Exhibit 10.40
CO-MARKETING AGREEMENT
This Agreement is made as of this 1st day of September 1999 ("Effective Date"),
by and between Educational Video Conferencing, Inc., a Delaware corporation,
having offices at ▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ("EVC"), and
▇▇▇▇ Atlantic Network Services Inc., a Delaware corporation, having offices at
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("▇▇▇▇ Atlantic").
WHEREAS, EVC offers educational video conferencing services;
WHEREAS, EVC desires (i) to pay ▇▇▇▇ Atlantic a sales commission to sell EVC's
products, and (ii) to pay ▇▇▇▇ Atlantic a referral fee for sales referred to EVC
by ▇▇▇▇ Atlantic,
NOW, THEREFORE, in consideration of the mutual covenants herein the parties
agree as follows:
1. Definitions
A. "Add-On Sale" means the provision of additional Services, for an
additional fee, to an End User, who is already party to a Sale or EVC Sale.
B. "Affiliate" means an entity that owns, directly or indirectly, greater
than fifty percent (50%) voting interest in a party ("Parent"), or any entity in
which a party or its Parent owns, directly or indirectly, at least twenty-five
percent (25%) voting interest.
C. "▇▇▇▇ Atlantic Region" means any and all of the areas in which ▇▇▇▇
Atlantic or any Affiliate provides local telephone service.
D. "CPE" means any and all of the equipment listed on Schedule 4, and any
associated software or installation services.
E. "Direct Sale" means a sale of the Services in which a ▇▇▇▇ Atlantic
salesperson or sales agent actively participates in negotiating and closing the
sale with the assistance of EVC during the first twelve months of this
Agreeement.
F. "End-User" means a person or entity that purchases the Service pursuant to
a Direct Sale, Referral, Add-On Sale or EVC Sale.
G. "End User Contract" means an agreement signed between EVC and an End User
for the Service.
H. "EVC Sale" means EVC's provision of the Service to and End User where such
sale was stimulated by a co-marketing or advertising funded in whole or in part
by ▇▇▇▇ Atlantic and does not qualify as a Sale.
I. "Monthly Service Revenue" means, with respect to each Sale, Add-On Sale
and EVC Sale, the total fees collected from End Users for the Service during a
calendar month, excluding amounts attributable to any taxes and inter-LATA
transport.
NOTICE
Not for use or disclosure outside the ▇▇▇▇ Atlantic Companies
except under written agreement.
1
J. "Referral" means a written notice from ▇▇▇▇ Atlantic to EVC identifying a
prospective End User.
K. "Sale" means EVC's provision of the Service to an End User resulting from
a Direct Sale or Referral; provided that a Sale shall not include EVC's
provision of the Service to any of the entities listed on Schedule 3.
L. "Service" means the educational video conferencing service described in
Schedule 1 and any modifications thereto during the term.
2. Term and Termination
A. This Agreement shall become effective as of the Effective Date and shall
continue in effect for three (3) years thereafter, unless earlier terminated as
provided herein. The term will automatically extend an additional year (to a
total of four (4) years) unless either party notifies the other of its intent
not to extend the Agreement within ninety days prior to the end of the first
year; and the term will extend another year (to a total of five (5) years)
unless either party notifies the other of its intent not to extend the Agreement
within ninety (90) days prior to the end of the second year.
B. Either party may earlier terminate this Agreement for a material breach by
the other party that is not cured by the other party using its best efforts
within a commercially reasonable time period, not to exceed sixty (60) days from
receipt of written notice of the breach. Such notice shall specifically identify
any and all breaches.
▇. ▇▇▇▇ Atlantic may terminate this Agreement immediately in the event EVC is
subject to a change in control, by merger, acquisition, consolidation or
otherwise whereby EVC becomes owned or affiliated with a competitor of ▇▇▇▇
Atlantic or any ▇▇▇▇ Atlantic Affiliate.
D. EVC acknowledges that ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇ and Dr. ▇▇▇▇ ▇▇▇▇▇▇▇ are key
employees of EVC and their continued employment by EVC is a material inducement
for ▇▇▇▇ Atlantic in entering into this Agreement. EVC will provide ▇▇▇▇
Atlantic with at least six (6) months notice prior to either one of these
individuals leaving the employment of EVC (other than separation due to
disability and death) and will provide ▇▇▇▇ Atlantic with a succession plan.
E. All obligations of the parties incurred prior to the effective date of
termination or expiration of this Agreement shall survive such termination or
expiration.
3. Sales By Affiliates
Any ▇▇▇▇ Atlantic Affiliate may also make Direct Sales and Referrals under this
Agreement, and such Direct Sales and Referrals shall be deemed to have been made
by ▇▇▇▇ Atlantic.
NOTICE
Not for use or disclosure outside the ▇▇▇▇ Atlantic Companies
except under written agreement.
2
4. Marketing
A. Direct Sales and Referrals. ▇▇▇▇ Atlantic may make Direct Sales and
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Referrals. ▇▇▇▇ Atlantic shall assign sales support personnel, who have
completed training courses described below, to work with other ▇▇▇▇ Atlantic
sales personnel and End Users to determine and evaluate End User requirements
for the Service.
B. Promotion. ▇▇▇▇ Atlantic may distribute EVC's promotional literature
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relating to the Service (EVC master documents to be supplied without charge by
EVC). EVC shall be responsible for ensuring that such literature complies with
all applicable laws, rules and regulations. ▇▇▇▇ Atlantic shall bear all costs
associated with its duplication and distribution of EVC literature. ▇▇▇▇
Atlantic shall not make changes to the literature without the prior consent of
EVC, which shall not be unreasonably withheld. ▇▇▇▇ Atlantic may also develop
its own promotional literature relating to the Service at its own expense
subject to EVC's consent, not to be unreasonably withheld. EVC hereby grants to
▇▇▇▇ Atlantic and its Affiliates a non-exclusive and non-transferable right and
license, without the right to grant sublicenses to any party, to use EVC's
trademarks during the term of this Agreement in connection with the promotion
and advertising of the Services and the solicitation of orders for the Services
in the ▇▇▇▇ Atlantic Region provided that the EVC trademarks shall be used by
▇▇▇▇ Atlantic in accordance with EVC's standards, specifications and
instructions. ▇▇▇▇ Atlantic shall acquire no right, title or interest in the EVC
trademarks other than the foregoing limited license, and ▇▇▇▇ Atlantic shall not
use any EVC trademarks, or words, phrases or symbols confusingly similar to any
EVC trademarks, as part of ▇▇▇▇ Atlantic's corporate or tradename without the
prior written consent of EVC.
C. EVC Advertising. EVC will provide ▇▇▇▇ Atlantic with the opportunity to
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market ▇▇▇▇ Atlantic products and services using EVC's marketing and advertising
that promote the Services. The parties will share the costs of such co-marketing
on a case-by-case basis, and in such event will share costs only to the extent
specifically agreed to in a writing signed by authorized representatives of each
party.
D. Demonstrations. ▇▇▇▇ Atlantic may demonstrate the Service to prospective
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End Users. EVC shall provide support for such demonstrations as set forth in
Section 5.
E. Billing. EVC shall ▇▇▇▇ and collect for the Services, and shall remit fees
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owed to ▇▇▇▇ Atlantic pursuant to Section 6; provided, however, that ▇▇▇▇
Atlantic will ▇▇▇▇ and collect for the Services from End Users to the extent
▇▇▇▇ Atlantic and EVC execute a billing and collection therefor.
5. EVC Support
A. Areas for Support. EVC shall provide the Services throughout the ▇▇▇▇
------------------
Atlantic Region.
B. Sales.
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(i) EVC shall use its best efforts to close Sales, Add-On Sales and EVC
Sales.
(ii) EVC will provide notice of its acceptance or rejection of a Referral
within ten (10) days of receipt of the Referral. EVC may reject a Referral only
if it specifically marketed (i.e., by direct customer contact with a concrete
proposal, and not through general marketing
NOTICE
Not for use or disclosure outside the ▇▇▇▇ Atlantic Companies
except under written agreement.
3
or advertising) the Service to the End User being referred within the three (3)
months immediately preceding the date of the Referral.
(iii) EVC shall execute an End User Contract for each Direct Sale,
accepted Referral and EVC Sale, and shall provide the Service pursuant to such
End User Contract, except in cases where: EVC cannot provide the Service solely
due to a bona fide technical incompatibility and, as a result, EVC does not at
that point or within twelve (12) months thereafter, provide the Service directly
or indirectly to such End User.
(iv) ▇▇▇▇ Atlantic will notify EVC when it intends to pursue a Direct
Sale. EVC will participate in the negotiation and will attempt to close each
Direct Sale opportunity.
C. Add-On Sales. Add-On Sales shall be qualified and accepted by EVC in the
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same manner in which Sales are processed.
D. Ancillary Services. EVC shall at no additional charge refer all End User
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requests for the purchase and/or installation of CPE, and for the purchase of
telecommunications services that ▇▇▇▇ Atlantic or an Affiliate is allowed to
offer by law, exclusively to ▇▇▇▇ Atlantic or an Affiliate that ▇▇▇▇ Atlantic
may from time to time designate. Alternatively, to the extent EVC decides to
sell CPE or telecommunications services directly to End Users, it will purchase
such CPE and telecommunications services exclusively from ▇▇▇▇ Atlantic or an
Affiliate that ▇▇▇▇ Atlantic may designate. ▇▇▇▇ Atlantic shall offer such CPE
and telecommunications services at competitive rates.
E. Support. EVC shall, without charge to ▇▇▇▇ Atlantic, provide reasonable
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amounts of technical and sales support to ▇▇▇▇ Atlantic in connection with ▇▇▇▇
Atlantic's performance of this Agreement. This support shall be related to the
Service, and not the telecommunications services or CPE provided by ▇▇▇▇
Atlantic or third parties. Reasonable technical support shall include, but shall
not be limited to, the following: (i) providing a toll free number for use by
authorized ▇▇▇▇ Atlantic personnel to call EVC for information relating to End
User requirements for the Service; (ii) responding by telephone within three (3)
business days to ▇▇▇▇ Atlantic inquiries concerning End User requirements for
the Service; and (iii) providing ▇▇▇▇ Atlantic with names and telephone numbers
of authorized personnel who can respond to inquiries about the Service and End
User requirements outside of normal business hours.
F. Defective Service Complaints. EVC shall immediately report to ▇▇▇▇
------------------------------
Atlantic any known problems with the Service that might impact any EVC Sale,
Sale or Add-On Sale.
G. Promotion and Demonstration of Service. EVC shall provide customary and
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standard demonstration facilities for the Service and related and support
sufficient to allow ▇▇▇▇ Atlantic to demonstrate the Service, at convenient
locations, to prospective End Users.
H. Help Desk. After the Service is installed, the End User shall be provided
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with two (2) contact telephone numbers, one for ▇▇▇▇ Atlantic to handle all
issues related to ▇▇▇▇ Atlantic provided network transport, hardware or
communication devices at the End User location and one for EVC to handle all
Service related issues. Each call shall be entered into a log book which will
track the issues addressed, (i.e., network or Service issue). If either party
receives a call for the other, it will immediately refer such call to the other
party. The parties shall review the logs three (3) months after the Effective
Date and semi-annually thereafter to determine if
NOTICE
Not for use or disclosure outside the ▇▇▇▇ Atlantic Companies
except under written agreement.
4
either party is receiving calls not relating to its areas of responsibilities.
If such is the case, the parties shall work together to resolve the problem.
I. Training of ▇▇▇▇ Atlantic Personnel. EVC shall, within forty-five (45)
------------------------------------
days from the Effective Date and without charge to ▇▇▇▇ Atlantic, provide sales,
technical and installation training sessions (similar to that provided to EVC's
own sales force) to ▇▇▇▇ Atlantic marketing and technical personnel who shall
then train other ▇▇▇▇ Atlantic personnel as necessary, including ▇▇▇▇ Atlantic
sales personnel. These sessions shall be provided at selected ▇▇▇▇ Atlantic
locations, on dates and in a manner mutually convenient to the parties, and
shall consist of, but not be limited to, an overview of the Service, its
applications, configuration criteria, system design, installation procedures and
the information needed to qualify prospective End Users to purchase the Service.
Follow-up sessions shall be provided from time to time at dates agreed to by the
parties. ▇▇▇▇ Atlantic shall have the right to reproduce material and
documentation utilized in these sessions without limit, provided said material
and documentation is utilized internally only.
J. End User Training. EVC will offer to End Users under a separate contract,
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in a timely manner and at prevailing charges, End User training in sufficient
detail, beyond introductory training, to fully familiarize the End User with all
capabilities of the Service. At the End User's option, such training classes may
be held at End User's location or at an EVC designated location.
6. Compensation
A. Calculation of Referral Fees. EVC shall pay ▇▇▇▇ Atlantic the compensation
----------------------------
set forth in Schedule 2 for all Sales, Add-On Sales and EVC Sales. ▇▇▇▇
Atlantic's right to compensation for Sales, Add-On Sales and EVC Sales made
prior to termination or expiration of this Agreement shall survive such
termination or expiration and shall remain payable until the expiration of the
End User Contract for each End User; provided, however, that EVC shall not
terminate prematurely or re-negotiate such contracts with the intent to deny
▇▇▇▇ Atlantic compensation.
B. Payment of Compensation and Reports. EVC shall provide to ▇▇▇▇ Atlantic a
-----------------------------------
listing of all End User contracts by the fifteenth (15th) day of each month
following the end of each calendar quarter during the time period in which EVC
is obligated to pay ▇▇▇▇ Atlantic compensation. This listing shall include the
status of Direct Sales, Referrals and EVC Sales made during the previous quarter
as well as the status of previous Direct Sales, Referrals and EVC Sales (e.g.,
opportunity, Referral pending, Referral rejected, Referral added, or
terminated), End-User name and address, acceptance date and contract price and
term. EVC shall pay ▇▇▇▇ Atlantic compensation on the fifteenth (15th) day of
the month following the end of a calendar quarter based on the amount collected
from End Users in the preceding quarter. Payments shall be mailed by first-class
U.S. mail, postage prepaid, to an address specified from time to time in writing
by ▇▇▇▇ Atlantic, or electronically transferred if agreed to by both parties.
EVC shall provide with such payment a statement (either as part of the report
referenced above or separately) itemizing the basis for the payment.
C. Late Payment. Failure by EVC to remit payments within the prescribed time
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limits may in ▇▇▇▇ Atlantic's sole discretion result in a late charge equal to
the lower of one and one-half
NOTICE
Not for use or disclosure outside the ▇▇▇▇ Atlantic Companies
except under written agreement.
5
percent (1.5%) per month or the highest amount permitted by law for any fees not
paid within thirty (30) days of the applicable due date.
7. Indemnities
A. Intellectual Property. Except as specifically provided herein, no licenses
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to any patents, copyrights, trademarks, trade secrets or any other intellectual
property, express or implied, are granted to either party under this Agreement.
B. Service Related Liability. EVC shall indemnify and defend ▇▇▇▇ Atlantic
---------------------------
and its Affiliates from any liabilities, lawsuits, penalties, claims or demands
(including the costs, expenses and reasonable attorney's fees on account
thereof) that may be made by any third party against ▇▇▇▇ Atlantic or any
Affiliate relating to the Service, including, without limitation, defects,
breach of warranties, infringement of intellectual property rights, or loss of
data.
C. Other Liability. With respect to matters of liability not covered above,
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▇▇▇▇ Atlantic and EVC each agree to indemnify and defend the other party from
any liabilities, lawsuits, penalties, claims or demands (including the costs,
expense and reasonable attorney's fees on account thereof) that may be made by
any third party arising from the other party's negligent or intentionally
wrongful acts or omissions or violations of law or those of persons furnished by
that party, its agents or subcontractors.
D. Defense and Settlement. A party seeking indemnification under this Section
----------------------
7 shall promptly notify the other in writing of the claim for which
indemnification is claimed, and shall give the other party sole control of the
defense and settlement of such claim. The indemnified party shall provide
reasonable cooperation in such defense and settlement.
8. Representations And Warranties
A. Authority. Each party warrants to the other that it is duly authorized to
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execute perform this Agreement according to its terms, and that such execution
and performance is not in violation of any laws, rules or regulations applicable
to that party. Each party further warrants that its performance of this
Agreement shall at all times be consistent, and shall not violate, any laws,
rules or regulations applicable to such party.
B. Provision of Service. EVC warrants that during the term the Service shall
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conform to the requirements set forth in Schedule 1. Without limiting the
foregoing, EVC shall use commercially reasonable efforts to ensure the Service
is of high quality and is competitively priced.
C. Disclaimer of Certain Warranties by ▇▇▇▇ Atlantic. ▇▇▇▇ ATLANTIC WILL
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PROVIDE DIRECT SALES AND REFERRALS ON AN AS IS BASIS, AND DISCLAIMS ALL
WARRANTIES IN CONNECTION WITH SUCH DIRECT SALES AND REFERRALS, WHETHER EXPRESS
OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY,
FITNESS FOR PARTICULAR PURPOSE, ACCURACY, COMPLETENESS OR OTHERWISE. ▇▇▇▇
ATLANTIC DOES NOT AND WILL NOT OFFER ANY WARRANTY OF ANY KIND TO AN END USER OR
OTHER PERSON OR ENTITY FOR THE SERVICE. ANY WARRANTY OBLIGATION SET FORTH IN AN
END USER'S AGREEMENT WITH EVC WITH REGARD TO THE SERVICE SHALL BE UNDERTAKEN
NOTICE
Not for use or disclosure outside the ▇▇▇▇ Atlantic Companies
except under written agreement.
6
SOLELY BY EVC, AND EVC'S AGREEMENT WITH END USERS SHALL PROVIDE THAT THE
WARRANTIES COME ONLY FROM EVC. ▇▇▇▇ ATLANTIC MAKES NO REPRESENTATIONS OR
WARRANTIES TO EVC'S END USERS WITH REGARD TO THE PERFORMANCE OF THE SERVICE OR
ITS CONFORMANCE WITH APPLICABLE SPECIFICATIONS OR DOCUMENTATION. ALL ▇▇▇▇
ATLANTIC WARRANTIES WHETHER WRITTEN, ORAL, EXPRESS, OR IMPLIED, INCLUDING,
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, ANY WARRANTY OF
MERCHANTABILITY OR FITNESS AS TO A PARTICULAR PURPOSE, ARE HEREBY EXCLUDED.
9. Limitation of Liability
Except for claims for which a party has indemnified the other and for payments
due or to become due: (i) neither party shall be liable to the other for any
consequential, indirect or special damages in any contract, tort or other action
relating to this Agreement; and (ii) a party's liability to the other in any
such action for damages not excluded under subsection (i) shall be capped at an
amount equal to two hundred thousand dollars ($200,000).
10. Notices
Any notice, report, or other communications under this Agreement shall be
sufficient if sent to a party by United States certified mail, return receipt
requested, postage prepaid, addressed as set forth below. Notices shall be
effective on receipt. The names and addresses set forth in this paragraph may be
changed at any time by notice sent in accordance with this paragraph.
To EVC:
Dr. ▇▇▇▇ ▇▇▇▇▇▇▇
President
Educational Video Conferencing, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Except that all Direct Sale and Referral forms shall be sent to the EVC contact
identified thereon.
To ▇▇▇▇ Atlantic:
Director, Market Management
▇▇▇▇ Atlantic Network Services, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
With a copy to:
Counsel, Business Marketing
▇▇▇▇ Atlantic Network Services, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇
NOTICE
Not for use or disclosure outside the ▇▇▇▇ Atlantic Companies
except under written agreement.
7
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
11. Other Terms
A. Choice of Law. The construction, interpretation, and performance of the
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Agreement shall be governed by and construed in accordance with the domestic
laws of the state of New York.
B. Publicity. Neither party shall disclose this Agreement or its contents
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(except as required by law), or issue any press release, advertising, or other
promotional material which uses the other party's name or marks, including, but
not limited to either party's name or logo, to any third party without the prior
written consent of the other party. Before a party discloses the Agreement or
its contents under requirement of law, it shall provide notice to the other
party so that the other party may seek reasonable protective arrangements.
C. Severability. If any provision of this Agreement is held invalid or
------------
unenforceable by courts, regulatory agencies, or other governmental bodies of
competent jurisdiction, such holding shall not invalidate or render
unenforceable the entire Agreement. In the event of such holding, the entire
Agreement shall be construed to the extent possible as if not containing the
particular invalid or unenforceable provision, and the rights, remedies, and
obligations of the parties shall be construed and enforced accordingly.
D. Cumulative Rights. Except as otherwise set forth herein, the rights and
------------------
remedies of the parties set forth herein are in addition to, and not in
substitution of, any right or remedy available to the parties at law or in
equity.
E. Nonexclusive Market Rights. This Agreement does not grant either party an
---------------------------
exclusive privilege to market with the other or any Affiliate any or all of the
Services listed herein and shall not be deemed to prevent either party or any
Affiliate from marketing, promoting, selling, or endorsing services that are the
same or similar to the Service.
F. Most Favored Treatment. Notwithstanding any other provisions of this
------------------------
Agreement, the prices offered by EVC to End Users shall be comparable to those
offered by EVC, either directly or indirectly, to other customers of the Service
who are located in the ▇▇▇▇ Atlantic Region.
G. Subcontracting. Any subcontract for any portion of any work or obligation
--------------
resulting from, or in conjunction with, this Agreement by EVC must have the
prior written approval of ▇▇▇▇ Atlantic.
H. Records and Audit. EVC shall maintain complete and accurate records of all
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amounts due and of payments made to ▇▇▇▇ Atlantic hereunder in accordance with
generally accepted accounting practices. EVC shall retain all such records for a
period of three (3) years from the date of expiration or termination of this
Agreement. ▇▇▇▇ Atlantic shall have the right, through its representatives, and
at its own expense, to make an examination and audit during normal business
hours, of EVC's records and accounts as may, under recognized accounting
practices, contain information bearing upon the amount of fees payable under
this Agreement. Prompt adjustment shall be made by the proper party to
compensate for any errors or omissions disclosed by such examination or audit.
Neither such right to examine and audit,
NOTICE
Not for use or disclosure outside the ▇▇▇▇ Atlantic Companies
except under written agreement.
8
nor the right to receive such adjustment, shall be affected by any statement to
the contrary, appearing on checks or otherwise, unless such statement appears in
a letter, executed by the party having such right and addressed and delivered to
the other party, expressly waiving such right.
I. Force Majeure. Neither party shall be responsible for any delay or failure
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in performance of any part of this Agreement to the extent that such delay or
failure is caused by fire, flood, lightning, explosion, war, strike, embargo,
government requirement, civil or military authority, act of God, acts or
omissions of carriers, or other similar causes beyond its control ("Condition").
If any such Condition occurs, the party delayed or unable to perform shall give
notice to the other party as soon as possible.
J. Compliance With Laws, Ordinances, Regulations And Codes. Both parties
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shall comply with all applicable federal, state, county and local laws,
ordinances, regulations and codes, including identification and procurement of
required permits, certificates, approvals, and inspections in performance
hereunder
K. Special Recognition. Both parties expressly recognize that each party is
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both a seller and reseller of services and products and that nothing agreed to
herein is intended to limit, prohibit or restrict either party's merchandising
activities in any way except as specified herein. EVC recognizes that ▇▇▇▇
Atlantic is affiliated with communications common carriers licensed by the
Federal Communications Commission. This Agreement may be subject to such changes
or modifications as any such regulatory body may from time to time direct in the
exercise of its jurisdiction. In the event of a substantial change or deviation
from the state of facts or the degree of regulation from that existing at the
time of the execution of this Agreement which materially alters the obligations
of either party under this Agreement, the affected party shall have the option
to terminate any and all future obligations contemplated under this Agreement.
With respect to state and federal regulatory matters, affecting a party, that
party's determination shall be definitive and conclusive unless a competent
regulatory body issues a contrary determination based upon the facts at issue.
L. Assignment. Any assignment or delegation, in whole or in part, of work to
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be performed or of any other interest, right or obligation hereunder without
written consent, except an assignment confined solely to monies due or to become
due, and/or unless otherwise provided herein, shall be void. It is expressly
agreed that any assignment of monies shall be void to the extent that it
attempts to impose upon the party obligations to the assignee in addition to the
payment of such monies, or to preclude the appropriate party from dealing solely
and directly with the other party in all matters pertaining hereto, including
the negotiation of amendments or settlements of amounts due. Neither party may
assign this Agreement without the written consent of the other party.
Notwithstanding the foregoing, each party shall have the absolute right to
assign this Agreement, in whole or in part, to any Affiliate.
M. Independent Contractor Status. This Agreement shall not constitute the
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creation of a legal representative or agency relationship between the parties,
nor shall either party have the right or authority to assume, create, or incur
any liability or obligation of any kind, expressed or implied, against, or in
the name of, or in the behalf of the other party. Nothing contained in the
Agreement shall be deemed or construed as creating a joint venture or
partnership between the parties. Neither party shall have the power to control
the activities and operations of any other party and their status is, and at all
times shall continue to be, that of independent contractors. Each party shall
pay all wages, salaries and other amounts due its employees,
NOTICE
Not for use or disclosure outside the ▇▇▇▇ Atlantic Companies
except under written agreement.
9
and shall be responsible for all obligations respecting them relating to FICA,
income tax withholdings, unemployment compensation and other similar
responsibilities. In the event a party's independent status is denied or changed
and that party's employees are declared to be the other's employees with respect
to work performed for it, to the extent permitted by law, the employing party
agrees to pay the other all taxes and costs, including reasonable attorneys'
fees, as set forth above, which the other party may incur as a result of such
change in status. Moreover, solely for purposes of complying with the
Immigration Reform and Control Act of 1986 and its regulations (IRCA), each
party warrants and agrees to the other party that, to the best of its ability,
it shall (i) not assign any individual to perform work hereunder who is an
unauthorized alien under IRCA and (ii) immediately remove any such alien
discovered to be unauthorized from such work and replace him/her with one who is
not an unauthorized alien.
N. Publicity. Announcements regarding the series of transactions contemplated
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herein shall be made only with the prior written consent of the parties hereto,
which consent shall not be unreasonably withheld. The parties shall maintain the
confidentiality of this Agreement and its terms.
O. Confidentiality. A party may ▇▇▇▇ as "confidential" information it
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discloses to the other in performing this Agreement that it desires to protect
against unrestricted disclosure or use. For a period of three (3) years from the
date of disclosure, or, in the case of information pertaining to a specific End
User Contract, until the termination of such Contract, the receiving party shall
not disclose information so marked to third parties, other than its consultants
or attorneys with a need to know. The obligations herein shall not apply to
information, whether designated as confidential: (i) which is made public by the
disclosing party or which generally becomes available to the public other than
through a disclosure by the receiving party or its officers, employees,
consultants or representatives; (ii) which is already in the possession of the
receiving party and not subject to an existing obligation of confidence between
the parties; (iii) which is received on a nonconfidential basis from a third
party having authority to disclose such information without restriction; (iv)
which is independently developed by the receiving party as evidenced by its
records; or (v) which is required to be disclosed by law.
P. Sale of EVC. If EVC decides to offer itself for sale, it will provide ▇▇▇▇
-----------
Atlantic with notice thereof and will give ▇▇▇▇ Atlantic the exclusive
opportunity to negotiate to purchase EVC for a period of forty-five (45) days,
provided that ▇▇▇▇ Atlantic responds to such notice within ten (10) days
thereafter indicating its intent to pursue such negotiations. If the parties are
not able to reach agreement during that time period, EVC may thereafter seek
other purchasers. This subsection (P) shall not obligate ▇▇▇▇ Atlantic to
negotiate to purchase or to purchase EVC.
Q. Telecommunications Services Purchase. On EVC's request, ▇▇▇▇ Atlantic will
------------------------------------
negotiate with EVC an appropriate and mutually acceptable agreement or
agreements for the sale by ▇▇▇▇ Atlantic to EVC of intraLATA telecommunications
services at volume and/or term discounts similar to those offered by ▇▇▇▇
Atlantic to customers who are similarly situated to EVC.
R. Entire Agreement. This Agreement and the attached Schedules constitute the
----------------
entire agreement between the parties on the subject matter hereof, and,
supersede all prior and contemporaneous agreements, understandings, and
representations on the subject matter hereof. This Agreement and the Schedules
may not be modified or waived except by written agreement signed by both
parties.
NOTICE
Not for use or disclosure outside the ▇▇▇▇ Atlantic Companies
except under written agreement.
10
IN WITNESS WHEREOF, duly authorized representatives of each party have caused
this Agreement to be executed as of the day and year first above written
EDUCATIONAL VIDEO ▇▇▇▇ ATLANTIC NETWORK
CONFERENCING, INC. SERVICES, INC.
/s/ ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------- --------------------------
(signature) (signature)
▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------- --------------------------
(printed name) (printed name)
President Director-Market Management
----------------------- --------------------------
(title) (title)
September 1, 1999 September 1, 1999
----------------------- --------------------------
(date) (date)
NOTICE
Not for use or disclosure outside the ▇▇▇▇ Atlantic Companies
except under written agreement.
11
Schedule 1
DESCRIPTION OF SERVICE
----------------------
The term "Service" includes any and all educational video conferencing services
as described in EVC's then-current catalogue or developed on a customized basis.
Generally, these services allow two-way interactive video conferencing that make
it possible for users at remote locations to see, hear, and interact "live and
in real time" with an instructor and other students taking the same course. The
participating students "attend class" at work, at community outreach centers, at
home, or at school, in conveniently located video-enabled rooms or via a desktop
or personal computer that has been specially equipped by EVC with an interactive
video conferencing system. EVC's offerings include undergraduate degree
programs, graduate programs, certificate programs, professional seminars,
training programs, language courses, and other programs, including SAT review
courses.
NOTICE
Not for use or disclosure outside the ▇▇▇▇ Atlantic Companies
except under written agreement.
12
Schedule 2
COMMISSION SCHEDULE
The fees due ▇▇▇▇ Atlantic will be based on the aggregate quarterly revenue
collected by EVC for Sales, Add-On Sales and EVC Sales, less only deductions for
taxes and revenue attributable to any interLATA services ("Quarterly Revenue"),
as follows:
Quarterly Revenue Direct Sales* Referrals Add-On Sales EVC Sales**
----------------- ------------- --------- ------------ ------------
Less than $1.25 M [*]% [*]% [*]% [*]%
$1.25-1.8749 M [*]% [*]% [*]% [*]%
$1.875-2.49 M [*]% [*]% [*]% [*]%
Over 2.5 M [*]% [*]% [*]% [*]%
Notes:
------
* These amounts are payable only during the first year of each End User
Contract; for the remaining years of an End User Contract, the compensation will
be [*]%.
** No compensation or reports shall be provided for EVC Sales.
NOTICE
Not for use or disclosure outside the ▇▇▇▇ Atlantic Companies
except under written agreement
[*] Confidential Portions
13
Schedule 3
EXCLUDED CUSTOMERS
------------------
1199 Hospital Workers Union Home Depot
ABB IXC Communications
Aetna Insurance ▇▇▇▇▇▇ Brothers
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Hospital Lockheed ▇▇▇▇▇▇
Ameren Long Island University
American International Group Loral Space & Communications
AT&T Maimonides Hospital
Automated Data Processing Manhattan Eye & Ear Hospital
Bellagio Hotel & Resort ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇▇ Israel/Roosevelt/St. Luke's Hospital ▇▇▇▇▇▇▇ ▇▇▇▇▇
Blythdale Children's Hospital Methodist Hospital
BMG Entertainment ▇▇▇▇
▇▇▇▇▇▇ Montefiore Hospital
Business Week Mt. Sinai Hospital
Caterpillar NASD/NASDAQ
Citibank, NA New Ame Zion Church
Columbia Presbyterian Hospital New York Methodist Hospital
Community Church of Nazarene New York City Community School
District #10
Consortium for Workers Education New York State Nursing Association
▇▇▇▇ ▇▇▇▇▇▇▇▇ NYU Medical Center
DOCS Clinics Reliance National
Equitable Rochester City School District
Evangelical Crusade Sony Music Entertainment
First Church of God Time, Inc.
General Reinsurance Travelers
Hackensack Hospital Zurich
NOTICE
Not for use or disclosure outside the ▇▇▇▇ Atlantic Companies
except under written agreement.
14
Schedule 4
CPE
---
Any and all PictureTel, Zydacron, Intel, VTEL or ▇▇▇.▇▇▇ (First Virtual) video
conferencing systems that support H.320, H.323, IP or ATM MPEG2 protocols at
bandwidths ranging from 384 Kbps to 45 Mbps.
NOTICE
Not for use or disclosure outside the ▇▇▇▇ Atlantic Companies
except under written agreement.
15