EXHIBIT 10.51
LICENSE AND SERVICES AGREEMENT
This agreement (the "Agreement") is made and entered into between
Educational Video Conferencing, Inc., ("EVCINC"), 00 Xxxx Xxxxxx Xxxxxx Xxxx,
Xxxxx 000, Xxxxxxx, Xxx Xxxx, 00000, and Learningforce, Inc. ("Learningforce"),
0000 Xxxxxxxxxxx Xxxxxx, XX, Xxxxxxxxxx, X.X. 00000, (collectively the
"Parties")
WHEREAS, EVCINC is in the business of marketing educational courses to
adult learners and, therefore, requires an educational-oriented tracking and
data management system; and,
WHEREAS, Learningforce has, over the course of a decade, already developed
and refined an extensive educational data management system; and
WHEREAS, EVCINC has the need to assist potential customers in choosing
among its course and/or degree offerings; and
WHEREAS, Learningforce has developed a proprietary, computer-driven,
academic advising and admissions process for adult learners which integrates
seamlessly with its data management system;
NOW, THEREFORE, the Parties do hereby agree as follows:
I. LICENSE
A. Use of Software. This Agreement shall provide to EVCINC an exclusive
limited license ("License") to utilize any and all educational data management
and college advising-related software developed by Learningforce, including any
and all software code developed for use on the world-wide Internet web (the
"Software"). Learningforce will insure the compatibility and transfer of data
between EVCINC corporate offices and any other outsourced support operation at
the request of EVCINC. Exclusive limited license shall be defined as
Learningforce granting the rights to EVCINC to use its software to support
EVCINC's enrollment and academic advising systems or for any other reason
related to enrolling students in EVCINC's educational courses. Further,
Exclusive Limited License shall mean that Learningforce may not license or use
the software for any company or entity in direct competition with EVCINC
according to EVCINC's definition of "Direct Competitor" without EVCINC's written
permission.
B. Future Improvements. The License shall include any enhancements,
improvements, or additional capabilities developed by Learningforce at any time,
for any reason, and for any client, throughout the effective period of this
Agreement, except in such cases as Learningforce is contractually obligated to
restrict usage of software developed exclusively for the use of a single client.
C. No License to Competitive Parties. Except for Learningforce's
unrestricted use of the Software for its own data management and marketing
purposes and to provide services to Learningforce clients, Learningforce will
not provide a license for the Software to any third party which shall enhance
such party's capability to compete with EVCINC without the written consent
of EVCINC. While this Agreement is in effect, Learningforce shall not engage in
any activity considered in direct competition with EVCINC according to EVCINC's
definition of "Direct Competition," without the express written consent of
EVCINC. For the purposes of this agreement, "Direct Competition" shall be
defined as selling educational programs of any kind, through any electronic
distance learning delivery method using Learningforce enrollment and advising
service or any other method of placing students with educational providers as to
create direct competition to EVCINC.
II. Learningforce Services To EVCINC
Learningforce shall provide the services listed below (the "Services") to
EVCINC. Learningforce shall commit to meet the timelines desired by EVCINC for
the development of EVCINC-specific software and for Learningforce's role in the
development of an EVCINC enrollment website.
A. Software Customization
1. Learningforce will customize the Software. The Software shall
include, but not be limited to, the screens and scripts required to create
prospect\customer records, capture information as required by EVCINC, create all
documents to assist academic advisors located at Learningforce and other offices
in a professional process focused on enrolling students in EVCINC classes and
all related computer driven systems required by EVCINC in the enrollment
process. Learningforce will have the Software fully functional (subject to
normal operational adjustments), ready for beta testing and capable of handling
a minimum of 20 complete degree programs, as prioritized by EVCINC, to meet
EVCINC's enrollment and academic advisement requirements by the end of the sixth
week following the signing of this Agreement, at which time the system will be
fully operational (subject to normal operational adjustments). At such time, a
two week beta testing period ("Initial Beta Period") will occur, during which
time software corrections will be made as identified. Learningforce will
continue to meet the specific needs of EVCINC by adding EVCINC programs into the
functioning system on a continuing basis beyond the Initial Beta Period. Failure
to meet the above time schedule will be a material breach of this agreement by
Learningforce. Any delay caused by EVCINC for approvals or any other reason
beyond the control of Learningforce will adjust the time lines accordingly.
(note: at the beginning of the
Initial Beta Period website visitors will, at a minimum, be able to see and
choose from the entire list of available EVCINC degree programs; however only
the prioritized programs as designated by EVCINC will be required to have
advising-level detail.) Learningforce will provide the following services
throughout the entire process:
a. Analysis of EVCINC current system and long-term needs;
b. Strategic data management planning;
c. Initial and as needed on-going programming to tailor the
Software to EVCINC offerings, corporate and consumer client bases and data
management structures
d. Development of an interface for seamless electronic data
exchange between Learningforce and EVCINC.
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e. Use of the software as part of the EVCINC interactive Web
Site
B. Customized Academic Advising Learningforce will provide customized
academic advising to potential customers of EVCINC, providing the following
services:
1. Advisement of in-bound callers regarding the academic
credibility and suitability of EVCINC offerings so as to maximize EVCINC
revenue;
2. Out-bound follow-up calls to non-responding leads to determine
their continued interest in EVCINC programs and convert them to customers.
3. Enrollment by Learningforce advisors of customers interested in
EVCINC programs.
C. Additional Academic Advising
1. It is further anticipated that some potential EVCINC customers may
have little or no prior college experience, and/or considerable doubt about
their secondary-level skills. In such instances, and where appropriate,
Learningforce shall encourage potential customers to enroll in EVCINC
video-assisted, at-home remedial courses available through Learningforce or
through EVCINC providers through various delivery and program design methods, in
order to increase their opportunity for success in EVCINC college level courses.
Learningforce shall make best efforts to secure the rights from the appropriate
copyright holders of the programs currently distributed by Learningforce, to be
offered to and used by EVC students. EVC shall set the market price of these
courses. Learningforce will be paid 70% of the current Learningforce published
price regardless of the price EVCINC charges its students for these courses.
EVCINC would be free to charge a surcharge, for whatever amount it considers
appropriate, at its discretion, to students taking the Learningforce remedial
courses. If courses are offered through other EVCINC providers Learningforce
will not be entitled to any compensation for this service beyond the
compensation described as part of the "Service" in this agreement.
D. Personalized Learner Educational Website
1. Learningforce will create a customized online capability for EVCINC
students to track their progress toward degrees, certificates and/or other
educational credentials available through EVCINC delivery mechanisms. The
website will be functional, ready for beta testing and capable of handling a
minimum of 20 complete degree programs, as prioritized by EVCINC, to meet
EVCINC's enrollment and academic advisement requirements by the end of the sixth
week following the signing of this Agreement, at which time the system will be
fully operational (subject to normal operational adjustments). At such time, a
two week beta testing period ("Initial Beta Period") will occur, during which
time software corrections will be made as identified. Learningforce will
continue to meet the specific needs of EVCINC by adding EVCINC programs into the
functioning system on a continuing basis beyond the Initial Beta Period. Failure
to meet the above time schedule is a material breech of this agreement by
Learningforce Any delay caused by EVCINC for approvals or any other reason
beyond the control of Learningforce will adjust the time lines accordingly.
(note: at the beginning of the
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Initial Beta Period website visitors will, at a minimum, be able to see and
choose from the entire list of available EVCINC degree programs; however only
the prioritized programs as designated by EVCINC will be required to have
advising-level detail which will continue to grow during the ongoing Beta period
as stated above). The features of this capability will include, but not be
limited to:
a. The ability to view, on a course-by-course basis, the
precise courses remaining to be completed to earn the desired credential;
b. The ability to enroll in additional EVCINC courses via
the website;
c. The ability to network with other EVCINC students around
the nation via a student bulletin board;
d. If provided information by EVCINC, the ability to access
information about their corporate tuition reimbursement policy.
III. TERM
The term of the Agreement (the "Term") shall be for a period of five (5)
years from the date of signature of the Agreement, subject to an earlier
termination under Section VI below.
IV. Financial Provisions
A. License Fees A license fee of $250,000 ("License Fee") shall be
earned over the Term of the Agreement. In consideration for the License
provisions described in Paragraphs IA-B, such fee will be calculated at a rate
of $50,000 per annum. Payment of the license fee will be $150,000 upon signing
of this Agreement, $50,000 three weeks after the signing of the Agreement and
$50,000 upon the timely delivery of functional Software for the Initial Beta
Period. In the event that the closing of the acquisition of 51% of Learningforce
by EVCINC occurs prior to any of the payments set forth above, then all payments
not yet made shall be made upon closing of such acquisition. A working copy of
the software and all upgrades, will be immediately held in escrow as security
for the advanced payment of the License, and shall be updated every quarter to
include specific software code written for EVCINC under this Agreement. In the
event that Learningforce commits a material breach of this Agreement, then any
software code specifically written for EVCINC by Learningforce for the purpose
of performing under this Agreement shall become the property of EVCINC.
B. Compensation for Learningforce Services
1. Cost Reimbursement. EVCINC shall reimburse Learningforce for
costs, not to exceed a monthly fee of $59,000 which does not include the profit
percentage described below, without the express written consent of EVCINC.
Learningforce is required to provide the Services according to the following
terms and mechanisms:
a. Learningforce shall submit to EVCINC purchase orders for all
start-up equipment expenses as approved by EVCINC official representatives.
EVCINC will
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order and pay for all computer equipment and furniture directly. Computer
equipment and furniture purchased under this agreement shall be inventoried and
remain the property of EVCINC. In the event of termination, EVCINC shall have
the right to remove the equipment and furniture and any other items specifically
purchased by EVCINC and placed in the Learningforce office for the express
purpose of supporting Learningforce in its execution and delivery of services to
EVCINC under this agreement.
b. EVCINC shall pay all direct costs for services by submitting
invoices to EVCINC representatives. Checks or electronic transfers will be
issued on the 15th and last day of each month, except for payroll costs for
EVCINC-approved personnel, for which a mechanism shall be developed to ensure
that Learningforce receives such funds prior to the bimonthly payroll periods
for which such personnel costs must be paid.
1) Prior to incurring an obligation for a cost required for
the performance of the Services, Learningforce shall obtain the written approval
of EVCINC to make such an expenditure unless the expenditure is clearly
identified as part of the official budget. Any of the following line item
categories, subject to budget approval by EVCINC, shall be considered legitimate
direct costs (not general or administrative costs) expenditures required for the
performance of the Services:
i) Fulfillment, advising and project management
personnel and personnel-related costs (agency
fees, ad placements, payroll taxes, approved
benefits, etc.)
ii) Training costs (detailed time charges to be
provided)
iii) Programming for database and website software
customization (detailed time charges to be
provided)
iv) Telephone line and time charges
v) New telephone, computer equipment and required
over-the-counter software expenditures
vi) New furniture expenditures
vii) Rent (pro rata)
viii) Postage
ix) Consulting, legal and accounting fees for reports
and services at EVCINC's request (not to include
legal and accounting fees expended by
Learningforce for the purpose of executing this
Agreement)
x) Travel, as approved by EVCINC.
2. Documenting Costs. Learningforce shall document the actual
costs, without xxxx-up, incurred by Learningforce (the "Costs") for line items
approved by EVCINC. Documented costs within the approved budgets shall be paid
directly to the vendor or to Learningforce as appropriate.
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3. Margin Fee On the 15th day of each month, a sum equal to 30%
of the Costs (excluding Costs for capital expenditures) documented and expended
from the budget during the prior calendar month ("Margin Fee") shall be paid to
Learningforce if the proposed acquisition of 51% of Learningforce stock is
consummated. In the event that the acquisition of Learningforce by EVCINC does
not happen, the margin fee will be 20% of the Costs (excluding Costs for capital
expenditures) documented and expended from the budget during the prior calendar
month.
4. Minimum Expenditure EVC guarantees to spend a minimum of
$700,000 in Costs (excluding Costs for capital expenditures) in the first twelve
(12) months from the effective date of the customized software and commencement
of customized service from Learningforce to EVCINC (The Guarantee Period)
provided that Learningforce is not in default of any provision of this agreement
and the acquisition of 51% of Learningforce stock by EVCINC is completed and
closed before December 31, 1999. If the sum of the documented costs for the
Guarantee Period does not total $700,000, then EVC shall pay to Learningforce on
the fifteen day of the thirteenth month the difference between the guarantee and
the total Margin Fees paid to Learningforce during the Guarantee Period if all
other conditions as described in this agreement are met.
5. Revenue to EVCINC In the event EVCINC does not make an equity
investment in Learningforce, EVCINC shall be entitled to a fee of 30 % of all
revenue generated by Learningforce for Learningforce fee-based advising and
remediation services ("EVCINC Revenue Share").
6. Executive management consulting services specifically
requested of Xxxxxxx Xxxx by EVCINC, including those services required in order
for Learningforce to meet its obligations under this Agreement shall be provided
by Xx. Xxxx to whatever extent required as his obligation as president of
Learningforce in completing the required services of EVCINC. Xx. Xxxx'x efforts
on behalf of EVCINC and the timely completion of this agreement are the primary
considerations for EVCINC to pay the five year licensing fee in advance and the
reason for consideration of the acquisition of Learningforce by EVCINC. Xx. Xxxx
shall consider EVCINC his highest priority and function accordingly.
V. Confidentiality.
A. On its part, Learningforce shall treat all information regarding EVCINC
operations, corporate matters of which it may become knowledgeable in the course
of the execution of the Agreement and non-public knowledge regarding its
proprietary technology and other properties ("EVCINC Information") as
confidential. Learningforce shall not disclose EVCINC Information to any other
party, nor shall Learningforce sell or otherwise use the names of EVCINC
students or potential students provided to Learningforce in order to provide the
Services described in this Agreement in any way except as specifically directed
by EVCINC for the execution of the provisions of the Agreement, or for joint
marketing ventures which shall be set forth in such other written agreements as
EVCINC and Learningforce may elect to jointly execute.
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B. On its part, EVCINC acknowledges that it has been informed that it is
the policy of Learningforce to maintain as secret and confidential all software
programs and systems heretofore or hereafter acquired, developed and/or used by
Learningforce in the implementation of this Agreement, and that all such
confidential information is of great value to Learningforce. EVCINC agrees that
it shall not disclose, use, permit or cause to authorize any third parties to
disclose or use, any such confidential information , or any other information
relating to the business or interests of Learningforce which EVCINC knows is
regarded as confidential and valuable to Learningforce, except as provided by
this Agreement.
C. In the event of a breach or threatened breach by either Party of the
provisions of A. or B., above, the other Party shall be entitled to an
injunction restraining the first from disclosing, in whole or in part, such
information. With respect to any action for injunction or other equitable
relief, the Parties agree that there is no adequate remedy at law for such a
breach and the Parties agree not to assert such an equitable defense.
VI. TERMINATION.
A. Termination Without Cause by EVCINC In the event that EVCINC terminates
this Agreement without cause, then:
1. The License granted herein shall be revoked upon the effective date
of termination and, commencing upon such date, EVCINC shall no longer have the
right to utilize the Software, or any customizations made thereto by
Learningforce as a result of this Agreement, and,
2. EVC shall be entitled to a pro-rata refund for licensing and other
fees paid in advance of the termination date. The formula used will be based on
number of months used vs. total contract of 60 months.
B. Termination without Cause by Learningforce will not be permitted.
C. Termination for Cause. Either Party may terminate the Agreement for
cause upon thirty (30) days prior written notice of termination (the "Notice")
to the other, except that, within such thirty day period, the Party receiving
such Notice has the opportunity to cure within 30 days. In such case as a cause
is cured in a timely manner, the Agreement will continue in full force and
effect. For the purposes of this Agreement, cause shall mean a material breach
of this Agreement and a notice of default with specificity of the material
breach shall be delivered to the other party by the accusing party.
1. In the event that Learningforce fails to deliver ongoing services
as detailed in this agreement, and in consideration of the five year licensing
agreement paid in advance, if EVCINC terminates this Agreement for cause, the
License granted herein shall remain in full force and effect throughout the
stated term of this Agreement. Further, Learningforce shall be required to
refund to EVCINC a pro rate portion of the License Fee as of the date of
termination. The Software held in escrow will become the property of EVCINC.
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2. For Learningforce, cause to terminate would be considered to
include, but not limited to, EVCINC not generating a minimum expenditure in any
given calendar year equal to the guaranteed expenditure during the Guarantee
Period. In such an event, 30 days shall be given to correct the situation. If
the breach is not resolved within the time period either party can request
immediate arbitration to resolve the breach.
VII. Entire Agreement.
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This Agreement contains the entire understanding of the parties with
respect of the subject matter hereof and may not be changed or terminated
orally. No change, termination or attempted waiver of any of the provisions
hereof shall be binding unless in writing and signed by both parties.
VIII. Successors and Assigns.
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Learningforce shall not assign , transfer, subcontract or otherwise
dispose of all or any of its obligations under this Agreement, without the
written consent of EVCINC.
IX. Notices.
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Any notices required or permitted under this Agreement shall be in
writing and effectively given upon personal delivery or upon deposit with the
United States Postal Service, faxed, sent electronically or via next day mail
service to the respective address set forth at the head of this Agreement or
such other address as either party hereto may properly give to the other.
X. Non-Waiver of Rights.
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The failure to enforce at any time any of the provisions of this
Agreement or to require at any time performance by the other party of any of the
provisions hereof shall in no way be construed to be a waiver of such provisions
or to affect either the validity of this Agreement, or any part hereof, or the
right of either party thereafter to enforce each and every provisions in
accordance with the terms of this Agreement.
XI. Severability.
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The invalidity or unenforceability of any particular provision of this
Agreement shall not affect the other provisions hereof, and this Agreement shall
be construed in all respects as if such invalid or unenforceable provisions were
omitted.
XII. Governing Law.
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All matters concerning the validity and interpretation of and
performance of this Agreement shall be governed by the laws of the State of New
York .
XIII. Dispute Resolution.
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Except for violations or threatened violations of Article V, which
shall entitle a Party to seek immediate injunctive relief, neither party will
file an action or institute legal proceedings
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with respect to any dispute, controversy, or claim arising out of, relating to,
or in connection with, this Agreement until first complying with the following
procedures:
A. Good Faith Negotiation. The parties will hold a meeting
("Meeting"), attended by senior executives for both parties with decision-making
power. During such Meeting, the parties will make good faith efforts to achieve
an amicable means of resolution. Should the parties achieve a resolution to the
dispute, such resolution shall be set out in writing in the form of a cure plan
or settlement agreement, signed by an authorized signatory for each party.
B. Arbitration. Any dispute or claim arising under or with respect to
this Agreement shall be settled in accordance with the Commercial Rules of the
American Arbitration Association (Association) before a single arbitrator
selected in accordance with the procedures of the Association. The award of the
arbitrator shall be final and binding upon the parties and any such award shall
be entered as a judgment in any competent court having jurisdiction. The
prevailing party in any such arbitration shall be entitled to the entry of an
award of reasonable attorney fees and costs associated with said arbitration
proceeding, including the reimbursement of the arbitrator fees in connection
with the proceeding. The arbitration shall take place in New York City, New
York, and the law of the State of New York shall apply
IN WITNESS WHEREOF, the parties hereto have executed this instrument
the day and year first above written.
LEARNINGFORCE, INC.
Xxxxxxx Xxxx President
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Printed Name Title
/s/ Xxxxxxx Xxxx October 18, 1999
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Signature Date
EDUCATIONAL VIDEO CONFERENCING, INC.
Xx. Xxxx X. Xxxxxxxx Chairman & CEO
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Printed Name Title
/s/ Xx. Xxxx X. Xxxxxxxx 10/18/99
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Signature Date
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