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EXHIBIT 10.10
AGREEMENT
Dated as of February 10, 2000
This Agreement (this "Agreement") is between ZD Education ("ZDE"), an
unincorporated division of ZD Inc., a Delaware corporation, with offices at 000
Xxxxx Xxxx Xxxx., Xxxxxxxxx, XX 00000, and Smart Planet Inc. ("SP"), a Delaware
corporation wholly owned by ZD Inc., with offices at 0000X Xxxxxxxx Xxxxx,
Xxxxxx Xxxx, XX 00000.
ZDE provides integrated IT learning solutions to businesses, resellers, OEMs and
organizations, including through ZDU, its web-based offering (the "ZDE
Service").
SP provides individual consumers with online learning products and services
through xxx.XxxxxXxxxxx.xxx (the "SP Service").
SP wishes to license certain content from ZDE and ZDE wishes to license certain
content from SP
Accordingly, ZDE and SP hereby agree as follows:
1. GRANT OF LICENSE
1.1 Grant of Rights; Provision of ZDU Content.
(a) ZDE hereby grants SP a non-exclusive world-wide right to
use, copy, distribute, display and perform on the SP Service, all content
distributed on the ZDE Service about software use, software development,
hardware use, hardware development, networking, software design, computer
design, database administration, computer programming, and the use of the
Internet (the "ZDU Content"), for the term of this Agreement, subject to the
limitations set forth in Section 5 and Exhibit A hereto. SP may use the ZDU
content on the SP Service including for co-branding, portal and other
promotional, advertising and distribution arrangements, but SP shall have no
right to license or authorize any third party to publish any ZDU Content on a
third party website. As used in this Agreement, ZDU Content shall not include
any content that may not be licensed to SP for the purposes set forth herein by
reason of the provisions of ZDE's agreements with content providers. Subject to
the terms and conditions of this Agreement, SP may sublicense the rights granted
above to an affiliate or subsidiary of SP that is the party providing the SP
Service.
(b) ZDE will make new ZDU Content available to SP on a timely
basis. The parties shall cooperate and use their reasonable and good faith
efforts to minimize channel conflict between SP and ZDE for ZDU Content,
including following the guidelines set forth on Exhibit A.
(c) SP may sell and distribute ZDU Content as part of the SP
Service as (i) subscription content; (ii) pay-per-view (or premium) content; and
(iii) free-of-charge content, provided, that SP complies with the guidelines on
pricing and uses in Exhibit A.
1.2 Royalties.
(a) Subscription Content. SP shall pay ZDE a royalty equal to
its Pro Rata Share of the Royalty Pool.
i. "Pro Rata Share" shall be calculated based on the
number of first-time course starts for ZDU Content courses as a percentage of
the total number of first-time course starts for all courses available on the SP
Service (except for courses created by SP subscribers), provided that the start
by a particular subscriber of an individual course will be counted only once,
without regard to the number of times the subscriber accesses such course.
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ii. "Royalty Pool" shall mean 50% of all subscription
revenue collected by SP less, sales commissions, agency fees, bad debt, refunds,
rebates, makegoods, or other costs directly associated with promoting the SP
Service which shall not exceed 20% of all subscription revenue.
(b) Pay-per-view (Premium) Content. For all pay-per-view and
premium revenue received by SP for ZDU Content, SP shall pay to ZDE a royalty in
the amount of 50% of such revenue collected by SP, less sales commissions,
agency fees, bad debt, refunds, rebates, makegoods, or other costs directly
associated with promoting the SP Service which shall not exceed 20%.
(c) Free-of-charge Content. ZDE shall not be entitled to any
fees in connection with the ZDU Content offered by SP free-of-charge.
1.3 Payment.
(a) SP shall pay to ZDE a guaranteed minimum payment (the
"Guaranteed Minimum") in respect of the royalties due to ZDE under this
Agreement of $600,000 for each calendar quarter, commencing October 1, 1999, for
an aggregate minimum amount of $3,000,000 over the term of this Agreement.
(b) For each quarter during the term of this Agreement, SP
shall also pay to ZDE the amount, if any, by which the aggregate amount of the
royalty due to ZDE for such quarter exceeds the Guaranteed Minimum for the
quarter.
(c) SP shall pay all such royalties to ZDE by check or wire
transfer no later than 30 days following the end of each quarter.
1.4 Preferred IT Content Provider. ZDE shall be SP's preferred
information technology content provider. In the event that SP desires content on
information technology not included in the ZDU Content, it shall notify ZDE
which shall use its reasonable efforts to provide such content within thirty
(30) days after such notice. If such content is not made available by ZDE in 30
days from SP's notice, SP may elect to contract with a third party other than
ZDE to provide such content.
1.5 Attribution. SP shall identify ZDU Content as licensed by ZDE and
shall carry reasonable copyright notices and other legends as ZDE may direct.
2. SP CONTENT.
2.1 Grant of Rights, Provision of SP Content
(a) SP hereby grants ZDE a non-exclusive world-wide right to
use, copy, distribute, display and perform the information technology content
developed by SP (the "SP Content") on the ZDE Service, including for related
promotions and advertising, for the term of this Agreement, subject to the
limitations set forth in Section 5 and Exhibit A hereto. ZDE may promote the SP
Content by co-branding, portal and other promotional, advertising and
distribution arrangements on the ZDE Service, but ZDE shall have no right to
license or authorize any third party to publish any SP Content on a third party
website. SP Content shall not include any content that may not be licensed to
ZDE by reason of the provisions of SP's agreements with content providers.
Subject to the terms and conditions of this Agreement, ZDE may sublicense the
rights granted above to an affiliate or subsidiary of ZDE that is the party
providing the ZDE Service.
(b) SP will make courses containing new SP Content available to
ZDE on a timely basis. The parties shall cooperate and use their reasonable
efforts to minimize channel conflict between SP and ZDE for SP Content courses.
(c) ZDE may only sell and distribute SP Content as a standalone
or incremental offering to its subscribers. If ZDE wishes to bundle SP Content
within existing course libraries on the ZDE Service, the parties shall mutually
agree upon the royalty rate for SP Content bundled with other
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ZDE products. ZDE and SP will mutually agree to the placement of and pricing of
SP Content courses on the ZDE Service.
2.2 Consideration. For all standalone or incremental revenue received
by ZDE for the use of the SP Content, ZDE shall pay to SP a fee in the amount of
50% of the revenue received by ZDE for such use, less sales commissions, agency
fees, bad debt, refunds, rebates, makegoods, or other costs directly associated
with promoting the SP Service which shall not exceed 20% of the revenue
received.
2.3 Payment. ZDE shall pay any royalties to SP on a calendar quarterly
basis during the term of this Agreement commencing October 1, 1999, by check or
wire transfer no later than 30 days following the end of each quarter.
2.4 Attribution. ZDE shall identify SP Content as licensed by SP and
shall carry reasonable copyright notices and other legends as SP may direct.
3. TERM AND TERMINATION.
3.1 Term. This Agreement shall become effective on October 1, 1999 and
continue through December 31, 2000, unless terminated earlier as set forth
below.
3.2 Termination for Breach. Either party may terminate this Agreement
upon 30 days written notice in the event that a material breach by the other
party is not cured within 15 days after written notice of such breach.
3.3 Effect of Termination. Within 60 days following expiration or
termination of this Agreement, each party shall remove from its services and
products the other party's content, and each party shall cease distribution and
sales of any other products and services that incorporate such content. During
such period, each party shall continue to pay royalties (but not Guaranteed
Minimums) for its use of the other party's content. Within 30 days after such
removal of content and termination of such distribution and sales, each party
shall deliver the final royalty payment for the other party's content.
Notwithstanding the termination of this Agreement, each party shall have the
right to continue to exercise the license granted under this Agreement for such
reasonable period of time as may be appropriate to allow the completion of any
pay-per-view or premium licenses as well as subscriptions for ongoing instructor
led classes using other party's content and in such case the royalties shall
continue with respect to revenue from such licenses or subscriptions. Payment of
any final royalty would be made within 30 days after completion of such licenses
or subscriptions.
4. LIMITED EXCLUSIVITY. ZDE and SP agree to limit the license, sublicense or
resale of their content as follows during the term of this Agreement:
4.1 Limitations Upon ZDE. ZDE shall not license to or authorize the
publication of any ZDU Content nor engage in any co-branding or resale
arrangement or other distribution of the ZDU Content with: (1) HungryMinds; (2)
Xxxxx0.xxx; (3) Click2Learn and Asymmetrix; (4) xxxxxxxxxx.xxx; and (5)
xxxxxxxx.xxx.
4.2 Limitations Upon SP. SP shall not license to or in any other
manner authorize the publication of any SP Content nor engage in any co-branding
or resale arrangement or other distribution of the SP Content with: (1)
DigitalThink; (2)Xxxxx0.xxx; (3) CBT Systems; (4) NETg; and (5) Instruction Set.
5. NON-COMPETITION.
5.1 The ZDE Service. During the term of this Agreement, ZDE shall not
distribute the ZDE Service directly to individual consumers through its own
consumer website, provided that ZDE shall have the right to (i) distribute
co-branded versions of the ZDE Service, (ii) offer individual subscriptions to
the ZDE Service through third party resellers, distributors and OEMs, and (iii)
ZDE shall have the right to promote the ZDE service to subscribers and customers
of its existing products and services.
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5.2 The SP Service. During the term of this Agreement, SP shall not
directly promote the SP Service to businesses or organizations, provided that SP
shall have the right to (i) distribute co-branded versions of the SP Service,
and (ii) offer business or organization subscriptions to the SP Service through
third party resellers and distributors.
6. REFERRAL FEE. ZDE and SP will use their reasonable efforts to cooperate
and direct interested user traffic from the website of one to the other as
appropriate in light of the character and focus of the respective businesses of
the parties, including but not limited to placement on each party's website of
the icon of the other and a link to its website, in a manner reasonably
acceptable to the parties. Both parties acknowledge that certain pages on each
other's website may not be appropriate to place icons or links to outside sites.
Each party shall pay the other party a referral fee (the "Referral Fee") of 10%
of the amounts received by such party that are attributable to receipts from
users who link to such party's website from a link on the other party's site,
less sales commissions, agency fees, bad debt, refunds, rebates, makegoods, or
other costs directly associated with promoting the SP Service which shall not
exceed 20% of the receipts. Each party shall pay all Referral Fees to the other
party on a calendar quarterly basis during the term of this Agreement commencing
October 1, 1999 not later than 30 days following the end of each quarter.
7. SUPPORTING OPERATIONAL SERVICES AND OTHER:
7.1 Commencing on the date hereof and continuing until December 31,
1999, ZDE will provide the following support services to SP on the same terms as
currently performed by ZDE for SP (collectively, "Transition Services"):
(a) management of SP's book fulfillment relationship (either
xx.xxx or SP's relationship with a new book fulfillment vendor);
(b) customer and tech support;
(c) financial reporting and planning; and
(d) management of the ZDU classroom infrastructure (message
boards), and the provision of sysops and instructors for use by SP users.
7.2 From the date of this Agreement through 1/31/2000, ZDE shall
redirect traffic to the URL xxx.XXX.xxx to the URL xxx.XxxxxXxxxxx.xxx or such
other URL as SP may request.
7.3 ZDE will invoice SP for the Transition Services for the actual
cost incurred by ZDE in connection with such services and SP shall pay for such
services within 30 days of receipt of such invoice. ZDE and SP acknowledge that
ZDE is providing the services pursuant to this Section as an accommodation to SP
and on an "at cost" basis. In no event shall ZDE be liable for any damages
arising in connection with such services except for damages resulting from ZDE's
gross negligence or willful misconduct.
8. ANNOUNCEMENTS: Each of the parties agrees that it will not, without the
prior agreement of the other party, make any public announcement of any of the
terms and conditions set forth in this Agreement. Either party may, without the
other's consent, identify the other as one of its content providers on its
website and in promotional and distribution activities, provided that no
disclosure is made of any of the financial arrangements or other material
business terms of this Agreement.
9. CORRECTIONS; SUPPORT; UPDATES.
9.1 Correction of Errors. Each party will promptly notify the other of
any inaccurate or incomplete information or any other defect in any of the ZDU
Content and the SP Content. Each party will promptly investigate any concerns
regarding such defects in its content and will use reasonable and good faith
efforts to promptly correct the same. Neither party shall be obligated to
correct, cure, or otherwise remedy any nonconformity or defect in content if
such nonconformity or defect is the result of changes made by the other party.
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9.2 Support. Each party will provide the other with reasonable access
to support for its content via telephone, fax, or email to the other party's
employees and developers.
9.3 Updates. Each party shall provide corrections, new versions and
updates for all content to the other, at no additional charge, at such time as
the foregoing may be developed or available.
10. PROPRIETARY RIGHTS, TRADEMARKS AND EXCLUSIVITY.
10.1 Rights of Parties. Each party shall retain the copyright and other
intellectual property rights in all of its content licensed to the other under
this Agreement, subject to the rights and privileges granted in this Agreement.
Each party shall retain all intellectual property rights in its website and in
the formats, models and systems used and developed in connection with its
content.
10.2 Trademark Use. Each party hereby grants the other permission to
use its trademark, trade name and logo in connection with the promotion,
marketing and sale of its content, including in promotions and content listings
on third party websites. Each party acknowledges that the use and/or display of
any trademark of the other in connection with the arrangements contemplated by
this Agreement shall not confer upon such party any right or interest whatsoever
in such trademark. The trademarks of the parties are and shall remain their
respective sole and exclusive property. Each party hereby agrees to indemnify
and hold the harmless from any and all liabilities, damages, losses, claims,
suits, judgments, costs and expenses, including reasonable counsel fees and
expenses, incurred as a result of any suit or claim for infringement of any
United States trademark or copyright by reason of the use of such party's
trademarks as contemplated by this Agreement. Trademarks of the parties shall be
used in exactly the form, and with such legal notices, as the owner of the
trademark may direct. Each party shall comply with the guidelines governing use
of the other party's trademarks provided by the other party.
11. WARRANTIES AND LIMITATION OF LIABILITY.
11.1 Warranties. Each party represents, warrants and covenants to the
other as follows: that it is and shall be the sole author of its content or that
it has received and will receive sufficient intellectual property rights therein
to grant the other the License granted by this agreement, that the content is
and shall be original and does not and shall not infringe upon any statutory
copyright or upon any common law proprietary or any other right whatsoever, and
the other party shall have all necessary rights to use, copy, distribute,
display and perform the same, and to create derivative works thereof, in the
formats and in the manner contemplated in this Agreement; that none of the
matter included in the content is obscene, libelous, in violation of any right
of privacy, or otherwise contrary to law.
11.2 Disclaimer of Warranties. EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT, EACH PARTY DISCLAIMS ANY OTHER PROMISES, REPRESENTATIONS AND EXPRESS
OR IMPLIED WARRANTIES WITH RESPECT TO ITS CONTENT, INCLUDING ITS MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE OR USE.
11.3 Limitation of Liability. IN NO EVENT SHALL EITHER PARTY BE LIABLE
FOR ANY LOSS OF PROFITS; ANY INCIDENTAL, SPECIAL, EXEMPLARY, OR CONSEQUENTIAL
DAMAGES; EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH CLAIMS
OR DEMANDS.
11.4 Indemnity. Each party will indemnify and hold the other harmless
against any loss, liability, damage, cost or expense (including reasonable
attorneys' fees) in connection with any claim arising out of any breach of the
party's warranties, representations and covenants set forth in this Agreement.
The indemnified party shall give the indemnifying party prompt notice of any
such suit, proceeding, claim, or demand brought or made against it. The
imdemnified party gives the indemnifying party the sole right to defend and/or
settle the claim at the indemnifying party's cost and expense, provided that no
settlement shall impose any duty or obligation upon the indemnified party,
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admit the liability of the indemnified party, or provide for the payment of any
sum other than as may be paid by the indemnifying party. The indemnified party
shall, at the indemnifying party's cost and expense, reasonably cooperate with
such defense.
12. MISCELLANEOUS.
12.1 No Partnership or Joint Venture. Neither party is acting and shall
not be deemed to be a partner, co-venturer, agent, employee, franchisee or
representative of the other party hereto.
12.2 Entire Agreement. Modifications. This Agreement, together with any
and all schedules and exhibits referred to herein, contains the entire agreement
between the parties hereto with respect to the transactions contemplated hereby
and contains all of the terms and conditions thereof and supersedes all prior
agreements and understandings relating to the subject matter hereof. No changes
or modifications of or additions to this Agreement shall be valid unless the
same shall be in writing and signed by each party hereto.
12.3 Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any one or more of the
provisions hereof shall not affect the validity and enforceability of the other
provisions hereof.
12.4 Assignment. No party to this Agreement may, assign or otherwise
transfer any of its rights or obligations under this Agreement, without
obtaining the prior written consent of all other party hereto, provided, that
(i) either party shall have the right to assign this Agreement in connection
with the sale of all or substantially all the assets of its business relating to
this Agreement, or (ii) to an affiliate or a wholly-owned subsidiary. Any
attempted assignment in violation of this Agreement shall be void and of no
effect.
12.5 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their permitted successors and assigns.
12.6 Waivers. No waiver of any of the provisions of this Agreement
shall be deemed to be or shall constitute a waiver of any other provision of
this Agreement, whether or not similar, nor shall any waiver constitute a
continuing waiver. No waiver of any provision of this Agreement shall be binding
on the parties hereto unless it is executed in writing by the party making the
waiver.
12.7 Notices. All notices and other communications under this Agreement
shall be in writing and shall be deemed given when delivered personally, or
mailed by certified or registered mail, return receipt requested, or sent by
overnight courier, to the parties at the addresses set forth in the first
paragraph of this Agreement (or to such other address as a party may have
specified by notice given to the other parties pursuant to this provision).
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12.8 Construction. In the interpretation and construction of this
Agreement, the parties acknowledge that the terms hereof reflect extensive
negotiations between the parties and that this Agreement shall not be deemed,
for the purpose of construction and interpretation, to have been drafted by
either party.
ZD EDUCATION SMART PLANET INC.
By: /s/ XXXXX XXXXX By: /s/ XXXXX XXXXXXX
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Printed Name: Xxxxx Xxxxx Printed Name: XXXXX XXXXXXX
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Title: President Title: CEO
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EXHIBIT A
PLACEMENT AND MINIMUM PRICING OF ZDU CONTENT
(1) FREE IT CONTENT (i.e., NOT AVAILABLE ON PREMIUM, PAY-PER-VIEW OR
SUBSCRIPTION BASIS))
SP will restrict the amount and type of free ZDU Content as follows:
(a) Personal Computing & Design Self Study Category*: SP will include no
more than 15 courses (of which no more than five may be Microsoft
Software training courses) from this category and no more than 50%
of the content for each selected course. SP shall only distribute
courses that utilize the Shockwave viewer (and not the Knowledge
Quest viewer).
(b) Personal Computing & Design Instructor-Led Category*: SP will include
no more 30 courses from this category.
(c) Computer Professional Self Study Category**: SP will include no more
10 courses from this category and no more than 50% of the content for
each course selected. SP shall only distribute ZDE proprietary
courses and not any third party courses licensed to ZDE.
(d) Computer Professional Instructor-Led Category**: SP will include no
more 30 courses from this category.
(2) CONTENT AVAILABLE IN $99 PAID SUBSCRIPTION LEVEL
(a) With respect to paid subscriptions, (i) SP shall only offer the
content set forth in subsection (b) unless otherwise mutually agreed
upon by the parties and (ii) shall not offer any paid subscriptions
for less than $99, provided, that SP may discount its base
subscription level to previous subscribers and renewals by up to 30%
off the $99 price.
(b) SP may offer:
(i) up to 80% of courses available in the Personal Computing and
Design ("PC&D") including all office applications, browsers,
illustration, and graphic design titles, PC&D Self-Study and Async
(ILF) categories;
(ii) Introductory Personal Computing Self Study titles (i.e.
level 1), Outlook level 2 and PowerPoint level 2 and shall not
offer any other advanced and level 2 titles on a subscription
basis;
(iii) up to 20% of courses available in ZDE's Computer
Professional Async (ILF) category; and
(iv) offer up to 10% of courses available in the Computer
Professional Self Study category.
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* The Personal Computing and Design Category includes office application (for
example, Word, Excel, etc.) and design (Photoshop, Illustrator, etc.) titles.
** Computer Professional includes all professional certification (MCSE, CNE,
A+, N+, I+, etc), web development, programming (Java, C++, VB, etc), and IT
infrastructure titles.
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(3) MINIMUM PRICING FOR STANDALONE PURCHASES OR SUB-LICENSING
(a) SP shall not offer, sell or sublicense the distribution of any PC&D
Self Study course for less than $14.95 per student per course (course
= 4 to 6 hours of training and approximately 15 to 20 tutorials).
However, smaller amounts of content can be sold for less than $14.95
on a prorated basis.
(b) SP shall not offer, sell or sublicense the distribution of any
Computer Professional Self Study course for less than $49.95 per
student per course (course = 4 - 6 hours of training, or 1 day of
training. Smaller amounts of training can be sold for less than
$49.95 on a prorated basis, e.g., 2 hours of training for $39.95.
Days of
Training Hrs of Training Minimum
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1 3-5 hours $49.95
2 6-10 hours $99.95
3 9-15 hours $124.95
4 12-20 hours $149.95
5 15-25 hours $174.95
(c) SP shall not offer, sell or sublicense the distribution of any Async
(ILF) Courses for less than $19.95 per course (up to 10-week course),
provided that for professional certification courses (e.g., MCSE,
CNE, A+, I+, etc,) SP shall not offer, sell or sublicense the
distribution of such courses for less than $29.95 per course.
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