EXHIBIT 10.06
CALIBER LEARNING NETWORK, INC.
PROGRAM DEVELOPMENT AGREEMENT
THIS PROGRAM DEVELOPMENT AGREEMENT ("Agreement") is dated as of this 2nd
day of February, 1998 (the "Effective Date") and is by and between CALIBER
LEARNING NETWORK, INC. ("Caliber"), a Maryland corporation, with its principal
place of business at 0000 Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, and
MACMILLAN COMPUTER PUBLISHING USA ("MCP"), a division of Simon & Xxxxxxxx, Inc.,
with its principal place of business at 000 Xxxx 000xx Xxxxxx, Xxxxxxxxxxxx, XX
00000.
RECITALS:
1. MCP is a publishing firm and provider of educational products to the
computer industry principally through its Que, XXXX, New Riders and Xxxxx Group
Press imprints.
2. Caliber is developing a network of nationwide facilities and a
distance learning infrastructure that will enable it to provide educational,
training and other distance learning services.
3. Caliber and MCP desire to jointly develop and distribute training
courses for distribution in a distance learning format.
TERMS AND CONDITIONS
In consideration of the mutual covenants and conditions set forth in this
Agreement and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, Caliber and MCP agree as follows:
1. TERM AND RENEWAL.
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1.1 This Agreement commences with the Effective Date and will
continue for three (3) years from the Effective Date (the "Expiration Date"),
unless terminated earlier as provided in Section 7 ("Termination").
2. PREFERRED PARTNER.
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2.1 In consideration of the minimum commitments set forth in section
6.2 and so long as MCP complies in all material respects with all the terms and
conditions of this
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Agreement, Caliber will consider MCP a Preferred Partner and shall not /*/.
MCP's IT training business shall mean those IT training courses developed by MCP
for delivery in Caliber Learning Centers.
3. DEVELOPMENT, MARKETING, AND SELLING OF COURSES.
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3.1 Content: Subject to the terms and conditions of this Agreement,
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MCP will develop computer training Courses (hereinafter "Courses") consisting of
the following two components: (i) an instructor-led training (ILT) module
offering MCP content to be delivered via The Caliber Learning Network; and (ii)
and web-based module offering MCP content deemed necessary to support the ILT
module. Each ILT module will consist of two sessions, one session per day, with
each session ranging in length from two (2) hours up to seven (7). A list of the
Initial Courses is provided in Attachment A attached hereto and may be modified
(i.e. rescheduled, added, or deleted) by MCP within thirty (30) days following
"Effective Date." Thereafter the list of Courses may be modified at least one
hundred and twenty days (120) prior to the delivery of a Course. At least one-
hundred twenty (120) days prior to the delivery of each Course, MCP will notify
Caliber of (i) the type of Course to be offered, (ii) the length of the Course
and dates and times the Course will be offered, (iii) the locations at which the
Course will be offered, (iv) the enrollment and participation fees, (v) the
related Course materials to be developed, MCP will be responsible for developing
all content of such Course, selecting and training instructors, and developing
(and distributing to all Caliber sites) and all of the supporting materials.
3.2 Program Management. For each Course, Caliber shall provide
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Program Management, which shall consist of the following activities: (i) Develop
and/or define a marketing plan, including product positioning, suggested pricing
and market execution, including recommendations on which Caliber sites and the
number of sites to reserve for a particular Course; (ii) Coordinate and develop
all product marketing (print, web based, and other mediums) and coordinate and
develop all public relations activities necessary to enroll students and collect
revenues; (iii) Assist with instructional design between MCP content developers
and Caliber's Instructional Design team, including the development of a Course
Template for each Course, which will enable an Instructor to provide stand-up
Instruction; (iv) Provide sales training to all Channel Partners and designated
MCP sales persons, including certain training materials; and (v) Coordinate
student registration via Inbound toll-free numbers and web-based registration
site; (vi) Manage all sales training, sales strategies, and sales activities of
the Caliber channel sales force. Caliber agrees that through Program Management
all marketing and sales training will be conducted by Caliber staff, Caliber
agrees that the staff of five (5) will be dedicated full-time to the execution
of the marketing and sales programs for MCP Courses. Such activity will include,
_________________________
/*/ Text omitted pursuant to a request for confidential treatment and filed
seperately with the Securities and Exchange Commission.
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but not be limited to, conducting market research and developing and executing
the direct mail campaigns necessary to drive Course registrations.
Caliber shall use its best efforts to provide additional services at MCP's
request, including but not limited to video roll-ins, enhanced video production,
additional power points, slides, animation, voice-overs, software demos,
creation of software labs, the loading of specialized software on file servers,
or creation, loading and maintenance of software not which is not a part of the
Caliber platform. Such additional services that are not included in Program
Management shall be agreed upon by MCP and be performed on a work-for-hire basis
and shall be invoiced to MCP at a mutually agreed price.
Under Program Management, Caliber and MCP agree that MCP's primary
responsibility will be the selection and development of Courses offered through
the Caliber network.
3.3 Format. Caliber shall format each Course so that it is suitable
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for distance learning delivery via the Caliber network. MCP agrees to cooperate
with Caliber and provide such assistance as Caliber may request for this
purpose, including but not limited to timely providing of instructors at
broadcast locations for training.
Caliber agrees that it is responsible for the direction of high quality
video and audio transmission of each Course and responsible for directing the
presentation of each Course instructor and the interaction of all participants
during each Course. Caliber agrees to make its best efforts to simulate the
interaction between instructor and participants possible in one-to-one student-
Instructor classes. Caliber also agrees to manage the transmission of all
internet/intranet content during the Course. Caliber agrees that if audio,
video, or internet/intranet transmission fail at anytime during the Course, so
as to prevent the complete presentation of the Course, /*/
3.4 Instructor Training. MCP shall select instructors, provide
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training, and will to its best ability develop Courses in a consistent style and
approach. Caliber shall make available to each instructor a room at the
Baltimore Caliber Learning Center for one (1) day of training and will provide
assistance in such 1-day training. Such room rental will be invoiced to MCP at
Caliber's standard daily rate, and MCP shall also be solely responsible for any
charges incurred by its use of studio time. Should MCP have a need for
additional rehearsal time for instructor training, Caliber will use its best
efforts to provide such facilities, and shall invoice MCP for additional
facilities at a mutually agreed upon price.
3.5 Marketing. Within thirty (30) days of the Effective Date, the
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parties shall mutually agree on a six (6) month Marketing plan, that shall
include the Courses to be offered
________________________
/*/ Text omitted pursuant to a request for confidential treatment and filed
seperately with the Securities and Exchange Commission.
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during the following six (6) month period and the marketing activities necessary
to support such Courses. The parties shall conduct a post-course audit for each
Course to determine whether the Course met mutually established performance
benchmarks.
MCP agrees to support the marketing of each Course each year of this
Agreement. Such support may include Direct Response Advertising, placement of
advertising in MCP books, and reprinting of book covers to include the Caliber
logo. All MCP marketing efforts are at the direction of MCP. Caliber agrees
that under Program Management it is responsible for the direction and
development of all marketing programs and MCP is responsible only for the
execution of marketing promotions related directly to MCP book and software
products and online services.
Caliber agrees to provide the marketing activities set forth in Section 3.2
above, and MCP agrees to cooperate as necessary to assist Caliber with such
activities, including, but not limited to providing speaker/instructor
biographies and Course outlines one hundred and twenty (120) days prior to each
Course's start date.
4. DELIVERY OF COURSES.
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4.1 Courses will be offered and delivered at those Caliber Learning
Centers and other Caliber-authorized locations as the parties may mutually
agree. The method or system by which Courses are to be delivered will be
established by Caliber and for that purpose:
A. Caliber will provide the software, including, without limitation,
class interaction support software, necessary to deliver each Course.
B. Caliber will provide the hardware components necessary to deliver each
Course and create a two-way audio and video environment, including,
without limitation, a satellite dish and integrated receiver decoder
to receive the video and audio signals for each Course broadcast, and
workstations, cameras, video monitors and related components necessary
to support the terrestrial based return audio and video signals for
each Course.
C. Caliber will provide maintenance and related support services
necessary to maintain the software and hardware components required
for delivery of each Course.
D. For delivery of each Course, Caliber will arrange to have a Caliber
employee present at those locations offering that course. Such
employees will be trained facilitators who will assist with Course
delivery.
E. MCP shall provide one instructor per Course broadcast and when MCP
determines necessary provide sufficient subject matter experts who
shall be proficient in the relevant subject matter and who can answer
student questions via a help-desk format or e-mail format.
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F. Caliber will collect an evaluation from each participant at the end of
each Course that (i) evaluates the MCP instruction and Course quality
and (ii) describes all Caliber deliverables. Caliber will provide a
summary and all original evaluations to MCP. MCP reserves the right
to make changes to a Course as it deems necessary through information
collected from Course evaluations.
G. Caliber will provide its Broadcast Origination Equipment at one or
more Caliber-compliant production studios. If MCP elects to use one
of these studios, it shall only pay for the studio fees. If MCP
elects to use a non Caliber-compliant studio, then it agrees to pay
all Caliber's set up costs, daily studio fees, and the reasonable pre-
approved travel expenses of Caliber personnel upon submission of
adequate documentation evidencing the occurrence of such expenses.
H. MCP shall make available electronic course content through its
website, which shall be linked to the Caliber web site. All access to
Course content will require use of a password, provided by MCP to
Course attendees, provided to Course participants through payment of
the total Course fee which shall include payment for the two-day
Caliber sessions. Course book, and on-line access. The development
and maintenance of the MCP web site shall be MCP's responsibility.
4.2 Enrollment. Caliber shall be responsible for implementing an
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inbound toll-free registration process for each Course, and shall provide a web-
based registration site by March 31, 1998. Caliber shall also be responsible for
collecting all applicable Course fees, and shall deposit all collected Course
fees in an interest-bearing account, with all interest earnings thereon /*/ .
Caliber agrees to provide MCP once a week a report indicating the number of paid
registrations per Caliber site where a Course is scheduled to be offered. If and
when a scheduled site becomes full, Caliber agrees to notify MCP within forty-
eight (48) hours. Caliber agrees to provide monthly to MCP a database of all
participant information, including but not limited to names, addresses, phone,
e-mail addresses, and positions. If MCP requests or Caliber conducts as a part
of its obligations for Program Management market research to its list of
participants, Caliber agrees to provide MCP with all information obtained
through such research. Such participant and market research information shall be
solely owned by MCP and shall be considered "Confidential Information" as
defined in this Agreement.
4.3 Additional Caliber Services. MCP may request certain other
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services to be provided by Caliber, including catering, additional production,
enhanced production, and
_________________________
/*/ Text omitted pursuant to a request for confidential treatment and filed
seperately with the Securities and Exchange Commission.
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additional assistance. Upon MCP's written request, Caliber shall provide an
estimate of rates (based upon Caliber's standard rates) for all such requested
services.
5. OWNERSHIP AND USE.
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5.1 MCP Ownership. Each Course in all media, all content developed by
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MCP in all forms originally developed by MCP and/or subsequently placed
including any derivative works, and all proprietary rights therein, including,
without limitation, copyright, trade secrets and patents, shall be owned by MCP.
MCP understands and agrees that Caliber is not granting to MCP any proprietary
rights in any Caliber Learning Center or any equipment, property, information or
other materials used by Caliber to deliver each Course. Notwithstanding the
foregoing, Caliber shall not have any ownership rights of any MCP materials used
as content for a Course. Caliber hereby assigns to MCP the right to use without
additional compensation in such MCP developed works or derivative works any
content provided by or developed by Caliber.
5.2 Exclusive Use. Except as provided herein, neither party shall
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license, use or permit any use of any distance learning session produced through
Caliber Learning Network pursuant to this Agreement and broadcast to Caliber
Learning Network centers or portion thereof, including, without limitation, any
derivative works (e.g. videotapes, CD-ROMS, Web/Internet products and/or sites),
by any person or entity, without the express prior written consent and approval
of the other party and if approved, any such use shall be on the terms and
conditions and with the payments agreed to by the parties. Notwithstanding the
foregoing, MCP maintains exclusive rights to its materials and property that are
used as content for a Course, including, but not limited to, scripts written by
the instructor to present the Course, printed materials, software, internet
applications, and books related to the Course, and MCP can use all such
materials in any manner, including for distance learning, provided that MCP
cannot use the name Caliber on said materials without the express prior written
consent of Caliber.
5.3 Applications and Filings. MCP and Caliber may at their own
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expense make all necessary applications and filings, including patent and
copyright registration and other legal protections, both U.S. and foreign, to
protect their respective interests in the Courses.
5.4 Confidentiality. (a) each party hereto (the "Disclosing Party")
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will disclose to the other party ("Recipient") information in connection with
the performance of this Agreement. All information disclosed by the Disclosing
Party to the Recipient during the term of this Agreement, including but not
limited to technical and business information relating to Disclosing Party's
products, research and development, production, costs, engineering processes,
profit or margin information, finances, customers, marketing and future business
plans, shall be deemed "Confidential Information." All Confidential Information
shall remain the sole property of Disclosing Party and Recipient shall have no
rights to or in the Confidential Information. Recipient agrees that it shall
hold the Confidential Information in strict confidence. Recipient further agrees
that it shall not make any disclosure of the Confidential Information (including
methods or concepts utilized in the Confidential Information) to anyone without
the express
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written consent of Disclosing Party, except to employees, consults or agents to
whom disclosure is necessary to the performance of this Agreement and who shall
be bound by the terms hereof, or to the extent it is required to disclose such
information in the context of any administrative or judicial proceeding;
provided that prior written notice of such required disclosure and an
opportunity to oppose or limit disclosure is given to Disclosing Party.
(b) Return of Information. After termination of this Agreement,
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upon written request, Recipient shall return within ten (10) business days all
originals and copies thereof of any requested Confidential Information disclosed
by Disclosing Party which has been fixed in any tangible means of expression.
(c) Exceptions. Notwithstanding the other provisions of this
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Agreement, nothing received by Recipient shall be considered to be Confidential
Information of the other, if: (i) it has been published or is otherwise readily
available to the public other than by a breach of this Agreement; (ii) it has
been rightfully received by Recipient from a third party without confidentiality
limitations; or(iii) it was known to Recipient prior to its first receipt by
Recipient, as shown by files existing at the time of initial disclosure.
(d) No Disclosure of Terms of this Agreement. Each party agrees
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that, without the prior written consent of the other party, it will not disclose
to any third party the material terms of this Agreement, except as required by
law or regulatory body.
6. FEES/PAYMENT.
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6.1 Course Delivery Fee. MCP agrees to pay Caliber a non-refundable,
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non-cancelable, except as set forth herein, Course Delivery Fee of /*/, to
cover Caliber's allocated network costs ("Delivery Fee"). For the purposes of
this Agreement, a "Network Rental Day" shall be defined as rental of up to
thirty (30) classrooms in a CLC for seven (7) network hours. Network hours shall
be defined as that time during which actual audio-video broadcast of Course
content takes place. If an unanticipated event occurs within thirty (30) days of
delivery of the Course for either party, either party reserves the right to
reschedule the "Network Rental Days" within sixty (60) days of the time the
course was originally offered for no extra charge. In the event that Course
demand exceeds thirty rooms per day or MCP desires to schedule additional
capacity, it is agreed that Caliber will use its best efforts to provide such
capacity at a rate of /*/ per additional classroom. Course Delivery Fees shall
be payable sixty (60) days following the completion of a Course session.
____________________
/*/ Text omitted pursuant to a request for confidential treatment and filed
seperately with the Securities and Exchange Commission.
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6.2 Minimum Volume Commitment: MCP agrees to develop a minimum of
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eight (8) Courses, during the first (1st) nine months of this Agreement. Such
eight (8) courses shall be offered by MCP in any combination MCP decides upon so
that MCP utilizes no less than forty (40) Network Rental Days during the first
(1st) nine (9) months of the Term. MCP understands and agrees that the minimum
volume commitment for the first (1st) nine (9) months of the Agreement is to
forty (40) Network Rental Days, but reserves the right to use the forty (40)
Network Rental Days for any proportion of the eight (8) Courses developed. MCP
shall give Caliber one-hundred twenty (120) days prior written notice regarding
which Courses will be offered, desired date, locations, and specific number of
classrooms. Caliber shall reserve such dates and locations, which will not be
subject to scheduling preemption, except as set forth herein. In the event
market demand warrants additional classrooms, Caliber will use best efforts to
make available at a pro-rated rate.
At the end of years one and two of this Agreement, the parties will
mutually agree to minimum volume commitments for years two and three,
respectively, if any, which in no event shall be less than the minimum volume
commitment applicable for the prior nine (9) months.
MCP reserves the right to sublicense its network time to its customers or
to any affiliates. In the event MCP exercises its option to sublicense network
time, Caliber reserves the right to adjust network pricing to its standard
commercial rate.
If MCP does not materially achieve the revenue targets projected in
Attachment B, MCP reserves the right to terminate this Agreement, effective as
of the end of the first (1st) nine (9) months of the term of this Agreement,
with no further obligation to develop Course content for the Caliber Learning
Network and/or to fulfill the terms of this Agreement. In addition, after the
first (1st) nine (9) months of this Agreement, MCP also reserves the right to
terminate this Agreement with ninety (90) days notice to Caliber with no further
obligation to develop Course content for the Caliber Learning Network and/or to
fulfill the terms of this Agreement. If MCP does not materially achieve the
revenue targets projected in attachment B.
6.3 Program Management Fee. For each Course, MCP shall pre-pay
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Caliber a Program Management Fee of /*/ per Course. Such fee will be pro-rated
throughout the calendar year and shall be payable monthly according to the pro-
rated amount.
6.4 Audit. Caliber and MCP shall each have reasonable rights during
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normal business hours and upon reasonable prior notice to inspect, copy and
audit the records of the other party concerning the Courses and other activities
under this Agreement. In the event that the reviewing party discovers a
discrepancy in excess of five percent (5%) between the revenues
___________________
/*/ Text omitted pursuant to a request for confidential treatment and filed
seperately with the Securities and Exchange Commission.
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or Additional Revenues actually paid to or collected by such party and the
amount earned by such party, the other party shall pay any such difference;
provided, however, that if such party disagrees with the reviewing party's
determination, such party shall be entitled to engage an Independent firm of
certified public accountants of national standing to perform an audit ("CPA
Audit"). If the results of the CPA Audit confirm the discrepancy in excess of
five percent (5%), payment to the aggrieved party shall be made as herein above
set forth. Otherwise, no payments shall be made and the parties shall jointly
bear the cost of the CPA Audit.
6.5 Net Revenue/Income Distribution. The parties mutually agree that
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Caliber shall receive a /*/ ("Income Distribution") as defined in Table 1.1
below in consideration for its filling seventy-five Percent (75%) or more of the
seats available for any single Course session with paid participants. Net
Revenues shall be defined as gross revenues less and except commissions paid to
channel partners, other discounts and promotions, and less the percent of gross
revenues calculated according to the schedule in Table 1.1.
Table 1.1
Percent of Total Paid Participants
Attending Courses Sessions Income Distribution
75% /*/
80% /*/
85% /*/
90% /*/
95% /*/
100% /*/
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/*/ Text omitted pursuant to a request for confidential treatment and filed
seperately with the Securities and Exchange Commission.
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One hundred percent (100%) shall mean /*/ paid participants and use of
thirty (30) Caliber classrooms for every Course session during years one and two
of this Agreement and shall mean /*/ paid participants and use of forty (40)
classrooms for every Course session during year three of this Agreement. If
Course pricing is discounted below /*/ per Course, MCP reserves the right to
adjust the Income Distribution paid to Caliber accordingly, proportional to any
retail adjustment.
Caliber will collect all enrollment fees, will make required disbursements
of fees and payments to third parties (e.g., book wholesalers), and then shall
deduct and retain its enrollment fee of /*/ per enrollee. The remaining
revenues shall be forwarded to MCP prior to MCP's fiscal month and close for the
month when enrollment fees are collected. A schedule of MCP's 1998 month-end
close dates is provided in Attachment C. Schedules for 1999 and 2000 fiscal
month end dates will be provided in January of each respective year. When
Caliber submits revenue to MCP, it shall provide a report indicating the exact
calculation of net revenues including only those deductions allowed herein.
6.6 Reselling MCP Books. Both parties agree that for each Course offered,
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all Course participants are required to purchase the relevant MCP Course book.
Caliber shall be responsible for collecting all payment for and distributing all
Course books to attendees of MCP-Caliber Courses and responsible for returning
to MCP or a distributor chosen by MCP any Course books remaining after a Course
because of cancellations or over shipment. Caliber shall receive the standard
"Retail Discount" for all books distributed to Course attendees. Such titles
shall be sold to Caliber at the "1998" Retailer Terms and Conditions," as such
may be revised from time to time, attached herein.
In addition to the distribution of Course books to all attendees of MCP-
Caliber Courses, Caliber agrees to purchase during the first nine (9) month
period and each twelve (12) month period thereafter of this Agreement no less
than /*/ total Macmillan products per Caliber center for sale in all Caliber-
owned centers operating during each year of this Agreement. Such titles will be
sold to Caliber at the "1998" Retailer Terms and Conditions" attached herein
(Attachment D).
_________________________
/*/ Text omitted pursuant to a request for confidential treatment and filed
seperately with the Securities and Exchange Commission.
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Caliber agrees to promote the selling of such products in all operating centers
and to restock and stock new products throughout the term of the Agreement.
6.7 Multimedia Product. It is agreed that during the contract the
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parties may choose to jointly create multimedia products ("Multimedia Products")
that augment the Courses and are sold through existing MCP retail channels and
Caliber Learning Centers. The Multimedia Products may consist of a packaged
offering including one or more of the following items: MCP Course book, CD ROMs
and/or videotapes that supplement a Course, a registration tool allowing
purchasers access to MCP's Zone, and assessment tool or access to assessment
tools on-line. Caliber agrees to video tape each session of each MCP Course
offered, to develop and edit all recorded video as directed by MCP, and to
provide MCP with no less than six (6) hours of recorded video of each new Course
offered. MCP agrees to pay Caliber /*/ . If MCP uses /*/ of the video content
from a Course, MCP agrees to pay Caliber a royalty on all net sales for each
Multimedia Product according to the royalty schedule in Table 1.2.
Table 1.2
Net Units Royalty
1-500 /*/
5001-10,000 /*/
10,001-15,000 /*/
15,001-20,000 /*/
Above 20,001 /*/
____________________
/*/ Text omitted pursuant to a request for confidential treatment and filed
seperately with the Securities and Exchange Commission.
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MCP shall determine the appropriate price for each Multimedia Product. MCP
and Caliber shall jointly own the copyright in and to any videotaped material
used a Multimedia Product, and MCP may copy, reproduce, modify, manufacture,
market, advertise, display, publish, distribute, rent, license, sell and use
such Multimedia Products under any and all MCP trademarks, including after
termination or expiration of this Agreement. MCP shall own all rights, title
and interest in and to any Multimedia Product.
6.8 Course Pricing. The parties agree that MCP shall determine all
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Course pricing.
6.9 Channel Partner Commission. The parties agree that Caliber shall
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use its best efforts to pay a maximum commission of /*/ of the enrollment fee to
authorized channel partners, who shall be authorized to market to and recruit
potential Course enrollees. Caliber shall pay channel partners /*/ commission
only when the channel partner is directly responsible for closing a paid
registration.
6.10 Payment Terms. MCP shall pay Caliber the Program Management Fees
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sixty (60) days upon receipt of a Caliber invoice according to the pro-rated
schedule as agreed upon in Section 6.3 above, which invoice shall be sent after
Caliber receives the Course Notice described in Section 3.1 herein. Within
fifteen (15) business days of receiving the Course Notice, Caliber shall notify
MCP of any additional pre-approved fees related to the sales and marketing. MCP
reserves the right to approve such services and agrees to pay such additional
fees related to services sixty (60) days from invoicing. Caliber shall invoice
MCP for the Course Delivery Fees upon the conclusion of each Course delivery.
All above invoices shall be paid net sixty (60) days.
6.11 Annual Cost Adjustments. The parties mutually agree that the
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costs and fees stated herein shall be annually adjusted to reflect annual
adjustments in the Consumer Price Index (CPI). Such adjustments shall be
effective sixty (60) days after the CPI has been published.
7. TERMINATION.
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7.1 Either party may terminate this Agreement in the event of a
material breach of the Agreement, upon sixty (60) days written notice to the
other party setting forth the details of such material breach, such notice to be
effective only if the party receiving the notice does not cure such breach
within such sixty (60) day notice period.
______________________
/*/ Text omitted pursuant to a request for confidential treatment and filed
seperately with the Securities and Exchange Commission.
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7.2 In the event either party to this Agreement shall become
insolvent, shall make an assignment for the benefit of creditors, shall have a
trustee on liquidation, appointed for it or a substantial part of its property,
shall file a voluntary petition in bankruptcy, shall be the subject of an
involuntary petition in bankruptcy, this Agreement shall automatically terminate
without notice.
7.3 Notwithstanding anything herein to the contrary, upon termination
of this Agreement MCP shall continue to have the right to manufacture, publish,
duplicate, market, promote, distribute, advertise and sell any Multimedia
Products which have been jointly published or which are in the process of being
jointly published prior to termination or expiration, for the full term of
copyright and any renewals and extensions thereof and shall continue to have the
right to use the Caliber Marks in connection therewith, subject to MCP's
continuing obligation to pay Caliber its share of any royalties due from sales
of the Multimedia Products. Any subsidiary rights Agreements for the Multimedia
Products in force as of the date of termination (including without limitation
foreign rights and translation agreements) shall continue in full force and
effect for their full terms, including any extensions and renewals thereof
(whether or not such extensions or renewals are effected prior or subsequent to
the date of termination), subject to MCP's continuing obligation to pay Caliber
its share of any royalties due from sales of the Multimedia Products.
8. WARRANTIES AND REPRESENTATIONS/INDEMNIFICATION.
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8.1 Caliber warrants and represents that:
(a) Caliber possesses full power and authority to enter into
this Agreement and to fulfill its obligations hereunder and that it is
financially and technically competent to perform its obligations hereunder, and
agrees that any change in such status shall be immediately communicated in
writing to MCP; and that performance of the terms of this Agreement and of
Caliber's obligations hereunder shall not breach Caliber's charter or bylaw or
any separate agreement by which Caliber is bound;
(b) the work and services provided to MCP by Caliber will be its
original work (except for material in the public domain or as to which
permission has been obtained from the copyright owner); and
(c) the Caliber learning Network, Program Management, and the
software provided by Caliber will not contain any libelous or otherwise unlawful
material or infringe any statutory or common law copyright, trademark or
registered U.S. patent or otherwise infringe any personal or proprietary right
of any person or entity.
8.2 MCP warrants and represents that:
(a) MCP possesses full power and authority to enter into this
Agreement and to fulfill its obligations hereunder and that it is financially
and technically
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competent to perform its obligations hereunder, and agrees that any change in
such status shall be immediately communicated in writing to Caliber; and that
performance of the terms of this Agreement and of MCP's obligations hereunder
shall not breach MCPs charter or bylaw or any separate agreement by which MCP is
bound;
(b) the work and services provided to Caliber by MCP will be its
original work (except for material in the public domain or as to which
permission has been obtained from the copyright owner); and
(c) the Courses, exclusive of any material provided by Caliber,
will not contain any libelous or otherwise unlawful material or infringe any
statutory or common law copyright, trademark or registered U.S. patent or
otherwise infringe any personal or proprietary right of any person or entity.
8.3 Indemnification by Caliber. Caliber shall indemnify, and hold MCP
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and its successors, assigns, agents, officers, directors and employees, harmless
from and against any and all third party liabilities, obligations, losses,
claims, damage, cost, charges or other expenses of every kind and character
(including but not limited to reasonable attorneys' fees and court costs) which
arise out of or result from any breach or alleged breach of any representation
or warranty by Caliber hereunder, Caliber shall have the sole right to control
the defense of any such claim and shall consult with MCP prior to settlement
thereof and shall not agree to impose any obligation upon or admit any liability
of the other party's rights without its prior written consent, such consent not
unreasonably to be withheld. MCP agrees to provide reasonable assistance to
Caliber at Caliber's expense, in the defense of same.
8.4 Indemnification by MCP. MCP shall indemnify, and hold Caliber and
----------------------
its successors, assigns, agents, officers, directors and employees, harmless
from and against any and all third party liabilities, obligations, losses,
claims, damage, cost, charges or other expenses of every kind and character
(including but not limited to reasonable attorneys' fees and court costs) which
arise out of or result from a breach or alleged breach of and representation or
warranty by MCP hereunder. MCP shall have the sole right to control the defense
of any such claim and shall consult with Caliber prior to settlement thereof and
shall not agree to impose any obligation upon or admit any liability of the
other party's rights without its prior written consent, such consent not
unreasonably to be withheld. Caliber agrees to provide reasonable assistance to
MCP at MCP's expense, in the defense of same.
8.5 NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY
INCIDENTAL, CONSEQUENTIAL, SPECIAL, OR PUNITIVE DAMAGES OR LOST OR IMPUTED
PROFITS OR ROYALTIES ARISING OUT OF THIS AGREEMENT OR ITS TERMINATION, WHETHER
FOR BREACH OF WARRANTY OR ANY OBLIGATION ARISING THEREFROM OR OTHERWISE, WHETHER
LIABILITY IS ASSERTED IN CONTRACT OR TORT (INCLUDING NEGLIGENCE AND STRICT
PRODUCT LIABILITY) AND IRRESPECTIVE OF WHETHER THE PARTY HAS ADVISED OR HAS BEEN
ADVISED OF THE POSSIBILITY OF ANY SUCH LOSS OR DAMAGE. EACH
-14-
PARTY HEREBY WAIVES ANY CLAIMS THAT THESE EXCLUSIONS DEPRIVE SUCH PARTY OF AN
ADEQUATE REMEDY.
9. INDEPENDENT CONTRACTORS.
-----------------------
Each party is appointed by the other party only for the purposes and to the
extent set forth in this Agreement, and each party's relation to the other
shall, during the period covered by this Agreement, be that of an independent
contractor, and neither party has and shall not have any power, and neither
party shall represent that such party has any power, to bind the other party, to
assume or to create any obligation or responsibility, express or implied, on
behalf of the other party or in its name. Both parties shall perform all duties
hereunder in good faith, and shall avoid any conflicts of interest in the
performance of their respective obligations hereunder.
10. APPLICABLE LAW.
--------------
This Agreement shall be deemed to have been made in the State of New York
and shall be construed and enforced in accordance with, and the validity and
performance hereof shall be governed by, the laws of the State of New York,
without regard to conflict of laws principles.
11. FORCE MAJEURE.
-------------
Neither party shall be liable for delay or failure in performance of any of
its obligations under this Agreement when such delay or failure arises from
events or circumstances beyond the reasonable control of such party (including,
without limitation, acts of God, fire, flood, war, explosion, sabotage,
terrorism, embargo, civil commotion, acts or omissions of any government entity,
supplier delays, communications or power failure, equipment or software
malfunction, or labor disputes); provided, however, that MCP shall use
reasonable efforts to obtain substitute instructors in the event that the
intended instructor for any Course is, for whatever reason, unable to attend as
originally planned. In the event that a Course is canceled pursuant to the
terms of this Section 11.0, the parties will use their best efforts to
reschedule the Course. Enrollment brochures, forms and other registration
materials will contain a statement to the effect that the subject Course may be
canceled or re-scheduled due to circumstances beyond Caliber's and/or MCP's
reasonable control and, except for a full refund of all amounts paid, neither
Caliber nor MCP will have any liability to any participant. Course participants
will be instructed to contact Caliber at its Web address in order to learn of
any Course cancellations and/or reschedules.
12. WAIVER.
------
No failure on the part of either party to exercise, no delay in exercising,
and no Course of dealing with respect to any right, power or privilege under
this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power or privilege preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
13. ASSIGNMENT.
----------
-15-
Neither party may assign this Agreement, or any part thereof, without the
prior written approval of the other party, which approval shall not be
unreasonably withheld. Caliber may, without the necessity of obtaining MCP's
consent, assign its rights and obligations under this Agreement to a parent or
wholly-owned subsidiary, provided that MCP is given prompt written notice of
such assignment. Notwithstanding the foregoing, MCP may assign this Agreement
to any MCP affiliate or in connection with a sale or transfer of all or
substantially all of its business or assets.
14. GENERAL.
-------
This Agreement constitutes the entire Agreement between the parties with
respect to the subject matter hereof and may only be changed or modified in
writing signed by both parties. If any provision of this Agreement is held
invalid, the validity of the remainder of this Agreement shall not be affected.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
"CALIBER" "MCP"
CALIBER LEARNING NETWORK, INC. MACMILLAN PUBLISHING USA
By:__________________________ By:_______________________________
Title:_______________________ Title:____________________________
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ATTACHMENT A
1998 MCP-Caliber Suggested Courses
1. Windows Platform Strategy: Planning, Implementation, Support and Training
Issues for Windows 98 and NT 5
2. Upgrading and Supporting PC Hardware
3. Upgrading and Supporting Networks
4. COBOL Programming for the 21st Century: Year 2000 Issues; legacy code
migration, maintenance and integration; client/server COBOL; COBOL database
programming; object-oriented COBOL
5. Building, Upgrading, and Supporting Heterogeneous Networks in the
Enterprise
6. Network and Internet/Intranet Security
7. Introduction to Cisco Routing
8. Windows NT 5: Introduction
Substitutes
-----------
. Windows NT 5: Domain Naming Services*
. Windows NT 5: Upgrading from Windows NT 4*
. Windows NT 5: Active Directory*
. Cisco Routing and Switching
. Re-engineering Your Web Site: the latest in programming, navigational, and
database tools to give your web site the functionality, design, and
dependability required for your organization
*Pending the release of Windows NT 5, these courses may be scheduled and
delivered in 1998 in place of others or held until 1999.
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ATTACHMENT B
MCP-CALIBER COURSE
PROJECTED REVENUES
FOR THE TWELVE MONTHS ENDED JANUARY 31, 1999
Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan YTD
Enrollment Revenue
Book & /*/
On-Line
Revenue
Returns
TOTAL
MCP-CALIBER COURSE
PROJECTED REVENUES
FOR THE TWELVE MONTHS ENDED JANUARY 31, 2000
Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan YTD
Enrollment Revenue
Book & /*/
On-Line
Revenue
Returns
TOTAL
MCP-CALIBER COURSE
PROJECTED REVENUES
FOR THE TWELVE MONTHS ENDED JANUARY 31, 2001
__________________________________________
* Text omitted pursuant to a request for confidential treatment and filed
separately with the Securities and Exchange Commission.
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Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan YTD
Enrollment Revenue
Book & /*/
On-Line
Revenue
Returns
TOTAL
_________________________
/*/ Text omitted pursuant to a request for confidential treatment and filed
seperately with the Securities and Exchange Commission.
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ATTACHMENT C
1998 MONTH-END CLOSE DATES
Period Month Day # of Weeks
--------------------------------------------------------------------------------
1 JAN 24 4
2 FEB 21 4
3 MAR 28 5
4 APR 25 4
5 MAY 23 4
6 JUN 27 5
7 JUL 25 4
8 AUG 22 4
9 SEP 26 5
10 OCT 24 4
11 NOV 21 4
12 DEC 31 5+
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ATTACHMENT D
Macmillan Computer Publishing
Macmillan General Reference
1998 Retailer Terms and Conditions
Discount Schedule:
For Resale Only
Discount is /*/
Macmillan Technical Publishing /*/
FREIGHT
Customers will have the option of choosing pre-paid freight on an annual basis,
which will reduce their discount by up to /*/. Retailers can prepay product
delivery, or returns delivery, or both, calculated at a rate of /*/ for product
delivery in and /*/ for delivery of returns to Macmillan Publishing USA (MP).
The prepaid freight option applies only to ground transportation. To be
eligible, customers must agree to use the MP minimum shipment weight.
ELECTRONIC DISCOUNTS
Electronic discounts will be separated by transaction type.
* Customers submitting purchase orders electronically (EDI transaction type
850 or PUBNET) will receive an additional /*/ discount.
* Customers using electronic invoicing (EDI transaction type 810) will
receive an additional /*/ discount.
_______________
/*/ Text omitted pursuant to a request for confidential treatment and filed
seperately with the Securities and Exchange Commission.
-21-
RETAIL DISTRIBUTION CENTER DISCOUNT
An additional /*/ discount may be earned by meeting the following
qualifications:
* Retailer must maintain a distribution center with truck-height loading and
a receiving dock capable of receiving multiple cartons on a skid.
* Retailer must order in carton quantities, and/or allow orders to be rounded
to the carton quantity.
SELL THROUGH INFORMATION DISCOUNT
An additional /*/ discount may be earned by providing Macmillan Computer
Publishing (MCP)/Macmillan General Reference (MGR) sell through information
electronically. For the purpose of qualifying for this discount, acceptable
electronic formats will be defined as electronic spreadsheet or ASCII file
delivered on a 3 1/4" diskette, or EDI transaction type 852. This information
must be provided on a monthly basis by ISBN for all MCP and MGR titles, with
remaining in-field inventory levels.
DIRECT FULFILLMENT GUIDELINES
These Terms and Conditions apply to customers who meet the MCP/MGR Direct
Fulfillment Guidelines. A copy of the Direct Fulfillment Guidelines are
available from your MCP or MGR sales representative.
RETURNS POLICY
Address for Returns
0000 Xxxxxxx Xxxxxxxxxx
Xxxxx X
Xxxxxxxxxxxx, XX 00000
Products returned to a MP or Simon & Xxxxxxxx/Xxxxxxxx Xxxx facility other than
the above address risk being destroyed without credit to the retailer's account.
LTL and full truck shipments will be refused without dock appointment.
_________________
/*/ Text omitted pursuant to a request for confidential treatment and filed
seperately with the Securities and Exchange Commission.
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All products returned are at account's risk and expense, unless the customer has
chosen to trade /*/ of discount for pre-paid return freight as defined above.
product must be in resaleable condition, free of markings, labels, and security
tags.
Any and all product which is not published by MP and is shipped by the customer
to MP for any reason (including but limited to misdirected returns of other
publishers' product) is subject to destruction by MP without notice and without
any credit to the customer's account with MP. Notwithstanding the foregoing, MP
may contact the customer to arrange for the prompt shipment to the customer of
such non-MP product, in which case the customer shall bear and pay all risk of
loss or damage and all expenses relating to any such shipment (including but not
limited to the cost of freight and charges by MP for processing and handling
such shipments).
CREDIT FOR RETURNS
Credits will be issued for product only - no cash refunds.
The bookseller will be credited for returns using the average discount given for
MCP/MGR product purchases shipped during the previous year. This discount
information will be available to the retailer by January 15 of each year until
such time as the MCP/MGR Retailer Terms & Conditions state otherwise. The
retailer may contact MP's Customer Service Department at 000-000-0000 for
average discount information. MP will not give credit to dealers for MCP/MGR
books purchased through distributors.
PERIOD OF ELIGIBILITY FOR RETURNS
New titles, not before 120 days from publication date; backlist, not before 90
days from invoice date.
STRIP COVER RETURNS
Strip covers are accepted for the following:
Arco All Product
Lasser All Product
Frommers Titles declared OP only
Both front and back covers of the product are required for customer credit.
___________________
/*/ Text omitted pursuant to a request for confidential treatment and filed
seperately with the Securities and Exchange Commission.
-23-
If the customer receives damaged or defective goods from MP, the retailer should
contact MP Customer Service or the MCP or MGR Sales Representative.
PACKAGING AND SHIPPING GUIDELINES
Additional information regarding the handling, packaging, and shipping
requirements for returning product to MP is published in a document titled
"Macmillan Computer Publishing, Macmillan General Reference Packaging and
Shipping Guidelines for Customer Returns." Please contact MP Customer Service or
a MCP or MGR Sales Representative if a copy of these guidelines is required.
TERMS
Net 30 days, F.O.B. point of shipment. Payment terms based on a customer receipt
are standard terms reduced by 15 days.
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Macmillan Computer Publishing
Macmillan General Reference
Packaging and Shipping Guidelines For
Customer Returns
The following is a guide for preparing documents and products returned to
Macmillan Publishing USA (MP).
SHIPPING METHOD
LTL and full truck shipments require carriers to obtain dock appointments.
Shipments without appointments will be refused. Appointments are obtained by
calling (000) 000-0000 or (000) 000-0000. Small package returns do not require
appointments.
ADDRESS
Returns must be sent to the following address:
0000 Xxxxxxx Xxxxxxxxxx
Xxxxx X
Xxxxxxxxxxxx, XX 00000
Products returned to a MP or Simon & Xxxxxxxx/Xxxxxxxx Xxxx facility other than
the above address risk being destroyed without credit to the customer's account.
REQUIRED DOCUMENTS
* Standard Xxxx of Lading which includes skid count, carton count, weight of
shipment, shipper name and address and customer reference number.
* Standard Packing Slip which includes carrier, customer name and
address, customer reference number, customer original PO#, MP invoice #,
carton count information, ISBN #, ISBN description, quantity per ISBN,
retail price per ISBN, customer cost per ISBN, extended dollar value of
ISBN, total quantity returning, and total dollars of return.
* Special Handling: Please make sure when returning bundled product you use
the bundle ISBN and the quantity of one unit per bundle.
REQUIRED PACKAGING
All material must be packaged on corrugated cartons. Carton size should be
fitted for product size. Packing material should be used to secure product from
movement within the carton.
All cartons should be labeled or identified with the customer name and
reference/credit number. If more than one carton, all cartons should be labeled
with corresponding 1 of X information.
Shipments requiring pallet loading should use a standard 40 X 48 pallet. All
pallet and xxxxxxx shipments must be clearly marked with pallet/xxxxxxx tags as
to reference/credit number. The reference/credit number is crucial for correct
posting to accounts.
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A carton, pallet or xxxxxxx must not contain multiple reference/credit numbers.
NON-CONFORMING PRODUCT
MCP/MGR product not conforming to these return guidelines will be shipped back
to the customer at the customer's expense or destroyed at the customer's
request. Any and all product which is not published by MP and is shipped by the
customer to MP for any reason (including but not limited to misdirected returns
of other publishers' product) is shipped to destruction by MP without notice and
without any credit to the customer's account with MP. Notwithstanding the
foregoing, MP may contact the customer to arrange for the prompt shipment to the
customer of such non-MP product, in which case the customer shall bear and pay
all risk of loss or damage and all expenses relating to any such shipment
(including but not limited to the cost of freight and charges by MP for
processing and handling such shipments).
-26-
