License Agreement - CBT Systems Ltd. and Computer Literacy Inc.
CBT SYSTEMS, LTD. AND COMPUTER LITERACY INC. AGREEMENT
This Agreement is entered as of this 7th day of March, 1998
("Effective Date") by and between CBT Systems, Ltd., having its principal place
of business at 1005 Hamilton Court, Menlo Park, California 94205 ("CBT") and
Computer Literacy Inc., a California corporation, having its principal place of
business at 1308 Orleans Drive, Sunnyvale, CA 94089 ("CL").
NOW THEREFORE, for good and valuable consideration, the
parties hereby agree as follows:
1. GRANT OF RIGHTS
1.1 License. Subject to the terms and conditions of this Agreement, CBT
hereby grants to CL a non-transferable, non-exclusive license to distribute
CBT's proprietary computer programs described on Exhibit A in object code format
(the "Courseware") and any documentation supporting the Courseware provided from
time to time by CBT (the "Documentation") solely to third parties ("End Users")
pursuant to a personal use, perpetual license for use on a single personal
computer. All copies of Courseware distributed by CL shall be distributed with
CBT's current End User License, as amended by CBT from time to time upon sixty
(60) days' notice to CL (the "End User License").
1.2 Exclusive. During the term of this agreement, CBT will not enter an
agreement with []* to distribute the Courseware or enter into an agreement with
a third party through which the Courseware is intended to be distributed to []*.
In exchange, during the term of this agreement, CL will not distribute computer
based training products branded by []* unless such branded product is []* that
is not []*.
1.3 Ownership. As between CBT and CL, CBT owns and retains all right,
title, and interest in and to the Courseware, Documentation, and all trademarks,
service marks or tradenames associated with the Courseware or Documentation (the
"Trademarks"), including all copyrights, patents, trade secret rights,
trademarks and other intellectual property rights therein. Except as expressly
granted herein, CBT does not grant to CL any right or license, either express or
implied, in the Courseware, Documentation, or Trademarks. CL shall not
disassemble, decompile, or otherwise attempt to derive source code from the
Courseware.
1.4 Minimum Commitment. CL agrees to purchase from CBT at least the
minimum quantity of the Courseware set forth on Exhibit B (the "Total Purchase
Commitment"). Annual Purchase Commitments for renewal terms, if any, shall be
determined by mutual agreement. Notwithstanding anything to the contrary
contained in this Agreement, CBT shall be entitled to terminate this Agreement
thirty (30) days after written notice to CL if CL fails to satisfy its Total
Purchase Commitment pursuant to the terms in Section 3.3.
2. CL'S OBLIGATIONS
2.1 CL's Marketing Obligations. CL will design and designate a CBT
partners' area on CL's web site for Prentice Hall customers that want to
purchase CBT's Courseware. CBT will direct users to this CBT partners' area
([]*) in promoting Bundled Prentice Hall Promotions. "Bundled Prentice Hall
Promotions" shall mean a product offering in which a Prentice Hall title is
bundled with CBT Courseware. Such referral shall be placed in a manner that will
direct a user of the Bundled Prentice Hall Promotion to go to the CBT partners'
area on CL's web site for any inquiries regarding the Courseware. CL shall not
make any representations or warranties other than those contained in the
Documentation and shall not make any representations or warranties on CBT's
behalf.
2.2 Trademarks. During the term of this Agreement, CL shall have the
right to use and reproduce the Trademarks in connection with CL's marketing,
advertising, promotion, and distribution of the Courseware. CL's
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use of the Trademarks shall not create any right, title or interest therein. CL
shall use the Trademarks only in a manner which complies in all material
respects with CBT's policies in effect from time to time and all such use shall
be for CBT's benefit. CL shall submit to CBT a representation of the Trademarks
that CL intends to use for any purpose for CBT's approval of design, color, and
other details prior to their initial use. CL shall not publish, disseminate,
exhibit, or otherwise distribute any material bearing such representations
without CBT's prior approval. CL shall not remove, obscure or alter CBT's
copyright notice or the Trademarks from the Courseware or Documentation. If CL,
in the course of distributing the Courseware, acquires any goodwill or
reputation in any of the Trademarks, all such goodwill or reputation shall
automatically vest in CBT when and as, on an on-going basis, such acquisition of
goodwill or reputation occurs, as well as at the expiration or termination of
this Agreement, without any separate payment or other consideration of any kind
to CL, and CL agrees to take all such actions necessary to effect such vesting.
CL shall not contest the validity of any of the Trademarks or CBT's exclusive
ownership of them. CL shall not adopt, use, or register, whether as a corporate
name, trademark, service mark or other indication of origin, any of the
Trademarks, or any word or mark confusingly similar to the Trademarks in any
jurisdiction.
2.3 Support for Courseware. CBT shall provide support to CL, upon
request, based upon its then customary support policies, at no charge. CBT shall
also provide training at CBT, at no charge to personnel of CL, as reasonably
necessary to enable CL to carry out its support obligations hereunder.
2.4 Compliance with Applicable Laws. CL shall comply with all laws and
regulations applicable to CL's performance and distribution of the Courseware
and Courseware hereunder. Without limiting the generality of the foregoing, CL
(a) shall not distribute the Courseware in any country where such distribution
would be unlawful; (b) shall comply with all Department of Commerce and other
United States exports controls regarding the license and delivery of technology
and products abroad including the Export Administration Act of 1979, as amended,
any successor legislation, and the Export Administration Regulations issued by
the Department of Commerce, Bureau of Export Administration. CL shall, at its
own expense, make, obtain, and maintain in force at all times during the term of
this Agreement, all filings, registrations, licenses, permits and authorizations
(collectively "Authorizations") in the Territory required for CL to perform its
obligations under this Agreement.
2.5 Protection of Proprietary Rights. CL shall not do anything to
compromise CBT's proprietary rights related to the Courseware, including without
limitation, CBT's copyrights, patent, trade secret, and trademark rights
("Proprietary Rights"), and will cooperate, at CBT's expense, in CBT's efforts
to protect its Proprietary Rights. CL shall promptly notify CBT of any known
infringements of CBT's Proprietary Rights that come to CL's attention. CBT shall
have the exclusive right to institute infringement or other appropriate legal
action against alleged prospective or actual infringers of its Proprietary
Rights. CBT shall incur all expenses in connection therewith and shall retain
all monetary recoveries received therefrom.
3. PRICE AND PAYMENT; SHIPMENT AND DELIVERY
3.1 Suggested End User Price. CL is free to determine its own End User
prices for the Courseware. Although CBT may publish suggested end user prices
for the Courseware from time to time, these are suggestions only.
3.2 Per Copy Fees. After CL's Courseware orders have exceeded the []*
Total Purchase Commitment set forth in Section 3.3, CL shall pay to CBT for each
copy of the Courseware shipped hereunder per copy fees (the "Per Copy Fees")
equal to []* of the suggested end user prices for the Courseware as set forth on
Exhibit B hereto, as adjusted by CBT from time to time in its sole discretion
("Suggested Prices"). In the event that CBT changes the Suggested Prices, Per
Copy Fees based on such changed Suggested Prices shall apply to any order for
the Courseware received by CBT after the effective date of the increase or
decrease. CBT shall provide CL with at least []* days written notice of any
increase in the Per Copy Fees.
3.3 Purchase Commitment. CL shall pay CBT []* of the Total Purchase
Commitment ([]*) within []* after execution of this Agreement. The next payment
shall be due on []* in the amount of []*. Starting on the first anniversary of
the effective date (the "First Anniversary") CL shall pay CBT []* on or before
the
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end of each []* following the First Anniversary, and in no event later than the
dates set out in Exhibit B). Should CL's Courseware orders exceed the []*
commitment before the end of the two year term, CL will be required to pay the
balance of the []* before CBT ships additional Courseware. Upon shipment of
Courseware after the []* purchase commitment has been exceeded, CL will pay a
royalty for the Courseware on a []* basis, accompanied with a detailed royalty
statement. CL shall pay CBT a late charge on outstanding amounts due equal to
[]*. If CL fails to make payment when due, CBT reserves the right, in its
reasonable commercial judgement, to place CL on credit hold, in which case CBT
may cease CL's rights to fulfill orders. If CBT elects to suspend CL's rights to
fulfill orders, then CL's obligation to fulfill the Total Purchase Commitment
shall be suspended until the credit hold is released and when resumed, if the
suspension extends for a period longer than three months, the Payment Schedule
for the Total Purchase Commitment shall be equitably adjusted (as agreed between
the parties in good faith) in order to take into account the period in which CL
could not fulfill orders. All payments shall be made in United States dollars,
free of any withholding tax and of any currency control, or other restrictions
to CBT, at the address within the United States indicated by CBT to CL. Except
as provided in Section 4.2(a), []* CBT shall be []*.
3.4 Finder's Fee. CL is authorized to co-market with CBT through a
process in which CL may submit a co-marketing opportunity to CBT for
"co-marketing consideration". CBT agrees to co-market its products to CL
prospects/accounts in accordance with the following qualification criteria:
(a) The prospect/account cannot be an existing CBT client.
(b) The prospect/account cannot be currently engaged in a
sales cycle with CBT.
(c) The prospect/account cannot be an Affiliate (defined
below) of an existing CBT client if such existing client has an agreement with
CBT that allows the existing client to license the CBT product in question to
such prospect/account. An "Affiliate" of a party shall mean an entity directly
or indirectly controlling, controlled by or under common control with that party
where control means the ownership or control, directly or indirectly, of more
than fifty percent (50%) of all of the voting power of the shares (or other
securities or rights) entitled to vote for the election of directors or other
governing authority, as of the date of this Agreement or hereafter during the
term of this Agreement, provided that such entity shall be considered an
Affiliate only for the time during which such control exists.
(d) Fulfillment (order processing, shipping and invoicing) of
products will be done directly by CBT. CL will provide CBT with all of the
information required to process the order resulting from the co-marketing
engagement.
(e) Where the situation warrants, exceptions to the above
criteria, including leads to territories outside North America, may be requested
by CL; however, CBT will determine whether an exception request is permitted.
If the opportunity meets the qualification criteria, CL may then register the
opportunity with CBT and remove itself from further participation in the sales
cycle. CBT will then work directly with the End User to formulate a proposal.
If CBT enters into an agreement with the End User within []* days of opportunity
registration, CL will be paid a dollar amount ("Finder's Fee") equal to []* of
the []*, calculated as follows:
The total dollar value of the agreement which is due to be paid to CBT over the
term of the agreement as of the effective date of the agreement, will be
determined ("Contract Value"). The Contract Value will then be divided by the
number of years specified by the term of the agreement to determine the Annual
Value. []* the dollar amount []* shall be the Finder's Fee.
CBT will pay CL the Finder's Fee within thirty (30) days of CBT's receipt of
payment by the applicable End User for the amount representing the Annual Value
of the Agreement.
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3.5 Taxes, Tariffs, Fees. CBT's suggested end user prices and Per Copy
Fees do not include any national, state or local sales, use, value added or
other taxes, customs duties, or similar tariffs and fees which may be required
to be paid or collected upon the delivery of the Courseware or upon collection
of the prices for the Courseware or the Per Copy Fees. Should any tax or levy be
made, CL agrees to pay such tax or levy and indemnify CBT against any claim for
such amount. CL represents and warrants to CBT that all Courseware acquired
hereunder is for redistribution in the ordinary course of CL's business, and CL
agrees to provide CBT with appropriate resale certificate numbers and other
documentation satisfactory to the applicable taxing authorities to substantiate
any claim of exemption from any such taxes or fees.
3.6 Shipment and Delivery. CBT will keep CL informed of changes to the
bill of materials for the Courseware. Shipment and Delivery of the Courseware
and Documentation to CL shall be as set forth on Exhibit C.
3.7 Inventory Rotation. CL shall have the right to return unsold
inventory that has a ship date of no more than six (6) months prior to the date
of return in exchange for new inventory of the same or lesser value. CL will pay
all freight expenses incurred.
4. PROPRIETARY RIGHTS
4.1 Product Warranty. CBT warrants that for a period of []* days
following delivery to CL, the Courseware will perform substantially as set forth
in the Documentation and that the media on which the Courseware is furnished to
CL will be free from defects in materials and workmanship during normal use.
EXCEPT AS EXPRESSLY SET FORTH ABOVE, THE COURSEWARE AND DOCUMENTATION ARE
PROVIDED "AS IS". CBT HEREBY DISCLAIMS ALL OTHER WARRANTIES, EXPRESS, IMPLIED,
OR STATUTORY, INCLUDING WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
4.2 Proprietary Rights Indemnification.
(a) CBT shall indemnify CL and hold it harmless from any and
all damages, liabilities, costs and expenses (including but not limited to
reasonable attorneys' fees) incurred by CL as a result of any claim (or a claim
by an end user that is related to a claim) that the Courseware or the Trademarks
or any part thereof infringes any patent, copyright, trademark or trade secret
of any third party, provided that CL promptly notifies CBT in writing of any
such claim and CBT shall control and defend or settle any such claim at CBT's
expense and with CBT's choice of counsel. CL shall cooperate with CBT, at CBT's
expense, in defending or settling such claim and CL may join in defense with
counsel of its choice at its own expense. CL may not settle any claim without
CBT's prior written consent. Following notice of any claim with respect to which
CL believes itself entitled to indemnification under this section, CBT shall
have the right at its option and expense to (i) procure for CL and the End-Users
the right or license to use the Courseware as delivered; (ii) modify the
infringing materials so as to render them non-infringing; (iii) replace the
Courseware or parts thereof with other functionally equivalent software; or (iv)
if (i), (ii) and (iii), and each of them, are not commercially feasible,
terminate this Agreement and refund to CL amounts paid for unsold inventory,
which inventory CL shall promptly return to CBT.
(b) CBT shall have no liability for any infringement based on
(i) the use of the Courseware other than as set forth in the Documentation; (ii)
the modification of the Courseware by any party other than CBT if such
infringement would have been avoided by the use of the unmodified Courseware; or
(iii) the combination or use of the Courseware with other software, items or
processes not furnished by CBT if such infringement would have been avoided by
the use of the Courseware alone. If the Courseware being distributed infringes
an intellectual property right of a third party, CL shall have up to 90 days
(after a new release of the Courseware that does not infringe has been provided
to CL) to begin distribution of such new release. CBT shall have no liability or
obligation to indemnify pursuant to this Section for any infringement violation
due to use of Courseware by an end user that was not provided with a new release
within such ninety (90) day period. THIS SECTION 4.2 STATES
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CBT'S ENTIRE OBLIGATION WITH RESPECT TO ANY CLAIM REGARDING THE INTELLECTUAL
PROPERTY RIGHTS OF ANY THIRD PARTY.
4.3 LIMITATION OF LIABILITY. EXCEPT FOR A CLAIM PURSUANT TO SECTION
4.2, THE LIABILITY OF EITHER PARTY OR CBT'S LICENSORS, IF APPLICABLE, TO THE
OTHER PARTY OR TO ANY THIRD PARTY ARISING OUT OF THIS AGREEMENT, EXCEED THE
TOTAL AMOUNT ACTUALLY RECEIVED BY CBT HEREUNDER DURING THE PREVIOUS TWELVE (12)
MONTHS. NOTWITHSTANDING THE ABOVE, IN NO EVENT SHALL EITHER PARTY OR CBT'S
LICENSORS, IF APPLICABLE, BE LIABLE TO THE OTHER PARTY OR ANY THIRD PARTY FOR
LOSS OF DATA, COSTS OF PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES, OR ANY
INDIRECT, INCIDENTAL, SPECIAL, OR CONSEQUENTIAL DAMAGES UNDER ANY CAUSE OF
ACTION, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
THIS LIMITATION SHALL APPLY NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF
ANY LIMITED REMEDY PROVIDED HEREIN.
5. TERM AND TERMINATION
5.1 Term of Agreement. The term of this Agreement shall commence on the
Effective Date and continue for a period of two (2) years. This agreement shall
automatically renew for additional one-year terms. Either party may terminate
this Agreement for convenience effective on any date on or after the date that
is twenty-five (25) months after the Effective Date, by giving at least thirty
(30) days' written notice of termination to the other party.
5.2 Automatic Termination. This Agreement shall terminate automatically
without notice and without further action by either party in the event that the
other party becomes insolvent (i.e. becomes unable to pay its debts in the
ordinary course of business as they come due) or makes an assignment of this
Agreement for the benefit of creditors.
5.3 Termination for Breach. This Agreement may be terminated by either
party in the event of a material breach of this Agreement by the other party
that is not cured within forty-five (45) days of written notice of such breach
delivered to such party.
5.4 Effect of Termination. Upon the expiration or termination of this
Agreement:
(a) Each party shall immediately pay to the other party all
accrued fees and any other amounts due to the other party hereunder.
(b) CL shall, within forty-five (45) days of such expiration
or termination (i) return to CBT all Demonstration Copies, any Master Copies
received hereunder, and all other material received from CBT and for which CL
has not paid CBT a per copy fee; (ii) erase any and all of the foregoing from
all computer memories and storage devices within CL's possession or control; and
(iii) provide CBT with a signed written statement certifying that it has
complied with the foregoing obligations.
(c) All rights and licenses granted by CBT hereunder shall
terminate, provided such termination shall not result in the termination of End
User Licenses for copies of the Courseware which have been purchased by End
Users.
(d) Notwithstanding the foregoing, upon the expiration or
termination of this Agreement for any reason other than CL's breach, CL may
distribute its existing inventory of Courseware for a period of []* after the
date of such expiration or termination. All applicable provisions of this
Agreement shall continue in force solely for the purpose of permitting CL to
distribute such existing inventory.
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(e) Sections 4, 5 and 6, and the reports and audit provisions
of Exhibit C, to the extent applicable, shall survive.
5.5 Limitation of Liability Upon Termination. In the event of
termination by either party in accordance with any of the provisions of this
Agreement, neither party shall be liable to the other because of such
termination for compensation, reimbursement or damages on account of the loss of
prospective profits or anticipated sales or on account of expenditures,
inventory, investments, leases or commitments in connection with the business or
goodwill of CBT or CL.
6. GENERAL PROVISIONS
6.1 This Agreement Controls. This Agreement shall control CL's
reproduction and distribution of the Courseware and Documentation. All different
or additional terms or conditions in any CL purchase order or similar document
shall be null and void.
6.2 Notices. All notices shall be given in writing and shall be
considered effective when (a) personally delivered, (b) upon confirmed receipt
if sent by electronic mail or facsimile; or (c) two (2) days after posting if
sent by registered private carrier (e.g. DHL, Federal Express, etc.). Notice
shall be sent to the parties at their respective addresses set forth above or to
such other address as either party may specify by written notice.
6.3 Merger; Amendment; Waiver. This Agreement, including the Exhibits
hereto, constitutes the final, complete, and exclusive agreement between the
parties with respect to the subject matter hereof and supersedes all prior or
contemporaneous agreements. No modification, amendment, or waiver of any
provision of this Agreement shall be effective unless in writing signed by both
parties. The failure or delay by either party in exercising any right, power or
remedy under this Agreement shall not operate as a waiver of any such right,
power or remedy.
6.4 Independent Contractor. CL is an independent contractor, and
nothing herein shall be construed to create an employer-employee, partnership,
joint venture, or agency relationship between the parties. CL shall have no
authority, right or power to create any obligation or responsibility on behalf
of CBT.
6.5 Assignment. Except to an entity that succeeds to all or
substantially all the assets or business of a party, neither party may assign
any of its rights or delegate any of its obligations hereunder, whether by
operation of law or otherwise, without the other party's prior written consent.
Notwithstanding the foregoing, if CL assigns this Agreement to a direct
competitor of CBT, CBT has the option to terminate this Agreement immediately.
Subject to the foregoing, this Agreement shall bind and inure to the benefit of
the parties, their respective successors and permitted assigns.
6.6 Severability. If any provision of this Agreement shall be held by a
court of competent jurisdiction to be contrary to law, such provision shall be
changed and interpreted so as to best accomplish the objectives of the original
provision to the fullest extent allowed by law and the remaining provisions of
this Agreement shall remain in full force and effect.
6.7 Governing Law. This Agreement shall be governed by and construed
under the laws of the State of California, excluding conflict of law provisions
and excluding the 1980 United Nations Convention on Contracts for the
International Sale of Goods. The parties consent to the personal and exclusive
jurisdiction of and venue in the state and federal courts of Santa Clara County,
California, U.S.A. for any disputes arising out of this Agreement.
6.9 Multiple Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each one of which shall be deemed an
original, but all of which shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of
the date first above written.
COMPUTER LITERACY INC. CBT SYSTEMS, LTD.
Name: /s/ Dennis Capovilla By: /s/ Richard Okumoto
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Title: V.P. Sales and Business Development Title: Vice President and Chief Financial Officer
------------------------------------------- --------------------------------------------
Date: 3/26/98 Date: 3/27/98
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APPLICABLE ATTACHED EXHIBITS
Please Initial Below if attached:
(____) Exhibit A
(D.C.) Exhibit B
(D.C.) Exhibit C: Reproduction
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EXHIBIT A
COURSEWARE -
Name Version Language
DOCUMENTATION -
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EXHIBIT B
SUGGESTED PRICES FOR COURSEWARE - [PRICE LIST TO COME.]
TOTAL PURCHASE COMMITMENT - []*
PER COPY FEES - []*
PAYMENT SCHEDULE:
[]* Due within []* following Execution
[]* Due []*
[]* Due []*
[]* Due []*
[]* Due []*
[]* Due []*
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EXHIBIT C
REPRODUCTION
C-1 Additional Definitions.
"Master Copy" means the copy of the Courseware, which CL may use to make copies
of the Courseware under Section C-2.
C-2 Reproduction License. Subject to the terms and conditions of this Agreement,
CBT hereby grants to CL a non-transferable, non-exclusive license to make copies
of the Courseware from the Master Copy and to make copies of the End User
License and Documentation solely for distribution as part of the Courseware
pursuant to Section of the Agreement. CL may not sublicense the rights granted
in this Exhibit C.
C-3 Restrictions. The licenses granted to CL in Section C-2 above are expressly
conditioned upon CL's compliance with the following:
CL shall ensure that each copy of the Courseware is accompanied by one (1) copy
of the End User License. CL shall not alter, modify, change or replace the End
User License.
CL's FAILURE TO COMPLY WITH THE PROVISIONS OF THIS SECTION C-3 SHALL BE DEEMED A
MATERIAL BREACH OF THIS AGREEMENT.
C-4 Delivery. Within thirty (30) days after the Effective Date or at such other
time as the parties shall mutually agree, CBT shall deliver to CL one (1) Master
Copy and one (1) copy of the End User License.
C-5 Shipment Terms. All shipments hereunder shall be F.O.B. CBT's shipping
location (either CBT's address or that of third party fulfillment contractors),
freight collect, unless specified otherwise by CBT in writing.
C-6 Inspection. CL shall inspect all items upon arrival at their destination and
shall, within ten (10) days of arrival, give written notice to CBT of any claim
of damage or shortages. Should CL fail to give such notice, or fail to obtain an
extension to such ten (10) day period from CBT, the items shall be deemed to be
accepted by CL.
C-7 Reports. Within thirty (30) days after the end of each calendar quarter, and
at such other times as CBT may request, CL shall deliver to CBT a written fee
report certified as accurate by an authorized representative of CL which sets
forth for such calendar quarter the number of copies of the Courseware
distributed and the number of copies of the Courseware reproduced by CL.
C-8 Audit. CL shall use reasonable efforts to make and keep materially accurate
records of all reproduction and distribution of the Courseware under this
Agreement. Upon reasonable notice and at CBT's expense, CBT may appoint an
independent certified public accountant to inspect, copy, and audit CL's
relevant sales and accounting records to ensure compliance with the payment
terms of this Agreement. Such inspection and audit shall be at CL's office
during normal business hours upon at least fourteen (14) days prior notice and
shall not interfere unreasonably with CL's business activities. Inspections and
audits shall be made no more frequently than twice a year. In the event any such
audit reveals underpayment of more than five percent (5%) of amounts payable to
CBT during the period subject to audit, CL shall pay the cost of such audit in
addition to the amounts due.
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ADDENDUM TO
CBT SYSTEMS, LTD. AND COMPUTER LITERACY, INC. AGREEMENT
This Addendum is entered as of this first day of June, 1998
(the "Addendum Effective Date") with respect to that certain Agreement, dated
March 7, 1998, by and between CBT Systems, Ltd., a Delaware corporation, with a
principal place of business at 1005 Hamilton Court, Menlo Park, California,
94205 ("CBT") and Computer Literacy, Inc., a California corporation, having its
principal place of business at 1308 Orleans Drive, Sunnyvale, California, 94089
("CL") (the "Agreement"). Except as set forth in this Addendum all terms and
provisions of the Agreement shall remain in full force and effect. Capitalized
terms not otherwise defined herein shall have the meaning given to them in the
Agreement.
WHEREAS CBT and SAP America, Inc. ("SAP") have an agreement
providing for the development and distribution of CBT interactive educational
software to deliver training with respect to SAP products ("SAP CBT
Courseware"), and CBT and SAP desire to extend that agreement to provide for
marketing and distribution of SAP Courseware by means of an Internet website
that features both parties' logos and trademarks; and
WHEREAS CBT and CL desire to enter into an agreement to
provide for the distribution of SAP CBT Courseware and other SAP-related
Courseware owned or developed by CBT (collectively "SAP Courseware") by means of
a website hosted by CL that is designated as a site jointly maintained by CBT,
SAP and CL.
NOW, THEREFORE, for good and valuable consideration, the
parties hereto agree as follows:
1. CL will use reasonable efforts to create, host, and maintain
an Internet website on which SAP Courseware which CBT owns or develops is
promoted and which features the logos and trademarks of each of CBT, SAP and CL
(the "Co-Branded Website"). CL agrees that the Co-Branded Website will present a
professional look and feel, and provide editorial content and guidance to
visitors to the Co-Branded Website except as expressly set forth to the contrary
within this Addendum, SAP Courseware shall be deemed "Courseware" for purposes
of the Agreement.
2. CBT hereby grants CL the worldwide right and license to
market and distribute SAP Courseware on the Co-Branded Website, including CBT's
SAP-related Courseware that CL is currently authorized to distribute pursuant to
the Agreement, and to fulfill customer orders submitted electronically thereto.
3. CL agrees to provide electronic "links" from CL's proprietary
Internet website to the Co-Branded Website and to monitor and report when orders
for SAP Courseware submitted to the Co-Branded Website have originated from CL's
website or from either the respective proprietary website of CBT or SAP.
4. CL will provide quarterly customized electronic reporting to
CBT for sales pursuant to the Co-Branded Website. The reports will include, if
such information is reasonably available to CL, information regarding sales by
title, by state and by country, as well as the origin and generation of such
sales, such as by link from the proprietary website of CBT, CL or SAP. In
addition, CL will use reasonable efforts provide complete "webographics:"
click-thru analysis by day, by link, and by title. The appropriate format will
be determined in conjunction with CBT to ensure smooth data transfer and minimal
reformatting effort. CL will submit the agreed quarterly reports to CBT no later
than thirty (30) days from the end of a calendar quarter.
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5. CL will provide CBT with a dedicated point of contact who
will be responsible for managing all ongoing efforts between the two parties,
including account management, product selection, marketing and merchandising
efforts, and ongoing process improvements.
6. CBT shall incur and ensure that CL has the right to use and
reproduce the SAP's trademarks in connection with marketing, advertising,
promotions and distribution of the SAP Courseware. In addition, SAP's trademark
shall be deemed "Trademarks" for purposes of the Agreement.
7. Notwithstanding the Per Copy Fees set forth in the Agreement,
CL and CBT agree that the amount to be paid by CL to CBT for SAP Courseware
ordered and fulfilled in connection with the Co-Branded Website will be as
follows: CL shall pay CBT []* for all sales of the SAP Courseware orders
fulfilled by CL. In addition, if an SAP Courseware order is generated from a
user placing an order from http://www.clbooks.com/sap, CL shall pay CBT []* as a
referral fee for such sale.
8. The foregoing payment shall be the only payment made to CBT
in relation to the specific SAP Courseware ordered. Furthermore, any payments
made pursuant to this Addendum shall count towards calculating units for the
Total Purchase Commitment.
9. Unless extended by mutual written agreement, this Addendum
will terminate nine (9) months from the Effective Date.
10. THE CO-BRANDED WEBSITE IS PROVIDED "AS-IS". CL HEREBY
DISCLAIMS ALL OTHER WARRANTIES, EXPRESSED OR IMPLIED OR STATUTORY, INCLUDING
WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS, FOR A
PARTICULAR PURPOSE OR NONINFRINGEMENT.
IN WITNESS WHEREOF, the parties hereto have signed this
Agreement as of the date first above written.
COMPUTER LITERACY INC. CBT SYSTEMS USA, LTD.
By: __________________________ By: ______________________________
Title: _______________________ Title: ___________________________
Date: ________________________ Date: ____________________________
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* CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION.
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<PAGE> 13
ADDENDUM NO. 2 TO
AGREEMENT
BETWEEN
CBT SYSTEMS, LTD. AND COMPUTER LITERACY, INC.
This Addendum No. 2 (the "Addendum") is entered as of this
20th day of June, 1998 with respect to that certain Agreement, dated March 7,
1998 (the "Distribution Agreement"), by and between CBT Systems, Ltd., a
Delaware corporation, with a principal place of business at 1005 Hamilton Court,
Menlo Park, California 94205 ("CBT") and Computer Literacy, Inc., a California
corporation, having its principal place of business at 1308 Orleans Drive,
Sunnyvale, California 94089 ("CL"). Except as set forth in this Addendum, all
terms and provisions of the Distribution Agreement shall remain in full force
and effect. Capitalized terms not otherwise defined herein shall have the
meaning given to them in the Distribution Agreement.
WHEREAS CBT and CL desire to amend the Distribution Agreement to expand CL's
distribution rights and increase CL's purchase commitment,
NOW, THEREFORE, for good and valuable consideration, the parties hereto agree as
follows:
1. Right to Distribute Pursuant to Multi-User Licenses. The first sentence of
Section 1.1 of the Distribution Agreement shall be amended and restated to read
in its entirety as follows:
"1.1 License. Subject to the terms and conditions of this Agreement,
CBT hereby grants to CL a non-transferable, non-exclusive license to distribute
CBT's proprietary computer programs described on Exhibit A in object code format
(the "Courseware") and any documentation supporting the Courseware provided from
time to time by CBT (the "Documentation") to third parties ("End Users")
pursuant to either a personal use, perpetual license for use on a single
personal computer or pursuant to a multi-user license for a maximum of []* on a
stand-alone computer or network node."
2. []* Minimum Commitment. The amount stated as the Total Purchase Commitment in
Section 3.3 of the Distribution Agreement shall be changed from []* to []*, and
the payment schedule attached as Exhibit B shall replace Exhibit B to the
Distribution Agreement. The third and fourth sentences of Section 3.3 shall be
deleted and replaced by the following:
"3.3 Purchase Commitment. . . . Starting on the first anniversary of
the Effective Date (the "First Anniversary") CL shall pay CBT the remaining
amount of the Total Purchase Commitment in installments in the amounts and on or
before the dates set out in Exhibit B. Should CL's Courseware orders exceed the
[]* Total Purchase Commitment before the end of the []*, CL will be required to
pay the balance of the []* before CBT ships additional Courseware. . ."
3. Further Discounts in Per Copy Fees Upon Reaching Certain Targets;
Co-Marketing Expenditures. Section 3.2 of the Distribution Agreement shall be
amended by adding the following sentences:
"3.2 Per Copy Fees. . . . If CL's Courseware orders have exceeded []*
by []*, a number that reflects []* of the revenue target CBT has set for CL's
distribution activities, CL's Per Copy Fees in the []* of the term shall be
reduced by []*, resulting in []* Per Copy Fees commencing with Courseware orders
placed after []*. []* shall []* in an []* this additional discount over the
period from []* through []*. To illustrate: if CL's Per Copy Fees in the third
year of the term of the Distribution Agreement equal []* after
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* CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION.
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<PAGE> 14
the additional discount is applied to Courseware orders in the amount of []*
before the discount, []* shall []* CBT products in that same period."
4. Extension of Initial Term. Section 5.1 of the Distribution Agreement shall be
amended and restated to read in its entirety as follows:
"5.1 Term of Agreement. The term of this Agreement shall commence on
the Effective Date and continue for a period of three years and three months
(the "Initial Term"), terminating on June 20, 2001. This Agreement shall
automatically renew for additional one-year terms -- unless terminated by either
party at least one hundred and eighty (180) days prior to the end of the current
term; provided however, that early termination of the Initial Term, will not
reduce CL's total Purchase Commitment or change agreed payment terms therefor."
5. Exhibit B. Exhibit B shall be amended and restated as set forth in the
Attachment to this Amendment.
IN WITNESS WHEREOF, the parties hereto have signed this
Agreement as of the date first above written.
COMPUTER LITERACY INC. CBT SYSTEMS USA, LTD.
By: /s/ Dennis Capovilla By: /s/ Richard Okumoto
---------------------------------- -------------------------------------------
Title: Vice President Title: Vice President and Chief Financial Officer
---------------------------------- -------------------------------------------
Date: 6/22/98 Date: 6/24/98
---------------------------------- -------------------------------------------
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* CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION.
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<PAGE> 15
ATTACHMENT
EXHIBIT B
TOTAL PURCHASE COMMITMENT - []*
AMOUNT PAID TO DATE: []*
PAYMENT SCHEDULE FOR REMAINING []*:
[]* DUE []*
[]* DUE []*
[]* DUE []*
[]* DUE []*
[]* DUE []*
[]* DUE []*
[]* DUE []*
[]* []*
[]* []*
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* CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION.
15