COLLABORATION AGREEMENT
Exhibit
10.18
This Collaboration Agreement (the “Agreement”) is effective as of July 11, 2005 between Mind
Streams, LLC, a limited liability company (“Mind Streams”), and Significant Education, LLC, (d/b/a/
Grand Canyon University) a for-profit company (the “University”). Mind Streams and the University
are sometimes referred to individually as a “Party” and jointly as the “Parties”.
Agreement to Collaborate. Mind Streams and the University agree to work together in a cooperative
effort and in good faith to conduct certain projects (each, a “Project”) on a non-exclusive basis,
as may be agreed and the terms documented in an Exhibit to this Agreement (each, a “Project
Description”). Each Project Description to this Agreement (whether or not attached hereto) will
incorporate the terms of this Agreement and the terms thereof will be binding on the Parties. The
first Project of the Parties is described in the Project Description attached as Exhibit 1 (the
“First Project”). Each Party agrees to perform those duties of such Party as set forth in a
Project Description. For each Project, Mind Streams will contribute proprietary relationships,
business and technical developments, and know how, including, without limitation a management
system developed by it and specialized personnel, training, marketing and promotion activities.
The University will contribute specialized personnel for financial aid, enrollment, registration,
advisement, instruction, training and degree conferring coursework.
Consideration. The consideration to be received by each Party for each Project will be negotiated
and adjusted as mutually agreed by the Parties and will be set forth in the Project Description.
The consideration for the First Project is described in Exhibit 1.
Termination and Survival. This Agreement will terminate on December 31, 2010 (the “Termination
Date”), unless otherwise terminated for any reason by either Party, in its sole judgment, upon 45
days prior written notice to the other Party. The Parties may mutually agree, in writing, to
extend the Termination Date. Each Project will terminate upon the earlier of (i) its completion or
(ii) the termination of this Agreement, unless provided otherwise in the Project Description
relating to a Project. Any consideration described in the Project Description owed
under a Project but unpaid at the Termination Date will be paid within 30 days following the
Termination Date. The Parties agree that the students enrolled under a Project on the Termination
Date are attributed to Mind Streams’ efforts under such Project and any consideration described in
the Project Description related to those students, until their respective graduation or other
termination of enrollment, will be paid pursuant to the Project Description. The foregoing payment
obligations will survive the Termination Date.
Academic Responsibility. The University will have exclusive control over its academic programs.
The University is not delegating, and will not delegate, any of its institutional rights or
obligations. The University will make all academic and faculty employment judgments and decisions
consistent with its published policies and procedures. Non-delegated duties include course content
and the delivery of the instructional program; selection and approval of faculty; admission,
registration, and retention of students, calculation of prior learning; evaluation of student
progress and the awarding and recording of credit.
Authorization. Each of the Parties represents and warrants to the other Party that this Agreement
has been duly authorized by all necessary action and that it constitutes a valid and binding
obligation of each Party to the other Party.
Department of Education. The University has been approved for various programs sponsored by state
and federal governments, including without limitation, the approval by the U.S. Department of
Education to receive Title IV funds under Title IV of the Higher Education Act of 1965, as amended.
Mind Streams has provided the University with an April 20, 2005 memorandum from Dow, Xxxxxx &
Xxxxxxxxx addressing its activities described in this Agreement under the Higher Education Act and
regulations promulgated by the U.S. Department of Education. Mind Streams represents and warrants
that its compensation of its employees or other persons who perform any student recruitment or
admission activities for the University under this Agreement is and will continue to be in
compliance with Section 487(a)(20) of the Higher Education Act of 1965, as amended (20 U.S.C. §
1094(a)(20)), or any successor provision, and the regulations promulgated thereunder by the U.S.
Department of Education (currently located at 34 C.F.R. § 668.14(b)(22)). Mind Streams agrees to
indemnify and hold
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harmless the University and its successors, assigns, agents, officers, directors and employees,
from and against any and all liabilities, obligations, claims, losses, damages, expenses and costs
(including, but not limited to, reasonable attorneys’ fees and litigation costs) which arise out of
or result from (i) any breach or alleged breach of the representations and warranties made by Mind
Streams in this paragraph, or (ii) any assertion by the U.S. Department of Education that Mind
Streams’ compensation of its employees or other persons who perform any student recruitment or
admission activities for the University under this Agreement does not comply with Section
487(a)(20) of the Higher Education Act of 1965, as amended (20 U.S.C. § 1094(a)(20)), or any
successor provision, or the regulations promulgated thereunder by the U.S. Department of Education.
The foregoing representation and warranties shall survive the Termination of this Agreement.
Records And Accounting. Each Party will maintain complete and accurate books and records for the
Agreement, including records reflecting billing, payments, students, and payroll. The records must
be maintained for at least three years after the termination of the Agreement. If the University
provides Notice to Mind Streams that the University is subject to an audit or other review by a
regulatory agency, or to any claim or litigation, relation to the University’s compliance with the
statutory and regulatory provisions referenced in the paragraph of this Agreement titled
“Department of Education,” then Mind Streams will continue to maintain and retain complete records
relating to this Agreement and the compensation of its employees or other persons who perform any
student recruitment or admission activities for the University under this Agreement until the
University provides Notice to Mind Streams that such audit, review, claim or litigation has been
concluded. After Notice by either Party, the other Party will allow the requesting Party to have
access, during ordinary business hours, to the books and records as may be reasonably required to
verify services provided under the terms of the Agreement. Either Party may periodically, at its
expense, have the books and records of the other Party audited by a certified public accountant.
If the accountant determines that the requesting Party was overcharged or underpaid, the other
Party will refund the overage or underage and reimburse the requesting Party for the cost of the
audit within 20 days after Notice. If either Party disputes the accountant’s determination, and
good faith efforts to resolve the
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dispute are unsuccessful, the dispute will be resolved through binding arbitration as provided in
this Agreement.
Confidential Information. Each Party will have access to confidential and proprietary information
owned by the other Party, including, without limitation, information about the business affairs,
finances, customer and supplier lists, marketing, sales, methods of operation, trade secrets,
designs, inventions, formulas, software programs, processes, techniques, research, technical data,
curriculum or other learning information. Each Party agrees not to disclose to any third-party,
whether directly or indirectly, confidential or proprietary information without the written
permission of the other Party, except as required by either Party’s responsibilities under this
Agreement. After Notice by one Party or the termination of the Agreement, the other Party must
immediately return the confidential or proprietary information and comply with the instructions
regarding the return or disposition of the confidential or proprietary information, including any
copies or reproductions. This paragraph does not apply to information that: (a) is or becomes
available to the general public other than as a result of disclosure by the receiving Party; (b) is
known to a Party prior to the disclosure under this Agreement; (c) becomes available to a Party on
a nonconfidential basis from a source (other than the other Party) which is not known by the
receiving Party to be in breach of any nondisclosure obligations; or (d) is independently developed
by a Party without reference to confidential information. If a receiving Party believes that it is
required by law to disclose confidential information, it shall provide Notice to the disclosing
Party, to the greatest extent possible, prior to making such disclosure so as to allow the
disclosing Party to undertake action to prevent disclosure or otherwise obtain confidential
treatment of such disclosure.
Liability Insurance. Each Party will maintain in force at all times during the term of this
Agreement, with an insurance company acceptable to the other Party, worker’s compensation (the
amount required by statute), employer’s liability, comprehensive general liability and auto
liability, each in the amount of $3,000,000, and such additional insurance as may be necessary to
cover the Party’s obligations under the Agreement.
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Indemnification by Mind Streams. Mind Streams shall, to the fullest extent permitted by law,
defend, indemnify, and hold harmless the University and its members, shareholders, directors,
officers, employees, and agents for any and all liability, claims, litigation, judgments, causes of
action, losses, expenses, damages, and liabilities arising out of, or incurred in connection with
or arising directly or indirectly out of the obligations undertaken in connection with this
Agreement (“Claims”), except claims arising through the sole active negligence or willful
misconduct of the University. Claims include, without limitation, the following: (a) any willful
or negligent act, or failure to act by Mind Streams, its officers, directors, agents, employees or
representatives; (b) any inaccurate representation made by Mind Streams; (c) any default in
performance of any of the covenants or obligations that Mind Streams is to perform under the
Agreement, and (d) any investigations or actions taken by HLC or Department of Education against
the University as a result of the actions of Mind Streams in connection with this Agreement.
Indemnification by the University. The University shall, to the fullest extent permitted by law,
defend, indemnify, and hold harmless Mind Streams and its members, shareholders, directors,
officers, employees, and agents for any and all liability, claims, litigation, judgments, causes of
action, losses, expenses, damages, and liabilities arising out of the Claims, except claims arising
through the sole active negligence or willful misconduct of Mind Streams. Claims may arise from,
but are not limited to, the following: (a) any willful or negligent act, or failure to act by the
University, its officers, directors, agents, employees or representatives; (b) any inaccurate
representation made by the University; and (c) any default in performance of any of the covenants
or obligations that the University is to perform under the Agreement.
“Indemnify” means to hold harmless from and defend from loss or liability with respect to any
and all Claims (including costs and attorney’s fees at both trial and appellate levels), arising
out of, or incurred in connection with, an identified circumstance, incident, condition,
relationship, time period, or other matter. These indemnity obligations shall apply for the
entire time that any third party can make a Claim against one of the Parties for liabilities under
this Agreement and shall survive the termination of this Agreement.
Compliance With Laws. During the performance of the obligations under the Agreement, neither Party
will unlawfully discriminate against any person. Both Parties will conduct their
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activities under the Agreement in strict compliance with Laws. For the purpose of this Agreement,
“Laws” means all applicable laws, ordinances, regulations, and other requirements of any country,
federal, state, county, or municipal agency. Both Parties will obtain all required permits,
licenses, and bonds for the performance of their obligations under the Agreement. Both Parties
will certify and provide proof that they are in compliance with Laws and have obtained required
permits.
Binding Agreement. Upon execution by the signatories provided below, this Agreement shall be
binding on the Parties, and their respective successors, assignees, agents, affiliates,
representatives and attorneys.
Binding Arbitration.
Claims. Any controversy or claim between the Parties relating to or arising out of this
Agreement must be submitted to final and binding arbitration, including all controversies or claims
based on contract, tort, equity, and statute; provided, however, that if the controversy requires
provisional remedies, such as injunctive relief or attachment, any Party may elect to have the
matter determined by a court of competent jurisdiction; provided, however, thereafter the substance
of the claim will be subject to binding arbitration.
Waiver of Jury Trial. The Parties understand that they are waiving their rights to a jury
trial.
Procedures. (a) The arbitration will be conducted before the American Arbitration Association
at the location of the Party initiating the arbitration. Except as provided in this Section, the
arbitration will be governed by the Commercial Arbitration Rules. The demand for arbitration
setting forth the facts and issues must be in writing and submitted to the American Arbitration
Association within one year from the date the actions giving rise to the claims occur. The
American Arbitration Association shall select a single arbitrator. The responding Party may serve
a reply or cross demand within 20 days. The arbitrator will conduct a pre-arbitration hearing
within 30 days after the arbitrator is appointed and the arbitration will be completed within 120
days after the filing of the arbitration demand. The arbitrator will establish additional
deadlines reasonably required to facilitate the arbitration. (b) The arbitrator will provide for
discovery, including a Party may serve a document request for any document that would be
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discoverable in a civil lawsuit no less than 30 calendar days before the arbitration hearing;
responses to such request must be delivered with the requested documents and any objections within
20 days; and each Party may take no more than two depositions unless additional depositions are
allowed by the arbitrator.
Powers of Arbitrator. The arbitrator will have the powers to: (a) issue subpoenas for the
attendance of witnesses for the production of books, records, documents, and other evidence; (b)
order depositions to be used as evidence; (c) resolve discover disputes as if the arbitration were
a civil action; (d) conduct a hearing on the arbitrable issues; and (e) rule on the question of
whether specified issues are subject to arbitration and issue an award after the arbitration
hearing is concluded.
Costs and Expenses. The Parties will bear equally the arbitrator’s expenses and fees,
including meeting room charges, administrative fees, travel expenses, and out-of-pocket expenses.
Unless otherwise ordered by the arbitrator, each Party will pay its own attorney fees, costs,
witness fees, and other expenses. The arbitrator may award the prevailing Party any expenses and
fees of arbitration, including reasonable attorney fees and costs, in such proportion as the
arbitrator decides.
Final Award. Within ten days after completion of the arbitration hearing, the arbitrator will
issue a tentative written decision, specifying the reasoning for the decision and any calculations
necessary to explain the award. The Parties will have five days in which to submit comments to the
tentative decision. The final award will be issued within ten days after the arbitrator’s receipt
of comments. The final award may be entered as a judgment in any court having jurisdiction.
Attorneys’ Fees. In the event either Party requests arbitration or files a lawsuit for the
interpretation, specific performance, or damages for the breach of the Agreement, the prevailing
Party is entitled to a judgment or award against the other in an amount equal to actual and
reasonable attorney’s fees and costs incurred, together with all other appropriate legal or
equitable relief.
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Expenses. Except as expressly provided in this Agreement or any Project Description, each Party
shall pay, or cause to be paid, all expenses in the performance of its obligations hereunder,
including attorneys’ fees.
Relationship. The Parties agree that the terms of the Agreement do not constitute the formation of
a partnership, joint venture, or other relationship and that no form of agency exists between the
Parties. Neither Party will hold itself, or its agents or employees out to be an agent of the
other Party, and neither Party will have authority to bind or obligate the other Party in any
manner whatsoever.
Name Seal and Logo. Neither Party may use the name, seal, or logo of the other Party without its
prior written consent. Each Party shall identify in writing to the other Party the person
designated who is responsible for making decisions regarding requests to use the Party’s name, seal
or logo and to whom such requests should be made. Each Party will make available its “brand” for
the purposes related to the affiliation consistent with the terms of the Agreement.
Notices. When the Agreement requires that a Party give Notice to the other Party, including
specifically notices of default, termination, or a demand for arbitration, the Notice must comply
with the requirements in this Section. Notice will be effective when:
(a) personally delivered to the recipient, Notice is effective upon delivery; (b) mailed certified mail, return receipt requested, Notice is effective on receipt, if a return receipt confirms delivery; (c) delivered by overnight delivery (e.g., Federal Express/Airborne/United Parcel Service/DHL WorldWide Express), charges prepaid or charged to the sender’s account. Notice is effective on delivery, if delivery is confirmed by the delivery service; and, ((d) sent by facsimile, Notice is effective on receipt, except that any Notice given by facsimile is deemed received on the next business day if it is received after 5:00 p.m. or on a non-business day, provided that a duplicate copy of the Notice is promptly sent by first-class or certified mail or by overnight delivery or the receiving Party delivers a confirmation of receipt. Notice by facsimile is permissible only if all the Parties and others to receive notice have provided a facsimile number in accordance with this Section. Notices must be given to:
(a) personally delivered to the recipient, Notice is effective upon delivery; (b) mailed certified mail, return receipt requested, Notice is effective on receipt, if a return receipt confirms delivery; (c) delivered by overnight delivery (e.g., Federal Express/Airborne/United Parcel Service/DHL WorldWide Express), charges prepaid or charged to the sender’s account. Notice is effective on delivery, if delivery is confirmed by the delivery service; and, ((d) sent by facsimile, Notice is effective on receipt, except that any Notice given by facsimile is deemed received on the next business day if it is received after 5:00 p.m. or on a non-business day, provided that a duplicate copy of the Notice is promptly sent by first-class or certified mail or by overnight delivery or the receiving Party delivers a confirmation of receipt. Notice by facsimile is permissible only if all the Parties and others to receive notice have provided a facsimile number in accordance with this Section. Notices must be given to:
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| If to Mind Streams, to: | Xxxxxx X. Xxxxxx | |||
| Mind Streams, LLC | ||||
| 0000 X. 00xx Xxxxxx, Xxxxx 000 | ||||
| Xxxxxxx, XX 00000 | ||||
| Telephone Number: (000) 000-0000 | ||||
| Facsimile Number: (000) 000-0000 | ||||
| If to University, to: | Xxxxx Xxxxxx | |||
| Grand Canyon University | ||||
| 0000 X. Xxxxxxxxx Xxxx | ||||
| Xxxxxxx, XX 00000 | ||||
| Telephone Number: (000) 000-0000 | ||||
| Facsimile Number: (000) 000-0000 |
Either party may change either its address or facsimile number by giving the other party Notice.
All communications for which Notice is not required, including those provisions permitting or
requiring a party to “approve,” “advise,” or “consent” may be given by facsimile or other
electronic communications. In these circumstances only the contact person for each Party need
receive the communication.
Assignment. The Agreement may be assigned by either Party without the express written consent of
the other Party.
Entire Agreement/ Modification. This Agreement constitutes the entire agreement of the Parties and
supersedes any prior understandings or agreements of the Parties with respect to the subject matter
hereof. Except for the addition of Project Descriptions to this Agreement, provided that such
Project Descriptions are executed by both Parties, this Agreement cannot be modified except by
written agreement signed by both Parties.
Counterparts. This Agreement may be executed in any number of counterparts, all of which, when
taken together, shall constitute a fully executed agreement, provided, however, this Agreement
shall be of no force or effect until executed by both Parties.
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Governing Law/Jurisdiction. The laws of the State of Arizona govern this Agreement. All
arbitration or legal action brought by either Party arising out of or relating to this Agreement
shall be filed in Maricopa County, Arizona, and all Parities consent to the jurisdiction and venue
of the courts located therein.
The undersigned have agreed to the forgoing provisions as of the date hereof and have caused this
Agreement to be executed by their duly authorized representatives as of the date at the beginning
of this Agreement.
| Mind Streams, LLC, an Arizona limited liability company, |
Significant Education, LLC, a Delaware limited liability company, |
|||||||||
By:
|
/s/ Xxxxxx X. Xxxxxx | By: | /s/ Xxxxx Xxxxxxxxxx | |||||||
| Name: Xxxxxx X. Xxxxxx | Name: Xxxxx Xxxxxxxxxx | |||||||||
| Title: Vice President | Title: Chief Executive Officer | |||||||||
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Exhibit 1
Project One
Project One, collaboration activity between Mind Streams and the University relating to the
development, promotion and marketing of the University’s online master’s programs in education and
leadership. The terms and conditions of the Collaboration Agreement referenced above are
incorporated herein by this reference.
Mind Streams Obligations:
| 1. | Actively work with the University in identifying appropriate courses, programs and curriculum relating to online master’s degrees in education and leadership; | ||
| 2. | Actively promote the University generally and its courses and degree conferring programs, | ||
| 3. | Develop and maintain key contracts and relationships with school corporations within the United States catering to teachers and administrators interested in pursuing additional education opportunities of a kind offered by the University, | ||
| 4. | Provide teams dedicated to the recruitment and retention of students for the University’s programs. |
University Obligations: The University shall provide the following services to students of the
University’s online masters programs in education:
| 1. | Determine the curriculum to be offered to students, | ||
| 2. | Registration, | ||
| 3. | Enrollment, | ||
| 4. | Academic advisement, | ||
| 5. | Financial aid counseling, | ||
| 6. | Instruction, including selecting, hiring and compensating instructors, | ||
| 7. | Student academic record-keeping, and | ||
| 8. | Graduation and certification, if applicable. |
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Joint Obligations:
| 1. | The Parties will work in good faith to carry out their duties under this Project, including establishing lines of communication and monitoring systems necessary to effectuate such obligations. |
Consideration:
| 1. | During the term of this Project One, the University will pay to Mind Streams 45% of Net Revenue, defined below. For the purpose of this Agreement “Net Revenue” means tuition actually received by the University from students recruited by Mind Streams minus any discounts, refunds and allowances. | ||
| 2. | Within 30 calendar days following the start of each new enrollment period during the term of this Project One, the University shall provide Mind Streams with a report containing information regarding the number of eligible students enrolled, the date a student dropped any course(s) and the tuition received. The parties will reconcile and agree on the information in the report within 15 calendar days after the report is issued and payment will be remitted to Mind Streams 15 calendard days after the reconciliation. The University will provide Mind Streams with a similar report for the applicable enrollment period at the end of each month thereafter until all tuition has been accounted for and payment made to Mind Streams. | ||
| 3. | The form of such report shall be established jointly by the University and Mind Streams. |
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Termination:
This Project One will terminate on July 31, 2007, unless terminated earlier by mutual agreement of
the Parties. In the event of early termination, the provisions of the Termination and Survival
paragraph in the Collaboration Agreement are applicable to any consideration owned to either Party
by the other.
| Mind Streams, LLC, an Arizona limited liability company, |
Significant Education, LLC, a Delaware limited liability company, |
|||||||||
By:
|
/s/ Xxxxxx X. Xxxxxx | By: | /s/ Xxxxx Xxxxxxxxxx | |||||||
| Name: Xxxxxx X. Xxxxxx | Name: Xxxxx Xxxxxxxxxx | |||||||||
| Title: Vice President | Title: Chief Executive Officer | |||||||||
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Exhibit 2
Project Two
Project Two, collaboration activity between Mind Streams and the University relating to the
promotion and marketing of the University’s online programs. The terms and conditions of the
Collaboration Agreement referenced above are incorporated herein by this reference.
Mind Streams Obligations:
| 5. | Actively promote the University generally and its courses and degree conferring programs, | ||
| 6. | Develop and maintain key contracts and relationships with school corporations within the United States catering to teachers and administrators interested in pursuing additional education opportunities of a kind offered by the University, | ||
| 7. | Provide teams dedicated to the recruitment and retention of students for the University’s programs. | ||
| 8. | Mind Streams represents and warrants that its compensation of its employees or other persons who perform any student recruitment or admission activities for SigEd and/or GCU under this Agreement is and will continue to be in compliance with Section 487(a)(20) of the Higher Education Act of 1965, as amended (20 U.S.C. § 1094(a)(20)), or any successor provision, and the regulations promulgated thereunder by the U.S. Department of Education (currently located at 34 C.F.R. § 668.14(b)(22)). Mind Streams agrees to indemnify and hold harmless SigEd and GCU and their successors, assigns, agents, officers, directors and employees, from and against any and all liabilities, obligations, claims, losses, damages, expenses and costs (including, but not limited to, reasonable attorneys’ fees and litigation costs) which arise out of or result from (i) any breach or alleged breach of the representations and warranties made by Mind Streams in this paragraph, or (ii) any assertion by the U.S. Department of Education that Mind Streams’ compensation of its employees or other persons who perform any student recruitment or admission |
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Exhibit 2
Project Two
| activities for SigEd and/or GCU under this Agreement does not comply with Section 487(a)(20) of the Higher Education Act of 1965, as amended (20 U.S.C. § 1094(a)(20)), or any successor provision, or the regulations promulgated thereunder by the U.S. Department of Education. |
University Obligations: The University shall provide the following services to students of the
University’s online masters programs in education:
| 9. | Determine the curriculum to be offered to students, | ||
| 10. | Registration, | ||
| 11. | Enrollment, | ||
| 12. | Academic advisement, | ||
| 13. | Financial aid counseling, | ||
| 14. | Instruction, including selecting, hiring and compensating instructors, | ||
| 15. | Student academic record-keeping, and | ||
| 16. | Graduation and certification, if applicable. |
Joint Obligations:
| 2. | The Parties will work in good faith to carry out their duties under this Project, including establishing lines of communication and monitoring systems necessary to effectuate such obligations. |
Consideration:
| 1. | During the term of this Project One, the University will pay to Mind Streams 45% of Net Revenue, defined below. For the purpose of this Agreement “Net Revenue” means tuition actually received by the University from students recruited by Mind Streams minus any discounts, refunds and allowances. |
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Exhibit 2
Project Two
| 2. | Within 30 days following the end of each month during the term of this Project One, the University shall provide Mind Streams with a report containing information regarding the number of eligible students enrolled in the programs, the dates of enrollment and the tuition received for the month. The form of such report shall be established jointly by the University and Mind Streams. Payment to Mind Streams is due at time of receipt of the report. |
| Mind Streams, LLC, an Arizona limited liability company, |
Significant Education, LLC, a Delaware corporation |
|||||||||
By:
|
/s/ Xxxxxx X. Xxxxxx | By: | /s/ Xxxxx Xxxxxxxxxx | |||||||
| Name: Xxxxxx X. Xxxxxx | Name: Xxxxx Xxxxxxxxxx | |||||||||
| Title: Chief Financial Officer | Title: Managing Director | |||||||||
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