EXHIBIT 10.18
SUBCONTRACTOR AGREEMENT
This subcontractor agreement (the "Agreement"), is made to be effective
on May 1, 2003 (the "Effective Date") by and between EDT Learning, Inc. ("EDT
Learning"), a Delaware corporation and Interactive Alchemy, Inc. ("Contractor").
WHEREAS, EDT Learning is in the business of providing custom content
development services to its customers (in the corporate, government and
education customers sectors) and is the owner of certain proprietary techniques,
methods and/or processes for developing and converting content into online and
cd-rom based courses to individual end users and distributors;
WHEREAS, EDT Learning and Contractor desire to enter into an agreement
whereby Contractor will provide e-Learning custom content development and
professional services to EDT Learning and indirectly to EDT Learning's Customers
using among other things EDT Learning's Development Software;
WHEREAS, EDT Learning and Contractor wish to execute this Agreement and
certain subsequent statements of work, which will provide a description of each
specific engagement or project, the associated fees, and the resulting work
products or courses;
NOW, THEREFORE, EDT Learning and Contractor, in exchange for the mutual
promises and conditions contained herein and other good and valuable
consideration the sufficiency of which is hereby acknowledged, do agree as
follows:
1. DEFINITIONS:
a. "Custom Services" shall mean any of the services provided by
Contractor pursuant to a Statement of Work to EDT Learning and
indirectly to EDT Learning's Customers, which may include but are
not limited to: (i) development of Courses incorporating and
combining Customer Source Material with EDT's Learning Products or
EDT Learning's Development Software; (ii) customizing and creating
a Customer's Course using EDT Learning's Development Software;
(iii) the creation or customization of an existing Customer's
Course using Customer Source Material and a third party's
development software for EDT Learning; or, (iv) any other type of
work or effort on behalf of EDT Learning or its Customer pursuant
to a Statement of Work executed by the parties hereto.
b. "Source Material" shall be the source materials that belong to EDT
Learning or its Customers that will be used or incorporated into a
Course as a part of a Statement of Work, including text, pictures,
graphics, sound files and video files.
a. "Customer" shall mean any person or entity that: (i) had prior to
the Effective Date ever purchased, obtained or received any good,
service or product from either EDT Learning or from entities that
have engaged in a merger or asset purchase transaction with EDT
Learning, (specifically LearningEdge, Inc., ThoughtWare
Technologies, Inc., Quisic Corporation and Mentergy, Inc.) and
(ii) any person or entity who does during the period beginning
with the Effective Date and ending the with termination date of
this Agreement purchase, obtain or receive any good, service or
product from EDT Learning.
d. A "Contractor Client" shall mean any person or entity with which
Contractor does business who is not an EDT Learning Customer. If a
person or entity does business with the
SUBCONTRACTOR AGREEMENT PAGE 1 OF 18
Contractor prior to becoming an EDT Learning Customer and then
subsequently does business with EDT Learning then that person or
entity will not become a "Customer."
e. "Course" shall mean any computer based or web based training,
instructional or demonstration course that Contractor develops for
EDT Learning or an EDT Learning Customer and shall also mean the
Derivative Work and Work Product Contractor creates on behalf of
EDT Learning for its Customer using the EDT Learning Development
Software and/or the Contractor Development Software to modify the
Source Material from one or more Courses.
f. "Derivative Work" shall mean any work that is based upon one or
more preexisting works, EDT Learning Products, EDT Learning
Development Software, such as a revision, enhancement,
modification, translation, abridgement, condensation, expansion,
or any other form in which such preexisting works may be recast,
transformed or adapted, and that, if prepared without
authorization of the owner of the copyright in such preexisting
work, would constitute copyright infringement. For purposes
hereof, a Derivative Work shall also include any compilation or
combination that incorporates such preexisting work.
g. "EDT Learning Products" means the software and other proprietary
products developed, owned, leased and /or licensed by EDT
Learning, and/or the software and other proprietary products
developed and owned by EDT Learning including LearnLinc(R), or
learning management systems, and any other software in which EDT
Learning maintains a proprietary ownership interest.
h. "Proprietary Rights" shall mean any and all ownership rights and
other proprietary rights and interests, including but not limited
to, patents, patent rights and published or unpublished U.S. and
foreign patent applications, copyrights, copyrighted materials,
unpublished research and development information, engineering,
technical or product specification, designs, processes,
un-patented inventions, mask ware, mask works, know-how, trade
secrets, trademarks and their associated good will, trade names,
service marks and their associated good will, logos, designs,
technical data, licenses to practice any of the foregoing, and
physical embodiments of any of the foregoing.
i. "Development Software" shall mean the proprietary course
development tool set and course player developed and owned by EDT
Learning called i-CanvasTM and any software used or owned by EDT
Learning and used in conjunction with i-Canvas for the
development, creation or maintenance of a Course including EDT
Learning's scripting tool and i-ReviewTM products, together with
any documentation or materials provided therewith. "Statement of
Work" shall mean the document between EDT Learning and Contractor
in which Custom Services will be assigned by EDT Learning to
Contractor. Each Statement of Work to this Agreement will define
Custom Services to be provided and shall be mutually agreed to
between EDT Learning and Contractor and will be executed by both
parties and shall not be effective or binding upon EDT Learning or
its Customer until signed by an authorized officer of EDT Learning
and an authorized officer of Contractor. Each Statement of Work to
this Agreement may include the description of Custom Services to
be performed, the rate of compensation in hours and in total,
expected start and completion date, any acceptance criteria,
testing criteria, and delivery milestones. Where a Statement of
Work contains provisions that are inconsistent with this
Agreement, the inconsistent provisions of the Statement of Work
shall govern, and all other provisions of this Agreement shall
remain in full force and effect.
SUBCONTRACTOR AGREEMENT PAGE 2 OF 18
k. "Trademarks" shall mean the marks claimed in good faith by EDT
Learning to be its proprietary marks (service and trade) which
include, but are not limited to: "EDT Learning e-Learning
Simplified" "EDT Learning", "EDT Learning Custom Services Group",
iCanvas(TM), LearnLinc(R), TestLinc(TM), OfficeLinc(TM),
SupportLinc(TM), MeetingLinc(TM), ThoughtWare(TM), i-ReviewTM and
any corresponding design or logo, associated with those Trademarks
together with their respective stylistic markings and distinctive
logotypes for such trademarks, trade names and service marks,
along with all associated goodwill.
1. "Work Product" shall mean (i) all of the tangible product or
result of Contractor's work, including work of Contractor's
subcontractors, if any, pursuant to any Statement of Work issued
hereunder or pursuant to any other agreement of EDT Learning and
Contractor and (ii) all intellectual property and intellectual
property rights that relate to the business and interests of EDT
Learning that Contractor conceives, develops or delivers at any
time during the course of Contractor's performance of any
Statement of Work issued hereunder or pursuant to any other
agreement of EDT Learning and Contractor. Notwithstanding the
foregoing, "Work Product" shall not include Consultant Tools, and
EDT Learning hereby disclaims any ownership or proprietary
interest of any kind in any Consultant Tools.
m. "Advance Deposits" shall mean monies EDT collects from EDT
customers for work for which no Statement of Work" has been
executed.
n. "Consultant Tools" shall mean any method, process or technique
designed and developed by Contractor and used by Contractor in
connection with providing consulting services under a Statement of
Work, whether any such method, process or technique was conceived,
developed or delivered prior to this Agreement or in connection
with providing services under a Statement of Work that are not
directly related to, based upon or derived from EDT Learning
Products, Derivative Work or Development Software. Contractor
retains ownership of and all rights to any Consultant Tools.
Except as otherwise expressly provided in a separate, written
license agreement signed by Contractor, if any, no license or
other right to the Tools is granted or transferred to any Customer
or to EDT Learning by this Agreement, any Statement of Work, or
any Customer Contract.
o. "Customer Contract" shall mean any contract or agreement between
EDT Learning and a Customer (including without limitation any
master agreement, any amendments and all relevant statements of
work, including amendments) to which Custom Services relate.
2. APPOINTMENT AS CONTRACTOR. EDT Learning hereby appoints Contractor, and
Contractor hereby accepts appointment from EDT Learning, as its sole
authorized Custom Services contractor, subject to the terms and
conditions hereof. Contractor agrees to provide to EDT Learning and its
Customers Custom Services that are described and jointly agreed upon in a
Statement of Work, as provided in this Agreement, using approved
development tools including the Development Software. EDT Learning agrees
that from time to time Contractor may hire subcontractors to assist
Contractor in providing Custom Services, provided however that the use of
subcontractors shall not relieve Contractor of any obligation or
liability under this Agreement or any Statement of Work.
3. CUSTOM SERVICES. This Agreement is a foundation document to establish the
working relationship between EDT Learning and Contractor in an
independent agent principal relationship. EDT Learning and Contractor
will endeavor to use a Statement of Work in the form attached as EXHIBIT
"A." Statements of Work will be agreed upon concerning each project
obtained by EDT Learning from the
SUBCONTRACTOR AGREEMENT PAGE 3 OF 18
Customer pursuant to a Customer Contract and will be executed from time
to time by the parties after the Effective Date. EDT Learning shall
provide to Contractor, in connection with the negotiation of each
Statement of Work, a copy of all relevant portions of the Customer
Contract (including any amendments thereto). Any Statement of Work may be
supplemented or modified by the parties from time to time, but any
changes to a Statement of Work shall only be binding if made in writing
and signed by both parties. The parties will further refine the scope of
work and the timetables associated with any particular project through
the development of a project plan and scope document which may supplement
and/or amend the Statement of Work. Contractor will not attempt to
negotiate any Statement of Work directly with a Customer and accordingly
will not attempt to negotiate the price to be paid by the Customer or the
payment terms available to the Customer. However, Contractor may assist
EDT Learning in preparation of the Statement of Work by discussing the
project with the Customer including the nature of the work, the type of
deliverable, and the timelines associated with the project. Contractor
will not be authorized to begin the delivery of Custom Services to EDT
Learning unless and until a Statement of Work is executed by EDT Learning
and by Contractor authorizing the work.
4. CONTRACTOR OBLIGATIONS. Upon execution of a relevant Statement of Work,
issued by EDT Learning to Contractor and agreed to by Contractor in
writing, Contractor warrants and represents that it will identify and
allocate the resources required to design, develop and deliver the Custom
Services to EDT Learning for timely delivery to Customer in accordance
with the Statement of Work. Contractor shall be fully responsible for,
and shall exercise all due diligence with respect to, the care and
protection of any Source Materials which may be in Contractor's
possession, custody, or control, including but not limited to maintaining
the confidentiality thereof and preventing any unauthorized access or use
thereof. Contractor shall ensure that all Courses developed and delivered
to EDT Learning or its Customers are fully tested and comply with the
Statement of Work pursuant to which they were developed and delivered.
Within 30 days after termination of this Agreement Contractor and any
third parties to whom Contractor has disseminated such Source Materials
shall provide written verification that all such Source Materials have
been returned to EDT Learning or its Customers, and neither Contractor
nor its subcontractors will retain any copies of such Source Materials.
Contractor agrees that the quality control of the Course and the Custom
Services provided shall be the sole responsibility of Contractor. Subject
to Contractor's rights to pursue its remedies under this Agreement,
Contractor shall perform all Custom Services in a professional and
expeditious manner and warrants that its services will be of a
professional quality conforming to generally accepted industry standards
and procedures. Contractor will conduct its business with EDT Learning
Customers in a manner that reflects favorably at all times on EDT
Learning and the good name, goodwill and reputation of EDT Learning.
Contractor will avoid materially deceptive, misleading or unethical
practices that are or might be detrimental to EDT Learning or its
Products. Contractor will make no materially false or misleading
representations with regard to EDT Learning or the Custom Services and
will not: (i) employ or cooperate in the publication or employment of any
materially misleading or deceptive advertising with regard to the Custom
Services or Products; (ii) make representations, warranties or guarantees
to the Customers with respect to the specifications, features or
capabilities of the Custom Services or Courses other than those which are
consistent with the Statement of Work (or any amendment thereof); or,
(iii) enter into any contract or engage in any practice in conflict with
its obligations under this Agreement.
5. EDT LEARNING OBLIGATIONS. EDT Learning will conduct its business
activities in a professional and expeditious manner. EDT Learning will
avoid materially deceptive, misleading or unethical practices that are or
might be detrimental to Contractor. EDT Learning will make no materially
false or misleading representations with regard to Contractor or the
Custom Services and will not: (i) employ or cooperate in the publication
or employment of any materially misleading or deceptive advertising with
regard to the Custom Services or Products or (ii) make representations,
warranties or guarantees
SUBCONTRACTOR AGREEMENT PAGE 4 OF 18
to the Customers with respect to the specifications, features or
capabilities of the Custom Services or Courses other than those which are
consistent with the Statement of Work.
6. GRANT OF SOFTWARE LICENSE. Subject to the terms and conditions contained
herein, EDT Learning hereby grants to Contractor while this Agreement
remains in effect a non-exclusive, non-transferable, limited license to
use the Development Software and the EDT Learning Trademarks to provide
Custom Services to EDT Learning's Customers and to Contractor Clients. It
is agreed and accepted by the parties that any licenses granted by EDT
Learning to Contractor herein are limited personal licenses with no right
to sublicense or sell that license. All proprietary rights in and to the
Development Software, EDT Learning Products and Trademarks not granted
herein shall remain fully and exclusively vested in EDT Learning. The
limited license rights granted pursuant to this Agreement are the only
rights that Contractor has to the EDT Learning Development Software, EDT
Learning Products and Trademarks. During the term of this Agreement and
in consideration for its execution, Contractor will be provided a fifty
(50) user license to the i-Canvas software, including maintenance,
support and upgrades without charge to Contractor. Upon termination of
this Agreement, Contractor will have the right during the ninety (90) day
period following the termination date to purchase licenses of the
i-Canvas software at the lesser of the then current price or 80% of the
price of i-Canvas at the Effective Date of this Agreement with the
i-Canvas license purchased by Contractor being granted on EDT Learning's
standard end user license terms. Unless and until this Agreement is
terminated, Contractor may modify the source code of the i-Canvas
software from time to time for use on a Customer's or Contractor Client's
project. Prior to modification, Contractor will notify EDT Learning of
the proposed change. Any changes to the i-Canvas software or any other
EDT Learning Products or Development Software made by Contractor,
regardless of the nature of the change or the timing of the change, will
at all times exclusively vest in EDT Learning with all right title and
interest in and to the i-Canvas software or any other EDT Learning
Products or Development Software, and such changes shall be considered
work-for-hire by Contractor on EDT Learning's behalf, without
compensation of any nature to Contractor for the work performed or the
value of the resulting modified software or product. Except and expressly
authorized in writing by EDT Learning, Contractor shall not modify,
translate, reverse engineer, de-compile or disassemble the Development
Software or the EDT Learning Products or any portion thereof. Contractor
agrees that is will use the Development Software only for the purposes of
performing Custom Services or developing Courses for Contractor Clients
and EDT Learning's Customers. Unless a license is purchased, Contractor
agrees that within 30 days after termination of this Agreement, then
Contractor will immediately return to EDT Learning all copies of
Development Software or the EDT Learning Products, whether in the
possession of Contractor or any subcontractor, and the license granted
will immediately cease. Contractor will also receive such concurrent user
licenses as EDT Learning reasonably determines necessary to use the
LearnLinc(R) virtual classroom software for the exclusive purpose of
internal use (the "Internal Use License") by Contractor while this
Agreement remains in effect. The Internal Use Licenses will include free
maintenance, support and upgrades while this Agreement remains in effect.
Contractor will be able to use the Internal Use Licenses for the
exclusive purpose of: (a) training its own employees; (b) providing
training and support to those person who will be using the Courses
created by Contractor; or (c) providing to Customers and Contractor
Clients ongoing review and modification of the Courses while in
development or during maintenance periods. Contractor shall not use the
Internal Use Licenses to compete with EDT Learning and shall not directly
or indirectly sell, re-sell, deliver, distribute, transfer, lease,
sub-lease, sub-license or otherwise make available for use by an End User
the Internal Use Licenses other than those in the direct employment of
Contractor.
7. OFFICE SHARING ARRANGEMENT. Unless and until this Agreement is terminated
and in consideration for the Contractor Payments (hereinafter defined),
EDT Learning will provide to Contractor use of an appropriate amount of
square feet of EDT Learning's premises (located at 2999 N. 44th Street,
Suite
SUBCONTRACTOR AGREEMENT PAGE 5 OF 18
620, Phoenix, Arizona) (the "Premises") and facilities for the support of
up to 45 fulltime employees who work for Contractor (the "Contractor
Space"). Should Contractor need more square footage than the Contractor
Space provided then Contractor and EDT Learning may engage in a separate
sublease agreement concerning some other portion of EDT Learning's
Premises or Contractor may seek other additional premises outside of the
EDT Learning's Premises. Unless and until this Agreement is terminated
and in consideration for the Contractor Payments, EDT Learning will
provide to Contractor use of its office equipment, office furniture and
general office suite services (the "Executive Suite Services") which is
necessary to provide the Custom Services to EDT Learning that will
include at no additional cost to Contractor office cubicles, desks,
computers, software, telephones, internet access, long distance, fax,
copier, office supplies and postage without itemization. Should EDT
Learning vacate the Premises for any reason and not provide equivalent
space reasonably acceptable to Contractor, then, on and after the date of
vacancy of the Premises, the obligation to provide Contractor Space and
the obligations related to the Executive Suite Services shall terminate
and the Percentage (as defined below) shall be reduced by one-half and
the fees due to Contractor under Section 9b shall be increased to 90%
from 80% of the Net Fees as defined therein. In the event of vacancy of
the Premises, other than the foregoing changes in the Percentage and the
amount due to Contractor the obligations of Contractor to EDT Learning
concerning the Contractor Payments shall continue during the Term hereof.
In consideration for the Executive Suite Services and use of the
Contractor Space provided and other good and valuable consideration, then
Contractor will (the "Contractor Payments"): (a) provide to EDT Learning
each month that this Agreement remains in effect, at no additional
charge, 80 hours of Custom Services for the creation of product
demonstration, sales and marketing literature, web site enhancements and
other creative services for use by EDT Learning, but not as part of the
Custom Services provided to Customers; (b) reimburse one half of the base
compensation of the sales executive which is focused on the sale of
Custom Services (currently Ms. Sue Leff) in an amount up to $2,500 per
month; (c) pay a percentage (the "Percentage") of the collected revenues
associated with the sale of Custom Services to Contractor's Clients
(i.e., revenues to persons other than EDT Learning Customers, the
"Collected Revenues") based upon the following table:
- --------------------------------------------------------------------------------------------------
COLLECTED REVENUES BY DURING THE FIRST DURING THE SECOND AFTER THE SECOND
CONTRACTOR 12 MONTHS FROM THE 12 MONTHS FROM THE ANNIVERSARY OF THE
EFFECTIVE DATE EFFECTIVE DATE EFFECTIVE DATE
- --------------------------------------------------------------------------------------------------
Less than $2 million 20% 20% 20%
BETWEEN $2 AND $4 MILLION 15% 15% 15%
BETWEEN $4 AND $5 MILLION 10% 10% 10%
OVER $5 MILLION 10% 5% 0%
- --------------------------------------------------------------------------------------------------
EDT Learning will maintain a fulltime sales representative who is
dedicated to the sale of Custom Services (the "Contractor Payments").
However, should EDT Learning terminate that sales associate and no longer
employ a person who is dedicated to the sale of Custom Services, then
Contractor on the termination date of that dedicated sales person will no
longer provide to EDT Learning reimbursement of any sales person's
compensation. If EDT Learning desires to hire and/or assign a new
salesperson dedicated to the sale of Custom Services then Contractor will
have the right to approve or disapprove the assignment/hire and upon
their hiring the obligation to reimburse for one half of their
compensation shall again resume.
SUBCONTRACTOR AGREEMENT PAGE 6 OF 18
8. LOYALTY AND EXCLUSIVITY.
a. Each party warrants and represents to the other party that:
i. During the term of this Agreement and for the one (1) year
period after termination of this Agreement, neither party
will solicit for hire or hire any employee of the other
party.
ii. During the term of this Agreement and for the three (3)
year period after termination of this Agreement, Contractor
will not solicit any Customer of EDT Learning (or
facilitate the solicitation of any Customer by any third
party) for the purpose of the sale of the Custom Services
or other product or service which is competitive with that
of the products and services sold by EDT Learning as of the
termination date of this Agreement other than pursuant to
the terms and conditions of this Agreement, and EDT
Learning will not solicit any Contractor Client for the
purpose of the sale of the Custom Services..
iii. During the term of this Agreement and for the one (1) year
period after termination of this Agreement, Contractor will
not solicit any Value Added Reseller or referral partner of
EDT Learning (or facilitate the solicitation by any third
party), including but not limited to SkillSoft, for the
purpose of the sale of the Custom Services or other product
or service which is competitive with that of the products
and services sold by EDT Learning as of the termination
date of this Agreement, other than pursuant to the terms
and conditions of this Agreement. During the term of this
Agreement and for the one (1) year period after termination
of this Agreement, EDT Learning will not solicit any
distribution or referral partner of Contractor (or
facilitate the solicitation by any third party), for the
purpose of the sale of the Custom Services, other than
pursuant to the terms and conditions of this Agreement
iv. During the term of this Agreement and for the three (3)
year period after termination of this Agreement, each party
represents and covenants that it will not (either
personally, or through any individual association,
partnership, corporation or other entity) intentionally
disclose any Trade Secret or Confidential Information of
the other party to any person, (or any association,
partnership, corporation or other entity) for any reason or
purpose whatsoever, except as may be required by this
Agreement, a Statement of Work or operation and compulsion
of law.
b. Each party represents and warrants that its training and
experience are such that the restrictions contained in this
section, in general and in this paragraph specifically, shall not
result in an inability on its part to pursue a livelihood, and
that other alternatives or employment or business endeavors are
reasonably available with these covenants fully enforced. Each
party expressly agrees that the duration, geographical limitations
and description of the prohibited conduct described in these
representations and covenants are reasonable and that such party
has given valuable consideration for the representations and
covenants contained in this section. Each party agrees that the
representations and covenants contained in this section are a
material inducement for the other party to enter into this
Agreement. Because each party has negotiated and agreed to the
limitations and restrictions contained in this section, such Party
expressly waives the right to later protest the reasonableness of
the limitations, warranties, geographical limitations and
prohibited conduct specified in these restrictive representations
and covenants. Each party agrees that any
SUBCONTRACTOR AGREEMENT PAGE 7 OF 18
compensation or fee due to such party may be offset by any damages
sustained by the other party should Contractor materially breach
the foregoing restrictive covenants after notice and failure to
cure such breach. Each party agrees that the other party would be
immediately and irreparably harmed in the event of breach by it
and therefore enforcement by immediately obtaining an injunction
would be proper; and each party agrees that the amount of surety
bond if any required shall not exceed $500.00.
9. FEES, PAYMENT TERMS AND CANCELLATION.
a. EDT Learning and Contractor agree that the fees charged to
Customers for the Custom Services shall be mutually agreed upon by
both parties prior to the execution of a Statement of Work between
EDT Learning and the Customer. Attached hereto in EXHIBIT "B" is
Contractor's current standard fee schedule for the provision of
Custom Services. EXHIBIT "B" is subject to modification by
Contractor on at least 90 days prior written notice by Contractor.
Any deviation from the standard rates for any Statement of Work
shall be mutually agreed upon by both parties prior to quotation
of the prices for the Custom Services to the Customer.
b. Only EDT Learning will bill and collect from the EDT Learning
Customer and accordingly Contractor will only look to EDT Learning
for collection of any fees and charges due to Contractor from such
Customer, including for work performed pursuant to this Agreement
or any applicable Statement of Work. EDT Learning shall make
reasonable commercial efforts to collect such fees and charges,
and in connection therewith and will provide to Contractor a
weekly written report of EDT Learning's aged accounts receivable,
cash collections and such other related information that
Consultant reasonably requests concerning Custom Services. EDT
Learning represents that it shall not write off its accounts
receivable arising from Custom Services performed by Contractor
except for appropriate reserves and write offs due to
uncollectability. Notwithstanding the foregoing, Contractor may
bill and collect from any Contractor Client who is not an EDT
Learning Customer. The fees due to Contractor will be equal to
eighty percent (80%) of the Net Fee received by EDT Learning from
the Customer for the Custom Services provided by EDT Learning to
Customer. The term "Net Fee" shall mean the amount of the fee paid
by Customer to EDT Learning after deduction of the sales
commission (the amount of which is subject to mutual agreement by
EDT Learning and Contractor) due to the EDT Learning sales
executive who was responsible for the sale of the Statement of
Work and shall not include any sales or other taxes collected by
EDT Learning and remitted to any taxing authority. By way of
example but not limitation, should EDT Learning's sales person
receive 10% of the total revenue earned and a project derive
revenue of $100,000, then Contractor shall be due a cash fee equal
to $72,000 with EDT Learning retaining the remaining cash
associated with the revenue of $18,000.
c. Payments to Contractor of the Net Fee will be due upon the
collection of cash from the Customer and which is earned revenue
on an accrual basis in 'accordance with GAAP (matching the
payments from the customer) and will be tendered to Contractor
within three (3) business days of its receipt by EDT Learning.
However, EDT Learning will have no obligation to tender to
Contractor any portion of any Advance Deposits received by EDT
Learning. If EDT Learning receives a deposit of money from a
Customer in advance of the Net Fee being due and payable, then EDT
Learning will advance to Contractor an amount equal to eighty
percent (80%) of that deposit after deduction of the sales
commission (the "Deposit"), provided, however, that such Deposit
shall remain a liability of Contractor to EDT Learning unless and
until earned by Contractor under the applicable accrual rules. By
way of example but not limitation, should EDT Learning's sales
person receive 10% of the
SUBCONTRACTOR AGREEMENT PAGE 8 OF 18
total revenue earned and the Customer tenders a deposit of
$10,000, then Contractor will receive a cash Deposit equal to
$7,200 with EDT Learning retaining the remaining cash associated
with the deposit of $1,800. Only Custom Services which are
resulting from executed Statements of Work on and after the
Effective Date of this Agreement will result in a Net Fee due to
Contractor. Contractor will not be entitled to any portion of any
accounts receivable on EDT Learning's books prior to the Effective
Date. Contractor and EDT Learning will apportion any work in
process which is ongoing (i.e., partially completed projects prior
to the Effective Date) and only the agreed upon un-completed
portion of any work in progress will be subject to any Net Fee or
sharing between EDT Learning and Contractor. EDT Learning and
Contractor will execute separate Statements of Work for projects
that are in partial completion and for which a Net Fee is due. All
payments to Contractor shall be made in United States dollars. EDT
Learning will provide to Contractor a weekly written report in
reasonable detail itemizing cash receipts for payments received
for Custom Services. Contractor will have right to audit upon
reasonable notice and during normal business hours EDT's books and
records concerning custom content development services that are
provided to Customers. EDT Learning will be responsible for the
collection of and payment of all taxes that are imposed on the
Custom Services delivered to Customer, including any sales taxes.
Notwithstanding any other provision of this Agreement, if EDT
Learning fails to make any payment of the Net Fee within the three
(3) days specified above, then in addition to any other remedies
available under this Agreement Contractor shall have the right,
but not the obligation, to immediately suspend all work under the
Statement of Work and/or terminate the Statement of Work in its
entirety.
10. CHANGE MANAGEMENT PROCEDURES.
a. CANCELLATION OF STATEMENTS OF WORK. Once a Statement of Work has
been executed by the parties, then EDT Learning may cancel such
outstanding Statement of Work by providing to Contractor written
notice of such cancellation in the event that: (i) the Customer
cancels the Customer Contract to for which the Statement of Work
provides Custom Services; (ii) the Contractor and EDT Learning
mutually cancel the Statement of Work; or, (iii) Contractor
breaches the Statement of Work and fails to cure such breach
pursuant to Section 18b. hereof. Cancellation of a Statement of
Work will be effective on the later of the date provided in the
notice or the date Contractor receives written notice of
cancellation. In the event of a cancellation of a Statement of
Work, EDT Learning shall reimburse Contractor for all expenses
incurred and for all Custom Services performed through and
including the effective date of the cancellation. The fee due at
cancellation for the services performed shall be based upon the
hours expended and rates provided in the applicable Statement of
Work (or if the specific hourly rates are not provided in the
Statement of Work then the fee due to Contractor shall be based
upon Contractor's standard hourly rate schedule).
b. REQUIREMENT OF CHANGE ORDERS. Any changes, modifications, or
additions to the obligations of either party or to any other
material aspect of a Statement of Work will require a written
Change Order prepared by either party and mutually agreed to by
the parties. Either party may initiate a Change Order by sending
the Change Order to the other party for review and approval. All
Change Orders will conform to the template set forth in EXHIBIT
"C" and may contain, but will not be limited to, the following
information, as applicable:
i. A description of any additional work to be performed
and/or changes to the performance required of either party,
including the estimated number and skill level of personnel
necessary to make such changes and/or additions and the
availability of such personnel over the ensuing period;
SUBCONTRACTOR AGREEMENT PAGE 9 OF 18
ii. A statement of the impact of the work or changes on the
services or other requirements of this Agreement;
iii. The estimated timetable to complete the work specified
in the Change Order;
iv. The impact, if any, on the schedule or fees;
v. Acceptance criteria for such work; and,
vi. Signatures of both parties.
c. ACCEPTANCE OF CHANGE ORDER. Within five (5) days of the submission
of a Change Order to either party, the other party will notify the
party submitting the Change Order of its acceptance or rejection
of the proposed change or addition in writing. Failure to respond
to such a request will not be deemed to constitute acceptance of
such Change Order request.
11. WARRANTY.
a. Contractor represents and warrants that:
i. All work undertaken by it to provide Custom Services, all
Courses, and all Work Product shall be accomplished in a
professional and workmanlike manner, and in accordance with
industry standards, and in accordance with this Agreement
and the applicable Statement of Work; and,
ii. All software, content and other material provided to EDT
Learning or EDT Learning Customer, including Contractor
Work Product and covered Derivative Works do not and will
not, to its knowledge, violate any copyright, trademark,
service mark, trade secrets, U.S. patents, proprietary
right or personal right of any third party, including any
right of privacy or publicity and will not contain any
defamatory or obscene statement or material.
b. EDT Learning represents and warrants that the Development Software
and EDT Learning Products and other material provided to
Contractor for a Customer do not and will not, to its knowledge,
violate any copyright, trademark, service mark, trade secrets,
U.S. patents, proprietary right or personal right of any third
party, including any right of privacy or publicity, and that they
are original works for which EDT Learning has the right, power and
authority to convey the licenses to Contractor or Contractor's
subcontractors contemplated by this Agreement.
12. LIMITATION OF LIABILITY. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS
AGREEMENT, EDT LEARNING AND CONTRACTOR MAKE AND RECEIVE EACH TO THE OTHER
NO WARRANTIES, EXPRESS, IMPLIED, STATUTORY, ARISING FROM THE COURSE OF
DEALING OR USEAGE OF TRADE, OR OTHERWISE, AND EACH PARTY SPECIFICALLY
DISCLAIMS ANY WARRANTIES OF TITLE, QUIET ENJOYMENT, ABSENCE OF SECURITY
INTEREST, LIEN OR ENCUMBRANCE, NONINFRINGEMENT, MERCHANTABILITY AND/OR
FITNESS FOR A PARTICULAR PURPOSE. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED
HEREIN (INDEMNIFICATION), NEITHER EDT LEARNING NOR CONTRACTOR SHALL BE
LIABLE FOR ANY INDIRECT, SPECIAL, CONSEQUENTIAL, INCIDENTAL EXEMPLARY, OR
PUNITIVE DAMAGES RELATING TO OR ARISING FROM ANY BREACH OR ALLEGED BREACH
OF THIS AGREEMENT, OR
SUBCONTRACTOR AGREEMENT PAGE 10 OF 18
FROM ANY PRODUCTS, SERVICES OR OTHER ACTIONS OR OMISSIONS CONNECTED WITH
OR UNDERTAKEN PURSUANT TO THIS AGREEMENT, UNDER ANY CAUSE OF ACTION OR
THEORY OF LIABILITY, (WHETHER BASED UPON BREACH OF CONTRACT OR WARRANTY,
STRICT LIABILITY, NEGLIGENCE, TORT OR OTHERWISE), INCLUDING, WITHOUT
LIMITATION, LOST PROFITS OR INJURY TO BUSINESS, REGARDLESS OF WHETHER THE
OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. EDT
LEARNING'S LIABILITY FOR DAMAGES RELATING TO OR ARISING FROM ANY ALLEGED
BREACH OF THIS AGREEMENT, OR PRODUCT, SERVICE ACT OR OMISSION IN
CONNECTION WITH THIS AGREEMENT SHALL NOT EXCEED THE BALANCE OF PROJECT
PRICE PAYABLE TO CONTRACTOR WITH RESPECT TO COMPLETED COURSES PREVIOUSLY
DEVELOPED PURSUANT TO THE STATEMENT OF WORK DELIVERED BY EDT LEARNING TO
CONTRACTOR PURSUANT TO THIS AGREEMENT AND PRIOR TO EXPIRATION OR
TERMINATION OF THIS AGREEMENT. CONTRACTOR'S LIABILITY FOR DAMAGES
RELATING TO OR ARISING FROM ANY ALLEGED BREACH OF THIS AGREEMENT SHALL
NOT EXCEED THE AMOUNT OF PROJECT PRICE ALREADY PAID BY EDT LEARNING WITH
RESPECT TO STATEMENT OF WORK ISSUED PURSUANT TO THIS AGREEMENT. IN NO
EVENT SHALL EDT LEARNING'S OR CONTRACTOR'S RESPECTIVE AFFILIATES, OR THE
RESPECTIVE SHAREHOLDERS, DIRECTORS, OFFICERS, EMPLOYEES, AGENTS OR
REPRESENTATIVES OF EDT LEARNING OR CONTRACTOR, BE LIABLE FOR ANY CLAIMS
OR DAMAGES RELATING TO OR ARISING FROM ANY BREACH OR ALLEGED BREACH OF
THIS AGREEMENT, OR FROM ANY PRODUCTS, SERVICES OR OTHER ACTIONS OR
OMISSIONS CONNECTED WITH OR UNDERTAKEN PURSUANT TO THIS AGREEMENT, UNDER
ANY CAUSE OF ACTION OR THEORY OF LIABILITY, (WHETHER BASED UPON BREACH OF
CONTRACT OR WARRANTY, STRICT LIABILITY, NEGLIGENCE, TORT OR OTHERWISE),
INCLUDING, BUT NOT LIMITED TO, INDIRECT, SPECIAL, CONSEQUENTIAL,
INCIDENTAL, EXEMPLARY, OR PUNITIVE DAMAGES, OR THIRD PARTY CLAIMS,
INCLUDING WITHOUT LIMITATION LOST PROFITS OR INJURY TO BUSINESS,
REGARDLESS OF WHETHER SUCH INDIVIDUALS OR ENTITIES HAVE BEEN OR ARE
ADVISED OR KNOW OR SHOULD KNOW OF THE POSSIBILITY OF SUCH DAMAGES.
13. INDEMNIFICATION.
a. BY CONTRACTOR. Contractor hereby agrees to indemnify, defend and
hold harmless EDT Learning, its affiliates, and their respective
shareholders, officers, directors, employees, agents and
representatives from and against any and all third party claims or
proceedings ("Claims") for causes of action, demands, liabilities,
obligations, losses, damages, judgments, costs and expenses
(including reasonable attorney's fees and expert witness fees) of
any kind whatsoever: (a) which arise directly or indirectly out
any breach of a Statement of Work by Contractor or its
subcontractors; (b) which arise directly or indirectly under any
agreement between Contractor and any Contractor Client; (c) which
are based on an allegation that any materials, Custom Services,
covered Derivative Works, Customer's Courses, or Work Product
provided by Contractor hereunder infringe any Proprietary Rights
of third parties provided that such infringement in not caused in
whole or in part by EDT Learning Products; or, (d) which are
claims by Contractor's employees for any wage, compensation,
taxes, benefits, vacation pay, insurance, workman's compensation
or other employment claims based upon the employment of such
person by Contractor.
b. BY EDT LEARNING. EDT Learning hereby agrees to indemnify, defend
and hold harmless Contractor, its affiliates, and their respective
shareholders, officers, directors,
SUBCONTRACTOR AGREEMENT PAGE 11 OF 18
employees, agents and representatives from and against any and all
Claims of any kind whatsoever: (a) which arise directly or
indirectly out any breach of a Statement of Work by EDT Learning;
(b) which arise directly or indirectly under any Customer Contract
(other than a breach of the related Statement of Work by
Contractor or its subcontractors); (c) which are based on an
allegation that any EDT Learning Products infringe any Proprietary
Rights of third parties; or, (D) which are claims by EDT
Learning's employees for any wage, compensation, taxes, benefits,
vacation pay, insurance, workman's compensation or other
employment claims based upon the employment of such person by EDT
Learning.
c. PROCEDURES. A party's obligation to indemnify the other party
hereunder is conditioned upon such other party providing prompt
written notice to the indemnifying party of an Claim and
cooperating (at no out-of-pocket cost) with the indemnifying party
in all reasonable respects.
14. INDEPENDENT CONTRACTOR RELATIONSHIP BETWEEN PARTIES. Contractor
represents and warrants that it, and not EDT Learning, is the employer of
Contractor's employees and that it is solely responsible for complying
with all laws, rules and regulations of any governmental authority having
appropriate jurisdiction relating to such employment, including, but not
limited to, immigration, taxation, worker compensation and unemployment
compensation. EDT Learning and Contractor are independent contractors,
and neither party will have the power to bind the other or incur
obligations on the other's behalf without the other's prior written
consent. The parties agree that Contractor shall retain sole discretion
and judgment in the manner the services are to be performed. Neither
party is, nor shall be considered to be, an agent, distributor, partner,
joint venture or representative of the other party for any purpose.
15. CONFIDENTIAL INFORMATION. The term "Confidential Information" means, with
respect to each party information which relates to a party's business,
research, development, programs, costs, customers or general activities
that is held in confidence by such party, including information that is
designated as confidential or that, by its nature, should be considered
confidential, including the terms of this Agreement, information relating
to the Development Software, Source Material, EDT Learning Products, Work
Products, Custom Services and Customers.. Each party (and its agents and
licensors) will not disclose to any third party (except as required by
law or government requests/orders or to its attorneys, accountants and
other advisors as reasonably necessary), any of the Confidential
Information. If law requires disclosure of Confidential Information, the
party receiving the request will give prior written notice to the other
to permit the other to contest such disclosure. Each party agrees to
protect the confidentiality of the Confidential Information with at least
the same degree of care it takes to protect its own Confidential
Information. Neither party has any confidentiality obligations regarding
information that enters into the public domain without breach of this
Agreement; that it receives from a third party without restrictions on
disclosure and without breach of a nondisclosure obligation; or that it
has developed internally.
16. RIGHTS IN WORK PRODUCT.
a. WORK PRODUCT. All Work Product created or prepared by Contractor
for EDT Learning pursuant to this Agreement whether or not
prepared on or off the premises of EDT Learning or during regular
work hours shall be the sole and exclusive property of EDT
Learning.
b. EXCLUDED ITEMS. EDT Learning hereby disclaims any ownership in,
and Contractor shall not be required to assign to EDT Learning,
any invention, discovery, innovation or improvement of Contractor
which does not involve any of EDT Learning Products or Development
SUBCONTRACTOR AGREEMENT PAGE 12 OF 18
Software or Contractor Tools (the "Excluded Inventions"). In any
Dispute with respect to these exclusions, the burden of proof will
be on Contractor to show that the exclusion applies.
17. INSURANCE. Contractor agrees to obtain and maintain insurance which is
required by any Statement of Work or that is required by the Customer of
EDT Learning, including the following:
a. Workers' Compensation insurance in an amount sufficient by virtue
of the laws of the State of Arizona;
b. General Liability insurance in which the limit of liability for
injuries, including accidental death, and property damage is no
less than U.S. $1,000,000 for any one occurrence;
c. Professional Liability (errors & omissions): with limits of not
less than $1,000,000 each occurrence; and,
d. Automobile insurance in which the limit of liability for injuries,
including accidental death, and property damage is no less than
U.S. $1,000,000 for any one occurrence.
18. TERM AND TERMINATION.
a. TERM. The initial term of this Agreement will be thirty-six (36)
months from the Effective Date of this Agreement (the "Initial
Term"), unless terminated as provided herein with the date upon
which termination is to occur provided in the Notice of
Termination (the "Termination Date").
b. BREACH. In the event that either party hereto breaches in the
substantial performance of any material obligation specified
herein or in any Statement of Work, the non-breaching party shall
notify the other party hereof in writing and, if such breach is
not remedied within thirty (30) days from the date of such notice,
then the non-breaching party shall have the right to terminate
this Agreement and all outstanding Statements of Work immediately.
c. FINANCIAL DIFFICULTY. This Agreement shall automatically terminate
if any of the following take place with regard to the other party:
such party makes a general assignment or general arrangement for
the benefit of its creditors; the filing by or against such party
of a petition to have it adjudged bankrupt or of a petition for
reorganization or arrangement of such party under any law relating
to bankruptcy or insolvency unless, in the case of a filing
against such party, the same is dismissed within thirty (30) days;
the appointment of a trustee or a receiver to take possession of
substantially all of such party's assets or its interests in this
Agreement, where such possession is not restored within thirty
(30) days; or the attachment, execution or other judicial seizure
of substantially all of such party's assets or its interests in
this Agreement, where such seizure is not discharged within thirty
(30) days.
d. VOLUNTARY TERMINATION. After the Initial Term, this Agreement
shall continue from month to month unless and until terminated
upon delivery by either party of thirty (30) days prior written
notice of a party's intent to terminate (the "Termination Date").
e. EFFECT UPON TERMINATION. No new Statements of Work may be entered
into after the Termination Date, but termination of this Agreement
by either party will not cause the automatic cancellation of any
pending Statement of Work signed by both parties prior to the
Termination Date (the "Remaining Statements of Work"). Services to
be performed under Remaining Statements of Work will continue
until completion, unless Customer cancels any
SUBCONTRACTOR AGREEMENT PAGE 13 OF 18
or all of the Remaining Statements of Work as provided herein.
This Agreement will remain in effect with respect to the Remaining
Statements of Work until their completion, at which time this
Agreement will automatically terminate.
19. MISCELLANEOUS PROVISIONS.
a. FORCE MAJEURE. Either party's non-performance shall be excused to
the extent that performance is impossible due to reasons beyond
such party's control.
b. GOVERNMENT REGULATIONS. Contractor will not export, re-export,
transfer, or make available, whether directly or indirectly, any
regulated item or information to anyone outside the U.S. in
connection with this Agreement without first complying with all
export control laws and regulations which may be imposed by the
U.S. government and any country or organization of nations within
whose jurisdiction Customer operates or does business.
c. GOVERNING LAW. This Agreement is made under and will be governed
by and construed in accordance with the laws of the State of
Arizona (except that body of law controlling conflicts of law) and
specifically excluding from application to this Agreement that law
known as the United Nations Convention on the International Sale
of Goods. Notwithstanding the foregoing, claims seeking injunctive
relief for Services in accordance with this Agreement may be
brought in any state or federal court of competent jurisdiction.
The prevailing party in any litigation between the parties shall
recover its reasonable attorneys' fees and costs from the
non-prevailing party.
d. SEVERABILITY; WAIVER. In the event any provision of this Agreement
is held to be unenforceable, the remaining provisions of this
Agreement will remain in full force and effect, and the
unenforceable provisions will be construed in accordance with
applicable law as nearly as possible to reflect the original
intention of the parties. The waiver of any breach or default of
this Agreement will not constitute a waiver of any subsequent
breach or default, and will not act to amend or negate the rights
of the waiving party.
e. ASSIGNMENT. Contractor may not assign this Agreement, whether by
operation of law or otherwise, without the prior written consent
of EDT Learning, and any purported assignment without such consent
will be void. The rights and obligations of EDT Learning hereunder
may be assigned to an EDT Learning affiliate, or to an individual
or entity that acquires all or substantially all of the assets or
shares of EDT Learning, or with whom EDT Learning merges. This
Agreement will bind and inure to the benefit of each party's
permitted successors and assigns.
f. NOTICES. Any written notices, demands or other communications
required or permitted by this Agreement must be given in English
language and delivered via registered or certified air mail,
return receipt requested, postage prepaid or by overnight courier
or transmitted via telegraph, telex or telefax as follows: If to
EDT Learning at 2999 N. 44th Street, Suite 650, Phoenix, AZ 85018,
(602-952-0544 -- FAX) or if to Contractor at the address
identified as Contractor's principal place of business. Delivery
shall be deemed to have occurred upon receipt and/or transmission
validation for telex and telefax. All notices are to be forwarded
to the parties at their respective addresses stated hereinabove,
unless either party furnishes written notice as to a change of its
address in the manner provided hereinabove.
g. CONTRARY, INCONSISTENT, OR ADDITIONAL TERMS. Any contrary,
inconsistent, or additional terms contained in a mutually executed
Statement of Work between EDT Learning and Contractor
SUBCONTRACTOR AGREEMENT PAGE 14 OF 18
securing such services, as compared to the terms and conditions
contained in this Agreement, will be governed, interpreted, and
construed in the following order of precedence: (i) the applicable
Statement of Work and (ii) this Agreement. Any pre-printed terms
and conditions on any materials, which EDT Learning regularly uses
with its other customers, will be null and void and of no
consequence whatsoever in interpreting the parties' legal rights
and responsibilities as they pertain to any of the contemplated
services provided hereunder. Should the terms of this Agreement or
the existence of this Agreement itself cause a change in the
ability of EDT Learning to recognize revenue from the sale of
Custom Services or cause any change in the value of any of EDT
Learning's assets, then the parties agree that they will either
modify this Agreement to avoid that occurrence or will mutually
terminate this Agreement.
h. ENTIRE AGREEMENT; COUNTERPARTS; ORIGINALS. This Agreement,
including all documents incorporated herein by reference,
constitutes the entire agreement between the parties with respect
to the Custom Services, and supersedes all prior or
contemporaneous agreements, written and oral, regarding the Custom
Services. This Agreement may be executed in counterparts, each of
which will be deemed an original, but both of which together shall
constitute one and the same instrument. This Agreement may be
changed only by a written document signed by authorized
representatives of both parties.
i. AUTHORITY. Authorized representatives of EDT Learning and
Contractor have read the foregoing and all documents incorporated
therein and agree and accept such terms effective as of the date
set forth beneath such party's signature.
Executed as indicated below to be effective as indicated on the first
date written above.
INTERACTIVE ALCHEMY, INC. EDT Learning, Inc.
By: /s/ Donald C. Pierson By: /s/ James M. Powers
-------------------------------- ------------------------------
Printed Name: Donald C. Pierson, III Printed Name: James M. Powers, Jr.
Title: President Title: President
Date: 5-31-03 Date: 5-13-03
SUBCONTRACTOR AGREEMENT PAGE 15 OF 18
EXHIBIT "A"
FORM OF STATEMENT OF WORK
The following document is the form of Statement of Work that will be the
basis for any work performed by Contractor for EDT Learning, with the actual
terms and conditions varying from project to project as needed.
[The remainder of this page intentionally left blank.]
SUBCONTRACTOR AGREEMENT PAGE 16 OF 18
WORK ORDER FORM
(ASSOCIATED WITH SUBCONTRACTOR AGREEMENT BETWEEN INTERACTIVE ALCHEMY, INC.
AND EDT LEARNING, INC.)
This Work Order defines certain Services to be performed by Interactive
Alchemy, Inc. ("Subcontractor") in accordance with the terms and conditions of
the Subcontractor Agreement ("Agreement") dated May 1, 2003 by and between
Subcontractor and EDT Learning, Inc. The EDT Learning client associated with
this Work Order is _________________ ("Client")
- --------------------------------------------------------------------------------
EDT CUSTOMER NUMBER:
- --------------------------------------------------------------------------------
EDT CUSTOMER NAME:
- --------------------------------------------------------------------------------
EDT CUSTOMER CONTACT Name:
INFORMATION:
-----------------------------------------------------
Contact:
-----------------------------------------------------
Title:
-----------------------------------------------------
Address:
-----------------------------------------------------
Phone:
-----------------------------------------------------
Fax:
-----------------------------------------------------
Email:
- --------------------------------------------------------------------------------
DOCUMENTS NEEDED: o Services Agreement
o Work Order
- --------------------------------------------------------------------------------
BACKGROUND:
SCOPE OF WORK (DELIVERABLES):
o ___ hours of training
o Training will be delivered in the following formats:
|_| Web-based |_| Computer-based |_| Instructor-led |_| Other
Comments:______________________________________________________________
_______________________________________________________________________
o Training will be developed from the following materials to be provided
by the Customer
|_| On-Line (WBT) |_| Self-paced (CBT) |_| Instructor-led |_| None
|_| Other
Comments:______________________________________________________________
_______________________________________________________________________
o The training will be developed by adapting existing content in the
following manner(1)
|_| Repurpose |_| Rewrite/Produce new |_| Not applicable
Comments:______________________________________________________________
_______________________________________________________________________
o Tier:
|_| 1 |_| 2 |_| 3 |_| Other
Comments:______________________________________________________________
_______________________________________________________________________
o Development platform:
|_| i-Canvas |_| MacroMedia Flash |_| Other |_| Not applicable
Comments:______________________________________________________________
_______________________________________________________________________
______________________
(1) If "Repurpose" is selected existing content (text, media and graphics) will
be used to the maximum degree possible. If "Rewrite/Produce New" is selected,
substantial portions of the existing content will be written or produced anew.
EDT Learning, Inc. Page 1 of 3 Version. 4.0, June 1, 2002
o Delivery platform:
|_| EDT LMS (specify) |_| Docent (specify version)
|_| Other LMS (specify below) |_| Not applicable
Comments:______________________________________________________________
_______________________________________________________________________
ASSUMPTIONS:
TIMING OR SPECIAL ISSUES:
A general timeline has been indicated and will be considered until otherwise
indicated by Customer:
o Execution of this agreement is dependant on __________________
o Estimated project kickoff is______________
o Estimated course delivery date is_____________
o Other significant milestone dates (estimated):
______________________________________________________________
______________________________________________________________
______________________________________________________________
Comments: ____________________________________________________
______________________________________________________________
LOCATION WHERE SERVICES WILL BE PERFORMED:
Interactive Alchemy's offices in Arizona.
-----------------------------------------------------------------------------------------------------------------------------
FEES & CHARGES:
-----------------------------------------------------------------------------------------------------------------------------
DELIVERABLES DETAILS UNIT PRICE EXTENDED PRICE
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
Sub-Total:
-----------------------------------------------------------------------------------------------------------------------------
Sales & Use Taxes:
-----------------------------------------------------------------------------------------------------------------------------
TOTAL DUE:
-----------------------------------------------------------------------------------------------------------------------------
EXPENSES REIMBURSEMENT: Approved Travel expenses, if any reimbursed by Client.
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
PAYMENT TERMS: AS DEFINED IN THE AGREEMENT
-----------------------------------------------------------------------------------------------------------------------------
Please sign where indicated below to acknowledge acceptance of the terms of this
Work Order and provide authorization to begin the project provided herein. This
Work Order may be executed in counterparts and by facsimile, each of which when
so executed, will be deemed an original, and all of which together shall
constitute one and the same instrument.
EDT Learning, Inc. Page 2 of 3 Version. 4.0, June 1, 2002
EDT LEARNING, INC INTERACTIVE ALCHEMY, INC
Signature: _________________________ Signature:_________________________
Title: _____________________________ Title:_____________________________
Date: ______________________________ Date:______________________________
Tel: (602) 952-1200
Fax: (602) 952-0544
EDT Learning, Inc. Page 3 of 3 Version. 4.0, June 1, 2002
EXHIBIT "B"
CONTRACTOR'S STANDARD HOURLY RATES
----------------------------------
THE FOLLOWING ATTACHMENT WILL BE THE BASIS FOR ANY WORK PERFORMED BY CONTRACTOR
FOR EDT LEARNING, WITH THE ACTUAL HOURS AND RATES VARYING FROM PROJECT TO
PROJECT AS NEEDED AND REFLECTED IN THE APPROPRIATE STATEMENT OF WORK.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
SUBCONTRACTOR AGREEMENT PAGE 17 OF 18
CUSTOM TIERS
TIER 1 TIER 2 TIER 3
INTERFACE
BRANDING LOGO ONLY Custom Custom
GRAPHICAL MENUS NO YES YES
NAVIGATION
LINEAR YES YES YES
NON-LINEAR NO YES YES
MEDIA
STATIC GRAPHICS
2-D UPTO8 UP TO 8 UP TO 12
3-D NO UP TO 2 UP TO 4
ANIMATED GRAPHICS
2-D NO UP TO 2 UP TO 4
3-D NO NO UP TO 2
TOTAL GRAPHICS UP TO 8 UP TO 12 UP TO 20
FLASH ELEMENTS NO YES YES
AUDIO YES YES YES
VIDEO NO Add'l Chg Add'l Chg
PRESENTATION & INTERACTIVITY
ROLLOVERS UP TO 2 UP TO 4 UP TO 8
POPUPS UP TO 2 UP TO 4 UP TO 8
TIMED BULLETS NO UP TO 4 UP TO 8
TIMED HIGHLIGHTING NO UP TO 4 UP TO 8
REMEDIATION Yes Yes Yes
INSTRUCTIONAL TECHNIQUES
PRESENTATION Yes Yes Yes
DEMONSTRATION Yes Yes Yes
PRACTICE Yes Yes Yes
SOFTWARE SIMULATIONS Yes Yes Yes
SCENARIOS/CASE STUDIES NO UP TO 2 UP TO 4
Pricing
STANDARD HOURLY RATE $120
FIRST HOUR ADDITIONAL HOURS (SAME PROJECT)
STARTING POINT STARTING POINT
TIER 1 OLT SPT ILT NO EXISTING OLT SPT ILT NO EXISTING
REPURPOSE $9,000 $11,250 n/a n/a $7,200 $9,000 n/a n/a
REWRITE $11,250 $14,063 $16,875 $22,500 $9,000 $11,250 $13,500 $18,000
TIER 2 OLT SPT ILT NO EXISTING OLT SPT ILT NO EXISTING
REPURPOSE $13,800 $17,250 n/a n/a $11,040 $13,800 n/a n/a
REWRITE $17,250 $21,563 $25,875 $34,500 $13,800 $17,250 $20,700 $27,600
TIER 3 OLT SPT ILT NO EXISTING OLT SPT ILT NO EXISTING
REPURPOSE $18,600 $23,250 n/a n/a $14,880 $18,600 n/a n/a
REWRITE $23,250 $29,063 $34,875 $46,500 $18,600 $23,250 $27,900 $37,200
DEFINITIONS
OLT Customer has existing on-line, web based training that will provide the basis for the course
SPT Customer has existing self-paced, computer-based training that will provide the basis for the course
ILT Customer has existing instructor-led training that will provide the basis for the course
NO EXISTING Customer does not have a current course, but will provide us with the content in another form
REPURPOSE The new web-based course will be produced by adapting the existing content, sticking closely to the original
REWRITE The new web-based course will be produced by significantly re-writing the current course or material
EDT CONFIDENTIAL 5/13/2003 Page 1
EXHIBIT "C"
-----------
CHANGE ORDER
Change Order No._________________________________entered into pursuant to the
Subcontractor Agreement dated May 1, 2003 by and between EDT Learning, Inc. and
Contractor ("Contractor ") and the Statement of Work or Statement of Work
executed on_____________________________pertaining to_____________________
1. Describe changes, modifications, or additions to the services.
2. Necessity, availability and assignment of requisite EDT personnel and/or
resources to make requested modifications or additions.
3. Impact on Costs, Performance Period, and other requirements.
a. Changes in Costs:
b. Changes in Performance Period:
c. Changes to any other requirements:
4. Describe any revisions in acceptance test procedures.
____________________________________ _______________________________________
Signature of Contractor Date
____________________________________ _______________________________________
Signature of EDT Learning, Inc. Date
SUBCONTRACTOR AGREEMENT PAGE 18 OF 18
ILINC
COMMUNICATIONS
AMENDMENT TO SUBCONTRACTOR AGREEMENT
This amendment to subcontractor agreement (the "Amendment") is made to be
effective on April 1, 2004 (the "Effective Date") by and between iLinc
Communications, Inc. (formerly known as EDT Learning, Inc.) ("iLinc
Communications"), a Delaware corporation and Interactive Alchemy, Inc.
("Contractor").
WHEREAS, iLinc Communications and Contractor entered into a subcontractor
agreement dated May 1, 2003 (the "Agreement") whereby Contractor provides
e-Learning custom content development and professional services to iLinc
Communications and indirectly to iLinc Communications' Customers using among
other things iLinc Communications' Development Software;
WHEREAS, iLinc Communications and Contractor wish to modify that
Agreement;
NOW, THEREFORE, iLinc Communications and Contractor, in exchange for the
mutual promises and conditions contained herein and other good and valuable
consideration the sufficiency of which is hereby acknowledged, do agree as
follows:
1. Section 19(e) of the Agreement "Assignment" shall be amended and
replaced in its entirety to read as follows:
"19(e) ASSIGNMENT. Contractor may not assign this Agreement, whether by
operation of law or otherwise, without the prior written consent of iLinc
Communications, however, such approval of cannot be unreasonably withheld
or delayed. The rights and obligations of iLinc Communications hereunder
may be assigned to an iLinc Communications affiliate, or to an individual
or entity that acquires all or substantially all of the assets or shares
of iLinc Communications, or with whom iLinc Communications merges. This
Agreement will bind and inure to the benefit of each party's permitted
successors and assigns."
2. The Agreement shall be hereby amended to reflect the foregoing
agreement of the Parties on and after the Effective Date, and except as amended
hereby and any other preceding amendments, the Agreement shall remain otherwise
unchanged.
Executed as indicated below to be effective as indicated on the first
date written above.
Interactive Alchemy, Inc. iLinc Co munications, Inc.
By: /s/ Donald C. Pierson By: /s/ James M. Powers
--------------------------------- -------------------------------
Donald C. Pierson, III, President James M. Powers, Jr., President
Date: 4/22/04 Date: 4/22/04
AMENDMENT TO SUBCONTRACTOR AGREEMENT PAGE 1 OF 1
Amendment No. 2 to Sub-Contractor Agreement
Between
iLinc Communications, Inc.
and
Interactive Alchemy, Inc.
This second amendment (the "Amendment") to that sub-contractor agreement
dated May 1, 2003 (the "Agreement"), (together with and as amended by the first
amendment dated April 1, 2004) by and between iLinc Communications, Inc.
(formerly EDT Learning, Inc.), a Delaware corporation (the "iLinc"), and
Interactive Alchemy, Inc. ("Contractor").
Whereas, iLinc wishes to continue to provide custom content development
services to its customers while fostering the business opportunity of
Interactive Alchemy; and
Whereas, Contractor wishes to continue to provide outsourced custom
content services to iLinc's customers while it continues to build its own custom
content business to its own Contractor customers pursuant to the existing
Sub-contractor Agreement; and,
Now Therefore, in exchange for the mutual promises contained in the
Agreement and herein, iLinc and Contractor agree as follows:
1. This amendment shall be effective on April 29, 2006 (the
"Amendment's Effective Date"), and all capitalized terms not
defined herein shall have the meaning given them in the Agreement
2. Section 18 titled Term and Termination of the Agreement shall be
modified so that the Initial Term of the Agreement shall be
extended for an additional twenty- four (24) months (with the
modified Initial Term being a total of sixty (60) months from the
effective date of the Agreement) and, unless earlier terminated
pursuant to Section 18, the Agreement shall expire on its own
terms on May 1, 2008.
3. Beginning on May 1, 2006, iLinc will no longer be responsible for
providing the full range of Executive Suite Services that are
described in the Agreement and not as part and parcel of payment
of Contractor Fees. Therefore, from May 1, 2006 until July 15,
2006 Contractor will remain in the Premises while other facilities
are being prepared by Contractor (the "Occupancy Period") and
during the Occupancy Period Contractor will pay to iLinc a rental
fee in the fixed and determined amount of $11,140 per month (the
"Rent"), (with a prorated amount per day for any partial month).
The so-called Rent payment will be due on the first day of each
month that the Contractor remains in the Premises beginning May 1,
2006 and will be specifically for: use of the premises (including
CAM and taxes), office equipment, office furniture, telephone
(excluding long distance and audio conferencing), and parking;
but, will not be for office supplies, regular and express mail,
coffee and water, and all other "services" not listed above.
Finally, on or after July 15, 2006, Contractor will vacate the
Premises (Suite 620), and Contractor thereafter will no longer pay
Rent (unless held over after July 15, 2006 in which case Rent will
continue until the Premises are vacated), and iLinc will no longer
be responsible for providing, Premises, or the Executive Suite
Services to Contractor. By way of clarification, after July 15,
2006, Contractor will be responsible for obtaining its own
premises, parking, office
Amendment No. 2 to Sub-Contractor Agreement Page 1 of 3
supplies, internet connectivity, IT staffing, computers, office
equipment, and telephone systems.
4. Beginning on May 1, 2006 and during the first twelve (12) months
of this Amendment, the Percentage that will be paid to Contractor
for work performed by Contactor under Section 9(b) shall be
increased to 90% of the Net Fee. During the second twelve (12)
months of this Amendment, the Percentage that will be paid to
Contractor for work performed by Contactor under Section 9(b)
shall be decreased to 87.5% of the Net Fee, (with the amount being
retained by iLinc during year one and year two being called the
"iLinc Retained Portion"). Furthermore, the amount due to iLinc
from Contractor for work performed on Contractor's Client under
Section 7 (see inset table) shall be stricken. Instead, in
consideration for access to iLinc's Development Software,
Derivative Works and the continued relationship as iLinc's custom
content supplier, Contractor agrees to pay a fee equal to ten
percent (10%) of all Contractor's sales from work performed on
Contractor's Clients during the first twelve (12) months of this
Amendment; and, a fee equal to twelve and one half percent (12.5%)
of all Contractor's sales from work performed on Contractor's
Clients during the second twelve (12) months of this Amendment
(with the amount paid by Contractor called the "Royalty Fee").
Notwithstanding the foregoing, in no event, during the first
twelve (12) months of this Amendment, shall the total of the iLinc
Retained Portion and the Royalty Fee together exceed two hundred
thousand dollars ($200,000) (i.e., as an annual maximum); and in
no event, during the second twelve (12) months of this Amendment,
shall the total of the iLinc Retained Portion and the Royalty Fee
together exceed four hundred fifty thousand dollars ($450,000), so
that during the two year term of this Amendment, the total of the
iLinc Retained Portion and the Royalty Fee shall not exceed a
total of six hundred and fifty thousand dollars ($650,000). To
assure that cash collections are acknowledged and payments made on
a timely basis by both parties, when a payment is received from an
iLinc Customer or a Contractor Client, then evidence of the
receipt of payment (e.g. a copy of the check or wire transfer
documentation) shall be delivered to the other party within 24
hours of receipt and payment of the corresponding amount due to
Contractor or the Royalty Fee shall be delivered within
seventy-two (72) hours of receipt of payment.
5. At the end of the amended Initial Term and upon termination of the
Agreement, then the covenants of Section 8(a)(ii) and 8(a)(iii)
are terminated without further effect; but provided for clarity
Section 8(a)(i) and Section 8(a)(iv) shall remain unchanged and in
full affect notwithstanding termination of the Agreement, provided
further that Sue Leff shall be considered an employee of both
Contractor and iLinc for purposes of Section 8(a)(i). Furthermore,
at the end of the amended Initial Term and upon termination of the
Agreement then the license granted in Section 6 to the Development
Software (e.g. i-Canvas software) shall continue on a perpetual
basis from the termination date of the Agreement but the internal
use license for all other software (e.g. LearnLinc software) shall
terminate.
Amendment No. 2 to Sub-Contractor Agreement Page 2 of 3
6. Conflicts between the provisions of this Amendment and the
Agreement shall be resolved in favor of the spirit, intent, terms
and provision of this Amendment. All other provisions not directly
modified by this Amendment contained within the Agreement shall
remain unchanged and in full force and effect.
iLinc Communications, Inc. Interactive Alchemy, Inc.:
By: /s/ James M. Powers By: /s/ Don Pierson
--------------------------------- -------------------------------
James M. Powers, Jr., Don Pierson,
President President
Date: 5/5/06 Date: 5/5/06
Amendment No. 2 to Sub-Contractor Agreement Page 3 of 3
Amendment to Contractor Agreement
between
iLinc Communications, Inc.
and
Interactive Alchemy, Inc.
This third amendment (the "Agreement") is to be effective on September
28, 2007 (the "Effective Date"), and is between iLinc Communications, Inc., a
Delaware corporation ("iLinc"), and Interactive Alchemy, Inc. ("Contractor").
Whereas, Contractor did execute that certain sub-contractor agreement
dated May 1, 2003, (together with and as amended by the first amendment dated
April 1, 2004 and second amendment dated May 5, 2006) (all together the "Custom
Content Agreement"), a copy of which is attached as Exhibit "A";
Whereas, iLinc wishes to continue to provide custom content development
services to its customers while fostering the business opportunity of Contractor
through the term of the Agreement; and
Now Therefore, in exchange for the mutual promises contained in the
Agreement and herein, iLinc and Contractor agree as follows:
1. All capitalized terms not defined herein shall have the meaning
given them in the Custom Content Agreement.
2. Beginning on the Effective Date, and during the remainder of the
term of the Custom Content Agreement:
a. the Percentage that will be paid to Contractor for work
performed by Contactor under Section 9(b) shall be
increased to 95% of iLinc's collected revenue;
b. Contractor shall not owe a fee to iLinc from work performed
on Contractor's Clients (the so-called "Royalty Fee");
c. At the end of the Amended Initial Term and upon termination
by expiration of the Agreement (but not if terminated by
the parties by assertion of a material breach that is
adjudicated by an arbitrator as uncured):
i. All compensation whether in the form of fees or
otherwise accrued but unpaid between the parties
shall be fully paid and shall no longer accrue;
ii. All Statements of Work outstanding and uncompleted
at the termination date will be irrevocably assigned
by iLinc to Contractor, and all cash deposits
associated with those outstanding Statements of Work
will be transmitted to Contractor, if any, and all
such outstanding and assigned Statements of Work
will thereafter be completed by Contractor;
iii. Because Contractor will be responsible for
completion of those outstanding Statements of Work,
Contractor will indemnify and hold harmless iLinc,
for the three (3) year period beginning with the
termination date, for claims that arise on and after
the termination
Third Amendment to Contractor Agreement Page 1 of 2
date against iLinc by and of iLinc's Customers
arising from any custom content services that had
been provided at any time by Contractor; and,
iv. iLinc covenants that, for the three (3) year period
beginning with the termination date, it will not
compete with Contractor in the custom content
development business, specifically concerning custom
content development business of United Airlines;
provided however for clarity that nothing herein
shall prohibit iLinc from offering any other service
or product other than custom content development
services to any person or entity, including United
Airlines.
v. The parties will execute a mutual release and
indemnity from any and all claims arising from the
Custom Content Agreement upon termination of the
Custom Content Agreement.
d. Provided further that Sue Leff shall be permitted to be
employed by Contractor and Contractor shall be responsible
for all compensation due to Ms. Leff, whether base salary
or commission, but not any Agent commission due upon United
hosting.
3. Conflicts between the provisions of this Amendment and the Custom
Content Agreement (and any Amendment thereto) shall be resolved in
favor of the spirit, intent, terms and provision of this
Agreement. All other provisions not directly modified by this
Amendment contained within the Agreement (and any amendment) shall
remain unchanged and in full force and effect.
iLinc Communications, Inc.
By: /s/ James M. Powers
---------------------------------
James M. Powers, Jr.,
President
Date: 9/28/07
Interactive Alchemy, Inc.:
By: /s/ Don Pierson
-------------------------------
Don Pierson,
President
Date: 9/28/07
Third Amendment to Contractor Agreement Page 2 of 2