Contributions II.B.2
Trademark Materials XI.B
Trademarks IX.A
Training Seminars II.B.5
Workbooks II.B.3
II. THE PARTIES' PERFORMANCE OBLIGATIONS
A. EPG's responsibilities include the following:
1. prepare Textbooks in accordance with EPG's business judgment,
and, unless otherwise agreed, publish them within eighteen
(18) months of Acceptance of TPR's Deliverable agreed under a
Project Agreement for that particular Textbook, in such style
and manner, under any imprint of any EPG Division and at a
price EPG deems in the best interest of such Textbook; and
keep the Textbooks in print for as long as EPG deems
appropriate. EPG's good faith determination of the schedule
for, and timing of, publication will be binding on TPR. If a
Textbook is being prepared in anticipation of an adoption, and
the adopting agency postpones or otherwise delays the
adoption, the eighteen- (18-) month period referenced above
will be extended for a corresponding period;
2. print, publish and sell Workbooks created by TPR, either alone
or bundled with each Workbook's corresponding Textbook;
3. contribute XxXxxx-Xxxx Materials for TPR's use in the creation
of TPR Textbook Contributions and Workbooks;
4. contribute to the Question Pool * questions from its CTB
Division in the same subject matters and in approximately the
same relative percentages for each subject matter as the
questions that TPR is creating under Paragraph II.B.4;
5. arrange and schedule Training Seminars through EPG's Regional
Sales Offices;
6. sell and market the Online Product, if the parties decide to
develop it.
B. TPR's responsibilities include the following:
1. review, within the limits of its available resources as TPR
will decide in its sole discretion, the first page proofs, in
whole or in part, of pupil and teacher editions of
EPG-prepared Textbooks and offer oral or written comments and
suggestions for ensuring that sample test questions and other
testing information contained in them is accurate and aligned
with
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state or national standards ("TPR Editorial Review"). TPR will
inform EPG if it declines to perform TPR Editorial Review in
whole or in part, but if it performs, it will report to EPG as
part of the Project Agreement the number of pages it will
review. TPR Editorial Review is intended to enhance, not
replace, EPG's normal editorial and fact-checking procedures
and will be completed in accordance with a schedule to be
agreed upon in writing by the parties;
2. prepare one-color pages and other contributions for Textbooks,
which may include TPR Materials and XxXxxx-Xxxx Materials
("TPR Textbook Contributions");
3. prepare Workbooks in print format, each of which will refer to
a particular Textbook, or review and revise existing EPG
workbooks ("Workbooks");
4. create a pool of test questions that can be used by students
in grades 2-12 to practice for the major state and national
exams (the "Question Pool") and, subject to EPG's
determination in Section V.B.4, support the Question Pool so
as to keep it technically up-to-date and able to accommodate
minor changes to the exams. The initial Question Pool will
include * questions that EPG contributes from its CTB
Division, * questions from TPR's then-current and future
inventory, and * that TPR will create (at least * for each of
math and language arts and at least * for each of science and
history) on the schedule set out in the attached Exhibit A. If
TPR creates a question by electronically altering a question
from one test so that it conforms to the appropriate format of
a new test, TPR will count the new question as * of a question
for the purpose of meeting its quota of questions; if TPR
creates a question by manually altering a question from one
test so that it conforms to the appropriate format of a new
test, TPR will count the new question as * of a question for
the purpose of meeting its quota of questions. All such
altered questions shall be known as "Derivative Questions."
Each question in the Question Pool will be tagged so as to
identify whether it was created by TPR, contributed by TPR,
contributed by CTB Division, or, if a Derivative Question,
from what question it was derived. The major states are Texas,
California, Florida, Virginia, and North Carolina, and the
major exams are the SAT, ACT, CTBS, Terra Nova, SAT9, and
ITBS. If the parties agree, the Question Pool may be expanded
to include other states or tests;
5. prepare and conduct pre-service, in-service, and other
seminars for teachers and administrators about state or
national tests, at times and locations as the parties agree
("Training Seminars"); EPG shall have the right, pursuant to a
Project Agreement, to review the format, content, and
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materials that TPR uses for the Training Seminars, and TPR
will conduct Training Seminars only with the request and prior
approval of the appropriate EPG Regional Sales Office;
6. sell and market the Online Product, if the parties decide to
develop it.
III. DEVELOPMENT OF THE ONLINE PRODUCT
A. Design Document. EPG will pay * toward the creation of a design
document which contains specifications, features, schedules, and
cost estimates for an online product for students, their parents,
and teachers that complements the Textbooks ("Online Product") to be
delivered through the Internet ("Design Document").
B. Delivery and Approval. Not later than three days after execution of
the Agreement, TPR will deliver the Design Document, which will
include TPR's proposed price for the Online Product and a yearly
base online fee. After TPR's delivery of the Design Document, EPG
will have up to forty-five (45) days in which to decide whether to
proceed with the Online Product at TPR's price. If EPG elects to go
forward, the parties will enter into a separate agreement.
C. Option. If EPG elects not to proceed with the Online Product, TPR
will be free to negotiate with a third party for publication of the
Online Product based on the Design Document, except that if TPR
negotiates such a deal within the six (6) months following EPG's
rejection of TPR's offer for a price that is less than the price
that EPG rejected, TPR must again offer publication to EPG at that
price, and EPG will have ten (10) days in which to accept it.
D. If EPG elects not to go forward with the Online Product, TPR will
own all rights including copyright in the Design Document. If TPR
publishes the Online Product with another entity, TPR will repay EPG
* from the first proceeds of that publishing venture; if TPR
publishes the Online Product itself, TPR will repay EPG * which will
be offset against the royalties due under Section V.D.1 in three
equal amounts over the three years following TPR's publication.
IV. PROJECT AGREEMENTS AND PROJECT MANAGERS
A. Project Agreements. TPR Editorial Review, TPR Textbook Contribution,
Workbook, Training Seminar, Question Pool, and, if developed, Online
Product (collectively or singly, "Project") must be the subject of a
Project Agreement that conforms to the Sample Project Agreement
attached to this Agreement as Exhibit B and incorporated in it
("Project Agreement"). No Project Agreement is effective unless
signed by both parties. "Specifications" refers to all the
information contained in a Project Agreement or a Change Order. No
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Specification in a Project Agreement that conflicts with a provision
of this Agreement is valid, unless the Project Agreement is signed
by an officer of each of the parties.
B. Project Manager. Each party must designate a "Project Manager" for
each Project Agreement. Each of the Divisions is entitled to
negotiate and enter into Project Agreements with TPR. EPG's Project
Manager will initiate Project Agreements. Project Managers will be
responsible for managing each party's performance under a Project
Agreement. Project Managers will coordinate and facilitate
communication between the parties, direct activity for their
respective parties, send and receive notices, schedule meetings,
review and accept Deliverables and the performance of services, and
authorize payments, among other management duties.
C. Change Orders. Material changes in the Specifications of a Project
Agreement or for any material aspect or detail related to the
performance of a Project, including changes in Deliverables,
schedule dates, payment amounts, or other matters will be made by
use of a Change Order that conforms to the Sample Change Order
attached to this Agreement as Exhibit C ("Change Order"). A Change
Order will become part of the Project Agreement that it modifies,
and will become effective only when it is signed by each party's
Project Manager for the Project Agreement that it modifies, but no
Specification in a Change Order that conflicts with a provision of
this Agreement is valid, unless the Change Order is signed by an
officer of each of the parties.
D. Progress Reports. Project Managers will notify each other promptly
of any factor, occurrence, or event that may affect the party's
ability to meet the Specifications of a Project Agreement or that is
likely to occasion any material delay or accelerate completion of
the Project. As reasonably requested, TPR's Project Manager will
provide EPG from time to time with oral or written reports on the
progress of services performed and required under each Project
Agreement. Unless EPG gives notice of dissatisfaction within five
(5) business days of TPR's report, TPR will be entitled to assume
that its progress is satisfactory to EPG, and EPG will not later
claim lack of Acceptance based on circumstances of which it was
notified but did not object.
E. Acceptance. TPR will deliver any Deliverable for any Project in
accordance with the applicable Project Agreement, including
timetables. The Deliverables for any Project including electronic
files and/or camera-ready copy shall be prepared in accordance with
professional standards in the trade. "Acceptance" means that EPG has
determined in its reasonable judgment that a Deliverable or TPR's
services meet the agreed Specifications in the applicable Project
Agreement and this Agreement, or EPG's Project Manager has allowed
the Approval Period to
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pass without rejecting TPR's Deliverables or services. The "Approval
Period" will be a reasonable period to keep the Project on schedule,
generally not to exceed 14 days after TPR's delivery of a
Deliverable.
F. Non-Acceptance. If EPG determines that a Deliverable or service is
not Acceptable, EPG will so notify TPR within the Approval Period
specifying to the extent practical, how and to what extent, the
Deliverable or service is deficient and how it should be modified in
order to make it Acceptable. TPR will make changes in the
Deliverable or provide additional services at its own cost to make
the Deliverable or services Acceptable and re-deliver the revised
Deliverable to EPG. EPG will indicate its Acceptance of the revised
Deliverable according to the procedure established for Acceptance of
any Deliverable.
G. Deliverables and Services that are Not Acceptable. If TPR fails to
modify or correct Deliverables or services or if, after
modification, they are still not Acceptable to EPG, EPG will have
the right, in its sole discretion:
1. to permit TPR to finish, correct or improve any unsatisfactory
Deliverable of a Project by a reasonable date specified by
EPG, or
2. either as an alternative or in addition to TPR's revision
under (1) above, to make arrangements with third persons or
entities, as EPG may select, to correct, revise and complete
the Deliverable so as to make it Acceptable to EPG. In that
event, EPG may charge the reasonable cost of such arrangements
to TPR from funds due to TPR under this Agreement giving TPR
credit for any savings EPG may have realized, but the costs of
those changes charged to TPR will not exceed the monies due
TPR for the applicable Project Agreement.
V. PAYMENT FOR PROJECTS AND ROYALTIES
A. Payment Authorization. No royalty or other compensation will be due
or payable to TPR in relation to any Project or the exercise of any
rights, except as is expressly provided in this Agreement as duly
amended or in a Project Agreement or Change Order.
B. Project Fees.
1. For TPR's services in connection with the TPR Textbook
Contributions and Workbooks, EPG shall pay TPR * per one-color
page. The payment may vary upwards upon mutual agreement
reflected in a Project Agreement depending on factors such as
increased complexity, additional
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colors, and, in future years, inflation based on the Consumer
Price Index. The payment may also vary downwards upon mutual
agreement if the TPR Workbook or the TPR Textbook
Contributions require only minor revisions due to small
changes in a state test or in the related Textbook. Unless
otherwise provided in the Project Agreement, EPG shall pay TPR
half of the fee due under each Project Agreement upon
signature, and the remainder within 45 days of TPR's final
delivery of the Deliverable under any Project Agreement unless
the Deliverable is rejected within the Approval Period. EPG's
final payment will not by itself be deemed Acceptance of the
Deliverable if the Deliverable has been rejected during the
Approval Period, and EPG shall have a right to set off against
amounts due to TPR under this Agreement any final payment made
on a Deliverable that is not Accepted within the Approval
Period. TPR acknowledges receipt from EPG of a pre-payment of
* toward the services under this provision.
2. For TPR's services in connection with TPR Editorial Review
where there has been review only and no TPR Textbook
Contribution, EPG shall pay TPR * for each edited page that
EPG submits to TPR for review.
3. For conducting Training Seminars, EPG shall pay TPR monthly *
per full-day seminar and * per half-day seminar, plus
reimbursement of costs for travel, lodging, and meals, upon
submission of reasonable proof of expenditures over $50 in
accordance with EPG's reimbursement policies and practices,
and the TPR regional office will invoice EPG's local regional
sales office directly for such services and costs. EPG is
responsible for invoicing and collections from customers.
4. Question Pool. Under a Project Agreement under this Agreement
for TPR's preparation of * questions as provided in Paragraph
II.B.4, EPG will pay a total of * according to the following
schedule: for contract year * for contract year * and for
contract year * The payment for the 1998-99 contract year is
due upon execution of this Agreement, and subsequent payments
are due on the anniversary date of this Agreement. In
addition, EPG will pay TPR * annually at the beginning of each
contract year in order to support the Question Pool, except
that after the first year and on six (6) months' notice, EPG
may discontinue the * support fee if it reasonably concludes
that continued support of the Question Pool is unnecessary to
its continued usefulness. The first annual fee will be due
upon execution of the Agreement. If new questions are required
because of changed circumstances such as new tests, they will
be prepared under separate Project Agreements that include an
agreed fee.
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C. Brand Fee. Within 45 days of December 1, 1998, and within 45 days of
December 1 of each subsequent year of the contract, EPG will pay TPR
for use of the TPR Trademarks on materials in the EPG Programs as
follows: *
D. Royalties.
1. During the term of the Agreement, EPG shall pay TPR the
following royalties based upon net sales of all components of
all EPG Programs except those listed on Exhibit D, which may
be amended by mutual consent, and upon net sales of any
Textbook or Workbook with a copyright date earlier than EPG
Programs, to which TPR has contributed or which it supports in
any way:
a. For all language arts programs, *
b. For all non-language arts programs, *
An "EPG Program" means each program for the math subject area
beginning with those bearing a 1999 copyright date and each
program for the social studies, science, reading/literature,
and language arts subject areas beginning with those bearing a
2000 copyright date, which are published by the
Glencoe/XxXxxx-Xxxx and XxXxxx-Xxxx School Divisions and the
Open Court Reading and Open Court Math programs of the
SRA/XxXxxx-Xxxx Division. Notwithstanding the foregoing, EPG
Programs do not include the 1999 Glencoe/XxXxxx-Xxxx "Math
Applications and Connections" math program outside of Texas
unless TPR later contributes or supports it in some way.
2. As soon as EPG establishes its divisional sales projections,
it will provide TPR with the sales goals (in dollars) for the
EPG Program that make up those projections, which shall
constitute Confidential Information under Section XVII.
3. If an EPG Program exceeds its sales goal, EPG will pay an
additional royalty as follows:
a. for those net sales that are more than * and less than
or equal to * the above goal, an increase of * ,
b. for those net sales that are more than * and less than
or equal to * the above goal, an increase of * and
c. for those net sales that are more than * the above goal,
an increase
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of *
4. If an EPG Program fails to meet its sales goal, the royalty
rate otherwise payable to TPR on such EPG Program shall be
reduced as follows:
a. if such net sales are less than * of that EPG Program's
goal but not less than * of goal, a reduction of * ,
b. if such net sales are less than * of that EPG Program's
goal but not less than * of goal, a reduction of * ,
c. if such net sales are less than * of that EPG Program's
goal, a reduction of *
5. After the termination or expiration of this Agreement, EPG
will continue to pay TPR royalties at the rates stated in
Sections V.D.1 and D.6 for any EPG Program to which TPR
contributed in any way during the term of the Agreement.
6. In any contract year, the royalty amounts due TPR will not
exceed *
7. Notwithstanding the foregoing royalty obligations, on all
copies of any elements of the EPG Programs sold at a * forth
in Section V.D.1 above.
8. No royalties are payable for the following: copies of a
Textbook or any component of an EPG Program, distributed or
disposed of at or below cost, including copies provided in
connection with the sale of other copies; copies furnished for
review, publicity, promotion, sample or similar purposes, or
for charitable or other public purposes; or for copies
furnished gratis to TPR or to others at TPR's request. For
purposes of this provision, copies sold or distributed or
disposed of at a discount of * or more from the lowest state
adoption price of the Textbook, shall be deemed sold below
cost.
9. As used in this Section, V.D, "net sales" means, with respect
to EPG's sales, the net cash amount actually received by EPG
from each copy sold of any component or material in the EPG
Programs or, after the termination of the agreement, any
Textbook, not credited for return, after discounts, any
depository charges and exchange allowances.
10. Beginning after publication of the first Textbook, EPG will
render royalty statements in April and October for semi-annual
accounting periods
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ending December 31, and June 30 of each year in accordance
with its regular practices. Each statement will be accompanied
by payment of monies shown to be due after recoupment of
amounts payable as recoverable advances, if any.
11. EPG's failure to pay the Brand Fee, royalties, or Project Fees
when due, unless excused by TPR, is a material breach of the
Agreement, entitling TPR, in addition to all other remedies,
to terminate the Agreement.
VI. AUDITING
Each party shall keep and maintain accurate books and records with respect
to financial transactions relating to this Agreement. Where financial
figures have been agreed upon as an element of this Agreement or a Project
Agreement, each party and its agents shall have audit rights and access to
the other's books and records limited to those financial figures, upon
reasonable notice, at reasonable intervals, to determine the accuracy of
such financial figures and the royalties due under this Agreement or any
Project Agreement. Such examination shall be at the examining party's
expense unless it discovers accounting errors of more than four percent
(4%) to its disadvantage for any single accounting period, in which case,
the examined party will pay the reasonable costs of the audit.
VII. COPYRIGHT AND LICENSES
A. Ownership. EPG and TPR agree as follows concerning ownership and the
respective rights and licenses of each party:
1. XxXxxx-Xxxx Materials. As between XxXxxx-Xxxx and TPR,
XxXxxx-Xxxx owns or controls all rights, including copyright
in XxXxxx-Xxxx Materials, unless otherwise stated in writing
by EPG. EPG may provide TPR with XxXxxx-Xxxx Materials, at
EPG's sole cost, for use in or in connection with any Project,
together with the right to adapt the XxXxxx-Xxxx Materials for
the purposes of this Agreement as stated in a relevant Project
Agreement.
2. TPR Materials. As between TPR and EPG, TPR owns or controls
all rights, including copyright, in TPR Materials.
3. TPR Editorial Review. TPR Textbook Contributions and
Workbooks. Except for TPR Material that is contained in the
Question Pool, Online Product, if developed, and Training
Seminars and subject to Section XIII.B, all TPR Materials
created in performing the TPR Editorial Review, and contained
in the TPR Textbook Contributions and the Workbooks have been
specially commissioned by EPG as Works Made For Hire, and
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EPG shall be considered the author and the owner of the
copyright in them for all time everywhere in the world. If it
is determined that the TPR Materials that EPG has commissioned
as Works Made For Hire are not Works Made For Hire, then as of
the date of this agreement and subject to Section XIII.B, TPR
hereby assigns them to EPG outright and forever throughout the
world.
4. Question Pool. TPR and EPG jointly own all right, title and
interest in the TPR Question Pool, including copyright, except
that (a) the TPR questions contributed from TPR's inventory
and Derivative Questions based on them shall remain the
property of TPR, and (b) any questions supplied by CTB and
Derivative Questions based on them shall remain the property
of CTB.
5. TPR Training Seminars. TPR owns all right, title and interest,
including copyright, in the Training Seminars.
6. EPG is not authorized to revise any Textbook or any component
of an EPG Program using any TPR Materials or TPR Marks in
which TPR owns rights without entering into a new agreement
with TPR. Nothing shall prevent EPG from revising any Textbook
or component of an EPG Program without use of TPR Materials or
TPR Marks.
B. Copyright Notices. EPG and TPR will publish respectively EPG
Programs and Textbooks (EPG) and Training Seminars and, if
developed, the Online Product (TPR) with copyright notices in
conformity with United States copyright law and the Universal
Copyright Convention, including notice of the other's copyright in
any TPR Materials or XxXxxx-Xxxx Materials. After publication, each
party may, but is not obligated to, register copyright in its
respective works in its own name (or, for EPG, the name of one of
the Divisions). Each party is authorized to execute all documents
necessary to register copyright or to extend the copyright in any
manner provided by law anywhere in the world, but is not obligated
to do so.
C. Further Documents. Each party agrees to execute any document the
other party deems necessary to evidence, perfect, record, or
otherwise confirm the rights transferred or licensed under this
Agreement.
D. EPG Use of TPR Ideas, Concepts. Any other provision of this
Agreement notwithstanding, in connection with its performance under
this Agreement, EPG and TPR may each use any ideas, concepts,
approaches, suggestions and other similar material suggested or
communicated by the other without additional credit or additional
compensation of any kind.
E. Other Publishing Ventures. Without limitation of any of the
foregoing grants and
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licenses of this Section VII and so long as EPG itself receives no
revenues, EPG may, without any additional compensation to TPR,
itself publish or license others:
1. to publish any component of an EPG Program, including
any TPR Materials in whole or in part, in forms and
special formats for the handicapped, such as Braille and
recordings for the reading impaired, throughout North
America in the English or Spanish language, if
applicable rights have been cleared and special editions
of the Textbook, for use in special programs for the
learning disadvantaged;
2. to use selected portions of an EPG Program, including
TPR Materials for publicity or promotional purposes for
the EPG Programs in print format and on radio and
television broadcasts; and
3. to publish in any form, excerpts, summaries, and
serializations of any part of an EPG Program, including
Textbook and TPR Textbook Contributions in audiovisual,
computer, or other versions of the Textbooks, only for
use in connection with or to assist in use of a version
of the Textbooks or in advertising and promotion of a
version of the Textbooks, provided that TPR has reviewed
them and TPR will not unreasonably refuse a request to
do so.
4. Display on Closed Circuit Cable Systems. EPG may license
others, free of charge, to Display and transmit any part
of an EPG Program, in whole or in part, including any
Textbook or Textbook Contribution, by means of closed
circuit cable systems intended primarily for educational
purposes.
VIII. LICENSED THIRD-PARTY MATERIALS
A. TPR will obtain written, non-exclusive licenses to include in
Projects any third-party material included in the TPR Materials that
is still in copyright as well as any other material for which
permission is necessary in connection with TPR's warranties in
Section XIV of this Agreement ("Third Party Materials"). Third Party
Materials include text, computer programs, pictorial or graphic
works, musical compositions, sound recordings, audiovisual works and
other copyrightable material licensed from a third party. If TPR is
unable to obtain licenses for the rights set forth in Section
VIII.C. that are satisfactory to EPG, mutually agreeable material
will be substituted.
B. EPG will obtain written licenses to include in Projects any
third-party material in copyright that EPG directs TPR to include in
Projects.
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C. Scope of Third-Party Licenses. To the extent possible, TPR will
obtain rights to Third Party Materials in the English language for
print media and, if appropriate, online publication in the
Educational Market (1) in the United States of America, its
territories and possessions, (2) in those jurisdictions outside the
United States, which EPG will identify for TPR, that service the
U.S. military (Xxxxx) and other U.S. agency-related personnel or at
which American textbooks are used on a regular basis, such as
"American" or "International" schools established principally to
educate American or English speaking nationals, and (3) in the
Dominion of Canada (all the foregoing, "North America"). If the
parties agree in specific Project Agreements to designate the
Spanish Language or any other language, electronic or other media
publication rights, or other rights, including worldwide rights,
then to the extent possible, TPR will obtain such rights in Third
Party Materials.
D. Documentation of Licenses. TPR agrees to deliver to EPG copies of
all licenses for Third Party Materials and, if not provided in those
documents, the source of the Third Party Materials, the grantor's
name and address, and, if for a computer program, the release and
version numbers. Licenses for Third Party Materials are to be in a
form EPG provides or, if not provided, in whatever form TPR chooses.
TPR will provide this information and documentation as part of the
on-going developmental process but not later than the final delivery
of Deliverables for any Project Agreement.
E. Costs of Licenses. EPG will pay the costs of the licenses for Third
Party Materials either directly to the third-party owner or by
reimbursing TPR in those cases where TPR has paid the third-party
owner.
IX. TRADEMARK LICENSES
X. Xxxxx. "Trademark" means the trademarks, service marks, and trade
names listed in the attached Exhibit E, as amended from time to
time, whether or not registered (collectively, the "Trademarks").
Trademarks owned by TPR are identified as "TPR Marks." Trademarks
owned by XxXxxx-Xxxx are identified as "EPG Marks."
B. Ownership of Textbook and Workbook Titles. EPG may obtain trademark
or service xxxx protection for the name that it chooses to identify
any EPG Program, Textbook, Workbook, or other component of it. EPG
shall own all rights in such Trademarks. TPR agrees to cooperate to
the extent reasonably requested by EPG in furnishing information and
executing documents which may be required in connection with
registration of any such EPG Marks or to confirm EPG's ownership or
rights to use any such EPG Marks.
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C. Ownership of Training Seminar and Online Product Titles. TPR may
obtain trademark or service xxxx protection for the name that it
chooses to identify any Training Seminars and the Online Product.
TPR shall own all rights in such Trademarks. EPG agrees to cooperate
to the extent reasonably requested by TPR in furnishing information
and executing documents which may be required in connection with
registration of any such TPR Marks or to confirm TPR's ownership of
or rights to use any such TPR Marks.
D. EPG Use of TPR Marks. Subject to the terms and conditions of this
Agreement, TPR hereby grants to EPG a non-exclusive, nontransferable
license to use the TPR Marks solely in North America (1) on and in
connection with any Textbook that has undergone TPR Editorial Review
or contains TPR Textbook Contributions and on Workbooks, (2) with
advertising and promotional materials for the Projects, and (3) to
publicize EPG's relationship with TPR under this Agreement. EPG may
not use or reproduce the TPR Marks in any manner whatsoever other
than as expressly permitted by this Agreement.
E. TPR Use of EPG Marks. Subject to the terms and conditions of this
Agreement, EPG hereby grants TPR a non-exclusive, nontransferable
license to use the EPG Marks solely in North America (1) on and in
connection with the Training Seminars and the Online Product, if
developed, (2) to publicize the fact of TPR's relationship with EPG
under this Agreement, and (3) to publicize TPR's contribution to and
role in preparing the Projects. TPR may not use or reproduce the EPG
Marks in any manner whatsoever other than as expressly permitted by
this Agreement.
F. Ownership of Marks. Each party agrees and acknowledges that the
other owns and retains all right, title and interest in and to its
respective Trademarks. Except as expressly granted in this
Agreement, no party shall have any rights in the other's Trademarks.
The licenses each party has granted the other are personal to the
other party, and neither shall assign, transfer or sub-license its
rights in the other's Trademarks in any manner without the prior
consent of the party owning the Trademarks, and any transfer in
violation of this restriction will not be valid. Neither party will
use or take any action with respect to the other party's Trademarks
except in a manner that does not interfere, derogate or diminish the
party's rights in its Trademarks, either during the term of this
Agreement or afterwards. Each party agrees not to adopt, use or
register any corporate name, trade name, trademark, service xxxx or
certification xxxx, or other designation similar to, or containing
in whole or in part, the Trademarks belonging to the other. Any and
all goodwill arising from use of the EPG Marks and TPR's Marks shall
inure solely to the party owning said Trademarks respectively. Upon
termination of this Agreement, each party shall cease use of the
other's
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Trademarks.
X. TRADEMARK IDENTIFICATION; CREDIT
A. Trademark Notices on Textbooks. EPG shall cause to be imprinted
irremovably and legibly marked on each copy of Trademark Materials,
appropriate trademark notices with respect to the TPR Marks (and any
component of them) as TPR specifies in each case, including the
initials "TM" or the letter "R" encircled, or "*" (asterisk), and
such legend(s) as TPR may require, including a legend indicating
that the TPR Marks are owned by TPR, and are being used by EPG under
license from TPR. The size, location and other details of placement
of the TPR Marks on the Trademark Materials, shall be determined by
EPG in consultation with TPR's Project Manager.
B. EPG will credit TPR for its contributions to the Projects.
Attribution credit will generally be as follows, but must be
approved by TPR:
1. TPR's Trademark will appear on the title page of a Textbook
(both student and teacher edition);
2. TPR will be listed as an author or contributor (as applicable)
on those pages where like authors of the Textbook are listed;
3. TPR will be listed as a content reviewer on the reviewer page
of the Textbook, if TPR performs TPR Editorial Review.
XI. TRADEMARK QUALITY, INSPECTION AND APPROVAL
A. Quality of Textbooks. EPG agrees to maintain the quality of the
Textbooks and Workbooks on which the TPR Marks are used at least
equal to the quality of textbooks and other materials currently
published by EPG, which employ EPG's own trade name and TPR Marks.
The Textbooks will comply with applicable National Association of
State Textbook Administrators standards. TPR will likewise maintain
the current level of quality of the materials on which it uses EPG
Marks.
B. Samples and Review of Marks. At each party's request, the other
party shall supply the requesting party with suitable specimens of
the Projects and advertising and promotional materials (singly or
collectively, "Trademark Materials"), which demonstrate its use of
the other's Trademarks in the manner specified in the Agreement.
Each party shall cooperate fully with the other party to facilitate
periodic review of its use of the other's Trademarks and its full
compliance with the quality standards described in this Agreement.
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C. Approval of Trademark Use. Each party will abide by the other's
reasonable requirements with respect to Trademark usage. Each party
reserves the right to approve the other's use of its Trademarks in
promotional materials and in any press/public releases of
information. Each party reserves the right to approve use of its
Trademarks before the other party's use. Accordingly, each party
agrees to submit to the other for approval, before use, distribution
or disclosure all Trademark Materials. Each party shall act promptly
in granting or denying approval. Once a usage of the marks has been
approved, the same usage need not be resubmitted for approval and
may be used again in the like manner unless approval is withdrawn by
the owner. Any disapproval shall specifically state the reason(s)
for which approval is being denied. Any approval or denial of
approval shall be made within five (5) business days of submission
for review. If either party fails to respond to a request for
review, the submission shall be deemed approved and may be used by
the submitting party without liability to the other. Approval for
any such presumed usage may subsequently be withdrawn by the owner
of the marks, and the other party shall take all reasonable actions
to curtail and cease such disapproved usage but may use any existing
materials, and any materials which are required to be produced
immediately to meet immediate adoption delivery deadlines. If
problems occur with the foregoing approval process, either party may
request a reasonable change in the process to alleviate the problem.
D. No Assumption of Liability. Review and approval by either party of
the use of the other's Trademarks shall be limited to trademark
usage, but reasonable and responsible comment may also be
volunteered as to content and context, and each party will consider
the other's comments. Neither party assumes any liability for the
content of the other's advertising, promotional statements or other
materials, even if it has reviewed and approved usage of its
Trademarks in such materials or communications.
E. For purposes of trademark application, registration, recordation,
and registration in the U. S. or elsewhere in the world, each party
agrees, at the other's reasonable request, to provide necessary
information and samples of Trademark Materials, and to execute and
return promptly to the other any necessary document, including
documents which evidence a party's ownership, assignment or license
of rights with respect to the Trademarks.
XII. FAILURE TO PUBLISH; REVERSION OF RIGHTS
A. TPR Request for Publication. If EPG does not publish a Textbook
within the period provided in Section II.A.1, TPR may at any time
thereafter deliver to EPG a request under Section XVIII.H to publish
the Textbook within twelve (12) months after EPG's receipt of TPR's
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request. If EPG fails to comply with TPR's request within such
period, (1) this Agreement and the respective Project Agreement for
the Textbook will terminate without further notice at the end of
such period, and (2) all of TPR rights in the TPR Materials in the
specific unpublished Textbook will revert to TPR without further
obligation or liability on the part of either party to the other,
except for any questions, which will become part of the Question
Pool. The termination and reversion of rights provided in this
Section XII.A shall be TPR's sole remedy if EPG fails for any reason
to Publish a Textbook in which TPR Materials were intended to
appear.
B. Reversion of Rights. Five years after the copyright date of any
Textbook, all of TPR's rights in the TPR Materials for that Textbook
and any related Project shall revert to TPR, except for any
questions, which will become part of the Question Pool.
Notwithstanding that reversion, EPG shall have the right, subject to
the royalty payment provisions of this Agreement, to continue
selling Textbooks and related Projects as part of the EPG Programs
developed during the term of this Agreement, and any licenses
previously granted will continue in effect to the end of their
terms, and EPG will be entitled to its share of amounts received
under any such licenses. EPG agrees to execute such documents as TPR
reasonably requests to confirm any reversion of rights under this
section.
C. Rights After Reversion of Rights. In the event of reversion of
rights under Section XIII.B, EPG shall be entitled to prepare and
publish new or different textbooks using the same or similar
concepts, approaches and organization as were used in the Textbooks,
but shall not publish anything that infringes TPR's rights in TPR
Materials.
XIII TERM AND TERMINATION
A. Term. Except for the payment of royalties due after termination and
any provision that survives termination under Section XVIII.E, the
Term of the Agreement in which the parties may commence new Project
Agreements is four (4) years, and then the Agreement will renew
automatically for one-year terms unless either party gives one (1)
year's prior notice of termination.
B. EPG's Termination of the Agreement. EPG may terminate this Agreement
under the following circumstances:
1 TPR enters into any voluntary or involuntary declaration of
bankruptcy or there is a general assignment for the benefit of
TPR's creditors occurring before TPR's delivery to EPG of the
final Deliverables due under any completely executed Project
Agreement, or
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2 TPR materially breaches this Agreement and fails to cure the
breach within the time period specified in Section XIII.F, or
3 upon notice to TPR, if TPR's failure to perform Project
Agreements is substantial, material, and repetitive, and TPR
has received notice of such failure(s) and has been accorded a
commercially reasonable opportunity to cure such failures, but
has not done so, with the result that the intent of this
Agreement is frustrated.
C. EPG's Termination of a Project Agreement for Cause. EPG may
terminate a Project Agreement under any of the following
circumstances:
1 if a Deliverable, as corrected, revised, or completed pursuant
to Section IV.G is not acceptable to EPG, or
2 TPR's performance or delivery is so untimely that EPG is
unable to publish Textbooks in accordance with the school
adoption schedules; or
3 TPR materially breaches a Project Agreement and fails to cure
the breach within the time period specified in Section XIII.F.
D. TPR's Termination of the Agreement. TPR may terminate this
Agreement, in whole or in part in accordance with this Section XIII
if:
1 during the period when a Textbook is being prepared, EPG or
XxXxxx-Xxxx enters into any voluntary or involuntary
bankruptcy or there is a general assignment for the benefit of
EPG's or XxXxxx-Xxxx'x creditors, or
2 EPG breaches a material provision of this Agreement and fails
to cure the breach within the time period specified in Section
XIII.F.
E. EPG's Termination or Delay of a Protect Without Cause.
Notwithstanding any other provision of this Agreement and any
Project Agreement, EPG shall have the right in its sole discretion,
to terminate or to delay a Project Agreement based upon changed
business circumstances, including cancellation of an adoption for
which the work is being prepared. Upon EPG's notice to TPR of any
such termination or delay, each party will cooperate to immediately
cease performance of said Project Agreement so as to mitigate costs
for each party. EPG will pay TPR for all services performed that EPG
has approved in accordance with the Project Agreement, up to the
date of termination. EPG will also pay TPR the amount of any bona
fide "cancellation fees" payable to third parties arising from TPR's
canceled commitments to others. In addition, EPG shall pay to TPR,
ten
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percent (10%) of the amount remaining of the unpaid Project fees as
stated in this Agreement and the relevant Project Agreement, as
modified by any Change Order, as liquidated damages, and not as a
penalty, for cancellation. Upon payment, neither party will have any
further obligation or liability to the other under the terminated
Project Agreement, except those that survive under Section XVIII.E.
If EPG delays a Project, the parties will cooperate to make for a
smooth, economical transaction under the circumstances by adding
other Project(s) or by taking other appropriate measures.
F. Right to Cure. Except for termination under Section XIII.E above,
neither party may terminate this Agreement or any Project Agreement
unless and until the party seeking termination gives notice to the
other party stating that it intends to terminate this Agreement or
any Project Agreement and specifying the nature of the breach or
default and unless the receiving party fails to cure such breach or
default within thirty (30) days after receipt of the notice (or such
longer period of time as may be specified in the notice).
G. Consequences of Termination
1 Upon EPG's notice of termination of a Project Agreement under
Section XIII.C. l above, EPG may elect to: (a) retain any
Deliverable in its latest form of completion (including all
prior drafts, versions, builds or releases) and to own
whatever rights in it that have been granted in accordance
with this Agreement and the Project Agreement for that
Project, with no additional payments by EPG other than what
has been made as of termination; or (b) return the Deliverable
to TPR and grant back to TPR, without warranty of any kind,
all rights TPR granted to EPG under this Agreement and the
Project Agreement for that Project, and TPR will return
payments made under the Project Agreement but not expended
before notice of termination.
2 Upon termination or expiration of this Agreement, TPR will own
all right, title, and interest, including copyrights and other
rights in the Online Product, if developed, and the parties
will divide the Question Pool evenly and randomly by subject
between the two parties, except that (a) the questions TPR
initially contributed from its inventory shall be allotted to
TPR, (b) the questions CTB initially contributed shall be
allotted to EPG; and (c) the Derivative Questions shall be
assigned to whichever party is allotted the question from
which the Derivative Question was derived. Each party hereby
assigns to the other party as of the date of termination its
joint right, title, and interest, including copyright, in the
remaining questions in the Question Pool allotted to the other
party. Each party agrees to execute such documents as the
other reasonably requests to
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confirm such assignment of rights under this section.
3 All the assignments under this Section XIII.G are subject to
the exclusive license granted to TPR in Section XVI.A.2.
4 If either party terminates this Agreement, the rights and
remedies of the parties are cumulative, and each party also
has all the rights and remedies provided by law or equity.
H. Effect of a Project's Termination on Other Projects. Termination of
a portion of this Agreement or any Project Agreement relating to a
Project shall not affect those provisions relating to the rights in
copyrights or payment of royalties or other monies based upon the
sale or licensing of Projects containing TPR Materials or bearing
TPR Marks already published under this Agreement or EPG's recovery
of any advance in royalties EPG paid to TPR.
XIV REPRESENTATIONS AND WARRANTIES
X. XxXxxx-Xxxx warrants and represents as follows:
1 XxXxxx-Xxxx has the full right, power, and authority to enter
into this Agreement, and XxXxxx-Xxxx has not and will not
assign, pledge or encumber its rights in the Question Pool to
any other person or entity.
2 Except for TPR Materials, the EPG Programs, the Projects and
Textbooks contain nothing that is obscene, libelous,
defamatory, or, when taken as a whole is substantially
inaccurate, or injurious, and appropriate warnings and safety
instructions are included in Projects concerning any
particular hazards.
3 Except for TPR Materials, the EPG Programs, the Projects,
Textbooks, and EPG Marks contain nothing that violates or
infringes a copyright, patent, trade secret, or other literary
property rights; or that violates the rights of any person,
including the right of privacy, publicity, or moral right; or
that violates any EPG contract, express or implied; or that
discloses any information that EPG has obtained in confidence
or with the understanding that it would not be disclosed or
published.
4 EPG will use the TPR Marks on and in connection with any
Project solely as provided in this Agreement and any
applicable provision of any Project Agreement and will not use
the TPR Marks on or in connection with other goods, products
or services.
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5 EPG makes no representation or warranty concerning the timing
of a Textbook's publication or the number of copies of a
Textbook that will be sold.
B. TPR hereby warrants and represents as follows:
1 TPR has the full right, power, and authority to enter into
this Agreement and to grant, transfer, and assign the rights
granted and transferred in this Agreement and TPR has not and
will not assign, pledge or encumber such rights or its rights
in the Question Pool to any other person or entity.
2 Except for Third-Party Materials and any public domain
material, TPR is the sole developer of TPR Materials, and TPR
Materials are original and previously unpublished, except as
may be disclosed in a Project Agreement.
3 TPR Materials contained in any Projects contain nothing that
is obscene, libelous, defamatory, or, when taken as a whole,
are substantially inaccurate, or injurious, and appropriate
warnings and safety instructions are included in Projects
concerning any particular hazards.
4 TPR Materials and TPR Marks contained in any Project,
including any programming code, contain nothing that violates
or infringes a copyright, patent, trade secret, or other
literary property rights; or that violates the rights of any
person, including the right of privacy, publicity, or moral
right; or that violates any TPR contract, express or implied;
or that discloses any information that TPR has obtained in
confidence or with the understanding that it would not be
disclosed or published.
5 TPR will use the EPG Marks on and in connection with any
Project solely as provided in this Agreement and any
applicable provision of any Project Agreement and will not use
the EPG Marks on or in connection with other goods, products
or services.
6 TPR makes no representation or warranties relating to the
content of any Project that is not TPR Materials.
C. Each party shall abide by all applicable laws in performing this
Agreement.
XV INDEMNIFICATION
A. Each party will defend and indemnify the other party, its successor
and assigns,
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and any seller or licensee of the EPG Programs against all damages
(including settlement), costs, and expenses, including reasonable
attorney's fees, based on any third-party claim that said party's
contribution infringes that third party's copyright, trademark,
patent, trade secret, other proprietary right, or that third party's
personal property right, or any third-party claim, which, if proved,
breaches any of the representations or warranties made by said
indemnifying party in this Agreement, whether or not the claim
results in a judgment. If such a claim has occurred, or in the
opinion of the party is likely to occur, the other party agrees to
permit the indemnifying party, at its option and expense, to settle
any claim, action, change or proceeding on such terms as it deems
advisable, or either to procure the right to continue selling,
promoting or using the allegedly infringing contribution, or to
replace its contribution or Trademark so that the allegedly
infringing contribution or Trademark is non-infringing or
non-offending. Modification of the infringing or offending
contribution shall not negate the indemnifying party's obligation to
indemnify the other party in accordance with the terms of this
Agreement.
B. Each indemnifying party will have the right to defend with counsel
of its own choosing. If the indemnified party desires to retain its
own counsel, it will do so at its own cost. The indemnifying party
shall pay any resulting costs, damages, liabilities and expenses,
including reasonable attorney's fees, provided that the party
seeking to be indemnified promptly notifies the indemnifying party
of the claim and cooperates in the defense at the indemnifying
party's expense, and that the indemnifying party has sole control of
the defense and all related settlement negotiations.
XVI NON-COMPETITION
A. TPR
1 Competition During the Term of the Agreement. During the term
of the Agreement, TPR agrees it will not enter into a similar
agreement with a person or that part of a firm, corporation,
company, partnership or other entity engaged in the
development, publication, and distribution of proprietary
educational materials to the Educational Market ("Educational
Publisher"). Also during the term of the Agreement, each party
(including the Divisions) is entitled to use the questions
that it contributed to the Question Pool from inventory in
other ventures so long as such ventures do not compete with
this Agreement.
2 Competition After the Term of the Agreement. For so long as a
Textbook is being sold as part of an EPG Program, TPR will
not, for itself or an Educational Publisher, without EPG's
prior consent, use or publish more
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than forty percent (40%) of the TPR Materials in another
secondary school textbook or elementary school program, so
that such textbook or program might compete with or injure the
profitability of that Textbook or the EPG Program.
3 TPR Trade Books. Both during and after the term of this
Agreement, regardless of which party terminates the Agreement,
TPR will have the exclusive right, without any compensation to
EPG, to use the Question Pool, except for the CTB questions
and derivatives for trade print publications and for products
which are noncompetitive with the EPG Programs, so long as not
more than forty percent (40%) of any such trade publication
includes questions from the Question Pool. If the parties do
not go forward with the Online Product under Section III, each
party will have the right to use 50% of the Question Pool
without accounting to the other party, except that neither
party will be able to use the questions that the other party
initially contributed to the Question Pool from inventory and
the Derivative Questions based on those contributed questions.
B. EPG. During the term of the Agreement, EPG will not retain another
person or business entity to substitute for TPR in connection with
the services that TPR performs under this Agreement.
C. Ability to Compete. Except as expressly stated in this Section XVI,
each party acknowledges that the other may publish textbooks, test
questions, or materials within the same or similar areas of general
or specific interest as a Textbook published under this Agreement,
and nothing in this Agreement shall inhibit a party from that
practice. Each party understands that the other party is in the
business of providing goods and services of many types, and it is
not the intent of this Section XVI to unduly curtail the freedom of
either party to conduct its business affairs, to enter into
agreements with others, or to offer goods or services to its
customers in accordance with its business judgment. This Section XVI
is to be construed in a reasonable manner with the intent of
protecting each party's right to carry on its own business while
ensuring that each enjoys the benefits of its bargain under this
Agreement.
XVII CONFIDENTIAL INFORMATION
A. Nondisclosure. Confidential Information is and remains the property
of the disclosing party. The parties will hold Confidential
Information in confidence and treat it as each treats its own
Confidential Information and will not disclose it to any third
person without the express consent of the other party, except that
the parties may disclose Confidential Information, including the
terms of this
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Agreement, for the purpose of obtaining legal, financial or tax
advice. A material failure to abide by these provisions shall
constitute a material breach and cause for termination of this
Agreement.
B. Definition of Confidential Information. "Confidential Information"
means all information that either party discloses to the other and
identifies as "confidential" or "proprietary," or which, under all
of the circumstances, should reasonably be treated as confidential
or proprietary, including the content of a Textbook, its publication
date, the development fees, royalties rates and amounts paid, all
information that relates to each party's past, present, and future
research, development, plans, sales and business activities, as well
as all information, conclusions, drafts, programming and associated
materials and Textbook product resulting from TPR's performance
under this Agreement. Upon termination or expiration of this
Agreement, each receiving party will return all Confidential
Information to the disclosing party, or destroy it and certify its
destruction. The terms and conditions of this Agreement and
information learned during an audit conducted under Section VI are
Confidential Information, except that either party may disclose the
terms of the Agreement for the purpose of seeking legal, financial,
or auditing advice so long as such advisors agree to abide by the
confidentiality restrictions of this Section XVII.
C. Information that is Not Confidential. Confidentiality obligations
shall not apply to any Confidential Information (1) that at or after
disclosure is available to the general public, other than through a
breach by the receiving party; (2) that is already known to the
receiving party before disclosure; (3) that is developed through the
independent efforts of the receiving party; (4) that the receiving
party rightfully receives from a third party without restriction as
to confidentiality or use; or (5) whose disclosure is required by
law or is requested by legal or administrative process, except that
the party who is served with process will give immediate notice to
the disclosing party of the process and make reasonable efforts not
to disclose the Confidential Information until the disclosing party
has had an opportunity to make a motion to quash the request.
D. Press Releases. The parties will coordinate and cooperate with each
other in making any public announcement or press release concerning
this Agreement, any Project Agreement, or the relationship between
the parties under the Agreement. To that end, each party will give
the other party reasonable prior opportunity to comment upon any
such release or announcement and to approve the subject matter,
details, and use of the other's Trademarks in it. Neither party will
unreasonably withhold its approval.
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XVIII MISCELLANEOUS
A. Independent Contractors. Nothing in this Agreement shall be
construed so as to constitute the parties as joint venturers,
partners, or agents of each other, and neither party shall have the
power to obligate or bind the other in any way whatsoever.
B. Entire Agreement. This Agreement, Exhibits A-D attached to it, and
the related Project Agreements constitute the complete agreement
between the parties and supersede all other agreements, promises,
representations, and negotiations, whether written or oral, between
the parties regarding the subject matter of the Agreement, including
the parties' June 10, 1998 letter agreement.
C. Amendment: Waiver. No amendment or waiver of any provision of this
Agreement will be valid unless in writing and signed by all parties
affected by the amendment or waiver. No waiver shall be deemed a
waiver of a subsequent breach.
D. Assignment. Neither party may assign this Agreement or assign or
delegate its obligations under it without the other's prior consent,
except that TPR can assign any monies payable to it, and any
assignment in violation of this provision shall be null and void.
Notwithstanding the foregoing, each party may assign this Agreement
as a whole in connection with the transfer and sale of a Division,
line of business, substantially all its assets or the sale or
transfer of its voting shares, upon notice to the other. Should such
transfer create a material conflict of interest for the
non-assigning party, that party may terminate this Agreement upon
reasonable grounds upon prior notice. Subject to the foregoing, this
Agreement will be binding on the parties signing it and on all their
successors and permitted assignees.
E. Survival. The rights and obligations of Sections VI, VII, XIV, XV,
XVI.A.2, XVII, and XVIII, and those other provisions which by their
nature survive will survive the expiration or termination of this
Agreement and will bind the parties and their successors and assigns
in accordance with their terms.
F. Severability. If any provision of this Agreement is held invalid or
unenforceable, the remainder of the Agreement shall not be affected
and shall remain in effect, unless doing so would deprive one of the
parties of the benefit of the Agreement.
G. Applicable Law and Forum. This Agreement will be construed in
accordance with and governed by the laws of the State of New York
applicable to agreements made and to be performed there and without
regard to it conflict of laws rules. Any disputes arising out of or
related to this Agreement will be brought in the
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state or federal courts with jurisdiction in New York County, New
York, and the parties expressly consent to the exclusive
jurisdiction and venue of such courts.
H. Notices. Notices, approvals, disapprovals, excuses, requests, and
consents concerning day-to-day administrative and performance
matters must be in writing and sent to the respective party's
Project Managers. Notices, approvals, disapprovals, requests, and
consents of a substantive or legal nature required by this Agreement
for either party are to be in writing and shall be forwarded as
follows:
TPR: EPG:
--- ---
Xxxx Xxxxxxx, President Xxxx Xxxxxx, President
The Princeton Review The Educational and Professional
0000 Xxxxxxxx, 0xx Xxxxx Publishing Group
Xxx Xxxx, X.X. 00000 a unit of XxXxxx-Xxxx Companies, Inc.
Telephone: (2l2) 000-0000 000 Xxxxxxxx Xxxxx
Facsimile: (000) 000-0000 Xxxxxxxxxxx, Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to: with a copy to:
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Xxxx X. Xxxxxxx, Esq. Vice President and General Counsel
Patterson, Belknap, Xxxx & Educational Publishing Group
Tyler LLP 1221 Avenue of the Americas
1133 Avenue of the Americas New York, New York 10020-1095
Xxx Xxxx, Xxx Xxxx 00000 Telephone: (000) 000-0000
Telephone: (000) 000-0000 Facsimile: (000) 000-0000
Facsimile: (2l2) 336-2222
Changes in address by either party shall be made by notice to the
other party in accordance with this provision. Notices required by
this Agreement shall be deemed received (1) upon delivery, when
delivered in person or by commercially receipted courier, (2) upon
the date sent by facsimile or other electronic media, if the sender
confirms by sending a copy by courier delivery or U.S. Postal
Service, or (3) five (5) days after deposit with the U.S. Postal
Service by registered or certified mail.
I. Force Majeure: Neither party shall be liable to the other for any
failure or delay caused by events beyond its reasonable control,
including, acts of God, sabotage, accidents, failures or delays in
transportation or communication, labor disputes, shortages of labor,
fuel, raw materials or equipment, or other matters. Each party shall
promptly inform the other of any such event. Should the event
prevent performance of this Agreement for more than sixty (60) days,
the other party may terminate this Agreement or the applicable
Project Agreement; rights granted under this Agreement shall revert
to the grantor; and each party shall retain its
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rights in the Question Pool specified in Section VIII.A.4, may
exploit those rights to the extent permitted by law, and need not
account to the other party with any proceeds from that exploitation.
J. Headings. Headings and captions throughout this Agreement are for
convenience only and should not be considered part of the
substantive terms of this Agreement.
K. Including. "Including" means "including but not limited to" and
"including without limitation."
L. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first set forth above.
EDUCATIONAL AND PROFESSIONAL PRINCETON REVIEW
PUBLISHING GROUP, A UNIT OF PUBLISHING L.L.C.
THE XXXXXX-XXXX
COMPANIES, INC.
By: /s/ Xxxx Xxxxxx By: /s/ Xxxx Xxxxxxx
----------------------------- -----------------------------
Title: President Title: President
---------------------------- ----------------------------
Date: 12/24/98 Date: 12/28/98
---------------------------- ----------------------------
Taxpayer ID No. 00-000-0000
------------------
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Exhibit A: Question Pool Schedule
This chart represents the numbers of questions that The Princeton Review will
create, not edit, broken down by grade grouping, major subject area, and the
school year during which the questions will be delivered.
--------------------------------------------------------------------------------
CONTRACT YEAR Math Reading Social Studies Science TOTAL
1998-1999
K-2 * * * * *
--------------------------------------------------------------------------------
3-6 * * * * *
--------------------------------------------------------------------------------
7-8 * * * * *
--------------------------------------------------------------------------------
9-12 * * * * *
--------------------------------------------------------------------------------
TOTAL * * * * *
--------------------------------------------------------------------------------
*
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CONTRACT YEAR Math Reading Social Studies Science TOTAL
1999-2000
--------------------------------------------------------------------------------
K-2 * * * * *
--------------------------------------------------------------------------------
3-6 * * * * *
--------------------------------------------------------------------------------
7-8 * * * * *
--------------------------------------------------------------------------------
9-12 * * * * *
--------------------------------------------------------------------------------
TOTAL * * * * *
--------------------------------------------------------------------------------
*
--------------------------------------------------------------------------------
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--------------------------------------------------------------------------------
CONTRACT YEAR Math Reading Social Studies Science TOTAL
2000-2001
--------------------------------------------------------------------------------
K-2 * * * * *
--------------------------------------------------------------------------------
3-6 * * * * *
--------------------------------------------------------------------------------
7-8 * * * * *
--------------------------------------------------------------------------------
9-12 * * * * *
--------------------------------------------------------------------------------
TOTAL * * * * *
--------------------------------------------------------------------------------
*
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SUMMARY Math Reading Social Studies Science TOTAL
--------------------------------------------------------------------------------
K-2 * * * * *
--------------------------------------------------------------------------------
3-6 * * * * *
--------------------------------------------------------------------------------
7-8 * * * * *
--------------------------------------------------------------------------------
9-12 * * * * *
--------------------------------------------------------------------------------
TOTAL * * * * *
--------------------------------------------------------------------------------
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Exhibit B: Sample Project Agreement
--------------------------------------------------------------------------------
Instructions: A Project Agreement is to be prepared by the EPG Contracts,
Copyright & Permissions Department as part of the Contract Request Form
procedures. EPG's Project Managers should initially complete this form and send
it to the Contract Department together with other required materials.
--------------------------------------------------------------------------------
This is a PROJECT AGREEMENT between the Educational and Professional Publishing
Group of The XxXxxx-Xxxx Companies, Inc. ("EPG") and Princeton Review Publishing
L.L.C. ("TPR") under a master Agreement dated _______________ 1998, between EPG
and TPR (the "Master Agreement"). The Master Agreement will govern preparation
and publication of the Textbook.
Please complete additional pages, if necessary.
Any capitalized term (or grammatical variant of it) in this Project Agreement
has the same definition as does that term in the Master Agreement.
NAME OF PROJECT:
PROJECT AGREEMENT DATE:
NAME OF EPG DIVISION:
TYPE OF PROJECT: Ownership rights, including copyright rights, to the various
Deliverables that comprise TPR Materials are determined under the Master
Agreement in accordance with Section VII and Section XIII. Therefore, it is
important to correctly classify the various components of TPR Materials, since
such classification will determine each party's ownership rights to these
components of the Textbook. Please circle one:
Editorial Review
Workbook
Question Pool
Online Product
Training Seminar
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NAME OF PROJECT MANAGERS:
EPG: TPR:
Name: _____________________ Name: ______________________
Telephone: _________________ Telephone: __________________
Fax: _______________________ Fax: ________________________
EPG: TPR:
E-mail: _______________________ E-mail: _______________________
(1) NAME OF EPG TEXTBOOK: Insert the title of the Program/Textbook (if
applicable) for which TPR is preparing a contribution ("Project").
Identify the title by name, proposed copyright date, Edition Number
(if applicable), Author's Name (if applicable), copyright, and other
identifying details.
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
(2) DESCRIPTION OF SERVICES AND DELIVERABLES: Insert a description of
the services TPR is to perform and the TPR Materials that TPR is to
deliver ("Deliverable") hereunder. Attach additional pages, if
needed.
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
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(3) Will TPR use any XxXxxx-Xxxx Materials in the preparation if this
TPR Work? yes / no If yes, please describe.
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
(4) MILESTONE EVENTS AND DELIVERY DATES: List all delivery dates for
services and Deliverables of the Project. Use additional page(s), if
needed:
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
Delivery/Performance Dates
-------------------- -----
(Deliverables/Services to be performed)
(5) OWNERSHIP/LICENSE OF RIGHTS; RIGHTS OBTAINED FOR PERMISSIONS. Will
EPG have the right to publish and distribute the Textbook in the
following languages in addition to English (If Spanish or other
rights are specified, TPR will be obligated to obtain such rights
for all Third Party Materials, as stated in Section VIII.C of the
Master Agreement):
Spanish/Other (specify)/English only
(6) TOTAL PROJECT FEE: Insert the total Project Fee or Budget for the
Project, including payment dates or events; attach additional pages,
if needed. Unless otherwise noted, half payment will be made at the
start of the project, and half on acceptance.
Total Project Fee:
(7) LICENSED THIRD-PARTY MATERIALS: Describe the nature, sources, and
cost of any Third Party Materials that TPR will be licensing under
Section VIII of the Agreement:
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Under Section VIII.E, EPG will pay the cost of the Third Party
Materials
_____ directly to the Third Party (identify):
_____ to TPR, which will pay the Third Party.
(8) SPECIAL PROVISIONS: Describe any other special provisions, if
necessary:
EPG TPR:
Division:
By: ____________________________ By: ____________________________
Title: __________________________ Title: ___________________________
Date: __________________________ Date: ___________________________
Note: Please provide the EPG Contracts, Copyrights & Permissions
Department with other relevant documentation such as correspondence
exchanged between the parties, any "Request for a Proposal" issued by EPG,
or any Proposal or Response to Proposal, or Bid issued by TPR when
submitting a Contract Request Form for this Project Agreement.
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Exhibit C: Sample Change Order
This is a CHANGE Order to a PROJECT AGREEMENT between the Educational and
Professional Publishing Group of The XxXxxx-Xxxx Companies, Inc. ("EPG") and
Princeton Review Publishing L.L.C. ("TPR") under a Master Agreement dated
_____________ 1998, between EPG and TPR (the "Master Agreement"). Any
capitalized term (or grammatical variant of it) in this Change Order has the
same definition as does that term in the Master Agreement.
This Change Order affects the following Project Agreement:
Date: __________________________________
EPG Division: ___________________________
Title of Program/Textbook:__________________
Insert a description of the material changes in TPR's services or TPR Materials,
for example, any change in the scope of services to be provided by TPR,
Deliverables, scheduled delivery dates, amount and dates of payment of Total
Project Fee, etc. Attach Additional Page(s), if necessary.
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
i) SCOPE OF CHANGE: (TPR services or materials to be added or deleted)
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
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ii) COMPENSATION OR PAYMENT SCHEDULE:
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
iii) OWNERSHIP RIGHTS:
_______________________________________________________________________________
iv) OTHER SUBSTANTIAL CHANGES:
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
EPG: TPR:
Division:
By: ____________________________ By: ____________________________
Title: __________________________ Title: ___________________________
Date: __________________________ Date: ___________________________
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Exhibit D: Excluded Materials
Sales of the following materials are excluded from the calculation of royalties
under Section V.D. l of the Agreement:
SCHOOL DIVISION
*
GLENCOE/XXXXXX-XXXX
SOCIAL STUDIES
*
LANGUAGE ARTS
*
SCIENCE
*
MATH
*
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Exhibit E: List of Licensed Trademarks
A list of Trademarks, service marks and logos which are cross-licensed under the
Agreement between EPG and TPR.
"TPR MARKS" LICENSED TO EPG:
THE PRINCETON REVIEW
"EPG MARKS" LICENSED TO TPR:
EPG Marks:
Corporate:
XxXxxx-Xxxx
XxXxxx-Xxxx log. THE XXXXXX-XXXX COMPANIES
The XxXxxx-Xxxx Companies, Inc.
The Educational and Professional Publishing Group of the XxXxxx-Xxxx
Companies, Inc.
Glencoe Marks:
Glencoe
Glencoe/XxXxxx-Xxxx/
Mindjogger
SRA Marks:
SRA
SRA/XxXxxx-Xxxx
Science Research Associates
SRA logo
Open Court
OC Design (Open Court)
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School Division:
School Division
Math in My World
Marks may be added or deleted from this Exhibit during the term of the Agreement
with written notice.
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AGREEMENT BETWEEN
THE EDUCATIONAL AND PROFESSIONAL PUBLISHING GROUP,
A UNIT OF THE XXXXXX-XXXX COMPANIES, AND
THE PRINCETON REVIEW
TABLE OF CONTENTS
I. DEFINITIONS....................................................... 1
II. THE PARTIES' PERFORMANCE OBLIGATIONS.............................. 3
III. DEVELOPMENT OF THE ONLINE PRODUCT................................. 5
IV. PROJECT AGREEMENTS AND PROJECT MANAGERS........................... 5
V. PAYMENT FOR PROJECTS AND ROYALTIES................................ 7
VI. AUDITING.......................................................... 11
VII. COPYRIGHT AND LICENSES............................................ 11
VIII. LICENSED THIRD-PARTY MATERIALS.................................... 13
IX. TRADEMARK LICENSES................................................ 14
X. TRADEMARK IDENTIFICATION; CREDIT.................................. 16
XI. TRADEMARK QUALITY, INSPECTION AND APPROVAL........................ 16
XII. FAILURE TO PUBLISH; REVERSION OF RIGHTS........................... 17
XIII. TERM AND TERMINATION.............................................. 18
XIV. REPRESENTATIONS AND WARRANTIES.................................... 21
XV. INDEMNIFICATION................................................... 22
XVI. NON-COMPETITION................................................... 23
XVII. CONFIDENTIAL INFORMATION.......................................... 24
XVIII.MISCELLANEOUS..................................................... 26
41
Exhibit A: Question Pool Schedule...................................... 29
Exhibit B: Sample Project Agreement.................................... 31
Exhibit C: Sample Change Order......................................... 35
Exhibit D: Excluded Materials.......................................... 37
Exhibit E: List of Licensed Trademarks................................. 39
