AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 20, 1998
REGISTRATION NO. 333-66085
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 2
TO
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
EDUCATIONAL VIDEO CONFERENCING, INC.
(EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 8299 06-1488212AA9
(STATE OR JURISDICTION (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
OF INCORPORATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>
------------------------
35 EAST GRASSY SPRAIN ROAD, SUITE 504, YONKERS, NY 10710
(914) 395-3501
(ADDRESS AND TELEPHONE NUMBER OF PRINCIPAL EXECUTIVE OFFICES AND PRINCIPAL PLACE
OF BUSINESS)
------------------------
DR. AROL I. BUNTZMAN
35 EAST GRASSY SPRAIN ROAD, YONKERS, NY 10710
(914) 395-3501
(ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
------------------------
Copies to:
<TABLE>
<S> <C>
JOSEPH D. ALPERIN, ESQ. HENRY O. SMITH III, ESQ.
FISCHBEINoBADILLOoWAGNERoHARDING PROSKAUER ROSE LLP
909 THIRD AVENUE, NEW YORK, NY 10022 1585 BROADWAY, NEW YORK, NY 10036-8299
(212) 826-2000 (212) 969-3000
</TABLE>
------------------------
APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: As soon as practicable
after this Registration Statement becomes effective.
------------------------
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box: /x/
If this form is filed to register additional securities for an offering
pursuant to rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier registration statement for the same
offering. / /
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If the delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. / /
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==================================================================================================================================
PROPOSED
MAXIMUM
TITLE OF EACH CLASS AGGREGATE AMOUNT OF
OF SECURITIES TO BE REGISTERED OFFERING PRICE(1) REGISTRATION FEE
------------------------------ ----------------- ----------------
<S> <C> <C>
Common Stock, $0.0001 par value........................................................ $15,000,000 $4,425.00
Representative's Warrants.............................................................. 100 0.03
Common Stock, $0.0001 par value, underlying Representative's Warrants(2)............... 1,800,000 531.00
Total.................................................................................. $16,800,100 $4,956.03
==================================================================================================================================
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee in
accordance with Rule 457 under the Securities Act of 1933, as amended.
(2) Pursuant to Rule 416, this Registration Statement also covers an
indeterminable number of additional shares of Common Stock issuable as a
result of any future anti-dilution adjustments in accordance with the terms
of the Representative's Warrants.
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Amended and Restated Certificate of Incorporation and By-Laws of the
Registrant provide that the Registrant shall indemnify any person to the full
extent permitted by the Delaware General Corporation Law (the 'GCL'). Section
145 of the GCL, relating to indemnification, is hereby incorporated herein by
reference.
In accordance with Section 102(a)(7) of the GCL, the Certificate of
Incorporation of the Registrant eliminates the personal liability of directors
to the Registrant or its stockholders for monetary damage for breach of
fiduciary duty as a director with certain limited exceptions set forth in
Section 102(a)(7) of the GCL.
The Registrant also intends to enter into indemnification agreements with
each of its officers and directors, the form of which is filed as Exhibit 10.17,
to which reference is hereby made.
Reference is made to Section 9 of the Underwriting Agreement (Exhibit 1.1)
which provides for indemnification by the Underwriter of the Registrant, its
officers and directors.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated expenses (other than
underwriting discounts and commissions) payable by the Registrant in connection
with the issuance and distribution of the securities being registered. Except
for the SEC and NASD filing fees, all expenses have been estimated and are
subject to future contingencies.
<TABLE>
<S> <C>
SEC registration fee......................................... $4,956.03
NASD fee..................................................... 2,000.00
American Stock Exchange Entry Fee............................ *
Legal fees and expenses...................................... *
Printing and engraving expenses.............................. *
Accounting fees and expenses................................. *
Blue sky fees and expenses................................... *
Transfer agent and registrar fees end expenses............... *
Miscellaneous................................................ *
---------
Total................................................... $
---------
---------
</TABLE>
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* To be completed by amendment.
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
Since its inception, the Registrant has issued unregistered securities in
the transactions described below:
In connection with its formation in March 1997, the Registrant issued
to eight persons 184 shares, no par value, for services rendered. The 184
shares were exchanged for 3,690,000 shares of Common Stock in connection
with the Registrant's recapitalization and reincorporation in Delaware in
April 1998.
In May 1997, the Registrant issued a warrant to one entity to purchase
up to 75,000 shares of Common Stock, at $2.72 per share, as partial
consideration for that entity's multi-year agreement with the Company. Such
warrant is not exercisable until one year after the effective date of this
offering and expires six years after such effective date.
In June 1997, the Registrant received gross proceeds of $115,000 from
the issuance to three accredited investors of $115,000 principal amount 18%
promissory notes and warrants to purchase 23,000 shares of Common Stock at
$1.00 per share. In connection with such issuance, the Registrant paid
$14,300 in commissions to one entity. In April 1998, $100,000 principal
amount of these notes were converted into 40,000 shares of Common Stock and
warrants to purchase 16,000 shares of Common Stock at $3.00 per share.
II-1
<PAGE>
Between August and December 1997, the Registrant received gross
proceeds of $235,000 from the issuance to 12 accredited investors of
$235,000 principal amount 18% convertible promissory notes and warrants to
purchase 47,000 shares of Common Stock at $2.00 per share. In connection
with such issuances the Registrant paid $24,850 in commissions, and issued
16,500 shares of Common Stock to one entity. In June and July 1998,
$185,000 of these notes were converted into 92,500 shares of Common Stock.
In October 1997, the Registrant received gross proceeds of $1,000,000
from the issuance to one accredited investor of 500,000 shares of Common
Stock and warrants to purchase 300,000 shares of Common Stock. Of these
warrants, 200,000 are exercisable at $2.00 per share and 100,000 are
exercisable at $10.00 per share. In connection with such issuance, the
Registrant paid a fee of $130,000 and issued 100,000 shares of Common Stock
to one person.
In October 1997, the Registrant issued 117,647 shares of Common Stock
valued at $400,000 to a video conferencing systems vendor and applied the
$400,000 to the purchase of $1,000,000 of equipment.
Between January and April 1998, the Registrant received gross proceeds
of $1,072,500 from the issuance to four accredited investors of 390,000
shares of Common Stock and warrants to purchase 156,000 shares of Common
Stock at $3.00 per share. In connection with such issuance, the Registrant
paid fees of $99,000 and issued to two entities warrants to purchase
103,591 shares of Common Stock at $3.00 per share.
In April 1998, the Registrant issued to two persons 7,000 shares of
Common Stock as payment for consulting services in March through October
1997.
Between May and August 1998, the Registrant received gross proceeds of
$4,000,000 for the issuance of 1,066,667 shares of Common Stock. In
connection with such issuance, the Registrant paid a fee of $400,000 and
issued warrants to purchase 50,000 shares of Common Stock at $6.00 per
share to one entity.
Except for the conversions into Common Stock, the foregoing transactions
were transactions not involving a public offering and were exempt from the
registration provisions of the Securities Act of 1933, as amended (the
'Securities Act') pursuant to Section 4(2) thereof. The securities were sold
pursuant to Regulation D, and the certificates evidencing the shares bear a
restrictive legend permitting the transfer thereof only upon registration of the
securities or an exemption under the Securities Act. The shares of Common Stock
issued upon conversion of promissory notes were issued pursuant to Section
3(a)(9) of the Securities Act, as no remuneration was paid directly or
indirectly for soliciting such conversions.
ITEM 27. EXHIBITS
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<C> <C> <S>
1.1 -- Form of Underwriting Agreement.
3.1 -- Certificate of Incorporation of the Registrant.
3.2 -- By-Laws of the Registrant.
3.3 -- Certificate of Merger of Educational Video Conferencing, Inc. (a New York Corporation) into
Educational Video Conferencing, Inc. (a Delaware Corporation).
3.4 -- Certificate of Correction of the Certificate of Incorporation of the Registrant
4.1 -- Form of Common Stock Purchase Warrant issued to investors in private placements and for services
provided in connection with such private placements.
4.2 -- Tayside Common Stock Purchase Warrant.
4.3 -- Adelphi Common Stock Purchase Warrant.
4.4 -- Form of Representative's Warrant Agreement (including Form of Representative's Warrant).
*5 -- Opinion of FischbeinoBadillooWagneroHarding re: validity of securities.
9.1 -- Agreement between Arol I. Buntzman and John J. McGrath dated March 4, 1997.
9.2 -- Supplement to Agreement between Arol I. Buntzman and John J. McGrath dated May 18, 1998.
**+10.1 -- Agreement between Educational Video Conferencing, Inc. and Adelphi University for the Offering of
Interactive Televideo Courses dated May 13, 1997.
</TABLE>
II-2
<PAGE>
<TABLE>
<C> <C> <S>
+10.2 -- Agreement between Educational Video Conferencing, Inc. and The College of Insurance for the Offering
of Interactive Televideo Courses dated September 16, 1997.
**+10.3 -- Agreement between Educational Video Conferencing, Inc. and Mercy College for the Offering of
Interactive Video Conferenced and Computer Courses dated March 10, 1998.
10.4 -- Agreement between Educational Video Conferencing, Inc. and Reliance National for the Offering of
Interactive Televideo courses and Distance Learning Programs dated October 7, 1998.
10.5 -- Agreement between Educational Video Conferencing, Inc. and Citibank dated May 20, 1997.
10.6 -- Agreement between Educational Video Conferencing, Inc. and American International Group dated May
21, 1997.
10.7 -- Agreement between Educational Video Conferencing, Inc. and Merrill Lynch for the Offering of
Interactive Televideo Courses and Distance Learning Programs dated June 3, 1998.
*10.8 -- Agreement for Interactive Televideo Courses and Distance Learning Programs between Educational Video
Conferencing, Inc. and Travelers Indemnity Company dated July 24, 1998.
10.9 -- Agreement between Educational Video Conferencing, Inc. and Zurich Insurance Company, U.S. dated
August 12, 1998 Branch for the Offering of Interactive Televideo Courses and Distance Learning
Programs dated August 12, 1998.
10.10 -- Memorandum of Understanding between Educational Video Conferencing, Inc. and VSI Enterprises, Inc.
dated September 30, 1997.
*10.11 -- Lease Agreement between Educational Video Conferencing, Inc. and Realty Co. (doing business as Royal
Realty) dated September 5, 1997.
10.12 -- Employment Agreement between the Registrant and Dr. Arol I. Buntzman dated October 1, 1998.
10.13 -- Employment Agreement between the Registrant and Dr. John J. McGrath dated October 1, 1998.
10.14 -- Employment Agreement between the Registrant and Richard Goldenberg dated October 1, 1998.
10.15 -- Employment Agreement between the Registrant and Wallace J. Caven dated October 1, 1998.
10.16 -- Employment Agreement between the Registrant and James H. Mollitor dated October 1, 1998.
10.17 -- Consulting Agreement between the Registrant and Arthur H. Goldberg dated March 4, 1998.
*10.18 -- Consulting Agreement between the Registrant and William R. Coda dated October 1, 1998.
10.20 -- Chief Executive Officer Change in Control Agreement between the Registrant and Dr. Arol I. Buntzman
dated October 1, 1998.
10.21 -- Form of Indemnification Agreement.
10.22 -- 1998 Incentive Stock Option Plan of the Registrant.
23.1 -- Consent of Goldstein Golub Kessler LLP.
*23.2 -- Consent of FischbeinoBadillooWagneroHarding (contained in opinion to be filed as Exhibit 5).
23.3 -- Consent of Arthur H. Goldberg.
23.4 -- Consent of William R. Coda.
24.1 -- Power of Attorney (set forth on page II-5).
</TABLE>
- ------------------
* To be filed by amendment.
** Filed herewith.
+ Confidential treatment has been requested with respect to portions of this
exhibit.
II-3
<PAGE>
ITEM 28. UNDERTAKINGS
(1) The undersigned Registrant hereby undertakes that it will:
(a) File, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement to:
(i) Include any prospectus required by Section 10(a)(3) of the
Securities Act,
(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the
information in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if
the total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a 20
percent change in the maximum aggregate offering price set forth in the
'Calculation of Registration Fee' table in the effective registration
statement; and
(iii) Include any additional or changed material information on the
plan of distribution.
(b) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial
bona fide offering.
(c) File a post-effective amendment to remove form registration any of
the securities that remain unsold at the end of this offering.
(2) The undersigned Registrant hereby undertakes to provide to the
Underwriter at the closing specified in the Underwriting Agreement certificates
in such denominations and registered in such names as required by the
Underwriter to permit prompt delivery to each purchaser.
(3) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue:
(4) The undersigned Registrant hereby undertakes that it will:
(a) For determining any liability under the Securities Act, treat the
information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) of (4), or
497(h) under the Securities Act as part of this registration statement as
of the time it was declared effective.
(b) For determining any liability under the Securities Act, treat each
post effective amendment that contains a form of prospectus as a new
registration statement for the securities offered in the registration
statement, and the offering of such securities at that time as the initial
bona fide offering of those securities.
II-4
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and has authorized this registration
statement or amendment thereto to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Yonkers, State of New York on the 20th
day of November, 1998.
EDUCATIONAL VIDEO CONFERENCING, INC.
By: /s/ AROL I. BUNTZMAN
---------------------------
Arol I. Buntzman
Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below under the heading 'Signature' constitutes and appoints Dr. Arol I.
Buntzman and Dr. John J. McGrath, or either of them, his true and lawful
attorney-in-fact and agent with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities to sign any
or all amendments to this registration statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, each acting alone, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully for all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, each acting alone, or his substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
In accordance with the requirements of the Securities Act of 1933, this
registration statement or amendment thereto has been signed by the following
persons in the capacities and on the dates stated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ AROL I. BUNTZMAN Chairman of the Board and November 20, 1998
------------------------- Chief Executive Officer
Arol I. Buntzman
* President and Director November 20, 1998
-------------------------
John J. McGrath
/s/ RICHARD GOLDENBERG Chief Financial Officer, Secretary and November 20, 1998
------------------------- Director (Principal Financial Officer and
Richard Goldenberg Principal Accounting Officer)
* /s/ AROL I. BUNTZMAN November 20, 1998
-------------------------
Attorney-in-fact
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION PAGE NO.
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<C> <C> <S> <C>
1.1 -- Form of Underwriting Agreement.
3.1 -- Certificate of Incorporation of the Registrant.
3.2 -- By-Laws of the Registrant.
3.3 -- Certificate of Merger of Educational Video Conferencing, Inc. (a New York Corporation)
into Educational Video Conferencing, Inc. (a Delaware Corporation).
3.4 -- Certificate of Correction of the Certificate of Incorporation of the Registrant
4.1 -- Form of Common Stock Purchase Warrant issued to investors in private placements and for
services provided in connection with such private placements.
4.2 -- Tayside Common Stock Purchase Warrant.
4.3 -- Adelphi Common Stock Purchase Warrant.
4.4 -- Form of Representative's Warrant Agreement (including Form of Representative's Warrant).
*5 -- Opinion of FischbeinoBadillooWagneroHarding re: validity of securities.
9.1 -- Agreement between Arol I. Buntzman and John J. McGrath dated March 4, 1997.
9.2 -- Supplement to Agreement between Arol I. Buntzman and John J. McGrath dated May 18, 1998.
**+10.1 -- Agreement between Educational Video Conferencing, Inc. and Adelphi University for the
Offering of Interactive Televideo Courses dated May 13, 1997.
+10.2 -- Agreement between Educational Video Conferencing, Inc. and The College of Insurance for
the Offering of Interactive Televideo Courses dated September 16, 1997.
**+10.3 -- Agreement between Educational Video Conferencing, Inc. and Mercy College for the
Offering of Interactive Video Conferenced and Computer Courses dated March 10, 1998.
10.4 -- Agreement between Educational Video Conferencing, Inc. and Reliance National for the
Offering of Interactive Televideo courses and Distance Learning Programs dated October
7, 1998.
10.5 -- Agreement between Educational Video Conferencing, Inc. and Citibank dated May 20, 1997.
10.6 -- Agreement between Educational Video Conferencing, Inc. and American International Group
dated May 21, 1997.
10.7 -- Agreement between Educational Video Conferencing, Inc. and Merrill Lynch for the
Offering of Interactive Televideo Courses and Distance Learning Programs dated June 3,
1998.
*10.8 -- Agreement for Interactive Televideo Courses and Distance Learning Programs between
Educational Video Conferencing, Inc. and Travelers Indemnity Company dated July 24,
1998.
10.9 -- Agreement between Educational Video Conferencing, Inc. and Zurich Insurance Company,
U.S. dated August 12, 1998 Branch for the Offering of Interactive Televideo Courses and
Distance Learning Programs dated August 12, 1998.
10.10 -- Memorandum of Understanding between Educational Video Conferencing, Inc. and VSI
Enterprises, Inc. dated September 30, 1997.
*10.11 -- Lease Agreement between Educational Video Conferencing, Inc. and Realty Co. (doing
business as Royal Realty) dated September 5, 1997.
10.12 -- Employment Agreement between the Registrant and Dr. Arol I. Buntzman dated October 1,
1998.
10.13 -- Employment Agreement between the Registrant and Dr. John J. McGrath dated October 1,
1998.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION PAGE NO.
- -------- ----------- -----------
<S> <C> <C> <C>
10.14 -- Employment Agreement between the Registrant and Richard Goldenberg dated October 1,
1998.
10.15 -- Employment Agreement between the Registrant and Wallace J. Caven dated October 1, 1998.
10.16 -- Employment Agreement between the Registrant and James H. Mollitor dated October 1, 1998.
10.17 -- Consulting Agreement between the Registrant and Arthur H. Goldberg dated March 4, 1998.
*10.18 -- Consulting Agreement between the Registrant and William R. Coda dated October 1, 1998.
10.20 -- Chief Executive Officer Change in Control Agreement between the Registrant and Dr. Arol
I. Buntzman dated October 1, 1998.
10.21 -- Form of Indemnification Agreement.
10.22 -- 1998 Incentive Stock Option Plan of the Registrant.
23.1 -- Consent of Goldstein Golub Kessler LLP.
*23.2 -- Consent of FischbeinoBadillooWagneroHarding (contained in opinion to be filed as Exhibit
5).
23.3 -- Consent of Arthur H. Goldberg.
23.4 -- Consent of William R. Coda.
24.1 -- Power of Attorney (set forth on page II-5).
</TABLE>
- ------------------
* To be filed by amendment.
** Filed herewith.
+ Confidential treatment has been requested with respect to portions of this
exhibit.
Exhibit 10.1
AGREEMENT BETWEEN EDUCATIONAL VIDEO CONFERENCING, INC.
AND ADELPHI UNIVERSITY, FOR THE OFFERING OF INTERACTIVE
TELEVIDEO COURSES
W I T N E S S E T H
AGREEMENT made this 13th day of May, 1997 between Adelphi University,
Garden City, New York (hereinafter "Adelphi"), and Educational Video
Conferencing Inc., (hereinafter "EVC") a New York corporation with offices
located at 325 Mile Square Road, Yonkers, New York 10701.
WHEREAS, Adelphi is a not-for-profit institution of higher education duly
certified by the Education Department of the State of New York, and accredited
by the Middle States Association to offer undergraduate and graduate courses,
and
WHEREAS, EVC is a domestic corporation engaged in the business of providing
access to such courses to students by way of Interactive Televideo, and
WHEREAS, Adelphi and EVC wish to enter into a mutually beneficial agreement
whereby EVC will provide access to Adelphi courses to such students,
NOW, THEREFORE in consideration of $10.00 in good funds paid by EVC to
Adelphi, as well as the mutual covenants contained herein, the parties hereby
agree as follows:
1. a) EVC shall have the right, for the duration of this agreement and any
renewal hereof, in conjunction with Adelphi, to offer courses included in the
Adelphi Undergraduate Business and MBA programs and General Education courses
via Interactive Televideo/Distance Learning (hereinafter "ITV/DL") commencing
with the Fall Semester, 1997.
b) For the purposes of this agreement, ITV/DL shall be defined as live,
two way video conferencing, either over desktop computers or room systems, as
the case may be, in which the student can see and hear the professor/instructor
and the professor/instructor can see and hear the individual student. In
addition, subject to both parties written approval, ITV/DL may be defined as
two-way audio, one-way video.
c) EVC and Adelphi agree that the minimum class size for the offering of
an ITV/DL course shall be FOURTEEN (14) students, unless the parties mutually
agree to offer a course with less than FOURTEEN (14) students.
2. EVC will provide, either directly or through corporate contracts, all
hardware (except personal computers, modems, keyboards and monitors which shall
be provided by the students), software, accessories and telecommunications
equipment (collectively referred to as "equipment") necessary to provide access
for Adelphi courses to ITV/DL students. Students taking courses on desktop
computers must have computers with the technological capacity to receive EVC's
interactive transport signal and function as an ITV/DL desktop system. The
parties acknowledge that it is the goal of EVC to solicit students from
corporations with substantial tuition reimbursement, and that EVC shall address
all student equipment issues. In any event, Adelphi shall not be responsible for
the cost of any equipment whatsoever.
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
EXHIBIT.
<PAGE>
3. a) EVC is responsible for and shall pay all such costs for marketing,
advertising, promotion, etc. regarding EVC's offering of access to Adelphi
courses. Adelphi shall provide to EVC copies of all brochures, catalogues,
posters, etc., applicable for courses being offered.
b) Adelphi will, whenever feasible, include ITV/DL courses, offered
through EVC, in any course advertisements, promotions, marketing plans, etc.,
which may be directed at the target market.
c) Adelphi will prepare and provide to EVC copies of class schedules,
course descriptions and necessary registration materials to be offered through
EVC.
4. Adelphi assumes no responsibility or cost for obtaining or providing
telecommunication signal transport for students dialing in for courses.
5. Adelphi shall provide rooms capable of becoming teaching stations. This
includes the installing and maintaining of adequate telephone lines (T-1, ISDN
and regular telephone lines), electrical outlets and lighting. EVC shall inform
Adelphi by June 1, 1997 of the number of classrooms required for the Fall 1997
semester. Subsequent to the Fall 1997 semester, EVC shall advise Adelphi of any
additional room requests ninety (90) days prior to the date classes are to be
offered. The teaching stations are to be installed and paid for by EVC. All
equipment in the teaching stations provided by EVC shall remain the exclusive
property of EVC.
6. All equipment is the sole and exclusive property of EVC, including but
not limited to any and all patents, copyrights and trademarks, if any,
associated therewith. All classroom, course and program materials or other
information supplied by Adelphi, and all rights and interests in said material
will remain the sole and exclusive property of Adelphi.
7. a) EVC is responsible for the maintenance, repair and/or replacement,
when necessary, of televideo equipment supplied to Adelphi for ITV/DL courses.
b) EVC will provide reasonably prompt service for repair or replacement
of defective equipment and software as necessary.
c) EVC shall provide and Adelphi will be responsible for the reasonably
prompt repair and/or replacement of interactive televideo equipment located at
Adelphi which may be damaged through improper or unauthorized use.
d) Adelphi is responsible for the repayment to EVC of the cost of
replacement of any EVC equipment which is lost or stolen while in Adelphi's
custody and control within 60 days of Adelphi being notified of the theft or
loss.
8. Neither party shall utilize the other's name or any associated names,
trademarks, copyrights, etc., without prior written consent. Such permission
shall not be unreasonably denied.
2
<PAGE>
9. a) EVC will provide initial faculty development reasonably required for
the offering of Adelphi courses through EVC. Thereafter, Adelphi agrees to
provide faculty or personnel who have received said initial training to assist
EVC in training any new faculty or personnel. EVC shall provide any updated
training which may from time to time become necessary hereunder.
b) Adelphi shall be responsible for obtaining the services of all
faculty participating in the ITV/DL courses, including but not limited to said
faculty's salary, benefits (if any) and verification of qualifications. EVC
assumes no responsibility for any costs associated therewith.
10. EVC is solely responsible to provide site locations for ITV/DL students
to participate in Adelphi courses. Adelphi assumes no responsibility for
obtaining or maintaining said sites, nor for any rent or other costs associated
therewith.
11. EVC is not responsible for curriculum, course content, faculty
qualifications, course materials or any other aspect of the academic content of
any courses offered hereunder. However, Adelphi acknowledges the expertise of
EVC in delivering ITV/DL courses and agrees to be receptive to EVC input as to
modification of course content and method of delivery consistent with required
academic standards.
12. EVC agrees to make every reasonable effort to maintain its equipment in
good working order. However, EVC is not responsible for service or repair delays
or interruption of service caused by strikes, labor actions, power outages
(other than those limited to site locations alone), acts of God or other matters
beyond EVC's control.
13. Adelphi hereby acknowledges that the ITV/DL program is targeted toward
the non-traditional student market and therefore agrees to offer ITV/DL courses
at dates and times appropriate to the target market, but only between the hours
of 8:00 a.m. and 11:00 p.m., seven days per week. The parties acknowledge that
implementing the foregoing may require the cooperation of certain Adelphi
collective bargaining units, insofar as same may be reasonably necessary and
Adelphi agrees to use all reasonable efforts to staff classes during that time.
14. a) The parties hereby acknowledge that this agreement is not intended
by the parties to facilitate the offering of college degrees, degree programs or
a course of study which may lead to a degree or certificate, and neither party
shall represent or advertise that the ITV/DL programs shall result in the
awarding of degrees or that it is a degree program or a course of study leading
to a degree or certificate.
b) In the event that, after offering individual classes, the parties
desire to modify the program in order to offer degrees, degree programs or
courses of study leading to a degree or certificate through ITV/DL, the parties
agree that appropriate accreditation for degree programs will be sought from the
Middle States Association of Colleges and Schools, so as not to negatively
impact on Adelphi's current accreditation with N.Y.S. Department of Education
and/or Middle States.
c) In the event that degrees, degree programs and/or courses of study
leading to a degree or certificate, are offered pursuant to sub paragraph "14.
b)" above, then and in that event all other provisions of this agreement shall
apply with equal force and effect to said courses or classes offered in
conjunction therewith.
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d) Adelphi shall attempt to obtain and/or maintain all New York State
Department of Education, Middle States Association, and any other approval and
accreditation necessary to the offering of college courses and credits under the
applicable New York State law. Should Adelphi lose its accreditation at any time
during the term of this agreement or any renewal hereof, EVC shall have the
right to cancel this contract at the end of the semester in progress, if
applicable, or immediately if no semester is underway.
15. a) Adelphi shall be responsible for all of its own administrative
functions (registration, etc.) associated with the offering of ITV/DL courses
through EVC. EVC will reasonably assist with the administrative functions of
admissions and academic advising.
b) Adelphi will provide all necessary forms, applications, catalogues,
etc., and written instructions to EVC in advance and it is understood by the
parties that EVC is merely a conduit and assumes no liability whatsoever for the
accuracy or correctness of the information in said forms provided by Adelphi nor
for return of any of the aforesaid documents to Adelphi.
c) Adelphi shall hire an employee, who is subject to EVC's approval, to
work at Adelphi. EVC shall underwrite 100% of the employee's salary and
benefits. This employee shall be responsible for all aspects of the admission
process for students applying to Adelphi under this contract. A job description
detailing the responsibilities is attached as Exhibit "B". The employee shall
report directly to Executive Director of Admissions at Adelphi. Adelphi shall
pay the employee and the employee's salary and benefits shall be deducted from
the monthly payment set out in paragraph (16a) to EVC by Adelphi. The employee
is an Adelphi employee and shall be subject to all Adelphi's policies and
procedures, programs and benefits. EVC shall reimburse Adelphi for all
recruitment expenses.
d) EVC has the right to recommend termination of the employee to
Adelphi University. If, after the University's personnel procedures are
completed, the employee is not terminated, that employee shall be reassigned
within the University and a new employee shall be hired under the terms set
forth in paragraph (15) above.
16. a) Adelphi shall pay to EVC, on the 10th day of each month, [*] and
retain [*] of the adjusted gross tuition actually collected by Adelphi the
preceding month, from any source whatsoever, from or on behalf of any student
registered for courses being offered through EVC's ITV/DL program, said payments
to commence the month immediately following the collection of any such tuition
by Adelphi.
b) For the purposes of this agreement, adjusted gross tuition shall
mean tuition less any refunds or deductions for a check returned for
insufficient funds, loss of financial aid, refunds or cost of collection, etc.,
it being understood that cost of collection includes the use of outside agencies
only, not the expense incurred by Adelphi personnel collection tuition.
[*] Confidential Portion.
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c) Adelphi shall present to EVC, along with each monthly payment, a
written list of any an all adjustments or credits utilized to compute the
aforementioned "adjusted gross tuition", which list shall include the student's
name and social security number, together with a brief description of the reason
for the adjustment.
d) Commencing on December 10, 1997, and continuing on the 10th day of
every month thereafter, for ITV/DL courses offered through EVC, Adelphi will
supply EVC with a list of all students who have applied to Adelphi, and/or
registered, for ITV/DL courses offered through EVC, the said list to include as
available, each student's name, address, telephone number, social security
number, registration status, student loans and payment status.
e) EVC shall have the right, on a semi-annual basis, to examine the
students records of Adelphi, pertaining to all ITV/DL students, in order to
audit and adjust any accounts due and owing the respective parties.
f) EVC shall require that each student registering for an ITV/DL course
offered through EVC sign a waiver and release granting EVC access to said
student's records, said waiver and release form to be provided to Adelphi by
EVC, the format of which shall be subject to Adelphi's approval, which approval
shall not be unreasonably withheld.
17. Simultaneously with the signing of this agreement EVC's parent company,
Interactive Learning Systems, Inc. and Adelphi shall enter into a warrant
agreement. The warrant shall grant Adelphi an option to purchase 75,000 shares
of common stock of Interactive Learning Systems, Inc. at a purchase price per
share equal to 120% of the Initial Public Offering price of such common stock.
This option shall be exercisable at any time beginning one year from the
effective date of the registration statement, and ending six years after the
date of such registration statement. The complete terms of the warrant agreement
are annexed as Exhibit A.
18. a) Adelphi will provide a minimum of six (6) rooms which will
accommodate teaching stations in order to facilitate all ITV/DL courses
emanating from its campus and will grant EVC, its agents and subcontractors,
reasonable access to said facilities as is required for proper installation,
operation, maintenance and repair of all equipment contemplated herein,
including but not limited to ITV/DL equipment and telephone lines. All such
vendors shall maintain appropriate insurance as approved by Adelphi's Associate
Director of Business Affairs.
b) Classrooms at Adelphi equipped for ITV/DL may not be used by the
University for any class, function or other purpose, without the prior written
permission of EVC.
c) EVC equipment may be used by Adelphi for purposes which do not
infringe on the rights of EVC hereunder, or tend to impact negatively on the
success of the program contemplated by this agreement, with the prior written
permission of EVC, whenever the said equipment is not in use by EVC.
19. Adelphi News and Public Relations Department will provide reasonable
cooperation with EVC in promoting Adelphi ITV/DL course offerings.
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20. Adelphi and EVC will, whenever possible, cooperate in applying for and
obtaining any grants, awards, stipends, fellowships, etc., which are mutually
beneficial to the parties.
21. Adelphi shall maintain academic control over all courses and will be
receptive to EVC input as to ITV/DL presentation, as said forth in paragraph
eleven (11) above.
22. Adelphi will assign at least one person who at all times will act as
liaison between Adelphi and EVC.
23. Term of Agreement
a) The basic term of this agreement shall be FIVE (5) YEARS.
b) The parties hereby acknowledge the necessity for allowing ITV/DL
students continuity and ongoing access to courses and programs.
c) In light of the foregoing, the parties agree that commencing
September 1, 1998, and every September 1st thereafter, this agreement shall
automatically be extended for an additional period of ONE (1) YEAR, subject to
the conditions hereinafter contained.
d) In the event that either party should desire not to automatically
extend this agreement, then and in that event, such party shall so notify the
other in writing, by Certified Mail, Return Receipt Requested, no later than
June 1st of any given year, after which the agreement will not be extended for
an additional ONE (1) YEAR, but will have only the FOUR (4) YEARS of the
existing term remaining.
24. Non-Disclosure and Non-Compete
a) Adelphi acknowledges that by entering into this agreement it will be
gaining access to certain technology, procedures and markets which are the
property and trade secrets of EVC. Adelphi agrees that, for the duration of this
agreement and any extensions hereof, as well as for a period of ONE (1) YEAR
immediately following any termination or expiration thereof, Adelphi will use
its best efforts to make sure that none of its employees disclose, directly or
indirectly, to any person, corporation or entity, any of the procedures,
technology, software, hardware, etc., employed by EVC in providing Interactive
Computer or Televideo Communication services in connection herewith, and will
not knowingly grant access for any competitor or potential competitor to view,
examine, copy and/or photograph, any of the procedures (including training
manuals, if any), technology, equipment, software, etc., as referred to above,
without the prior written permission of EVC. Adelphi hereby acknowledges that
any violation of this section will cause irreparable harm to EVC.
b) Adelphi further agrees that it will not disclose to any person,
corporation or entity the terms of this agreement without the prior written
consent of EVC.
c) During the term of this agreement, Adelphi agrees not to offer
ITV/DL classes independently of EVC, to any company under contract with EVC. If
Adelphi terminates this contract, Adelphi agrees not to offer any ITV/DL courses
to companies under contract with EVC at the time of the termination, for a one
year period. Each year at renewal and upon request, EVC shall provide Adelphi
University with a list of all companies under contract with EVC.
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25. Damages Limitation
a) It is expressly agreed and understood that neither party shall be
liable for incidental, special or consequential damages for any breach or
violation of this agreement.
26. The foregoing constitutes the entire agreement between the parties, and
any other agreements or representations, whether verbal or written, if not
contained herein, are void, of no effect, and are not binding upon the parties.
27. No valid modification, amendment, or deletion may be made to this
agreement except in writing and executed by the parties in substantially the
same manner as this agreement.
28. Any and all notices required hereunder shall be by Certified Mail,
Return Receipt Requested, to each party's last known address and shall be deemed
given at the time of mailing.
29. If any portion of this agreement shall be found to be void, voidable or
unenforceable, it shall not effect the validity of the remainder of the
agreement.
30. The parties agree that any disputes or disagreements arising hereunder
or in connection herewith shall be settled by binding arbitration before the
American Arbitration Association at their offices located in Garden City, New
York and that any judgment awarded thereunder may be entered in any court of
appropriate jurisdiction, and will have full force and effect therein.
31. This agreement shall be construed in accordance with, and governed by,
the laws of the State of New York.
In witness whereof the parties have hereunto set their hands and seal the
date first appearing above.
Educational Video Conferencing, Inc.
By: /s/ Dr. John J. McGrath
------------------------------
Dr. John J. McGrath, President
Adelphi University
By: /s/ Catherine Hennessey
--------------------------------
Catherine Hennessy
VP of Finance & Treasurer
Exhibit 10.3
AGREEMENT BETWEEN EDUCATIONAL VIDEO CONFERENCING, INC.
AND MERCY COLLEGE,
FOR THE OFFERING OF INTERACTIVE VIDEO CONFERENCED
AND COMPUTER CONFERENCED COURSES
W I T N E S S E T H
AGREEMENT made this 10th of March, 1998, between Mercy College, with
offices located at 555 Broadway, Dobbs Ferry, New York 10522 (hereinafter
"MERCY"), and Educational Video Conferencing Inc., (hereinafter "EVC"), with
offices located at 35 E. Grassy Sprain Road, Suite 504, Yonkers, New York 10710.
WHEREAS, MERCY is an institution of higher learning duly
certified by the Education Department of the State of New York and accredited by
the Middle States Association to offer undergraduate and graduate courses, and
WHEREAS, EVC is a domestic corporation engaged in the business
of providing access to such courses to consumers by way of interactive video
conferencing and computer conferencing, and
WHEREAS, MERCY and EVC wish to enter into a mutually
beneficial agreement whereby EVC will provide access to MERCY courses to such
consumers,
NOW, THEREFORE in consideration of $10.00 in good funds, as
well as the mutual covenants contained herein, the parties hereby agree as
follows:
1. a.) EVC shall have the right, for the duration of this agreement
and any renewal hereof, to offer all accredited college courses, degree programs
and non-degree courses and programs offered by MERCY via Interactive Video
Conferencing/Distance Learning (hereinafter "IVC/DL") and Web-based Computer
Conferencing/Distance Learning (hereinafter "CC/DL"), commencing in March, 1998.
This is not an exclusive right.
b.) For the purposes of this agreement, IVC/DL shall be
defined as live, two way video conferencing, either over desktop computers
equipped for video conferencing or video conferencing room systems, as the case
may be, in which the student can see and hear the professor/instructor and the
professor/instructor can see and hear the individual student. IVC/DL also shall
include one-way video and two-way audio distance learning.
c.) For the purposes of this agreement, CC/DL shall be defined as
Web-based computer conferencing.
d.) Unless MERCY and EVC agree otherwise in writing, the
minimum class size for the offering of an ITV/DL and CC/DL course shall be
Fifteen (15) students.
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS EXHIBIT
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2. EVC will provide all hardware (except personal computers, modems,
keyboards and monitors), software, and video conferencing equipment
(collectively referred to as "equipment") necessary to provide access for MERCY
courses to IVC/DL students. Students taking IVC/DL courses on desk-top computers
must have modern computers capable of being video enabled and function as an
IVC/DL desk-top system. Students taking CC/DL courses must have a modern
computer, a modem and Internet access. The parties acknowledge that it is the
goal of EVC to solicit students from corporations, governmental agencies and
institutions (hereinafter "Institutional Employers") with substantial tuition
reimbursement, and that EVC shall address all student use equipment issues with
the Institutional Employers and their employees. In any event, MERCY shall not
be responsible for the cost of any equipment whatsoever at Institutional
Employer locations and/or students homes.
3. EVC is responsible for costs for marketing, advertising, and
promotion regarding EVC's offering of access to MERCY courses. Unless otherwise
agreed, MERCY will provide brochures, catalogues, course schedules, program and
course descriptions, posters, etc., to EVC for distribution to employees of
EVC's corporate, governmental and institutional clients promoting the MERCY
programs and courses offered through EVC.
4. EVC will be responsible for installing and maintaining adequate
telephone lines for teaching stations and for the cost of providing
telecommunication signal transport for video conferenced courses from teacher
stations to the MCU Bridge. EVC assumes responsibility or cost for obtaining,
providing or paying for telecommunication signal transport for video conferenced
courses from the MCU Bridge to corporate locations and/or students homes.
5. EVC will be responsible for installing and maintaining up to 10
teaching stations in the rooms provided by MERCY to videoconference IVC/DL
courses offered through EVC, subject to enrollment. All teaching stations
installed and paid for by EVC shall remain the exclusive property of EVC. EVC
assumes no responsibility or cost for obtaining, providing or paying for teacher
station equipment for CC/DL courses.
6. All equipment supplied by EVC is the sole and exclusive property
of EVC, including but not limited to any and all patents, copyrights and
trademarks, if any, associated therewith. All classroom, course and program
materials or other information supplied by MERCY, and all rights and interests
in said materials will remain the sole and exclusive property of MERCY.
7. a.) EVC is responsible for the necessary maintenance, repair
and/or replacement of video conferencing equipment supplied to MERCY for IVC/DL
courses.
b.) EVC will provide reasonably prompt service for repair or
replacement of defective interactive video conferencing equipment and software
as necessary.
c.) MERCY will be responsible for the prompt repair and/or
replacement of interactive video conferencing equipment located at MERCY, which
may be damaged through improper or unauthorized use.
d.) MERCY is responsible for the repayment to EVC of the cost
of replacement of any EVC equipment, which is lost or stolen while in MERCY's
custody and control.
8. Neither party shall utilize the other's name or any associated
names, trademarks, copyrights, etc., without prior written consent. Such
permission shall not be unreasonably denied.
9. a.) EVC will provide faculty development to MERCY faculty
reasonably required for the offering of MERCY courses through EVC.
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b.) MERCY shall be responsible for obtaining the services of
all faculty participating in courses offered through EVC, including but not
limited to said faculty's salary, benefits (if any) and verification of
qualifications. EVC assumes no responsibility for any costs associated
therewith.
10. EVC is solely responsible to provide site locations for IVC/DL
students to participate in MERCY courses. MERCY assumes no responsibility for
obtaining or maintaining said sites, nor for any rent or other costs associated
therewith.
11. EVC is not responsible for curriculum, course content, faculty
qualifications, course materials or any other aspect of the academic content of
any courses offered hereunder. However, MERCY agrees to be receptive to and
consider EVC input as to course content presentation and delivery of IVC/DL and
CC/DL courses consistent with required academic standards.
12. EVC agrees to make every reasonable effort to maintain its
equipment in good working order. However, EVC is not responsible for service or
repair delays or interruption of service caused by strikes, labor actions, power
outages (other than those limited to site locations alone), acts of God or other
matters beyond EVC's control.
13. MERCY hereby acknowledges that the IVC/DL and CC/DL programs
marketed by EVC are targeted toward the non-traditional working adult student
market and therefore agrees to use its best efforts (a) to offer IVC/DL courses
at dates and times appropriate to the target market, between the hours of 8:00
a.m. and 11:00 p.m., seven days per week and at such other times requested by
EVC Institutional Employers and their employees, subject to enrollment. and (b)
to offer CC/DL courses commencing at times reasonable requested by EVC's
Institutional Employers corporate and their employees, subject to enrollment,
including but not limited to the three academic semesters offered each year by
MERCY: Fall, Spring and Summer.
14. a.) The parties hereby acknowledge that this agreement is intended
by the parties to facilitate the offering of college courses, degree programs
and/or courses of study, which may lead to a degree or certificate.
b.) MERCY shall attempt to obtain and/or maintain all New York
State Department of Education, Middle States Association, and any other
accreditation necessary to the offering of college courses and credits under the
applicable law. Should MERCY lose its accreditation at any time during the term
of this agreement or any renewal hereof, EVC shall have the right to cancel this
contract at the end of the semester in progress, if applicable, or immediately
if no semester is underway.
15. Administrative Functions
a.) MERCY shall be responsible for all of its own administrative
functions (admissions, academic advising, registration, financial aid, etc.)
associated with the offering of IVC/DL and CC/DL courses through EVC.
b.) MERCY shall hire, subject to EVC's approval, an admissions/
administrative coordinator to work at MERCY's and EVC's offices on a part time
or full time basis as registration demand requires. This employee shall be
responsible for coordinating all aspects of the admission/administrative
processes performed by MERCY employees for students applying to MERCY under this
contract. The employee shall report to the Assistant Vice President for Academic
Affairs in consultation with the Vice-President of Enrollment Management at EVC.
EVC shall be responsible for FIFTY (50%) PERCENT of said employee's salary and
benefits. MERCY shall pay the employee and
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shall deduct FIFTY (50%) PERCENT of said employee's salary and benefits from its
cash disbursement to EVC on a monthly basis.
c.) Beyond the first THREE HUNDRED FIFTY (350) prospective
students which will be handled by the admissions/administrative coordinator set
forth above in paragraph 15b, MERCY shall hire, subject to EVC's approval, one
admissions/administrative counselor for each THREE HUNDRED FIFTY (350)
prospective students interested in taking IVC/DL or CC/DL courses offered by
MERCY through EVC. Said employees shall work out of EVC's and MERCY's offices.
The employee shall report to the Assistant Vice President for Academic Affairs
at MERCY in consultation with the Vice-President of Enrollment Management at
EVC. EVC shall be responsible for FIFTY (50%) PERCENT of said employee's salary
and benefits. MERCY shall pay the employee and shall deduct FIFTY (50%) PERCENT
of said employee's salary and benefits from its cash disbursement to EVC on a
monthly basis.
d.) MERCY will provide all necessary administrative forms,
applications, catalogues, etc., and written instructions to EVC in advance of
marketing courses to any organization and it is understood by the parties that
EVC is merely a conduit and assumes no liability whatever for the accuracy or
correctness of the information in said forms provided by MERCY nor for return of
any of the aforesaid documents to MERCY.
16. Fees
a.) MERCY shall pay to EVC, on the 10th day of each month, [ *
] of the gross tuition actually collected by MERCY the preceding
month, from any source whatever, from or on behalf of any student employed by an
Institutional Employer customer of EVC registered for and attending accredited
college degree courses being offered through EVC's, said payments to commence
the month immediately following the collection of any such tuition by MERCY. All
checks for courses taken will be made out to MERCY COLLEGE.
b.) EVC shall have the right, on a semi-annual basis, to examine
the books and records of MERCY, pertaining to all students taking courses
through EVC, in order to audit any accounts due and owing the respective
parties. MERCY COLLEGE shall have the right to audit EVC accounts for students
taking MERCY courses on the same basis.
c.) Commencing on April 10, 1998, and continuing on the 10th day
of every month thereafter, MERCY will supply EVC with a list of all students who
have applied to MERCY, and/or registered, for courses through EVC, the said list
to include as available, each student's name, address, telephone number, social
security number, registration, financial aid loans and payment status. EVC shall
provide to MERCY updated information relating to MERCY students each month.
d.) EVC shall require that each student registering for a course
offered through EVC, sign a waiver and release granting EVC access to said
student's records, said waiver and release form to be provided to MERCY by EVC,
the format of which shall be subject to MERCY's approval, which approval shall
not be unreasonably withheld.
e.) Within THIRTY (30) DAYS of the completion of each Fall and
Spring Semester, MERCY shall Present to EVC, in writing, any requests for
adjustments or credits on monies already paid to EVC, which credits or
adjustments have been made necessary by an EVC student having dropped a course,
bounced a check, etc. EVC will credit any such valid adjustment to MERCY's
account in three equal installments over the three months immediately following
such request by MERCY.
[*] Confidential Portion
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f.) Students registering for MERCY courses through EVC who are
employed by an Institutional Employer customer of EVC which have a tuition
reimbursement policy for their employees shall be eligible for tuition deferment
from MERCY until completion of the course, thereby enabling said students to
register for MERCY courses through EVC without payment of tuition or fees up
front. Said students shall be required to sign a tuition payment guarantee
providing that they are fully responsible for 100% of all tuition in the event
that, for any reason, they are not reimbursed by their employer.
g.) Students registering for MERCY courses offered through EVC who
are not employed by an Institutional Employer customer of EVC providing tuition
reimbursement to their employees shall be required to pay tuition and fees up
when registering.
17. a.) MERCY will provide a minimum of three (3) dedicated rooms
which will accommodate teaching stations in order to facilitate IVC/DL courses
marketed by EVC emanating from its campus and will grant EVC, its agents and
subcontractors, reasonable access to said facilities as is required for proper
installation, operation, maintenance and repair of all equipment contemplated
herein, including but not limited to IVC/DL equipment and telephone lines. Said
room shall be a minimum of 10 feet by 12 feet with adequate electrical, air
conditioning, lighting, etc., and be otherwise suitable for use as a video
conferencing teacher station. Said rooms will be provided one at a time subject
to registration demand.
b.) Rooms at MERCY equipped by EVC for IVC/DL may not be used by
the college for any class, function or other purpose, without the prior written
permission of EVC.
18. MERCY Public Relations Department will provide reasonable
cooperation with EVC in promoting EVC/MERCY Telecommute to College Program and
the IVC/DL and CC/DL course offerings offered through EVC.
19. MERCY and EVC will, whenever possible, cooperate in applying for
and obtaining, any grants, awards, stipends, fellowships, etc., which are
mutually beneficial to the parties.
20. MERCY shall maintain academic control over all courses and will be
receptive to EVC input as to IVC/DL and CC/DL presentation.
21. MERCY will assign at least one person who at all times will act as
liaison between MERCY and EVC.
22. Term of Agreement
a.) The basic term of this agreement shall be FIVE (5) YEARS.
b.) The parties hereby acknowledge the necessity for allowing
IVC/DL students continuity and ongoing access to courses and programs, so long
as there is adequate registration.
c.) In light of the foregoing, the parties agree that commencing
July 1, 1998, and every July 1st thereafter, this agreement shall automatically
be extended for an additional period of ONE (1) YEAR, subject to the conditions
hereinafter contained.
d.) In the event that either party should desire not to
automatically extend this agreement, then and in that event, such party shall so
notify the other in writing, by Certified Mail, Return Receipt Requested, no
later than April 1 of any given year, after which the agreement will not be
extended for an additional ONE (1) YEAR, but will have only the Four (4) YEARS
of the existing term remaining.
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23. MERCY shall have the right to offer courses via IVC/DL and/or
CC/DL on its own, to Institutional Employer and/or the employees of any
Institutional Employer not under contract with EVC. In such event, EVC shall not
have any obligation to market, provide any services or equipment, permit the use
of EVC's equipment, or incur any costs in connection with such offerings.
24. MERCY agrees that, for the duration of this agreement and any
extensions hereof, as well as for a period of ONE (1) YEAR immediately following
any termination or expiration thereof, MERCY will not independently video
conference or computer conference its college courses or programs under this
contract to EVC clients or their employees. This provision does not include
corporate clients who have employees taking distance learning courses from MERCY
COLLEGE prior to March 1998.
25. Damages Limitation
a.) It is expressly agreed and understood that neither party shall
be liable for incidental, special or consequential damages for any breach or
violation of this agreement.
26. The foregoing constitutes the entire agreement between the
parties, and any other agreements or representations, whether verbal or written,
if not contained herein, are void, of no effect, and are not binding upon the
parties.
27. No valid modification, amendment, or deletion may be made to this
agreement except in writing and executed by the parties in substantially the
same manner as this agreement.
28. Any and all notices required hereunder shall be by Certified Mail,
Return Receipt Requested, to each party's last known address and shall be deemed
given at the time of mailing.
29. If any portion of this agreement shall be found to be void,
voidable or unenforceable, it shall not effect the validity of the remainder of
the agreement.
30. This agreement shall be binding on the respective parties' heirs,
successors, and assigns.
31. The parties agree that any disputes or disagreements arising
hereunder or in connection herewith shall be settled by binding arbitration
before the American Arbitration Association at their offices located in White
Plains, New York, and that any judgment awarded thereunder may be entered in any
court of appropriate jurisdiction, and will have full force and effect therein.
32. This agreement shall be construed in accordance with, and governed
by, the laws of the State of New York.
In witness whereof the parties have hereunto set their hands and seal
the date first appearing above.
EDUCATIONAL VIDEO CONFERENCING, INC. MERCY COLLEGE
By: /s/ John J. McGrath By:/s/ Jay Sexter
--------------------------------- --------------------------------
John J. McGrath, Ph.D., President Dr. Jay Sexter, Ph.D., President
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APPENDIX A
ARMS LENGTH TRANSACTION
The parties to the foregoing agreement hereby acknowledge that at all times
relevant hereto Dr. John J. McGrath was an employee of both Educational Video
Conferencing, Inc. and Mercy College.
The parties further acknowledge that as a result of such dual employment, there
has existed the potential for a conflict of interest with regard to the
foregoing agreement.
The parties hereby warrant and represent that no actual conflict of interest
has arisen in connection herewith and that this agreement represents an arms
length transaction which has the same validity and effect as though the
potential conflict had not existed.
Dated: Dobbs Ferry, New York
March , 1998
EDUCATIONAL VIDEO CONFERENCING, INC.
By: /s/ Arol I. Buntzman
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Arol I. Buntzman, Ed.D., C.E.O.
MERCY COLLEGE
By: /s/ Jay Sexter
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Jay Sexter, Ph.D., President
