MASTER AGREEMENT BETWEEN
EDUCATIONAL TESTING SERVICE
AND
SYLVAN LEARNING SYSTEMS, INC.
FOR COMPUTER-BASED. TESTING SERVICES
AT SYLVAN TECHNOLOGY CENTERS
IN THE UNITED STATES AND CANADA
THIS AGREEMENT, effective as of December 12, 1997 by and between
EDUCATIONAL TESTING SERVICE (ETS), a nonprofit, nonstock corporation, organized
and existing under the Education Law of the State of New York, with principal
offices at Xxxxxxxxx, Xxx Xxxxxx 00000, and SYLVAN LEARNING SYSTEMS, INC.
(Sylvan), a Maryland business corporation, with its headquarters at 0000
Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000.
WITNESSETH:
WHEREAS, ETS has developed, and is continuing to develop,
computer-based versions of various tests and exams which are designed to be
administered on networked personal computers; and
WHEREAS, ETS has also developed an ETS proprietary Computer-Based
Testing System, a set of computer software that permits the administration of
computer-based versions of tests on networked personal computers; and
WHEREAS, Sylvan operates a network of franchised/leased/owned, Sylvan
Technology Centers in the United States and its territories (as well as other
computer-based testing centers and mobile computer- based testing operations)
that are capable of administering computer-based tests to test-takers and
Sylvan wishes to utilize certain ETS test development and ETS software Systems
capabilities; and
WHEREAS, under the terms of an agreement effective as of September 1,
1993 (the " 1993 Agreement") between ETS and Sylvan, Sylvan has been providing
certain computer-based test administration and related services, for ETS
testing programs; and
WHEREAS, ETS and Sylvan wish to redefine their contractual
relationship to address issues that have arisen in the implementation of the
Agreement and to provide contract performance oversight.
NOW, THEREFORE, ETS and Sylvan agree to the following:
GENERAL STATEMENT OF PRINCIPLES
-------------------------------
It is implicit in this Agreement that the use of the Test Center
network by third parties be encouraged, thus providing a higher utilization and
allowing Sylvan to extend the best possible unit pricing to ETS.
The current success of CBT is due in large part to the flexibility,
which both parties have shown, in our approach to the daily operation of the
testing network.
1
*Portions of this exhibit has been omitted based upon a request for confidential
treatment.
We are separate organizations with sometimes different goals and needs. Our
planning cannot and should not be at the expense of either organization's
separate goals. Both ETS and Sylvan must respect the other organization's goals
and operate with a level of trust that assures a mutually successful future.
1.0 GENERAL
-------
The objective of this Agreement is to serve as a master agreement
under which ETS utilizes the Sylvan network of secure testing centers
in the U.S., Canada, and their territories that provides the highest
quality testing and related services, which are both easily accessible
to and economical for the Examinees to utilize.
These Sylvan services will normally include, but are not necessarily
limited to: local and national scheduling of Tests, registration of
Examinees (as defined in 2.17 below), receipt of payments (including,
but not limited to, credit card payments), computer-based test
administration, and local score reporting.
ETS services to Sylvan may include, but are not necessarily limited
to: test development, conversion of paper-based tests into
computer-based tests, and licensing of certain ETS developed software
systems.
ETS and Sylvan shall cooperate in the development and implementation
of plans for the warehousing, distribution, installation, and
operation of accommodative equipment and'softw-are at the Test
Centers, to accommodate Examinees with disabilities who need special
testing.
The parties further agree to use their best efforts to accomplish the
objectives of this Agreement and to meet the deadlines contained in
the mutually agreed to schedules that will be developed hereunder,
from time to time.
2.0 DEFINITIONS
-----------
For purposes of this Agreement, the following terms shall have the
meaning indicated below:
2.1 CBT Network:
The system for providing Computer Based Testing services on
behalf of ETS and ETS's Clients. This includes the conversion
of Tests to CBT format, the creation of new CBT Tests, the
administration of CBT Tests, the creation and delivery of CBT
related products, including but not limited to Practice Tests,
Tutorial and Test Preparation materials, CBT related
fulfillment activities and any other services and products
that ETS and Sylvan may determine to provide in the CBT field.
2.2 ETS:
Educational Testing Service (ETS) means the non-profit
organization established under New York law and located in
Princeton, New Jersey.
2
2.3 ETS Computer-Based Testing System:
The ETS proprietary open system architecture Computer-Based
Testing System currently consists of the following
sub-systems: the Computer-Based Test Development and
Production System, the Network Data Distribution and Routing
System, the Test Delivery Application System, the Test
Administrative System, the Network Management Control System.
Among other things, the open Systems architecture permits the
administration of computer-based versions of tests on local
area network based personal computers. These components will
be changed or replaced from time to time to take advantage of
new technology.
2.4 ETS Supported CBT Centers:
ETS supported CBT centers in ETS offices and institutions of
higher education.
2.5 Technologies and Materials:
2.5.1 ETS Owned, Acquired or Contracted For Technologies and
Materials:
ETS Owned, Acquired or Contracted For Technologies and
Materials shall include the ETS Computer-Based Testing
System, the Test databases and scripts to be
administered and all individual Test Questions
(including but not limited to discrete items,
simulations, vignettes, and performance assessments),
the Manual, and any other software, manuals,
documentation, secure test administration or
operational procedures or other materials developed by
ETS which will be provided to and/or used by Sylvan to
perform its responsibilities under this Agreement.
The following functions/applications were either
developed/written by ETS or were owned, acquired, or
contracted for by ETS as off-the-shelf (OTS) vendor
provided software that ETS is responsible for
maintaining.
System Functions, include all of the following:
*
*Text omitted based upon request for confidential treatment.
3
Administrative Functions, include all of the following:
*
Station Service Functions, include all of the following:
*
2.5.2 Sylvan Owned, Acquired, or Contracted For Technologies and
Materials:
The following functions/applications were either
developed/written by Sylvan or were owned, acquired, or
contracted for as OTS vendor provided software that
Sylvan is responsible for maintaining.
System Functions, include all of the following:
*
Administrative Functions, include all of the following:
*
Station Service Functions, include all of the following:
*
2.6 ETS Proprietary and Confidential Information:
ETS Proprietary and Confidential Information shall include but
not be limited to, the ETS Computer-Based Testing System for
test administration and delivery, the Test databases and
scripts and all individual Test questions, all data collected
from Examinees, all Examinee test scores AND THE IDENTITIES OF
THE EXAMINEES, THE MANUAL, internal ETS procedures for the
secure administration of computer-based tests and any other
information identified by ETS to Sylvan as confidential.
Sylvan's responsibilities concerning ETS Proprietary and
Confidential Information, are enumerated in Paragraphs 8.0 and
10.0 of this Agreement.
2.7 Examinee:
Examinee means any individual who receives or takes any Test or
a Test related activity such as a practice test or tutorial
product or is scheduled to take a Test or a test related
activity at a Test Center, or who reviews their previously
taken Test, if such review is permitted by ETS.
4
*Text omitted based upon request for confidential treatment.
2.8 LAN:
A local area network made up of personal computers.
2.9 Manual:
The most current version of the ETS Computer-Based Test Center
Administrator's Manual. The Manual is attached hereto as
Attachment #4.
2.10 Private Test:
Any Test which at ETS's direction is to be administered to an
Examinee as the sole occupant or user of the Room during the
Test.
2.11 Room:
The room(s) within the Test Center where the actual testing
takes place using the network based PC's.
2.11.1 Regular Testing Room:
A Room large enough to simultaneously test several
Examinees, but which may also be used for the private
testing of a single Examinee who requires private
testing because of a disability.
2.11.2 Private Testing Room:
A private Room separate from the Regular Testing Room
which is designed to accommodate a single Examinee who
requires private testing because of a disability and
the Examinee's reader or amanuenses.
2.12 Scheduled Hours of Service:
The amount of time, to be scheduled for each Examinee as
determined by ETS, including time allotted for the taking of a
Test, including a Specialized Test, plus the time allotted for
breaks during the Test, for the administration of any tutorial
or familiarization with computer-based test taking; and for
computerized registration of the Examinee. The Scheduled Hours
of Service may, but does not necessarily, equal the maximum
time in which any Test may be administered. Scheduled Hours of
Service for any Test may be modified from time to time by ETS.
2.13 Specialized Test:
Any test that, by virtue of an Examinee's disability, condition
or handicap, requires the involvement of special assistance to
the Examinee, in the way of additional equipment or aids,
and/or a reader or amanuenses.
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2.14 Sylvan:
Sylvan means the parent organization, any subsidiary, or
affiliated organization, successor organization, or assignee in
whole or in part.
2.1.5 Sylvan Candidate Services Call Center ("CSCC"):
The Sylvan Candidate Services Call Center ("CSCC") shall mean
the centralized reservation processing system operated and
staffed by Sylvan for scheduling prospective Examinees and the
collection, maintenance and storage of all confidential relevant
data regarding the delivery of services as directed by ETS under
this Agreement.
2.16 Sylvan Proprietary and Confidential Information:
Sylvan Proprietary and Confidential Information shall include
but not be limited to, the Sylvan test administration system and
scheduling system, Sylvan Manuals and procedures, internal
Sylvan procedures for the secure administration of
computer-based tests and any other information identified by
Sylvan to ETS as confidential. ETS"s responsibilities concerning
Sylvan Proprietary and Confidential Information, are enumerated
in Paragraphs 9.0 and 11.0 of this Agreement.
2.17 Sylvan Registration Services:
The series of activities authorized by ETS taking place at
Sylvan's CSCC and at STC's necessary to assist ETS in the
registration process. This can include such services as: 1) for
a walk-in Examinee at an STC collecting Examinee data, payment
receipt or payment information receipt and transmission of data
to ETS; 2) at the CSCC, coordination and communication to
correct Examinee registration information and receipt of
eligibility files.
2.18 Test(s):
2.18.1 Tests Administered on Behalf of ETS:
All computer-based versions of a Test (including
reviews by Examinees of their previously taken Tests),
which Sylvan is authorized by ETS to deliver or
administer at a Test Center under this Agreement,
including those Tests and test programs set forth on
Attachment 13 . Sylvan agrees that all Tests are
subject to security procedures that ensure that
Examinees have access to the Test(s) only during
testing, and that the Test itself or any part of it
shall not be disclosed or made available to any person
who is not subject to confidentiality and
nondisclosure obligations regarding same.
2.19 Test Center:
A Sylvan or ETS designated testing facility approved by ETS,
located in the United States, Canada or their territories,
operated by Sylvan and/or ETS trained and authorized staff,
including Sylvan Technology CentersO, facilities in ETS Offices
and institutions,
6
or through other parties. Centers operated by Sylvan or its
agents are sometimes called herein "Sylvan Test Centers".
Centers operated by ETS or other parties under Paragraph
16.1.2 are sometimes called herein"'ETS Test Centers".
2.20 Testing Client:
Any ETS client whose tests are administered through ETS
Computer Based Testing Network Group, provided that no Testing
Client is a third party beneficiary of this Agreement or
otherwise succeeds to any rights of ETS under this Agreement.
3.0 TERM AND RENEWAL
----------------
Unless earlier terminated as provided for herein, this Agreement shall
commence on the Effective Date and will expire on December 31, 2005.
This Agreement will renew automatically for an unlimited number of
consecutive, additional three (3) year renewal periods on the first day
of January of 2006 (and on the anniversary of said date every three
years thereafter), unless ETS or Sylvan provides notice at least two
(2) years before the expiration date of the initial or renewal term
that this Agreement will not be renewed. During each renewal term, the
terms and conditions of this Agreement shall remain in effect, except
that any agreed to changes in pricing and/or performance standards
shall be effective at the start of each renewal term.
4.0 CONTRACT PERFORMANCE OVERSIGHT
------------------------------
4.1 Contract Performance Oversight
As soon as practicable, but no later than January 1, 1998, the
parties shall establish the Contract Performance Oversight
Committee (the "Oversight Committee), consisting of officers
and employees of both organizations. The Oversight Committee
will consist of one officer each from ETS and Sylvan, and such
other employees of ETS and Sylvan as may be considered
appropriate. The ETS officer will chair the Oversight
Committee and ETS will have final approval authority for all
decisions of the Oversight Committee. The Oversight COMMITTEE
SHALL HAVE the ability to appoint and dissolve subcommittees
it deems necessary to the accomplishment of its mission. The
Oversight Committee will be charged with guiding the operation
and development of THE CBT NETWORK and with approving and
monitoring overall compliance with each 18 month operation and
development plan for the CBT Network (the "CBT Network Plan").
Both parties agree that the Oversight Committee shall have the
final say with regard to all operational and strategic issues
arising in the delivery of Tests and Test related events as
governed by this Agreement.
4.2 CBT Network Plan
The CBT Network Plan will be a comprehensive plan addressing
both the expansion of the CBT Network and operational
guidelines for system development and network operational
requirements addressing ETS and its client needs. The CBT
Network Plan will address development of the CBT Network and
related activities for each 18 month period. This can include,
in addition to the expansion and operation of the CBT Network,
such areas as future product introduction, sales of ancillary
CBT products, new CBT academic program implementation and the
general advancement of CBT.
7
The CBT Network Plan can, in the course of developing a system
to meet ETS's requirements for serving ETS's client base,
address design of systems and procedures, soffivare and hardware
upgrades, network upgrades, and system architecture in terms of
hardware, software, and manual processing functions, The CBT
Network Plan will include the requirements necessary for Sylvan
to service the ETS client base with due consideration of other
Sylvan clients using the same system. The CBT Network Plan will
recognize that (i) any system that serves multiple clients will
remain ultimately in the control of Sylvan and will address
ETS's requirements in the context of serving multiple clients
using the same systems and (ii) ETS will remain ultimately in
control of ETS-owned Eystems and systems used exclusively for
ETS clients.
The initial CBT Network Plan will be agreed to by the parties
within six (6) months of the Effective Date of this Agreement.
For subsequent plans the parties will begin the planning process
for each 18 month CBT Network Plan at least six (6) months
before the end of the previous plan. The plan for any subsequent
18 month period shall be completed at least sixty (60) days
prior to the end date of the prior plan. The Contract
Performance Oversight Committee will regularly review progress
against plan and budget.
4.3 Subcommittee
The Oversight Committee shall appoint a subcommittee consisting
of employees from both ETS and Sylvan that is charged with
preparing the CBT Network. Plan ("Subcommittee"). The
Subcommittee shall also propose to the Oversight Committee
amendments to the CBT Network Plan to accommodate the need for
changes to the CBT Network Plan that arise during the 18 month
period the CBT Network Plan is in effect. Either party may
submit a proposed change to the CBT Network Plan to the
Subcommittee. If the proposed change is minor the subcommittee
may authorize the change. If the proposed change is major, the
Subcommittee must submit the change to the Oversight Committee
which will approve or reject the change. The definition of minor
and ma or changes will be set forth in the first CBT NETWORK
PLAN, but the Oversight Committee with have ultimate authority
to determine whether a proposed change is minor or major in the
case of a disagreement. The Subcommittee must submit proposals
concerning major changes to the CBT Network Plan to the
Oversight Committee at least three (3) months before the
proposed change is to become operational. Each party will use
its best efforts to expediently approve changes proposed by the
other party.
4.4 Quality Control
ETS and Sylvan shall each make changes, upgrades, and
substitutions to the hardware and software in their respective
systems without the consent of the other party when such
changes, upgrades, and substitutions have no effect on the other
party; provided, however, that to protect against software and
hardware incompatibility the parties shall establish a Quality
Assurance Laboratory at a neutral location to test all such
changes before they are released as a production version that
may affect the CBT Network. This Quality Assurance Laboratory
will be designed to reproduce the typical high security testing
environment. Both parties may use the facility for quality
assurance that
8
software and hardware changes will not degrade Test Center
performance. Sylvan will manage the Quality Assurance
Laboratory and maintain the quality assurance testing
schedule. Overall supervision of Sylvan's operation of the
Quality Assurance Laboratory will be provided by the Oversight
Committee. Sylvan will be responsible for the direct out-of-
pocket costs of equipping and operating the Quality Assurance
Laboratory, and ETS will reimburse Sylvan for one-half of such
costs.
When Sylvan and ETS desires changes, upgrades, and
substitutions to hardware or software and those changes will
affect the other party's testing needs, except for maintenance
repairs and corrections for software defects, the party making
the change will notify the other party with sufficient
information for the other party to evaluate the impact of the
change and will simultaneously or as close to the notice date
as possible begin testing the proposed change, upgrade and/or
substitution in the Quality Assurance Laboratory. The party
not submitting the change will approve or disapprove the
change based on the results obtained from testing at the
Quality Assurance Laboratory. In those circumstances where
testing is not possible in the Quality Assurance Laboratory,
the party not submitting the change will be provided fifty
(50) calendar days to approve or disapprove the changes. Any
approvals required by this paragraph shall not be
unreasonably withheld.
5.0 SYLVAN'S RESPONSIBILITIES
-------------------------
5. 1 Sylvan Facilities and Furniture
At each Test Center, Sylvan will provide a testing Room
convenient for access by the Examinees and suitable for secure
testing purposes, which meet the specifications contained in
Attachment #1 hereto "ETS Computer-Based Test Center
Specifications".
During the time that an ETS Test is being administered in the
Room, Sylvan shall not allow the Room, or any areas near the
Room, to be used in a manner which would be detrimental to a
standardized testing environment. At all other times, Sylvan
shall either lock the Room or ensure through appropriate
mechanisms that there is no access to the ETS Application
System, the Tests, or other ETS confidential and proprietary
materials. The Sylvan Test Centers located in the United
States and its territories are to conform to the standards set
forth in Attachment #2 hereto "The Americans with Disabilities
Act" of 1990. Sylvan shall use its best efforts to ensure that
Examinees tested in Test Centers in Canada and its territories
will be tested under conditions that conform as closely as
possible to the requirements of the Americans with
Disabilities Act. Sylvan and all Test Centers shall, in the
performance of this agreement, comply with all applicable U.S.
and Canadian federal, state, provincial, local and territorial
laws now and hereafter in effect.
5.2 Sylvan Equipment and Software
PCs and software as specified in Attachment #3 hereto "Sylvan
provided ComputerBased Test Center Hardware and Software" will
remain the property of Sylvan or its lessor(s) or licensor(s).
Sylvan agrees to assume responsibility for obtaining and
paying for software licenses (including but not limited to Ms
Windows and Novell Operating System) and maintenance of those
PCs and software and to keep them in working order for the
duration of this Agreement, and to assume the risk of loss for
those PCs and
9
software. Except where deviations are permitted by ETS, all
Sylvan Test Center LAN Systems shall be consistent in all Test
Centers and in compliance with the specifications set forth in
Attachment # 1, as modified from time to time by ETS - The
parties will agree on the appropriate hardware and software
required for Test Centers in each 18 month CBT Network Plan. To
the extent that any hardware or software changcs are required
by any future CBT Network Plan, the costs of the change will be
shared between the parties in accordance with Attachment # 6
"Fees".
5.3 Sylvan Test Center Certification
Sylvan agrees that each new (including previously certified
Sylvan Test Centers when ownership of a Sylvan Test Center
changes) and/or relocated Sylvan Test Center will be required
to complete a facilities review, staff training and software
certification as part of a Test Center authorization process
prior to the delivery of ETS Tests and at other times when
significant software or operational changes occur.
Sylvan shall correct any condition where either security or
operating procedures have not been maintained In the event that
any such condition is not corrected by Sylvan within twenty-
five (25) days after Sylvan receives ETS's written notice of
need for remedial action, ETS reserves the right, at the
express written direction or approval of an ETS Executive Vice
President or ETS's President, to terminate immediately the
Sylvan Test Center's authorization to deliver ETS Tests, upon
the delivery of written notice of termination to Sylvan.
Where in ETS's sole opinion, the severity of the condition so
warrants, at the express written direction or approval of an
ETS Executive Vice President or ETS's President, ETS may
immediately terminate a Sylvan Test Center's authorization to
deliver ETS Tests, upon the delivery of written notice to
Sylvan.
5.4 Market Coverage/Additional Capacity
5.4.1 Sylvan and ETS will agree as part of each CBT Network
Plan on the designation of GEOGRAPHIC AREAS FOR MARKET
COVERAGE. Sylvan will at all times maintain a
SUFFICIENT NUMBER OF TEST CENTERS (STC's) in each
geographic area so as to MEET THE TEST AND TEST RELATED
event demand. Sylvan will be deemed to be providing
sufficient capacity if it meets the scheduling criteria
of placing 99% of all Examinees in a seat within 20
days of their requested date and within 50 miles of
their requested site as set forth in the Key
Performance Standards set forth in Attachment # 12
below. The parties recognize that in certain sparsely
populated locations it is impractical to maintain a
Test Center within fifty mile zones. Notwithstanding
the requirement set forth above, for those sparsely
populated areas, the parties shall, as part of the CBT
Network Plan, mutually agree on specific coverage
requirements for those areas.
Sylvan is not obligated to open a Test Center under
this paragraph or any other circumstance if the new
Test Center is within a fifty (50) mile radius of an
existing Sylvan Test Center, unless the existing Test
Center capacity is insufficient to serve the market
need as defined by Attachment # 12. Nothing
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stated in this Paragraph 5.4.1 shall in any way be
deemed to limit ETS's rights set forth in Paragraphs
16.1.2 and 16.1.3.
5.4.2 Both parties recognize that ETS may require additional
Test Centers to be opened in certain locations. The
parties agree.
a. For each of the first five years that this Agreement
is in effect Sylvan will open up to ten (10) Test
Centers per year in any location designated by ETS at
no cost to ETS. These Test Centers may be selected in
addition to the mutually agreed network plan. Mobile
testing sites and institutional sites will be
considered adequate for purposes of this clause. Sylvan
will open any center designated under this paragraph
within ninety (90) days of receipt of ETS's written
request.
b. After the first ten (10) centers per year and for
Test Centers opened in year six of the Agreement and
beyond, Sylvan will open a Test Center in any location
designated by ETS provided ETS pays a fee to Sylvan for
the cost of opening the Test Center. The fee for
opening a Test Center under this paragraph 5.4.2 b.
will be agreed to by the parties at the time the center
is requested by ETS. Upon agreement by both parties on
a fee and the location of the center, Sylvan will open
the Test Center within ninety (90) days of agreement.
c. With regard to both Subparagraphs 5.4.2 a and b,
Test Centers opened pursuant to those subparagraphs are
in addition to any Test Centers Sylvan is required to
open to meet the market coverage obligations of
Paragraph 5.4. 1.
For both a and b above Sylvan is not obligated to open
a Test Center under this paragraph or any other
circumstance if the new Test Center is within a fifty
(50) mile radius of an existing Sylvan Test Center,
unless the existing Test Center capacity is
insufficient to serve the market need. If Sylvan fails
to advise ETS that it will open a requested Test Center
pursuant to a or b above, or if Sylvan does not open
the requested Test CENTER IN THE TIME PERIOD ALLOWED,
ETS MAY THEN PROCURE THE DESIRED TESTING CAPACITY
ITSELF OR THROUGH OTHER PARTIES.
5.4.3 ETS and Sylvan recognize that there are times when ETS
testing reaches a peak in event volume. ETS and Sylvan
agree that ETS can block purchase up to * of the
network under the following conditions:
ETS may purchase a maximum of * of the US/Canadian
domestic testing network capacity for any specified day
within the normal workweek of Monday to Saturday upon
six months notice to Sylvan. ETS must purchase the seat
time in contiguous blocks and may purchase up
to * of the hours available in the entire
testing network for the day or days selected. For
example, ETS will purchase up to * of the
morning time available on the day it chooses in every
test site in the network. The price will be the hourly
rate in effect for the network capacity in hours
purchased plus the unit cost multiplied by the number
of events actually administered. Sylvan will xxxx ETS
the hourly fees immediately upon ETS's exercise of its
option to purchase. ETS will pay the hourly fees at
least three months in advance of the date or dates
purchased. The
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*Text omitted based upon request for confidential treatment.
per event fees will be paid in the normal course of
payment after administration of the events. The
following conditions apply:
a. ETS must purchase the time at least six months in
advance so that Sylvan can block the schedule and
avoid disruption of other testing programs.
b. ETS may not buy more than five days in any month
and no more than one Saturday per month. Any Saturday
purchased is included in the maximum of five days per
month.
c. If seat capacity is not scheduled 4 8 hours in
advance, Sylvan may begin scheduling other Client
Candidates into the blocked hours. If Sylvan resells
the seat time during this 48 hour period, ETS shall be
refunded 100% of the per test hour fees it paid for
the seats Sylvan fills but will not be reimbursed for
any empty seats during the blocked hours. Regardless
of whether ETS uses the purchased seat, the seat is
resold within the 48 hours or the seat remains empty,
ETS may count the hours purchased as part of the
calculation of total test hours for calculation of
fees in accordance with Attachment # 6 "Fees".
At all times and in its sole discretion, Sylvan
reserves the right to refuse to sell block seat time.
ETS requests for block purchase will not be
unreasonably denied.
5.4.4 If a Test Center, that is necessary to provide
adequate capacity in a geographic area, should cease
operating or lose its authorization to administer
Tests, or if a Test Center, which Sylvan has
represented in writing to ETS as a Center to be
opened, does not in fact open, for whatever reason, by
the time represented by Sylvan, Sylvan will open and
establish an alternative Test Center within fifty (50)
miles of the represented Test Center location within
thirty (30) days following the closing or represented
opening date. If necessary to meet existing test
demand during the thirty day period, Sylvan will
schedule mobile testing events in the interim.
However, if a Test Center serving a market or area
should cease operating or lose its authorization to
administer Tests, AND THAT MARKET or area is also
served by another Test Center located within fifty
(50) miles of the Test Center that ceased operations,
Sylvan shall be required to open and establish an
alternative Test Center only if the market is
determined, under Paragraph 5.4.1 immediately above,
to be underserved after the closing of the Test
Center.
5.4.5 If an Examinee has paid a surcharge to take a
computer-based Test in a market or area served by a
Sylvan Test Center and is unable to do so due to a
lack of adequate capacity under the circumstances
described in Paragraphs 5.4.1 immediately above, and
ETS must refund such surcharge to the Examinee, Sylvan
shall be liable for and shall reimburse ETS for all of
such surcharges refunded.
5.4.6 In the event that Sylvan fails to comply with any of
the requirements contained in this Paragraph 5.4, ETS
shall then be free to procure the needed capacity
itself
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or through other parties, in accordance with the
requirements of Paragraph 16.1.2.
5.5 Training,, Staffing and Support
Sylvan will provide all training to ETS standards for Sylvan's
Computer Based Test Center staff, as well as assure that the
correct administrative procedures and schedules are followed in
accordance with the Configuration Control and Communications
Plan as required by Attachment # 10. ETS shall provide
certification for those individuals trained to deliver Tests
and who demonstrate appropriate ability to do so. Sylvan will
provide all staff required to administer the Tests in strict
accordance with the procedures detailed in the most current
Manual. The Manual will include procedures to operate the test
administration and delivery software, to complete security
identification of all Examinees, to operate the Test Center
while maintaining appropriate test, system, and test security,
to secure Examinees responses to appropriate ancillary
questionnaires, and to return all proprietary and confidential
materials to ETS.
Sylvan will also provide all communication activities, hotline
support, retraining, and other activities necessary to comply
with the Configuration Control and Communications Plan
developed in accordance with Attachment 10.
5.6 Honoraria
Where ETS is conducting validation research on Tests, and will
pay Examinees to take such Tests, ETS may elect to use Sylvan
Test Centers and request Sylvan to recruit Examinees from the
area served by the Test Centers, and using Sylvan checks, pay
to each Examinee who completes the Test the ETS specified
honorarium.
53 Scheduling and Administration
Sylvan will operate and staff the Sylvan CSCC described in
Paragraph 2.15.
Sylvan will schedule ETS Examinees in accordance with existing
Sylvan CSCC guidelines and, in accordance with ETS procedures,
administer the Tests to Examinees who have either preregistered
with ETS or completed the proper registration procedure
(including payment of the proper registration fees payable to
ETS). ETS Examinees will be provided at least as much lead time
to register and schedule as the Examinees for any other Client
Sylvan has that uses the same network of Test Centers that ETS
uses. On a Test by Test basis, ETS may direct that Examinees be
allowed to view their score onscreen upon their completion of
the Test.
In those instances when an Examinee seeks to take a Test at a
Test Center that is located within fifty (50) miles of an
institutional Test Center or an ETS Office where the Test may
also be taken, Sylvan will advise the Examinee of the
availability and location of said non- Sylvan facilities and
allow the Examinee to select the location of his/her choice,
based on the testing time slots available at the Test Centers
from which the Examinee may choose. Sylvan shall provide the
same level of service for scheduling ETS institutional and ETS
Office Test Centers.
13
The Sylvan operating hours for the scheduling function shall be
the normal business hours local time for each Sylvan Test
Center. If a call is made to a Sylvan Test Center which is not
open at the time of the call, a recording device such as voice
mail or an answering machine will allow the caller the option to
leave a recorded message, inform the caller as to the hours of
operation for that Sylvan Test Center as well as for Sylvan's
CSCC, and provide the caller with the phone number of Sylvan's
CSCC.
5.8 Transmission of Data, Payments, Forms, and Other Information to
ETS
The CSCC will receive from the Sylvan Test Centers and transmit
directly to ETS all Examinee data in accordance with the
performance criteria attached as Attachment # 12 Payments,
forms, and materials will be returned to ETS on schedules to be
determined by each testing program as are included in the
Manual.
5.9 Recovery Standards
5.9.1 Applicable to Sylvan Test Centers
In the event that a Sylvan Test Center should be unable
to provide testing, the Sylvan Test Center shall
immediately notify the Sylvan CSCC. The CSCC will
notify and reschedule any Examinees affected using the
rescheduling standards set forth in Attachment # 12.
Sylvan will notify ETS as quickly as possible and in
the best manner possible. Sylvan will provide such
information as is reasonably required, including, but
not limited to, the names of affected Candidates.
Sylvan will make best efforts to provide information in
an adequate, timely fashion, with the understanding
that Candidate service will at all times be the top
priority. Sylvan shall use its best efforts to fix or
replace malfunctioning equipment and restore service at
the affected Test Center within 48 hours, so that
testing may resume no later than two Sylvan business
days after testing became unavailable. Sylvan will
automate the notice requirement in concert with its
revision of the registration and scheduling system. The
automation will provide ETS with read-only access to
the information on all Sylvan Test Centers that are
unable to deliver tests AND INFORMATION ON ALL affected
Examinees. This automation will take place not later
than eighteen (18) months after the Effective Date of
this Agreement.
For those programs that have testing window
restrictions, ETS will keep its Item Banks active for
two weeks past the scheduled testing window for the
purpose of offering retests and rescheduled appointment
times to any Examinees affected by a Test Center
outage.
5.9.2 Applicable to Sylvan Test Centers, Sylvan's Data
Communications Network, and Sylvan's Headquarters
In the event of a disaster, Sylvan agrees to
immediately notify ETS and to take the steps necessary
to implement Sylvan's Disaster Recovery Plan developed
in accordance with Attachment # 9.
14
5.10 Contract Compliance
Sylvan will comply with all requirements, covenants and
standards to be performed by Sylvan as contained in any
agreement that ETS shall enter into with a Testing Client
pursuant to Paragraph 6.1 for the provision of computer-based
test development and delivery services. Said agreements, and
all agreements subsequently entered into pursuant to Paragraph
6.1 are incorporated herein by reference for all purposes.
Where requirements, covenants and standards contained in an ETS
Testing Client contract are different from the service
offerings contained in this Agreement and Attachments, the
parties shall negotiate an equitable adjustment to price, time
of performance or other Sylvan obligations where the differing
requirements, covenants and standards cause an increase in
price, time of'performance or Sylvan's obligations.
5.11 Sylvan Services to ETS Test Centers
Sylvan will provide to ETS Test Centers all Sylvan developed
software required to offer ETS Tests and Sylvan will provide
scheduling services, and operate, monitor, and maintain the
data communications service as if they were Sylvan Test Centers
so long as the ETS Test Centers meet all the criteria required
for Sylvan Test Centers.
5.12 Software Downloads
All installation of ETS Proprietary Software and Testing Client
software in Test Centers shall be provided by Sylvan. Sylvan
will download all Item Banks, software upgrades and/or releases
and other data, by electronic means or other means approved by
ETS at the rate specified in Paragraph 7.0 and Attachment # 6.
Installation and downloading of software and data shall be in
accordance with the performance standards set forth in
Attachment # 12.
5.13 Additional Planning and Reporting Documents Required of Sylvan
5.13.1 Software Development'Plan
Sylvan will produce a software development plan in
accordance with the guidelines set forth in Attachment
# 7. Both parties will participate in planning
software development for all scheduling, registration
and administration systems CONNECTED WITH THE DELIVERY
OF TESTING SERVICES PURSUANT TO THIS Agreement and
such planning will include both Sy).van's and ETS's
software. This plan will address requirements for the
software systems, schedules for development, testing
and formal walk-throughs and technical reviews. The
plan will also include a process that addresses a
software revision release policy to prevent software
changes that impact the system from being released
without warning or time to performance test the
change. Again, systems which are used by multiple
clients will accept requirements from ETS but the
system and changes must remain in Sylvan's control.
This plan should include a Systems Testing and
Acceptance procedure as part of its overall software
development plan.
15
5.13.2 Quality Control Plan
Sylvan will develop a Quality Control Plan in
accordance with the guidelines set forth in
Attachment # 8. Both parties will participate in
development of a Quality Control Plan addressing
quality issues for both organizations. In accordance
with Attachment # 8, the plan to be developed will
define the quality control procedures, approval
processes and times, and other quality issues.
5.13.3 Security/Contingency Plan
Sylvan will develop a Security/Contingency Plan. The
Plan will address those items delineated in
Attachment # 9.
5.13.4 Configuration Control and Communications Plan
Sylvan will develop a Configuration Control and
Communications Plan in accordance with the
requirements of Attachment # 10. Sylvan will prepare
a comprehensive Configuration Control and
Communications Plan which will include notification
procedures, escalation procedures, problem and
complaint recordation procedures, and change control
procedures. The plan will be used as the criteria for
all systems problem/changes notification and both
parties will use the plan's procedures.
5.13.5 Management Information Reports
Sylvan will supply as standard reports, at no
additional cost, the reports set forth in Attachment
# 11. ETS may order such additional custom reports as
it requires at a fixed fee for the report to be
agreed to by the parties at the time the report is
requested.
5.14 Performance Standards
SYLVAN WILL PERFORM ALL SERVICES REQUIRED UNDER this contract
in accordance with the Performance Standards set forth in
Attachment # 12.
6.0 ETS'S RESPONSIBILITIES
----------------------
6.1 Procurement and Testing Contracts
Where appropriate, ETS will use reasonable best efforts to
procure contracts with its Testing Clients and prospective
Testing Clients, for, among others, the express purpose of
causing those clients' paper and pencil tests, in whole or in
part, to be delivered or administered in the United States,
Canada, and their territories, through a computerbased format
in Sylvan Test Centers and ETS Test Centers.
16
6.2 ETS Operated Test Centers
ETS will provide, operate, and maintain all of ETS's software
and all required hardware for the ETS Test Centers- that are
required for data communications and other Examinee services
at the ETS Test Centers.
ETS agrees to operate the ETS Test Centers so that the ETS
data communications and scheduler functions are compatible to
those at the Sylvan Test Centers.
6.3 Readers/Amanuenses
For all Tests ETS will be directly responsible for the
selection of persons qualified to serve as readers or
amanuenses in Specialized Testing delivery, and for scheduling
and compensating such persons for their services.
7.0 FEES, COMPENSATION, AND REIMBURSEMENTS
--------------------------------------
For the services to be provided hereunder by Sylvan, ETS agrees to pay
Sylvan the fees set forth in Attachment # 6.
7.1 No Charges for Aborted Tests Due to-Sylvan Failures
In the event that an Examinee is unable to complete a Test due
to a failure due to Sylvan, Sylvan will not xxxx ETS for such
time. Sylvan will retest the Examinee(s) as soon as possible,
at no additional charge to the Examinee(s).
7.2 All monetary amounts (whether stated in this Section or
elsewhere in this Agreement), prices, and payments are in
United States Dollars or Canadian Dollars.
7.3 Unless otherwise specified herein, all payments on Sylvan
invoices shall be due and payable to Sylvan within forty-five
(45) days after receipt of the invoices. Invoices paid after
the forty-five (45) day period will accrue interest at the
Citibank prime rate, adjusted as of the beginning of each
month, until payment is made.
8.0 ETS OWNERSHIP
-------------
8.1 Sylvan acknowledges and agrees that ETS holds all
proprietary rights, including, but not limited to, copyright,
trade secret, and patent, in the ETS-Owned Technologies and
Materials, which will be provided to and/or used by Sylvan to
perform its responsibilities under this Agreement. ETS-Owned
Technologies and Materials shall include any hardware or
software that Sylvan utilizes which is paid for by ETS.
8.2 Sylvan understands and agrees that, except for the right to
use the ETS-Owned Technologies and Materials, in accordance
with the terms of this Agreement, no proprietary rights in
the ETS-Owned Technologies and Materials are granted to
Sylvan. Sylvan agrees that it will not reproduce, modify,
distribute, disclose or create derivative works based upon
any of the ETS-owned software and other materials. Sylvan
also agrees that it will not reverse-engineer, decompile,
disassemble or in any way attempt to create source code from
the ETS Computer-Based Testing System.
17
8.3 Sylvan also understands and agrees that ETS, EDUCATIONAL
TESTING SERVICE, and the ETS logo are the registered
trademarks of ETS, registered in the U.S.A., and in many other
countries. Sylvan agrees not to use, reproduce, copy or create
materials bearing the ETS name or the ETS registered
trademarks for promotional or other purposes, without ETS's
advance written approval and review of such materials.
8.4 Sylvan agrees not to use the names of ETS Examinees except as
required to perform its duties under this Agreement. Provided
it first obtains written permission from E,rs, Sylvan may also
use the names of ETS Examinees to perform standard customer
satisfaction surveys or similar activities necessary to
further CBT, Sylvan performance of this Agreement or ETS
program goals in general. When ETS has given permission,
Sylvan may use the services of reputable third parties in
carrying out customer satisfaction surveys or similar
activities. Sylvan will guarantee that any third party engaged
by it to carry out customer satisfaction surveys or similar
activities will only use Examinee data in accordance with this
paragraph 8.4 and suitable restrictions will be placed in any
third party's contract with Sylvan. ETS permission shall not
be unreasonably withheld.
9.0 SYLVAN OWNERSHIP
----------------
9.1 ETS acknowledges and agrees that Sylvan holds all proprietary
rights, including, but not limited to, copyright, trade
secret, and patent, in the Sylvan-Owned Technologies and
Materials, which will be provided to and/or used by ETS to
perform its responsibilities under this Agreement.
Sylvan-Owned Technologies and Materials shall include any
hardware or software that ETS utilizes which is paid for by
Sylvan.
9.2 ETS understands and agrees that, except for the right to use
the Sylvan-Owned Technologies and Materials, in accordance
with the terms of this Agreement, no proprietary rights in the
Sylvan-Owned Technologies and Materials are granted to ETS.
ETS agrees that it will not reproduce, modify, distribute,
disclose or create dcrivative works based upon any of the
Sylvan-owned software and other materials. ETS also agrees
that it will not reverse-engineer, decompile, disassemble or
in any way attempt to CREATE SOURCE CODE FROM ANY SYLVAN OWNED
SOFTWARE.
9.3 ETS also understands and agrees that Sylvan, Xxxxxx Xxxxxxx
Systems, Sylvan Technology Center, Sylvan Prometric, and the
Sylvan logos are the registered trademarks of Sylvan,
registered in the U.S.A., and in many other countries. ETS
agrees not to use, reproduce, copy or create materials bearing
the Sylvan name or the Sylvan registered trademarks for
promotional or other purposes, without Sylvan's advance
written approval and review of such materials.
9.4 ETS acknowledges and agrees that Sylvan is the sole owner of
the Sylvan Equipment and Software used under this Agreement
and that ETS has no ownership right in the Sylvan Equipment
and Software, and the only right granted to ETS concerning the
Sylvan Equipment and Software, is the right to use the Sylvan
Equipment and Software in accordance with this Agreement. ETS
agrees, at the request of Sylvan, to affix in a prominent
position on each item of Sylvan Equipment and Software plates,
tags or other identifying labels supplied to ETS by Sylvan
showing ownership of the Sylvan
18
Equipment and Software by Sylvan. Sylvan or its designee, will
have the right to inspect the Sylvan Equipment and Software
and ETS's maintenance records related thereto.
10.0 SYLVAN CONFIDENTIALITY AND SECURITY
-----------------------------------
Sylvan acknowledges and agrees that, during the term of this Agreement,
certain information which is proprietary and confidential to ETS shall
be disclosed to Sylvan and its employees.
Sylvan agrees that such ETS Proprietary and Confidential Information,
including Examinee data, is xxxxxxxxx.xx Sylvan in trust and that it
will not disclose the ETS Proprietary and Confidential Information to
any third party without ETS's prior written consent. When the ETS
Proprietary and Confidential Information is not in use, Sylvan agrees
to keep the ETS Proprietary and Confidential Information in a secure,
locked location.
Sylvan also agrees that it will disclose the ETS Proprietary and
Confidential Information only to employees of Sylvan with a need to
know such ETS Proprietary and Confidential Information.
Sylvan agrees that it will use the ETS Proprietary and Confidential
Information for the sole purpose of performing its responsibilities in
connection with this Agreement. Upon either the termination or
expiration of this Agreement, except as provided in Paragraph 17.1
below, Sylvan agrees to remove all copies of the ETS Computer-Based
-Testing System from its machinereadable media and shall return all
copies of the ETS Computer-Based Testing System and other ETS
Proprietary and Confidential Information to ETS.
In the event that Sylvan uses vendors for either equipment or software
installation and/or maintenance support, Sylvan agrees to have each
such vendor sign a non-disclosure agreement to be supplied by ETS
before permitting such vendors any access to the ETS Computer-Based
Testing System or the LAN-based PCs upon which the ETS Computer-Based
Testing System, Tests or Test data are stored.
11.0 ETS CONFIDENTIALITY AND SECURITY
--------------------------------
ETS acknowledges and agrees that, during the term of this Agreement,
certain information which is proprietary and confidential to Sylvan
shall be disclosed to ETS and its employees.
ETS agrees that such Sylvan Proprietary and Confidential Information is
disclosed to ETS in TRUST AND that it will not disclose the Sylvan
Proprietary and Confidential Information to any third party without
Sylvan's prior written consent. When the Sylvan Proprietary and
Confidential Information is not in use, ETS agrees to keep the Sylvan
Proprietary and Confidential Information in a secure, locked location.
ETS also agrees that it will disclose the Sylvan Proprietary and
Confidential Information only to employees of ETS with a need to know
such Sylvan Proprietary and Confidential Information.
ETS agrees that it will use the Sylvan Proprietary and Confidential
Information for the sole purpose of performing its responsibilities in
connection with this Agreement. Upon either the termination or
expiration of this Agreement, except as provided in Paragraph 17.1
below, ETS agrees to remove all copies of the Sylvan software system
from its machine-readable media and
19
shall return all copies of the Sylvan software and other Sylvan
Proprietary and Confidential Information to Sylvan.
In the event that ETS uses vendors for perfon-xxxxx of its obligations
under this Agreement, ETS agrees to have each such vendor sign a
nort-disclosure agreement agreeing to keep Sylvan Proprietary and
Confidential Information confidential.
12.0 ETS'S RIGHT TO AUDIT
--------------------
12.1 Security Audits
ETS reserves the right to send either announced or unannounced
observers to perform either security audits at Sylvan Test
Centers, Sylvan's corporate center, and other Sylvan sites or
back-up sites, at any time, to observe/monitor operations
during Test Center staff training sessions, administration of
the Tests, and pre-and post-testing periods, and to verify the
Test Centers' security arrangements. Upon arrival at a site,
the ETS observers will furnish proper identification.
ETS reserves the right to conduct audits of the security and
communications procedures and technologies used by Sylvan.
Changes in procedures and technologies that result from such
an audit will be implemented by Sylvan, provided that the
changes are reasonable and do not increase Sylvan's operating
costs.
12.2 Financial Audit
ETS reserves the right to perform financial audits, during
Sylvan's normal business hours, of Sylvan's financial records
to verify Examinee counts, cost plus a fee activities
undertaken by Sylvan on ETS's behalf, Sylvan's honoraria
payments to Examinees, and the integrity of any reporting
activity to ETS undertaken by Sylvan in accordance with this
Agreement. ETS's right to audit is limited as follows:
a. Financial audits shall be limited to once per year
b. The scope of the audit will be confined to examining
records related to Examinee counts, fixed fee activities
undertaken by Sylvan on ETS's behalf, honoraria payments, and
the integrity of the content of Sylvan's reporting to ETS.
c. Audits will be conducted by an independent, qualified
auditing body.
d. Audits will be limited to ten (10) business days in
duration.
e. Sylvan will be provided at least thirty (30) days written
notice before an audit takes place.
f. Routine audits may not occur at certain peak times such as
Sylvan year end or certain peak testing periods. These periods
include the months of January, June, July, October and
November each year.
20
g. Notwithstanding the foregoing, ETS shall have the right to
conduct one or more additional audits per year, upon no less
than 15 business days notice, as to any issue for which
credible allegations of error or false or mistaken reporting
come to the attention of ETS.
The parties agree to review these restrictions in the event of
any significant change in the ownership of Sylvan's stock.
13.0 INSURANCE
---------
During the term of this Agreement, Sylvan shall procure and maintain
with an insurance carrier comparably rated "A+" with a financial class
of " 15 " as determined by A.M. Best, the following kinds of insurance
coverage in the U.S., Canada, and their territories, with minimum
limits set forth below. It is agreed that local coverage secured will
be comparable to insurance requirements for the U.S. in all material
respects, and that ETS may waive or adjust certain of the coverage
requirements in Canada or U.S. or their territories.
Line Perils Minimum Limits
---- ------ --------------
Worker's Compensation Statutory Worker's Statutory Coverage
Employers Bodily Injury by
Liability Accident $500,000.00 each accident
Bodily Injury by Disease $500,000.00 policy limit
Bodily Injury by Disease $500,000.00 each employee
a. Comprehensive $1,000,000
General General Liability Bodily Injury
Liability $1,000,000
--------- Property Damage
b. Premises-Operation $1,000,000
Bodily Injury
$1,000,000
Property Damage
c. Personal Injury $1,000,000
Bodily Injury
d. Contractual $1,000,000
Bodily Injury
$1,000,000
Property Damage
e. Independent $1,000,000
21
Contractor's Bodily Injury
$1,000,000
Property Damage
f. Owners Protective $1,000,000
(Which is Hold Harmless) Bodily Injury
$1,000,000
Property Damage
g. Advertising Injury $1,000,000.00 each occurrence
Umbrella Excess of Primary $9,000,000
Liability Policies Listed Above Bodily Injury
$9,000,000
Property Damage
Blanket Crime Crime & Fidelity $1,000,000.00
Including Employee Dishonesty
All Risk Prove For ETS Hardware/Software Replacement Value
in Sylvan's Care, Custody
& Control
Miscellaneous Professional Errors or Omissions in $3,000,000.00
Liability Test Administration
Valuable Papers CBT Test Items $500,000.00
Within thirty (30) days of Sylvan's signing of this Agreement, Sylvan
shall furnish ETS with insurance certificates evidencing the above
coverage and providing for at least fifteen (15) days prior written
notice of policy cancellation or modification.
The Certificates of Insurance shall name ETS as AN "ADDITIONAI INSURED"
TO REFLECT THE FACT THAT ETS has been named as an "Additional Insured"
on the policy.
The Insurance specified herein shall be minimum requirements, and
Sylvan is responsible for providing any additional insurance deemed
necessary to protect Sylvan's interests from other hazards or claims in
excess of the minimum coverage. The liability of Sylvan to ETS is not
limited to Sylvan's insurance coverage, nor is this clause intended to
limit Sylvan's liability in any way for other non-insurable risks.
14.0 HOLD HARMLESS
-------------
14.1 Sylvan will indemnify and hold ETS, its employees, guests, or
visitors, harmless from any and all loss, damage, injury, or
liability arising directly or indirectly out of Sylvan's
services to ETS, clients, or third parties, including
operation of Sylvan or ETS owned or leased equipment, acts of
omission, commission, or negligence of Sylvan's employees or
agents when engaged in carrying out its services, and the
failure to comply with applicable laws, regulations and
ordinances. Sylvan will assume responsibility and
22
liability for ETS owned or leased equipment in its custody,
including maintenance of, taxation of, defects in, and the
return of same to the appropriate party.
14.2 ETS will indemnify and hold Sylvan harmless from any and all
loss, damage, injury or liability claims arising out of or in
connection with the content, character, and/or validity of
any'rest, and the test development and measurement provided
for any Testing Client, by ETS, or in connection with any ETS
developed Test administered by Sylvan under this Agreement.
15.0 NOTICES
-------
Any notices or other communications required or which may be given by
either party to the other party under this Agreement, shall be in
writing and may be sent by FAX, however the original shall be sent
either by ovemight courier express, with a verified receipt, registered
or certified mail, postage prepaid and addressed to and at the address
stated below or to such other address as the parties shall subsequently
designate to each other by notice given in accordance with this
Paragraph. Such notice shall be deemed to be sufficiently given when
the original is received by the receiving party.
FOR ETS: EDUCATIONAL TESTING SERVICE
Xxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
ATTN: Xxxxxxx X. Xxxxxx, Esq.
CC: Xxxxxx X. Xxxxxxx
FORSYLVAN: SYLVAN LEARNING SYSTEMS, INC.
0000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
ATTN: 0. Xxxxxx Xxxxx General Cou-nsel
CC: Xxxxxxx X. Xxxxxxx, President
Xxxxxxx X. Xxxxxxxxxxx, Manager, Contract Administration
Both parties shall name a single point of contact and two alternates
for all operational concerns. All notices related to software, test
site failures, registration issues and other day-to-day operational
concerns shall be given to these individuals or their altemates only.
The individuals designated as operational notice recipients and their
alternates will be designated in the Configuration Control and
Communications Plan.
16.0 COVENANTS PROVIDER
------------------
16.1 ETS'Covenants
16.1.1 Except in those instances contained in Paragraph
16.1.2 below, ETS agrees that Sylvan will be the -
exclusive provider of computerized commercial testing
capacity to ETS for all secure ETS testing programs,
including those testing services provided for Testing
Clients under Paragraph 6. 1, throughout the United
States, Canada and their territories.
23
16.1.2 ETS may itself or through a party other than Sylvan,
establish or procure computerized testing capacity
pursuant to Paragraph 5.4; in addition ETS may itself,
or through a party other than Sylvan, establish or
procure computerized testing capacity in the following
instances:
a. at ETS Supported CBT Centers limited to Oakland,
California, Evanston Illinois, and Atlanta, Georgia;
b. at locations requested by an ETS Testing Client
after ETS, where appropriate, has proposed delivery of
that Testing Client's Test(s) in Sylvan Test Centers
and the Testing Client has declined due to conditions
or needs unique to that Testing Client;
C. subject to the restrictions set forth below, at
locations situated in facilities operated by public or
private primary and secondary schools, colleges,
universities and professional or graduate schools, to
be known as Institutional Sites;
provided, however, that in no event shall Sylvan's
portion of ETS's computer based testing volume, as
measured in Scheduled Hours of Service, in the Ufnited
States, Canada, and their territories (excluding
College Board tests) be less than fifty percent (50%).
Further, ETS shall cooperate with Sylvan's efforts to
establish Test Centers at such locations. ETS may open
and operate Institutional Sites only after the
Institutional Sites have rejected the installation of
a Sylvan Test Center due to conditions or needs unique
to that Institution.
16,13 Notwithstanding the above, if either party shall have
given notice of termination or notice of non-renewal,
as provided elsewhere herein, ETS shall be free to
establish Test Centers anywhere without restriction
and the fifty percent (50%) required minimum shall no
longer apply.
16.2 Sylvan's Covenants
16.2.1 Sylvan agrees that ETS will be the exclusive test
development provider for Sylvan and that Sylvan will
use its reasonable best efforts to procure test
development business for ETS. Should any third party
desire to utilize the services of Sylvan and its Test
Centers in the delivery of computerized tests, and
that third party desires or requires assessment
services or test development services, Sylvan agrees
to refer that third party to ETS for the provision of
such services, and to promptly advise ETS of those
circumstances, and ETS may or may not, as it shall
deem appropriate, pursue the opportunity to provide
such services. If the third party is unable to reach
an arrangement with ETS for such services, or if,
after Sylvan has advised ETS of Sylvan's contacts with
the third party, the third party affirmatively
declines Sylvan's proffer of ETS's services, Sylvan
shall not be restricted or prohibited in any instance,
except as provided in Paragraph 16.2.2 below, from
providing Sylvan services to the third party.
24
16.2.2 Sylvan will not enter into any agreement with any
third party for the delivery of any computerized
test(s) which, when the agreement is entered into, is
in competition with any tests offered or being
discussed with third parties by ETS.
16.2.3 Sylvan will not distribute preparatory publications or
materials that compete with ETS materials offered by
Sylvan for ETS testing programs delivered by Sylvan.
16.3 Capabilities of the Parties
Neither Sylvan nor ETS will develop capabilities provided by
the other without first informing and consulting with the
party providing the services that would be duplicated.
17.0 TERMINATION
-----------
17.1 Termination for Cause
This Agreement may be- terminated by either party only for
good cause (good cause being a material breach of an
obligation or responsibility imposed upon a party by this
Agreement) and only after notice and opportunity to cure has
been given. With respect to a monetary default, the notice
must provide for an opportunity to cure of at least ten (10)
days following receipt of the notice. With respect to
non-monetary defaults, the notice must provide for an
opportunity to cure of at least thirty (30) days following
receipt of the notice. If the party receiving the notice has
not cured the breach before the cure date stated in the
notice, only then may the party giving the notice terminate
this Agreement by giving the party in breach a written
termination notice, stating the date on which the termination
is to be effective.
In the event of termination by ETS for cause for a material
breach of this Agreement, Sylvan shall provide to ETS a
limited term non-exclusive software license and license for
the CBT source code for a term of one (1) year from the date
of termination. ETS may use said licensed software only for
the provision of services to Testing Clients with whom ETS was
negotiating a contract for CBT distribution, responding to
solicitations for CBT distribution or PROVIDING CBT
DISTRIBUTION THROUGH THE NETWORK. The licenses will be
provided at no cost. ETS shall not sublicense the Sylvan
software or source code nor may any third parties use the
software or source code. Only that Sylvan software necessary
for the delivery of ETS's Tests formerly delivered by Sylvan
will be licensed.
In the event of termination by Sylvan for cause for a material
breach of this Agreement, ETS shall provide to Sylvan a
limited term non-exclusive software license and license for
the CBT source code for a term of one (1) year from the date
of termination. Sylvan may use said licensed software only for
the provision of services to existing Sylvan clients with whom
Sylvan was negotiating a contract for CBT distribution,
responding to solicitations for CBT distribution or providing
CBT distribution through the network. The licenses will be
provided at no cost. Sylvan shall sublicense only its network
of test delivery centers and shall engage no other third
parties or subcontractors that will have access to the
licensed materials other than Test Centers. Only that software
necessary to the delivery of Sylvan's client's tests will be
licensed.
25
17.2 Sylvan's Covenant Not to Compete
17.2.1 Sylvan covenants and agrees that during the tem-i of
this Agreement and, if this Agreement is terminated in
accordance with the provisions of Paragraph 17. 1, or
not renewed in accordance with Paragraph 3.0, then in
either event, Sylvan for a period of two (2) years
after such termination, will not engage as an owner,
operator or in any other capacity, in a business
offering computer-based testing services or facilities
to any entity, person, company or organization that is
or has been at any time during the term of this
Agreement a Testing Client, or offers a test or tests
that are in direct competition with any Tests offered
by ETS or a Testing Client. Sylvan acknowledges that
ETS's remedy at law for Sylvan's breach of this
Paragraph 17.2 would be inadequate and that,
accordingly, in such event, ETS shall be entitled to
immediate injunctive relief to enforce the terms of
this Paragraph.
17.2.2 Sylvan will require that all of its officers, and any
key employees who routinely access and use ETS
Proprietary information and who are participants in
any stock option plan maintained by Sylvan, execute a
non-compete agreement containing a covenant that
prohibits the officer or key employee, during the te
of his employment-and for a period of two (2) years
after termination of employment, from engaging in, as
an owner, employee, operator or in any other capacity,
a business offering computer-based testing services or
facilities to any entity, person, company or
organization that is or has been at any time during
the term of employment a Testing Client, or offers a
test or tests that are in direct competition with any
Tests offered by ETS or a Testing Client. Further, the
noncompete agreement will contain a provision deeming
ETS to be a third-party beneficiary of such agreement,
and entitling ETS to such rights and remedies of
enforcement as are available at law or in equity,
including injunctive relief.
17.3 Force Majeure
If, as a result of an occurrence not occasioned by the conduct
of either party hereto such as an act of god, act or failure to
act by a third party, weather, riot, civil commotion,
intervention of public authorities, work stoppage, interruption
of utility service, or any other comparable event (an
"Extraordinary Event"), a party is temporarily unable to
perform, in whole or in part, any of that party's obligations
under this Agreement, that party's obligation to perform shall
be correspondingly suspended or delayed, as the case may be, so
long as the Extraordinary Event shall exist. Within seventy-two
(72) hours after the Extraordinary Event no longer exists, the
affected party shall submit a plan to the other party
describing how performance will be restored or achieved. Within
fortyeight (48) hours of receipt of the plan, the other party
shall respond with any objections it may have to such plan and
thereafter the parties shall attempt to negotiate in good faith
any appropriate changes to the plan.
Notwithstanding the above, which is applicable to Sylvan as an
entity and not to individual Sylvan Test Centers, if ten
percent (10%) or twenty-five (25) Sylvan Test Centers,
whichever is less, of the Sylvan Test Centers should become
unavailable for testing as a result of a force majeure event,
for a period of ten (10) or more days, ETS shall have the right
to either establish its own Test Centers or to contract with a
third
26
party to establish Test Centers in the areas where the Sylvan
Test Centers are unavailable for testing because of the force
majeure.
17.4 Changes in Sylvan's Business or Financial Condition
Notwithstanding anything contained in this Agreement to the
contrary, ET'S reserves the right to treat as good cause for
termination of this Agreement under Paragraph 17.1 above, any
of the following events:
a. Sale of Sylvan's Assets:
The sale of all or substantial ly'all of Sylvan's
assets to a single purchaser or to a group of
purchasers;
b. Control of Sylvan's Voting Stock:
The acquisition or accumulated ownership (by virtue of
Sylvan's repurchase of its shares, or by merger,
consolidation or acquisition, etc.) of more than 50%
of Sylvan's outstanding voting corporate shares by any
single person or entity, or by a group of affiliated
persons or entities as defined by Rule 12b-2 of the
rules of the Securities and Exchange Commission;
C. Sylvan's Insolvency or Bankruptcy:
1) if Sylvan shall be declared either insolvent or
bankrupt;
2) if a petition is filled in any court and not
dismissed in sixty (60) days to declare Sylvan
bankrupt or for a reorganization under the Bankruptcy
Law or any similar statute; or
3) if a Trustee in Bankruptcy or a Receiver or similar
entity is appointed for Sylvan; or
d. Termination of Sylvan's Business:
Sylvan's bona fide decision to terminate its business
and liquidate its assets.
18.0 PROHIBITION AGAINST COACHING
----------------------------
During the term of this Agreement and for a period of 180 days after
the termination or completion of this Agreement:
a. Neither Sylvan, nor any Sylvan Test Center (whether owned, leased,
or franchised), nor any employee or independent contractor of Sylvan or
any Sylvan Test Center, will develop or offer any coaching advice,
assistance, service, software, or materials (including those developed
by any third party) for the Tests being administered under this
Agreement; and
27
b. Neither Sylvan nor any Sylvan Test Center (whether owned, leased, or
franchised), will sublet, rent to, or make space available to any third
party that offers coaching advice, assistance, service, software, or
materials, for the Tests being administered under this Agreement.
Each Sylvan Test Center staff member administering the Tests covered by
this Agreement shall be required to sign with Sylvan an ETS provided
agreement, stating that they agree to be bound by the terms of this
provision and Sylvan will take all steps necessary to enforce said
agreements.
19.0 CONFLICT OF INTEREST
--------------------
No Sylvan Test Center staff administering the Tests covered by this
Agreement, shall take a Test covered by this Agreement for a period of
one hundred eighty (180) days following their last involvement in any
aspect of the administration of such a test.
No Sylvan Test Center staff shall handle materials for the
administration of or administer a Test covered by this Agreement, for a
period of ninety (90) days prior to the date of a Test administration
that involves either a household or immediate family member.
Each Sylvan Test Center staff member administering the Tests covered by
this Agreement shall be required to sign with Sylvan an ETS provided
agreement, stating that they agree to be bound by the terms of this
provision and Sylvan will take all steps necessary to enforce said
agreements.
20.0 USE OF NAMES,LOGOS, AND TRADEMARKS
----------------------------------
20.1 ETS shall not use Sylvan's name, logos, or trademarks,
without the prior written consent of Sylvan.
20.2 Sylvan shall not use ETS's name, logos, or trademarks,
without the prior written consent of ETS.
21.0 STANDARDS OF CONDUCT
--------------------
It is the policy of ETS not to discriminate on the basis of race,
ethnic background, creed, age, or sex. Accordingly, by executing this
Agreement, Sylvan agrees not to permit any of its agents or employees
to behave, either through speech or conduct, in a manner that could
reasonably be construed as offensive to members of any such group or
otherwise to be in violation of the aforesaid policy.
22.0 PROHIBITION ON GIFTS AND GRATUITIES
-----------------------------------
Sylvan warrants that it has not offered or given, and will not offer or
give to any employee, or representative, or immediate family member of
an ETS employee a payment, gratuity, personal service, entertainment or
gift, other than novelty advertising items (i.e., pencils, pens,
clipboards, cups) of a nominal value. Any such offerings may be
construed as Sylvan's attempt to improperly influence decisions at ETS,
and Sylvan agrees that ETS may, by written notice to Sylvan, terminate
this Agreement if it is found by ETS that Sylvan has violated this
provision. In the event this Agreement is terminated by ETS pursuant to
this provision, ETS shall be
28
entitled, in addition to any other rights and remedies, to recover or
withhold the amount of the cost incurred by Sylvan in providing such
gratuities.
23.0 EQUAL OPPORTUNITY
-----------------
Sylvan shall comply with all applicable provisions of Section 202 of
Executive Order 11246 (Equal Employment Opportunity) dated 9/24/65 as
subsequently amended.
24.0 FAIR LABOR STANDARDS ACT
------------------------
Sylvan shall comply with all applicable requirements of the Fair Labor
Standards Act of 1938, as amended.
25.0 COMPLIANCE WITH LAW
-------------------
Sylvan warrants that in the performance of this Agreement, it has
complied and will comply with all applicable U.S. and Canadian federal,
provincial, state, and local laws now and hereafter in effect.
26.0 LAWS GOVERNING
--------------
This Agreement shall be governed by the laws of the State of New
Jersey, now and hereafter in effect.
27.0 INDEPENDENT CONTRACTOR
----------------------
Under this agreement, Sylvan agrees that it will perform as an
independent contractor, and not an agent or employee of ETS.
Nothing in this Agreement shall be construed as. having established a
joint venture or a partnership between the parties.
28.0 ASSIGNMENT
----------
Sylvan agrees not to assign this Agreement, or any part thereof, or any
responsibility thereunder, without the prior written approval of ETS.
Any such request for approval of a proposed assignment, shall be
accompanied by a copy of the proposed contract between Sylvan and the
proposed ass ignee/subcontractor.
Notwithstanding the above, for those Sylvan Test Centers that are not
owned by Sylvan, but operate under a separate agreement with Sylvan,
Sylvan agrees to require the owner(s) of each such Test Center to sign
with Sylvan a written agreement containing the Flow Down Clauses,
attached hereto as Attachment #5, and, upon request, to send to ETS a
signed copy of each such agreement. Sylvan will take all necessary
steps to enforce said agreements.
29.0 SURVIVAL BEYOND COMPLETION
--------------------------
It is mutually agreed that Paragraphs 8.0 and 9.0, Ownership; 10.0 and
11.0, Confidentiality and Security; 12.0, ETS's Right to Audit; 14.0,
Hold Harmless; 17.2, Sylvan's Covenant Not to
29
Compete; 18.0, Prohibition Against Coaching; 19.0, Conflict of
Interest; and 20.0 Use of Names, Logos, and Trademarks, shall survive
any termination or completion of this Agreement.
30.0 MODIFICATIONS
-------------
This Agreement can be modified only by a writing signed by both
parties.
31.0 ENTIRE AGREEMENT
----------------
This Agreement, including the Attachments, listed herein and made a
part hereof, constitutes and expresses the entire Agreement and
understanding between the parties hereto in reference to all the
matters herein referred to, all previous discussions, promises,
representations, and understandings relative thereto, if any, had
between the parties hereto, being herein merged.
Attachment Attachment
Number Title
I . ETS Computer-Based Test Center Specifications
2. The American With Disabilities Act of 1990
3. Sylvan Provided Computer-Based Test Center Hardware and Software
4. ETS Computer Based Test-Center Administrator's Manual
5. Flow Down Clauses
6. Fees
7. Software Development Plan Requirements
8. Quality Control Plan Requirements
9. Security/Contingency Plan Requirements
10. Configuration Control and Communication Plan Requirements
11. Sylvan Standard Reports
12. Performance Standards
13. ETS Testing Programs
32.0 TERMINATION OF PRIOR AGREEMENT
------------------------------
It is mutually agreed that this Agreement will terminate the agreement
between the parties dated September 1, 1993, and all amendments
thereto, as of the Effective Date of this Agreement.
33.0 COUNTERPARTS
------------
This Agreement may be executed in counterparts, each of which shall be
deemed to be an original and which together shall constitute one and
the same instrument.
30
IN WITNESS WHEREOF, the parties hereunder have executed this Agreement
effective as of the day and year first above written.
SYLVAN LEARNING SYSTEMS, INC. EDUCATIONAL TESTING SERVICE
By: /s/ X.X. Xxxxx-Xxxxx By: /s/ Xxxxxx X. Xxxxxxxxx
---------------------- ---------------------------
Name: X.X. Xxxxx-Xxxxx Name: /s/ Xxxxxx X. Xxxxxxxxx
--------------------------- --------------------------
Title: CEO Title: /s/ Executive Vice President
-------------- -----------------------------
Date: 12/12/97 Date: 12/12/97
-------------- --------------
Attest: /s/ Xxxxx X. Xxxxxx Attest: /s/ Xxxxx Xxxxx
--------------------------- -----------------------
Name: /s/ Xxxxx X. Xxxxxx Name: /s/ Xxxxx Xxxxx
------------------------- ---------------------
Title: /s/ Vice President Title: /s/ Vice President
------------------------- -------------------------
Date: 12/12/97 Date: 12/12/97
-------------- ---------------
31
ATTACHMENT 1
ETS TEST CENTER SPECIFICATIONS
PC Network Server
*
Administrative PC
Same specifications as the test station PCs with the following exception:
A Digital Image capture card is required
Ancillary Equipment/Materials
- the server and Netware
- an Administrative PC
- a Xxxxx Accura External Modem
- a laser printer
- a video camera, monitor and tripod for use in taking digitized examinee
pictures
- a video camera with sound pickup, monitor and a VCR to record sessions
- a metal cabinet to house the server, bolted to the floor, with an
internal fan and a heavy duty lock.
- parabolic mirrors to facilitate proctoring
- lockers for examinees to store personal belongings before testing
- cabling and connectors for the network
- network cards for the testing PCs
- bankers lamps
- earplugs
- laser cartridges
- video cassette tapes
Testing Stations:
Stations will include a desk or PC table of 48"x 30" surrounded on three
sides by freestanding privacy panels. The back panel is a MINIMUM OF 48"
wide, 48"-54" high, and 1 "-2.5" deep. The two side panels are 43" wide,
48"-54" high, and 1 "-2.5" deep. At least one adjustable height
workstation is to be provided at each CBT site and one additional
adjustable height workstation for each five incremental workstations
(i.e., 9 workstations - I adjustable height workstation, 10 workstations -
2 height-adjustable workstations.) A height-adjustable cushioned
upholstered chair with padded arms and wheels.
*Text omitted based upon request for confidential treatment.
ATTACHMENT 3
*
*Text omitted based upon request for confidential treatment.
ATTACHMENT 5
------------
FLOW DOWN CLAUSES
The following provisions shall appear in any agreement entered into between
Sylvan and a third party operator (referenced in the provisions below as
"Agent") of a Test Center offering any Test Administered on Behalf of ETS:
A. AGENT'S RESPONSIBILITIES
1. Agent Facilities
At each Test Center, Agent will provide a testing Room convenient for
access by the Examinees and suitable for secure testing purposes, which
meet the specifications required by Sylvan.
During the time that an ETS Test is being administered in the Room,
Agent shall not allow the Room, or any areas near the Room, to be used
in a manner which would be detrimental to a standardized testing
environment. At all other times, Agent shall either lock the Room or
ensure through appropriate mechanisms that there is no access to the
ETS Application System, the Tests, or other ETS confidential and
proprietary materials.
The Test Center shall conform to the standards set forth in "The
Americans with Disabilities Act" of 1990, and all applicable federal,
state, and local laws, regulations, and ordinances, now or here after
in effect.
2. Security Measures
Agent agrees to operate an ETS owned software security mechanism which
will be used to monitor and maintain the security of all ETS Tests,
Test items and the ETS Application System software installed on the
Test Center's LAN-based PCs. ETS reserves the right to review and
approve the software security mechanism to be used by Agent at any time
prior to or after the experimental or operational administrations of
the Tests.
Page 1 of 9
3. Training, Staffing and Support
Agent will provide all training to ETS standards for Agent's Computer
Based Test Center staff, as well as assure that the correct
administrative procedures and schedules are followed. Agent will
communicate at least quarterly in writing to Sylvan about progress and
problems during the course of this Agreement. Agent will provide all
staff required to administer the Tests in strict accordance with the
procedures detailed in the most current Manual.
4. Honoraria
Where ETS is conducting validation research on Tests, and will pay
Examinees to take such Tests, Agent will recruit Examinees from the
area served by the Agent's Test Center, and using Sylvan's checks, pay
to each Examinee who completes the Test the ETS specified honorarium.
5. Transmission of Data, Payments, Forms, and Other Information to
Sylvan/ETS
The Agent will transmit directly to Sylvan or ETS all Examinee data
(Examinee performance records and images) according to schedules
established by Sylvan. All remaining Examinee data files, supervisor
reports, security logs, related Test Center data and an accounting of
any honoraria paid will be transmitted to Sylvan or ETS at the end of
every day the Agent's Test Center operates.
6. Recovery Standards
In the event that Agent's Test Center should be unable to provide
testing, Agent shall immediately notify Sylvan and all registered
Examinees so affected.
Agent shall fix or replace malfunctioning equipment and restore service
at the Test Center within 24 hours, so that testing may resume no later
than one business day after testing became unavailable.
Should the Test Center still be unable to provide testing after one
business day, Agent shall immediately notify Sylvan and follow Sylvan's
instructions concerning the rescheduling of Examinees.
Page 2 of 9
B. OWNERSHIP
Agent acknowledges and agrees that ETS holds all proprietary rights,
including, but not limited to, copyright, trade secret, and patent, in the
Ets-Owned Technologies and Materials, which will be provided to and/or used
by Agent to perform its responsibilities.
Agent understands and agrees that, except for the right to use the
ETS-Owned Technologies and Materials, in accordance with the terms of this
Agreement, no proprietary rights in the ETS-Owned Technologies and
Materials are granted to Agent. Agent agrees that it will not reproduce,
modify, distribute, disclose or create derivative works based upon any of
the ETS-owned software and other materials. Agent also agrees that it will
not reverse-engineer, decompile, disassemble or in any way attempt to
create source code from the ETS Computer-Based Testing System.
Agent also understands and agrees that the registered trademarks of ETS,
registered in the U.S.A. and in many other countries, are owned by ETS, and
that Agent shall have no interest or ownership in same. Agent agrees not to
use, reproduce, copy or create materials bearing the ETS name or the ETS
registered trademarks for promotional or other purposes, without ETS'
advance written approval and review of such materials.
C. CONFIDENTIALITY AND SECURITY
Agent acknowledges and agrees that, during the term of this Agreement,
certain information which is proprietary and confidential to ETS shall be
disclosed to Agent and its employees.
Agent agrees that such ETS Proprietary and Confidential Information,
including Examinee data, is disclosed to Agent in trust and that it will
not disclose the ETS Proprietary and Confidential Information to any third
party without ETS' prior written consent. When the ETS Proprietary and
Confidential Information is not in use, Agent agrees to keep the ETS
Proprietary and Confidential Information in a secure, locked location.
Agent also agrees that it will disclose the ETS Proprietary and
Confidential Information only to employees of Agent with a need to know
such ETS Proprietary and Confidential Information.
Page 3 of 9
Agent agrees that it will use the ETS Proprietary and Confidential
Information for the sole purpose of performing its responsibilities in
connection with this Agreement. Upon either the termination or expiration
of this Agreement, Agent agrees to remove all copies of the ETS
Computer-Based Testing System from its machine-readable media and shall
return all copies of the ETS Computer-Based Testing System and other ETS
Proprietary and Confidential Information to ETS.
D. ETS'S RIGHT TO AUDIT
1. Technical and Security Audits
ETS reserves the right to send either announced or unannounced
observers to perform either technical and/or security audits at Agent's
Test Center, at any time, to observe/monitor operations during Test
Center staff training sessions, administration of the Tests, and pre-
and post-testing periods, and to verify the Test Centers' security
arrangements. Upon arrival at a site, the ETS observers will furnish
proper identification.
2. Financial Audit
ETS reserves the right to perform financial audits, during Agent's
normal business hours, of Agent's financial records to verify Examinee
counts and Agent's honoraria payments to Examinees.
E. INSURANCE
During the term of this Agreement, Agent agrees to procure and maintain
with an insurance carrier rated "A+" with a financial class of "15" as
determined by A.M. Best, the following kinds of insurance with minimum
limits set forth below:
Line Perils Minimum Limits
---- ------ --------------
Worker's Statutory Worker's Compensation-
Compensation Compensation Statutory Coverage
and Employers
Liability
General a. Comprehensive $1,000,000
Liability General Liability Bodily Injury
$1,000,000
Property Damage
Page 4 of 9
b. Premises-Operation $1,000,000
Bodily Injury
$1,000,000
Property Damage
c. Personal Injury $1,000,000
Bodily Injury
d. Contractual $1,000,000
Bodily Injury
$1,000,000
Property Damage
e. Independent $1,000,000
Contractor's Bodily Injury
$1,000,000
Property Damage
f. Owners Protective $1,000,000
(which is Hold Harmless) Bodily Injury
$1,000,000
Property Damage
Umbrella Excess of Primary $4,000,000
Liability Policies Listed Above until December 31, 1995
and $9,000,000
thereafter
Bodily Injury
$4,000,000
until December 31,
1995 and $9,000,000
thereafter
Property Damage
Within thirty (30) days of Agent's signing of this Agreement, Agent shall
furnish Sylvan with insurance certificates evidencing the above coverage
and providing for at least fifteen (15) days prior written notice of policy
cancellation or modification.
The Certificates of Insurance shall name ETS as an "Additional Insured" to
reflect the fact that ETS has been named as an "additional insured" on the
policy.
Page 5 of 9
The Insurance specified herein shall be minimum requirements, and Agent is
responsible for providing any additional insurance deemed necessary to
protect Agent's insurance coverage, nor is this clause intended to limit
Agent's interests from other hazards or claims in excess of the minimum
coverage. The liability of Agent to ETS is not limited to Agent's insurance
coverage, nor is this clause intended to limit Agent's liability in any way
for other non-insurable risks.
F. HOLD HARMLESS
Agent will indemnify and hold ETS, its employees, guests, or visitors,
harmless from any and all loss, damage, injury, or liability arising
directly or indirectly out of Agent's services to ETS, clients, or third
parties, including operation of Agent or ETS owned or leased equipment,
acts of omission, commission, or negligence of Agent's employees or agents
when engaged in carrying out its services, and the failure to comply with
applicable laws, regulations and ordinances.
G. COVENANT NOT TO COMPETE
Agent covenants and agrees that during the term of this Agreement and, if
this Agreement is terminated or not renewed, Agent, for a period of two (2)
years after such termination, will not engage as an owner, operator or in
any other capacity, in a business offering computer-based testing services
or facilities to any entity, person, company or organization that is or has
been at any time during the term of this Agreement a Testing Client, or
offers a test or tests that are in direct competition with any Tests
offered by ETS.
H. PROHIBITION AGAINST COACHING
During the term of this Agreement and for a period of 180 days after the
termination or completion of this Agreement:
1. Neither Agent, nor any employee or independent contractor of Agent,
will develop or offer any coaching advice, assistance, service,
software, or materials (including those developed by any third party)
for the Tests being administered under this Agreement; and
Page 6 of 9
2. Agent agrees not to sublet, rent to, or make space available to any
third party that offers coaching advice, assistance, service, software,
or materials, for the Tests being administered under this Agreement.
Each Agent Test Center staff member administering the Tests covered by
this Agreement may be required to sign with Agent an ETS provided
agreement, stating that they agree to be bound by the terms of this
provision.
I. CONFLICT OF INTEREST
No Agent Test Center staff administering the Tests covered by this
Agreement, shall take a Test covered by this Agreement for a period of one
hundred eighty (180) days following their last involvement in any aspect of
the administration of such a test.
No Agent Test Center staff shall handle materials for the administration of
or administer a Test covered by this Agreement, for a period of ninety (90)
days prior to the date of a Test administration that involves either a
household or immediate family member.
Each Agent Test Center staff member administering the Tests covered by this
Agreement shall be required to sign with Agent an ETS provided agreement,
stating that they agree to be bound by the terms of this provision and
Agent will take all steps necessary to enforce said agreements.
J. STANDARDS OF CONDUCT
It is the policy of ETS not to discriminate on the basis of race, ethnic
background, creed, age, or sex. By executing this Agreement, Agent agrees
not to permit any of its agents or employees to behave, either through
speech or conduct, in a manner that could reasonably be construed as
offensive to members of any such group or otherwise to be in violation of
the aforesaid policy.
Page 7 of 9
K. PROHIBITION ON GIFTS AND GRATUITIES
Agent warrants that it has not offered or given, and will not offer or give
to any employee, or representative, or immediate family member of an ETS
employee a payment, gratuity, personal service, entertainment or gift,
other than novelty advertising items (i.e., pencils, pens, clipboards,
cups) of a nominal value. Any such offerings may be construed as Agent's
attempt to improperly influence decisions at ETS, and Agent agrees that
Sylvan may, by written notice to Agent, terminate this Agreement.
L. EQUAL OPPORTUNITY
The provisions of Section 202 of Executive Order 11246 (Equal Employment
Opportunity) dated 9/24/65 and subsequently amended, are incorporated
herein by reference and shall be applicable to this Agreement unless this
Agreement is exempted under rules, regulations, or order of the Secretary
of Labor.
M. FAIR LABOR STANDARDS ACT
Agent warrants that by accepting this Agreement, that for the performance
of the services specified therein, it has complied and will comply with all
requirements of the Fair Labor Standards Act of 1938, as amended.
N. COMPLIANCE WITH LAW
Agent warrants that in the performance of this Agreement, it will comply
with all applicable federal, state, and local laws now and hereafter in
effect.
O. INDEPENDENT CONTRACTOR
Under this agreement, Agent agrees that it will perform as an independent
contractor, and not an agent or employee or ETS.
P. ASSIGNMENT
Agent agrees not to assign this Agreement, or any part thereof, or any
responsibility thereunder, without the prior written approval of Sylvan.
Page 8 of 9
Q. SURVIVAL BEYOND COMPLETION
It is mutually agreed that paragraphs B. Ownership, C. Confidentiality and
Security, D. ETS's Right to Audit, F. Hold Harmless Agreement, G. Covenant Not
to Compete, H. Prohibition Against Coaching, and I. Conflict of Interest shall
survive any termination/completion of this Agreement.
Page 9 of 9
ATTACHMENT 6
FEES, COMPENSATION AND REIMBURSEMENTS
This Attachment 6 is effective as of the Effective Date of the
Agreement.
The parties agree to the following:
1) SERVICE TYPE DEFINITIONS
------------------------
Non-Testing Services: Services provided that are not Tests such as:
Familiarity and practice products
Pretests and other research or test
development-oriented activities
Test Disclosure
Basic Testing Services:
No eligibility checks
Standard check-in procedure with no photo
id
No additional test taking materials
The normal seating time and distance
requirements of 50 miles and 20
days do not apply. Candidates
will be lowest priority for
scheduling and NRC handling and
may be scheduled up to 45 days
from registration call. Call
center metrics for hold times
do not apply. Sylvan may use a
separate NRC scheduling method,
including the exclusive use of
telephony systems at Sylvan's
discretion. Seat times may not
be reserved for non-testing
events during peak times.
Any event which includes any single service level characteristic
higher than outlined above will automatically advance to either Standard
Testing or Expanded Testing.
Standard Testing: Eligibility checks or eligibility files
are present in a mutually
agreed format that speeds the
registration process.
Standard check-in procedure, including
photo, 2 standard Ids
Score reports on screen
No additional test taking materials
Testing available at least
monthly and substantially the
entire month (substantially
being defined as at least
twenty (20) days of testing per
month), continuous testing
availability of the Item Banks
1
Review and challenge can occur at same
time as operational testing*
Any event which includes any single service level characteristic
higher than outlined in Standard Services above will automatically advance to
Expanded Testing.
* This refers to the ability of a Candidate to review his/her test and
challenge questions. To the extent this occurs immediately after the
examination, for example the review and challenge is completed within 15 to
20 minutes of completion of the examination, and is limited to a written
challenge without discussion or interaction with the Client, this is included
with the Standard Service. If review and challenge must occur with the Client
present, completion of review and challenge takes more than 20 minutes after
the examination is completed, will prove disruptive to the test environment
or requires the test center to be closed to all but the Candidate, this will
fall within the Expanded Testing category.
Expanded Testing: Eligibility files are not in mutually agreed format
that speeds registration process.
Additional check-in requirements such as
security paragraphs; digital signature,
additional ID
Printed or customized score reports
Printed supplementary testing materials
Limited testing windows*
Review and challenge require private use
of test center
Any test will automatically advance from Standard Testing to the
Expanded Testing category when any single characteristic of the Expanded
Testing category exists in the testing services required.
*This provision will be waived for the GRE and GMAT programs for the first
four years of the Agreement after the effective date. Thereafter, GRE and
GMAT must be continuously testing (i.e. available seven days per week, every
week of the year) or GRE and GMAT must become Expanded Testing category
programs. Until these, or other ETS programs, become continuous, ETS will
cooperate with Sylvan to adjust testing windows to achieve maximum network
capacity and load leveling.
2) PER TEST FEE. This is a fixed fee that will cover the fixed costs
and per test variable costs that occur each time a test is
delivered. The per test fee is set out in the chart below. The per
test fee applies for all tests delivered but will vary depending on
the service level chosen and the volume of tests as set forth in
the chart below.
2
Volume in Tests Basic-Testing Standard Expanded
450,000 - 575,000 US$* US$* US$*
575,001 - 700,000 US$* US$* US$*
700,00f - 825,000 US$* US$* US$*
825,001 - 950,000 US$* US$* US$*
950,001 - 1,075,000 US$* US$* US$*
1,075,001 - 1,200,000 US$* US$* US$*
1,200,001 - 1,325,000 US$* US$* US$*
1,325,001 - 1,450,000 US$* US$* US$*
3) PER APPOINTMENT HOUR FEE. This is a fixed hourly rate to cover the
variable costs associated with the length of each event involved.
The hourly rate will vary depending on volumes but will not vary
between the types of services offered. The per appointment hour fees
are set forth in the chart below.
TESTING HOURS Hourly Fees
(Average=4hrs/test
2,000,000-2,500,000 hours US$ * hour
2,500,001-3,000,000 hours US$ * hour
3,000,001-3,500,000 hours US$ * hour
3,500,001-4,000,000 hours US$ * hour
4,000,001-4,500,000 hours US$ * hour
4,500,001-5,000,000 hours US$ * hour
5,000,001-5,500,000 hours US$ * hour
5,500,001-6,000,000 hours US$ * hour
With regard to both 2) and 3) above:
a) ETS will pay Sylvan the applicable Per Test Fee from the
applicable chart above for Tests delivered at all test sites
delivering ETS tests. This fee will provide for all registration,
electronic transmission of results and photo as well as all other
support services provided by Sylvan to Test sites.
b) The hourly test volume that determines the row of the table to
be used for the hourly fee is the total hourly volume from all ETS
testing programs tested in all US domestic and Canadian centers,
including Sylvan Technology Centers, institutional centers operated
by Sylvan, or other centers approved by ETS and Sylvan. In
determining total test hour volume ETS will receive credit for all
used and unused seat time it purchases in block purchases pursuant
to Paragraph 5.4.3
*Text omitted based upon request for confidential treatment.
3
of the Agreement. The test volume that the determines the row of the
table to be used for test fees is the total number of tests from all
ETS testing programs tested in all US domestic and Canadian centers,
including Sylvan Technology Centers, institutional centers operated
by Sylvan, or other centers approved by ETS and Sylvan.
c) Volume break points were determined based on current program
plans for introduction of computer-based testing. Based on current
projections, testing volumes are expected to be 1.5 - 2.0 million
hours in 1997-98. By 1999-00 with the introduction of TOEFL testing
hours are projected to grow to 3.5 - 4.0 million hours. The volumes
for determining pricing breakpoints includes all test volumes from
the following programs: GRE, GMAT, PRAXIS, TOEFL, SAT-IAAY, NBPTS,
TOEFL Pilot, APICS, AICPA, CEBS, NAPLEX, NCLEX,and NBPME.
d) Total volume will be projected prior to the start of each ETS
fiscal year (JulyJune) and the appropriate per test fees and hourly
rates used accordingly on monthly invoices. Any adjustments, if
necessary, will be determined at the end of ETS's fiscal year and
the appropriate credits/invoices will be issued.
e) The fees in this Attachment 6 will be effective July 1, 1998 and
will remain in effect for the term of the contract. All fees will be
adjusted annually in accordance with adjustments made to the
Consumer Price Index; provided however, that the maximum increase in
any Agreement year will be four (4%) but in any agreement year that
the actual adjustment to the Consumer Price Index exceeds four (4%)
percent, Sylvan will receive the maximum increase of four (4%)
percent in as many following years as is necessary to make up the
difference in revenue shortfall between the actual increase and four
(4%) percent.
4) MINIMUM ANNUAL PROGRAM RETAINER/SMALL PROGRAM CHARGE. This will be a
fixed annual minimum for any and all programs testing in the system.
The per test and per appointment hour fees will be used as a draw
down against this minimum program retainer. The minimum annual
retainer will be US$ * per year for each year the program is
in existence.
5) FEES TO BE COLLECTED SEPARATELY FROM PER TEST AND PER HOUR SEAT FEES.
a) Network Infrastructure Upgrade/Modification Reimbursements - ETS
and Sylvan have agreed on a methodology for ETS cost reimbursement
for Network Infrastructure Upgrades and Modifications based on the
current contract language (Ref contract 6.6, page 22). Any upgrades
or changes initiated solely to implement ETS's program requirements
will be reimbursed 100% by ETS. Any upgrades or changes initiated
solely to implement Sylvan's program requirements will not be
reimbursed by ETS. When upgrades or changes are beneficial to both
ETS and Sylvan, the parties will agree on an equitable split of the
costs.
4
*Text omitted based upon request for confidential treatment.
b) Forfeit Fees (No Shows) - If any Examinee fails to appear as
scheduled for a Test or other non-testing event, ETS will pay to
Sylvan *% of the seat fee (the per test fee plus the hourly
rate for the event) that Sylvan would have been paid had the Test or
other non- testing event been administered to the Examinee when
scheduled.
c) Rescheduling Fee - When a Candidate reschedules for his own
purposes and not because of a Sylvan error, a fee of US$*
will be charged directly to the Candidate for each reschedule
undertaken for the Candidate.
d) Private Testing - For each Private Test approved by ETS, ETS will
pay to Sylvan an additional $* fee for each such Private Test
administered, if testing occurs in the Regular Testing Room because
of the absence of a Private Testing Room.
e) Data Downloads - Eighty-five cents (US$*) per megabyte
for all data downloads to each individual test site. There will be
no free downloads including no free initial downloads. This will
include all downloads regardless of medium actually used and
regardless of whether ISDN was available at the site or not. This is
subject to the restrictions placed on data downloads in Attachment
12.
6) REPORT PREPARATION FEES
Sylvan will provide those standard reports set forth in Attachment
11 at no charge. ETS may elect to have customized reports. Sylvan shall be
reimbursed at a fixed price for those customized reports developed and
delivered in accordance with ETS's request. Sylvan will develop the plans,
devise the methods of measuring the data required by the plans and develop
the personnel and structures necessary to create and maintain such reports.
Sylvan will submit an invoice for the custom reports at the mutually agreed
upon fixed price.
7) NON-STANDARD SERVICES
The pricing established in 1 through 6 above is the pricing for the
standard service offering agreed to between the parties. From time to time,
ETS may request and Sylvan may, in its sole discretion, undertake
non-standard services on behalf of ETS. These services shall be priced in
advance on a fixed price basis and billed to ETS based on the mutually
agreed fixed price.
8) CONFERENCE TESTING
In those instances where ETS requests Sylvan's assistance for
conference testing, Sylvan will charge a fee of US$* per day plus
the actual cost of additional equipment rental, transportation, lodging and
meals.
5
*Text omitted based upon request for confidential treatment.
9) BEST PRICING
ETS will, during the term of this Agreement, receive the best price
Sylvan offers any other client with similar tests (being defined as Tests in
the same categories as ETS Tests),z similar volumes and similar program
requirements.
10) NON-TESTING SERVICES
ETS and Sylvan will negotiate separate agreements for each
Non-Testing Service delivered through the Sylvan testing network.
11) INCENTIVES AND PENALTIES
In order to ensure that ETS test candidates are provided the highest
quality and most efficient services, key performance standards will be
mutually agreed upon each year. The target performance standards will be
established in March of each year to become effective for the ETS fiscal year
beginning July 1 and ending June 30 the following year.
Incentives and penalties will be applied to the Per Test Hour fees
based on Sylvan's performance against the standards each calendar quarter of
the ETS fiscal year. Sylvan's performance will be measured quarterly and
incentives will be paid or penalties levied at each calendar quarter.
Two percent of the annual Per Test Hour fees paid will be both the
maximum incentive and the maximum penalty for any single twelve month period,
e.g., Sylvan may earn Per Test Hour fees in a range starting from a low of
* (*%) of total possible yearly Per Test Hour fees for substandard
performance and a maximum of * (*%) of Per Test Hour fees for full
compliance with the performance standards. The amount of penalty or incentive
will be calculated as follows. ETS and Sylvan have assigned to key
Performance Standards set forth in Attachment 12 a point for each standard
regarded as an important customer service benchmark. Sylvan's base Per Test
Hour Compensation will be assumed to be * (*%) percent of the total
Per Test Hour fees available in any quarter. For each PERFORMANCE STANDARD
met by Sylvan each quarter Sylvan will be awarded a point. For each
Performance Standard Sylvan fails to meet each quarter Sylvan will have a
point subtracted. The sum of all points added or subtracted divided by the
total number of points available and that quotient multiplied by the
incentive range (2%) will yield the final incentive or penalty percentage for
the quarter.
The penalties discussed in this paragraph 11) shall become effective one
hundred and eighty (180) days after the Effective Date of this Attachment 6,
provided that the Performance Standards of Attachment 12 and the agreed to
measurement methodologies have become effective.
6
*Text omitted based upon request for confidential treatment.
The incentives shall become effective within 12 months of the Effective
Date of this Attachment 6, provided that the Performance Standards of
Attachment 12 have been established and measurement methodologies agreed
to.
The money from each penalty levied and each incentive earned shall be
applied by the parties to aid in improvements to the network focused on the
specific metrics needing improvement.
7
ATTACHMENT 7
SOFTWARE DEVELOPMENT PLAN
This Attachment 7 sets forth the requirements and guidelines for
Software Development to be followed by. both parties. These guidelines will
be incorporated into the contract as Attachment 7. Sylvan will develop a
Software Plan in accordance with these guidelines and implement the same
within one hundred eighty (180) days after the contract revision effective
date.
SOFTWARE DEVELOPMENT GUIDELINES
In order to insure that test scheduling, administration and delivery
software fit the evolving needs of both parties, the following guidelines
will be followed:
1. All software will be planned, designed and developed according to
industry-standard life cycle methodologies. All software will be Year
2000 compliant. (ETS software must be Year 2000 compliant as well.)
2. All software development and enhancements will be planned on a schedule
which includes ample time for:
o integration planning
o gathering, review and acceptance of requirements
o logical and physical design
o prototyping where appropriate
o quality assurance testing
o fully loaded production performance testing, where appropriate
3. All ETS requirements for Sylvan software development and enhancements
must be included in the project requirements document which must be
delivered to Sylvan, in writing, within the project time frame. This
document must be agreed to and signed by all stakeholders prior to the
start of the project (This includes both ETS and Sylvan stakeholders.)
4. Where information is stored at Sylvan and required by ETS, that
information will be accessed by a standard interface and/or by standard
scheduled data transfer procedures, including Application Protocol
Interface (API).
5. Where appropriate, mutually agreed upon software tools and utilities
should be used so that both organizations can develop and use compatible
information access and enhancement methods.
6. Important software components will be upgraded on a regular schedule.
Unscheduled updates will be discouraged by both parties.
7. Version Control procedures will be developed and enforced so that there
is only one production version of a given component in the field or the
data center at any time.
8. All software which is to be implemented in the Sylvan network will be
acceptance tested by Sylvan.
9. Software source and production versions will be tracked by an
appropriate Release Management system. No software will be sent to the
field without passing through this system after the QA cycle.
10. Sylvan will continue to participate in the ETS Release Planning team to
facilitate communications and appropriate planning.
ATTACHMENT 8
QUALITY CONTROL PLAN
This Attachment 8 sets forth the requirements and guidelines for a
Quality Control Plan. . Sylvan will develop this plan and the parties will
jointly approve it. This plan will be developed and become effective one
hundred eighty (180) days after contract revision effective date.
QUALITY CONTROL GUIDELINES
Given the nature of the computer based testing business, software and
technology quality must be of utmost importance to both Sylvan and ETS. The
following will serve as a framework to ensure that Quality Control is a
priority to both parties during the day-today business of delivering
academic tests:
1. Software
In the areas of scheduling and registration, test center
administration, test delivery, and results processing, all software
which supports the testing process must be error free of critical
errors and support all appropriate requirements in order to ensure
that the candidate experience and service of test delivery are
acceptable.
2. Test Center Facilities
Sylvan has standards and specifications which support uniformity,
ergonomics, ADA access, proper monitoring, and security. These
standards must continue to be enforced and reviewed.
3. Test Center Administrators
The people who administer and monitor the testing process must be
properly trained and certified. They must have the tools needed to
handle irregularities and make decisions during the day-to-day
business of testing.
4. Test Content
Test item banks must be certified by ETS free of presentation
errors and obviously incorrect data.
5. Data Transmission
Software, Item banks, appointment data, test administration data
(such as eligibilities and retest files), test results and other
information must be protected from corruption while being
transmitted at the highest reasonable speed.
6. Scheduling
Assuming that software quality is addressed above, procedures for
handling the scheduling process, including special conditions
scheduling and other exceptions exist and must continue to be
monitored and enforced.
7. Documentation
Both Sylvan and ETS must ensure that all technical and user
documentation are complete, correct and up-to-date. This must be
part of the quality control of all items above.
8. Quality Control Tools
Sylvan will employ the following Quality Control tools in its
Quality Control program.
a. Software
Automated Code Checking
Automated Testing of Code
b. Test Center Facilities/Test Center Administrators
Mystery/Secret Shopper___ times per year____ center. This applies
to all centers delivering ETS Tests. For any center
found deficient the frequency will increase to___ times
per____year center in addition to requiring a plan for
correction of the deficiencies. Interactive training
for TCAs will be part of the plan.
c. Test Content
Sylvan will develop or purchase automated tools for test
presentation checking. (Not Test Content)
d. Data Transmission
Sylvan will monitor 100% of all transmissions. Sylvan will
upgrade the network and will purchase services from
providers that will insure greatly reduced or error
free transmissions.
e. Scheduling
Newscheduling system will have automatic checking and
will run processes to validate schedules. Sylvan will
do real time validation against business rules.
f. Documentation
Sylvan's plan is to have a single set of documentation and
access by applicable personnel will be on-line and
on-demand.
ATTACHMENT 9
SECURITY/CONTINGENCY PLAN
The contract revision will include as Attachment 10 the requirements
set forth below,for a Communications Plan. Sylvan will develop this plan.
This plan will contain those Security Audit plan features desired by ETS.
This plan will be developed and become effective one hundred eighty (180)
days after contract revision effective date.
SECURITY
Sylvan has security procedures in the following areas:
1. Data Center
Includes central servers, golden servers, the main back-end data base
system, and physical (corporate headquarters) building security
2. Data transmission
Includes the safety of software and item banks, test results, and other
client- and candidate-specific information which must be protected from
theft and tampering during movement to and from testing centers, the
Sylvan data center, and ETS
3. Testing Center
Includes the safety of software and item banks, test results, and other
client- and candidate-specific information which must be protected from
theft and tampering while resident at a Sylvan Testing Center. Also
includes the security of physical network and ancillary equipment.
4. Call Center
Includes appointment and test schedule data, candidate demographics,
and client related infon-nation. Also includes the security of call
center computers and other equipment.
5. Test Production
This is not currently an ETS issue.
Sylvan will share highlights and ETS specific portions of the plan with ETS
but must withhold customer sensitive issues. Sylvan will provide mutually
agreed ETS security requirements in the plan.
CONTINGENCY
Plans are in place to handle "disaster recovery" for:
1. The Sylvan Data Center
2. The Candidate Services Call Center
3. Any individual Sylvan Test Center
4. Communications and data transfer lines between any of the above, or
between Sylvan and ETS
The contingency plans include procedures for escalation, communication with
ETS, time frames for handling recovery tasks, "post mortem", and return to
normal operations.
Though personnel and candidate safety and equipment/facility security must
always be Sylvan's first concern, communications with ETS and other clients are
a high priority after a problem has occurred which affects ongoing testing
operations.
ATTACHMENT 10
CONFIGURATION CONTROL AND COMMUNICATIONS PLAN
The contract revision will include as Attachment 10 the requirements
set forth below for a Configuration Control and Communications Plan. Sylvan
will develop this plan and the parties will jointly approve it. This plan
will be developed and become effective one hundred eighty (180) days after
contract revision effective date.
CONFIGURATION CONTROL AND COMMUNICATIONS PLAN
The control of pertinent operations and Sylvan./ETS communications will be
tied together in the Configuration Control and Communications Plan. This
plan may include, but not be limited to:
1. Standard test delivery and STC operations procedures, as set forth in the
Policies, Procedures and Practices (PPP) manual
2. Physical and electronic security procedures both at Sylvan and ETS, as
set forth in the Security Plan
3. Schedules and procedures for ensuring that regular processes are
completed and errors handled so that normal testing operations may
continue
4. Communication and problem escalation procedures.
5. Candidate complaint procedures, including appropriate actions under
different circumstances. It is incumbent upon ETS to ensure that such
procedures may be implemented across programs.
6. Procedures for the collection, review and incorporation of business
requirements into software and other processes, as set forth in the
Software Development Plan. This will include costing, scheduling, and
impact analysis.
7. Software Version Control procedures, as set forth in the Software
Development Plan
8. Procedures for the joint diagnosis and correction of test center system
problems which do not appear to have an immediate source
9. Quality Control procedures for software and for manual processes, as set
forth in the Quality Control Plan
10. Procedures for the maintenance and dissemination of appropriate user and
technical documentation
11. Communication of procedures (as set forth in the Quality Control Plan)
to remedy problems stemming from misunderstanding of the PPP and/or
inadequate TCA training
12. Standard procedures for dissemination of periodic reports and
statistical information. The standard reporting packages will be fully
defined by calendar year end 1997.
13. Procedures for the protection of company private and trade secret
information
14. Procedures for collecting, verifying and incorporating information
required for capacity planning. This will include required lead times for
volume forecasts, and appropriate remedies when forecast and reality turn
out to be very different.
15. Procedures for communicating and responding to changes in the market and
business environment
ATTACHMENT 11
SYLVAN STANDARD REPORTS
Sylvan will develop a new standard reporting package. This Sylvan
Standard Client Reporting Package will be distributed monthly and will
consist of the reports set forth below. This Attachment I I will be
effective one hundred eighty (180) days after contract revision effective
date. All reports will be approved by the Contract Performance Oversight
Committee.
1. Candidate Services Report
Call Center Statistics
Local Registration Statistics
Registration Report
2. Client Services Report
Status Report
3. Logistics
Capacity Recap
4. Technical Services Status Report (If applicable)
5. Annual Operating Report
6. Reports necessary to monitor Performance Standards.
ATTACHMENT 12
PERFORMANCE STANDARDS
Note: UNLESS OTHERWISE STATED, ALL MEASUREMENT OF THE APPLICABLE METRICS
WILL BE QUARTERLY. WHENEVER NOTICE IS REQUIRED UNDER THIS ATTACHMENT,
NOTICE SHALL BE GIVEN TO THE INDIVIDUAL DESIGNATED IN THE NOTICE SECTION OF
THE AGREEMENT FOR ACCEPTANCE OF ALL OPERATIONAL NOTICES.
This Attachment 12 will become effective 180 days after contract revision
effective date. During the time that Sylvan installs Project Wirewalker and
moves its current systems and activities unto the Project Wirewalker
systems platform, these performance standards will be suspended for a three
month period. Sylvan will provide periodic reports to ETS during the three
month period.
DESCRIPTION OF PERFORMANCE STANDARD POINTS
1. SCHEDULING TEST TAKERS
a. *% of test takers will be offered an appointment within 20 days ofhis/her initial *
request and within 50 miles of the requested site. *% of test takers will be offered
an appointment within 60 days of his/her initial request and within 50 miles of the
requested site.
b. *% of all registration telephone calls will be answered in 5 minutes orless *
measured as an average queue time for each month.
c. *% of all Examinees who leave a message at the CSCC will be called back *
within 48 hours. Sylvan will document all call-backs including attempts resulting in
the Examinee not being available.
II. RESCHEDULING OF TEST TAKERS
a. ETS will be notified of the identity of individuals being rescheduled as a result of *
Sylvan operations within 24 hours.
b. When a justified scheduling complaint or a service disruption requires a
rescheduling of the test taker, Sylvan will respond as follows:
1. Sylvan will make 3 attempts to make voice contact within 24 hours of the *
need for rescheduling to occur for *% of test takers affected.
2. If voice contact fails, *% of affected test takers will receive a mailed *
post card requesting them to reschedule.
3. Once contact is established, Sylvan will complete rescheduling of test *
taker within 72 hours or document that test taker refused appointment
offers.
*Text omitted based upon request for confidential treatment.
1
DESCRIPTION OF PERFORMANCE STANDARDS Points
4. When necessary, Sylvan will open additional testing times at the original *
testing site or at a site within 50 miles of test takers original test site
to insure test taker is rescheduled within 15 days of establishing contact
with Sylvan. Where test taker chooses a date outside of the 15 days, the 15
day limit is waived.
5. Where a test taker documents that there will be a material injury to test *
taker if normal scheduling guidelines are followed, Sylvan will arrange for
the test taker to be rescheduled within a week.
6. ETS will extend the time the item banks are available for the sole
purpose of rescheduling test takers.
III. SPECIAL FACILITIES TEST TAKERS
a. *% of Special Facilities test takers will be offered an appointment within 20 *
days of their first choice and within 50 miles of the first center
requested.
IV. Test Delivery
a. *% of all tests will be delivered each month as scheduled. *
b. *% of all tests will result in a completed EPR except where disruption *
and/or cessation of testing is a result of ETS software errors or force
majeure circumstances.
c. *% of results will be communicated to ETS electronically within 24 hours, *% *
within 48 hours and *% within 4 business days.
V. SUPPORT OF ETS DEVELOPED SOFTWARE/SUPPORT OF SYLVAN DEVELOPED SOFTWARE/SERVICE
DISRUPTIONS
Both parties equally share the responsibility to support all software
systems. Therefore the parties agree to the following support functions:
1. When the problem is discovered by Sylvan:
a. EIR will be filed by Sylvan as soon as the problem is discovered.
b. When the technical staff at Sylvan perceives that there are multiple
cases of the same problem affecting at least 10 test takers or multiple
sites or the national registration system, Sylvan will notify ETS within 60
minutes of discovering the issue for *% of all incidents and within 12
hours for *% of the incidents.
c. An oral or written summary of the problem will be communicated to ETS
within 24 hours for a problem that prevents successful completion of the
testing process and within 4 business days for non-critical problems.
2
*Text omitted based upon request for confidential treatment.
DESCRIPTION OF PERFORMANCE STANDARDS POINTS
d. Requests for reasonable and relevant information regarding the incident(s)
in question, will be answered within 5 business days.
e. If the incident requires a Sylvan solution or Sylvan input into a
solution, Sylvan will prepare a recovery plan, including a resolution time
line, within a time commensurate with the severity of the problem. ETS must
provide all relevant and reasonable information and its cooperation where
necessary to accomplish the recovery plan in a timely fashion
2. When the problem is discovered by ETS
a. ETS will forward the equivalent of an EIR to Sylvan.
b. If the condition will or has affected 10 or more test takers, multiple
centers or the national registration system, then ETS will notify Sylvan
Corporate within 60 minutes of discovery of the problem for *% of all
incidents and within 12 hours for *% of all incidents.
c. ETS will provide an oral or written summary of the problem within 24 hours
for a problem that prevents successful completion of the testing process and
within four business days for non-critical problems.
d. Requests for reasonable and relevant information regarding the incident(s)
in question, will be answered within 5 business days.
e. If the incident requires an ETS solution or ETS input into a solution, ETS
will prepare a recovery plan, including a resolution timeline, within a time
commensurate with the severity of the problem. Sylvan must provide all
relevant and reasonable information and its cooperation where necessary to
accomplish the recovery plan in a timely fashion.
V1. DISTRIBUTION OF SOFTWARE AND DATA
a. *% of all software and data will be distributed to all locations in the *
network required to have it by the published date, provided it is received a
minimum of 96 hours before the published date. All hours are assumed to be
over business days.
b. *% of all locations will have all software and data distributed to them *
by the published date, provided it is received a minimum of 72 hours before
the published date. All hours are assumed to be over business days.
c. *% of all locations will have all software and data distributed to them *
by the published date, provided it is received a minimum of 48 hours before
the published date. All hours are assumed to be over business days.
The following conditions are required for this metric:
3
*Text omitted based upon request for confidential treatment.
DESCRIPTION OF PERFORMANCE STANDARD Points
- Work orders must be received by 4:00 p.m. eastern time the appropriate
number of business hours before each of a) through c) above.
- Individual work orders exceeding 15 megabytes must be received 268 hours
before the published date.
- The aggregate of all work orders due on the same published date may not
exceed 30 megabytes. Where the aggregate of all work orders will exceed 30
megabytes, Sylvan will require a priority list and will not guarantee
distribution per a), b) and c) above, for low priority data that exceeds
the 30 megabyte limit.
- These standards do not apply for non-ISDN sites. Non-ISDN sites will
have all data distributed by the published date provided it is received 10
business days before it is due.
- These standards do not apply to remote sites such as Guam, American
Samoa, etc. Sylvan will supply ETS with a comprehensive list of those
sites deemed remote.
- Theses standards do not apply when a force majeure condition applies.
d. Any candidate affected by the failure to distribute the data in
accordance with the above will be tested free.
VIL DISPOSITION OF IRREGULARITIES
a. *% of all EIRs will be closed within 3 business days.
b. *% of all EIRs will be closed within 5 business days.
c. When Sylvan or ETS believes corrective action is necessary, a remedial
action plan, with a timetable for completion, will be developed within 5
business days. Disagreement concerning the need for corrective action will
be adjudicated by the Contract Performance Oversight Committee.
VIII. RECOVERY STANDARDS
a. Site will immediately notify the CSCC when they are unable to deliver
tests. The CSCC will reschedule any candidates affected using the
rescheduling standards set forth above.
b. Sylvan will notify ETS as quickly as possible and in the best manner
available, but in any event not longer than 48 hours after a test center
goes down. Current practice is to notify ETS via ETS beeper and e-mail.
Sylvan and ETS are working to include all necessary information in an
automated client information system. Until that process is complete,
Sylvan will continue the current practice and will monitor that practice
to make certain it remains the best available manner.
4
*Text omitted based upon request for confidential treatment.
DESCRIPTION OF PERFORMANCE STANDARD POINTS
c. Sylvan will use its best efforts to bring the site back on line within 48
hours of the initial shut down.
d. If the site cannot be brought back on line within 48 hours, Sylvan Corp.
will notify ETS and reschedule the affected candidates through the CSCC.
e. Within 3 business days of the incident, Sylvan will notify ETS in writing
of candidates who could not be reached or could not be rescheduled.
Note: These standards as written represent the performance targets for the
first year of this Agreement, a key transition year for two major testing
programs. To effect continuous improvement in service to the ETS test takers
and test program sponsors, the measures contained in this Attachment 12 will
be reviewed, adjusted, and agreed upon each year. Financial penalties and
incentives associated with these Performance Standards will be determined
quarterly based on the formula in Attachment 6. Sylvan and ETS must jointly
determine the measurement methodologies for each of these Performance
Standards. These Performance Standards, the measurement methodologies and
the financial incentives and penalties will become effective one hundred
eighty (180) days after the Effective Date of the Master Agreement Between
Educational Testing Service and Sylvan Learning Systems, Inc. for Computer
Based Testing Services at Sylvan Technology Centers in the United States and
Canada entered into by Sylvan and ETS to replace the former Amended and
Restated Master Agreement dated September 1. 1993.
Attachment 13
ETS Testing Programs
GRE
GMAT
PRAXIS
TOEFL
SAT-IAAY
NBPTS
TOEFL Pilot
APICS
AICPA
CEBS
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