Pursuant to
17 CFR 240.24b-2, confidential information (indicated by [***]) has
been omitted and has been filed separately with the Securities and
Exchange Commission pursuant to a Confidential Treatment
Application filed with the Commission.
This Collaboration
Agreement (this “ Agreement ”) is entered into
as of this 6th day of February, 2007 (the “ Effective
Date ”) by and between The Corporate Executive Board
Company, a Delaware corporation (“ CEB ”), and
The Advisory Board Company, a Delaware corporation (“
ABCO ”). CEB and ABCO are sometimes hereafter referred
to individually as a “ Party ” and together as
the “ Parties .”
WHEREAS ,
each Party routinely explores opportunities and evaluates ways in
which it can by itself or in cooperation with others provide
additional programs, products, services, and value to its member
and prospective member customers of its commercial programs, and
each Party has considered various means of offering to its members
the programs, services and offerings contemplated by this
Agreement;
WHEREAS ,
ABCO and CEB wish to capitalize on the expertise of the other Party
to achieve in a faster, more cost-efficient manner the
(a) development of new best demonstrated practice (“
BDP ”) research programs, products and services,
(b) provision of new BDP research programs, products and
services to each Party’s members and prospective members, and
(c) availability of new services and enhanced research programs as
part of each Party’s existing BDP research programs,
products, and service offerings; and
WHEREAS ,
the Parties believe that combining their respective resources in
the manner contemplated by this Agreement will likely result in the
faster provision of higher quality BDP research programs, products
and services that will benefit the Parties’ respective
members and prospective members.
NOW,
THEREFORE , in consideration of the foregoing and the mutual
promises, covenants, and agreements herein contained, and for other
good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Parties agree as
follows:
Words and phrases
not otherwise defined herein have the following respective
meanings:
“
Collaborations ” means, collectively, the General
Counsel Collaboration, Employer Health Collaboration, New Product
Collaboration, and Enhancement Collaboration (as such terms are
defined in the first paragraphs of Sections 3.1 ,
3.2 , 3.3 and 3.4 , respectively).
“
Commercially Reasonable Efforts ” means, as to a
Party, an undertaking by such Party to perform or satisfy an
obligation or duty or otherwise act in a manner
reasonably
calculated to
obtain the intended result by action or expenditure not
disproportionate or unduly burdensome in the circumstances, which
means, among other things, that such Party will not be required to
(a) expend funds other than for payment of the reasonable and
customary costs and expenses of employees, counsel, consultants,
representatives, or agents of such Party in connection with the
performance or satisfaction of such obligation or duty or other
action or (b) institute litigation or arbitration as a part of
its Commercially Reasonable Efforts.
“
Confidential Information ” means all such information
(whether written, oral, electronic, visual or otherwise) furnished
or made available (whether before or after the Effective Date) by
either Party or any of its Representatives (as defined in
Section 4.6(a) ) to the other Party or its
Representatives (including, but not limited to, the information and
materials exchanged or made available by one Party’s Project
Manager(s) (as defined in Section 4.1(a) ) to the other
Party’s Project Manager(s) in connection with this
Agreement), and all analyses, compilations, forecasts, studies,
summaries, notes, data, and other documents and materials in
whatever form maintained, whether prepared by CEB, ABCO, or their
respective Representatives, which contain or reflect, or are
generated from, any such information. Notwithstanding the
foregoing, Confidential Information does not include any
information that:
(a)
at the time of disclosure is or later comes into the public domain
or becomes publicly known through no improper conduct of the
Recipient (as defined in Section 4.6(a) ), the
Recipient’s Representatives, or the Recipient’s Third
Party (as defined in this Section 1 below)
recipients;
(b)
can be demonstrated by documentation or other competent proof to
have been in the Recipient’s possession prior to disclosure
by the Disclosing Party (as defined in Section 4.6
);
(c)
is subsequently received by the Recipient from a Third Party who is
not bound by any obligation of confidentiality with respect to such
information, and the Recipient is not bound by any other obligation
of confidentiality to the Disclosing Party with respect to such
information; or
(d)
can be demonstrated by documentation or other competent proof to
have been independently developed by or for the Recipient without
reference to, or use of, the Disclosing Party’s Confidential
Information.
“
Covered Services ” means and includes membership-based
BDP subscription services in which members receive a bundle of
services incorporating a meaningful combination of the following:
(a) benchmarking efforts, case studies, root cause, economic
and/or quantitative analysis, which culminate in a syndicated
research report; (b) meetings focused on the discussion of
those syndicated research reports in a single-client or
multi-client setting; or (c) short answer custom
research.
“
Cross-Industry Covered Services ” means and includes a
Covered Service that draws from a diverse group of industries and
focuses on issues that are not the primary activity of those
industries.
2
“
Education Industry ” means and includes any Entity
that (a) falls under the Educational Services sector or any of
the subsectors referred to in Section 61 of the North American
Industry Classification System as of the Effective Date, as such
section may be amended from time to time (collectively, the “
Educational Services Sector ”), or (b) serves the
Educational Services Sector, such as technology, software,
communications, financing, and services vendors that sell their
programs, products or services predominantly to the Educational
Services Sector. Local, state and federal government entities that
directly govern Entities within the Educational Services Sector are
considered part of the Education Industry.
“
Entity ” means an individual; corporation;
partnership; limited liability company; association; trust or
unincorporated organization; a local, state or federal government
entity; any other entity, organization or institution; or any
division or subsidiary of any of the foregoing.
“
General Counsel Roundtable ” means the program
developed and offered by CEB that, as of the Effective Date,
provides BDP research, services and tools designed to assist legal
executives with their management, communications and
decision-making challenges.
“
Health Care Provider Company ” means any Entity that
is principally engaged in the health care provider business, which
will include providers of patient care (such as hospitals, health
systems, outpatient facilities, home health agencies, and relevant
governmental entities) and providers of medical professional
services (such as physician and nursing services and physician
management companies).
“
Health-Related Companies ” means, collectively, Health
Care Provider Companies and Other Health Care Companies (as defined
in this Section 1 below).
“
Industry Covered Services ” means and includes Covered
Services, such as those Covered Services that ABCO currently
provides to members of its health care BDP syndicated research
programs; i.e. , Covered Services (a) focused
principally on the primary activity, particular characteristic, or
critical issue of and (b) sold to Health-Related Companies,
Not-for-Profit Organizations (as defined in this
Section 1 below), or Entities in the Education
Industry. For the avoidance of doubt, for a Covered Service to be
an Industry Covered Service, it must be identified as exclusively
serving one “vertical” ( i.e. , a discreet
industry sector), its content will draw primarily from that
vertical, and all multi-client meetings include only clients from
that vertical. Further, while some content might be shared across
programs for reasons of leverage, any such content will be embedded
within a program targeted at one of the verticals identified
above.
“
New ABCO Industries ” means, collectively,
(a) the Education Industry and (b) Not-for-Profit
Organizations.
“
New CEB Industries ” means Entities that fall under
the (a) [***] sector referred to in Section [***] of the NAICS, (b)
[***] sector referred to in Section [***] of the NAICS, (c) [***]
sector referred to in Section [***] of the NAICS, (d) [***] sector
referred to in Section [***] of the NAICS, (e) [***] sector
referred to in Sections [***] of the NAICS, (f) [***] sector
referred to in Section [***] of the NAICS, (g) [***] sector
referred to in Section [***] of the NAICS, (h) [***] sector
referred to in Sections [***] of the NAICS, (i) [***] sector
referred to
3
in Section
[***] of the NAICS, (j) [***] sector referred to in Section [***]
of the NAICS, (k) [***] sector referred to in Section [***] of the
NAICS, (l) [***] sector referred to in Sections [***] of the NAICS,
(m) [***] sector referred to in Section [***] of the NAICS, (n)
[***] sector referred to in Section [***] of the NAICS, (o) [***]
sector referred to in Section [***] of the NAICS, (p) [***] sector
referred to in Section [***] of the NAICS, (q) [***] sector
referred to in Section [***] of the NAICS, (r) [***] sector
referred to in Section [***] of the NAICS, and (s) [***] sector
referred to in Section [***] of the NAICS, in each case to the
extent such Entity does not fall under a New ABCO Industry and is
not a Health-Related Company.
“
Non-Compete Period ” means the period commencing on
the Effective Date and continuing through the later of
(x) February 5, 2011 or (y) the first anniversary of
the last day that two (2) Collaborations remain in effect (
i.e. , whose Term has not yet expired or been terminated),
provided that at least one (1) of the two
(2) Collaborations that remain in effect is either the New
Product Collaboration or the Enhancement Collaboration.
“
Not-for-Profit Organizations ” means and includes
(a) any Entity that exists for educational, social welfare,
civic improvement, pleasure or recreation, charitable, or for any
other purposes except for-profit, no part of the income of which is
payable to or is otherwise available for the personal benefit of
any proprietor, member, trustee, or shareholder, (b) any
Entity serving the Entities referred to in immediately preceding
clause (a), such as technology, software, communications,
financing, and services vendors that sell their programs, products
or services predominantly to an Entity described in the immediately
preceding clause (a), and (c) local, state and federal government
entities that directly govern Entities referred to in either of
immediately preceding clauses (a) or (b).
“
Other Health Care Company ” means any Entity that is
not a Health Care Provider Company and that is principally engaged
in other types of health care business, including: pharmaceuticals
companies; medical technology and device companies, medical supply
companies; medical equipment companies; technology, software,
communications, financing, and services vendors selling
predominantly to Health Care Provider Companies; companies
providing health insurance; and managed care companies.
“
Term ” means the period commencing on the Effective
Date and continuing through the last day of the (a) the GC
Term, (b) the EH Term, (c) the NP Term, and (d) the
EC Term (as such terms are defined in Sections 3.1(a) ,
3.2(a) , 3.3(a) and 3.4(a) , respectively),
unless sooner terminated in accordance with the terms of this
Agreement.
“
Third Party ” means any Entity other than ABCO or
CEB.
2. CERTAIN
REPRESENTATIONS, WARRANTIES, AND COVENANTS
2.1 General
. Each Party hereby represents, warrants, and covenants to the
other Party as follows:
(a) such
Party is duly organized, validly existing, and in good standing
under the laws of the State of Delaware and possesses the requisite
corporate power and authority to
4
execute,
deliver and perform its obligations under this Agreement and convey
the rights herein granted to the other Party without the written
consent of any Third Party;
(b) this
Agreement, when executed and delivered by such Party, will be the
legal, valid, and binding obligation of such Party, enforceable
against such Party in accordance with its terms, subject to
applicable bankruptcy, reorganization, insolvency, moratorium, and
other laws affecting creditors’ rights generally from time to
time in effect and to general equitable principles; the execution,
delivery, and performance of this Agreement by such Party does not
and will not conflict with, or constitute a breach or default
under, such Party’s certificate of incorporation or bylaws or
any material agreement, contract, commitment, or instrument to
which such Party is a party; and such Party has not previously
granted and will not grant any rights to any Third Party that are,
nor contract with any Third Party in any manner that is,
inconsistent with the terms herein; and
(c) such
Party will comply with all applicable laws when performing its
obligations under this Agreement.
2.2
Certain Additional Representations and Warranties of Each
Party . (a) ABCO hereby represents and warrants to CEB
that it has (i) received no claims, demands, or letters
concerning or affecting the Employer Health Materials (as defined
in Section 3.2(b) ), licenses, services, or information
to be delivered and the services to be performed by ABCO under this
Agreement challenging the validity or scope of rights therein, or
requesting that ABCO limit, cease and desist use, or take a license
from a Third Party to continue the use or provision thereof, in
whole or in part, and (ii) sufficient rights, whether granted
by Third Parties or otherwise, to perform its obligations under
this Agreement, including, but not limited to, ABCO’s
obligations to enter into and perform the
Collaborations.
(b) CEB
hereby represents and warrants to ABCO that it has
(i) received no claims, demands, or letters concerning or
affecting the General Counsel Materials (as defined in Section
3.1(b) ), licenses, services, or information to be delivered
and the services to be performed by CEB under this Agreement
challenging the validity or scope of rights therein, or requesting
that CEB limit, cease and desist use, or take a license from a
Third Party to continue the use or provision thereof, in whole or
in part, and (ii) sufficient rights, whether granted by Third
Parties or otherwise, to perform its obligations under this
Agreement, including, but not limited to, CEB’s obligations
to enter into and perform the Collaborations.
3. TYPES AND
CERTAIN TERMS OF COLLABORATIONS
3.1 General
Counsel Collaboration . The Parties agree to collaborate during
the GC Term for provision to the global health care industry of
certain cross-industry BDP content developed by or on behalf of CEB
and offered by CEB through the General Counsel Roundtable in
accordance with the terms and conditions of this Agreement (the
“ General Counsel Collaboration ”). CEB has
informed ABCO that CEB will be providing the General Counsel
Materials and any other BDP content to ABCO for the purposes of the
General Counsel Collaboration, in each case subject to the terms
and conditions of this Agreement, as an extension of the so-called
“CEB Network,” and CEB hereby represents and warrants
to ABCO that CEB’s provision of General Counsel Materials and
any other BDP content for these
5
purposes does
not in any way impose on ABCO any right, obligation, limitation or
otherwise that is not expressly provided in this Agreement or
affect any of ABCO’s rights or obligations provided in this
Agreement with respect to the General Counsel Materials.
(a)
Term of General Counsel Collaboration . Unless sooner
terminated or extended in accordance with the terms and conditions
of this Agreement, the term of the General Counsel Collaboration
will commence on the Effective Date and will continue through
February 5, 2010 (the “ GC Initial Term ”).
ABCO will have the right, exercisable upon written notice to CEB
given at least thirty (30) days prior to the expiration of the
GC Initial Term, or any subsequent GC Extended Term, to extend the
term of the General Counsel Collaboration through February 5,
2012 and thereafter for subsequent two-year renewal terms (such
extension period(s), the “ GC Extended Term ,”
and together with the GC Initial Term, the “ GC Term
”).
(b)
Grant by CEB to ABCO of Certain Rights . Subject to the
terms and conditions of this Agreement, CEB hereby grants to ABCO a
nonexclusive, worldwide license to reproduce, prepare derivative
works based on (subject to Section 3.1(h) ), and
distribute in accordance with the remainder of this
Section 3.1(b) , all materials developed by or on
behalf of CEB in connection with the General Counsel Roundtable as
part of ABCO’s own BDP membership program to serve general
counsels and/or legal departments of Health Care Provider Companies
(the “ ABCO General Counsel Offering ”). Such
materials developed by or on behalf of CEB include, but are not
limited to, the following: research studies, briefings, watches;
meeting/on-site presentations and scripts; tools, templates, and
benchmarks; and all General Counsel Roundtable program materials
posted on CEB’s General Counsel Roundtable website (the
latter of which shall be provided through direct access by the
relevant Project Manager to the General Counsel Roundtable website)
(all such materials collectively, the “ General Counsel
Materials ”). ABCO in its sole discretion will be
entitled to distribute the General Counsel Materials as part of the
ABCO General Counsel Offering, subject to payment of license fees
in accordance with Section 3.1(d) , on a “private
label basis” ( i.e. , under ABCO’s own
trademarks, service marks and brands), and subject to the
attribution obligation set forth in Section 3.1(e) .
Membership of the ABCO General Counsel Offering that includes
access to the General Counsel Materials licensed by ABCO from CEB
pursuant to this Agreement will be an “ ABCO General
Counsel Membership .” Notwithstanding anything to the
contrary in this Agreement, ABCO will not be permitted to grant to
any Entity with an ABCO General Counsel Membership rights to the
General Counsel Materials offered by ABCO in connection with the
ABCO General Counsel Offering that are greater or more permissive
than the rights ABCO grants in the ordinary course of its business
to members of its other BDP programs with respect to materials
prepared by ABCO, including rights with respect to the
confidentiality, reproduction, and use of such
materials.
(c)
Dialogue and Training . CEB will provide to ABCO up to 40
hours of time per calendar quarter during the GC Term at mutually
agreeable times for dialogue with ABCO staff about research topics
and to train ABCO sales and service teams on matters concerning the
General Counsel Roundtable, the General Counsel Materials licensed
by ABCO from CEB in connection with the General Counsel
Collaboration, and the ABCO General Counsel Offering. CEB will also
make available to ABCO on a limited basis during the GC Term
appropriate researchers of its General Counsel Roundtable to field
specific questions
6
concerning the
research supporting the General Counsel Materials that are posed to
ABCO by Entities with ABCO General Counsel Memberships.
(d)
License Fees . (i) During the GC Term, ABCO will pay to
CEB, as a license fee for the General Counsel Materials, [***] for
each twelve (12) month ABCO General Counsel Membership (the
“ GC License Fee ”), with such license fee being
(A) prorated for each ABCO General Counsel Membership that is
shorter than twelve (12) full calendar months and
(B) subject to adjustment in accordance with
Section 3.1(d)(ii) .
(ii)
If the [***] from the [***]. [***]. Notwithstanding the foregoing,
[***]. For example, if [***] in a year [***].
(e)
Attribution on Certain General Counsel Materials . ABCO will
include the following language in the lower left corner of each
one-page publication or of each two-page spread of each multi-page
publication distributed by ABCO pursuant to
Section 3.1(b) : “Provided by The Advisory Board
Company by special arrangement with the General Counsel
Roundtable.” If a particular General Counsel Material (
e.g. , a meeting speech) will be distributed by ABCO only
orally ( i.e ., without such General Counsel Material also
being distributed by ABCO in writing in either printed or
electronic form (in which such case the attribution described in
the immediately preceding sentence will be included in such
writing) to the same audience), ABCO will either (i) state
orally during the distribution of that General Counsel Material (
e.g. , during the oral presentation of the meeting speech)
or (ii) include a notation on the agenda or any other
announcement or notification of such distribution ( e.g. ,
an agenda for a conference during which such speech will be
delivered), if there is one, that all or a portion of the content
being presented, as the case may be, “is being provided by
The Advisory Board Company by special arrangement with the General
Counsel Roundtable.” If a particular General Counsel Material
will be distributed in a manner or through a medium that is not
contemplated by either of the two immediately preceding sentences,
ABCO will attribute the General Counsel Material in a manner that
is as consistent with foregoing as is reasonably practicable in the
circumstances ( i.e. , communicate that the General Counsel
Material is being “provided by The Advisory Board Company by
special arrangement with the General Counsel Roundtable” in a
manner that is similarly conspicuous as those described in the
first two sentences of this Section 3.1(e) , in each
case to the extent reasonably practicable in the circumstances). No
further acknowledgments will be required.
(f)
ABCO General Counsel Offering Pilot Program . During the GC
Initial Term, ABCO will pilot an ABCO General Counsel Offering for
new product development research purposes by marketing the ABCO
General Counsel Offering to an alpha cohort of some of the larger
health systems in the United States (generally health systems with
operating expenses of $1 billion or greater) as identified by
ABCO in its sole discretion. Throughout the pilot period, which may
be shorter than the GC Initial Term, ABCO will evaluate the success
of the pilot, along with information from its other new product
development efforts, and determine in its sole discretion whether
to launch the ABCO General Counsel Offering into a broader
market.
(g)
Relationship with Members of the ABCO General Counsel
Offering . During and after the expiration of the GC Term, ABCO
will “own” the relationship ( i.e. ,
have
7
the
responsibility for selling to, servicing and renewing prospective
and actual members) and have sole direct contract privity with
members of the ABCO General Counsel Offering as such relationship
relates to the ABCO General Counsel Offering.
(h)
Derivative Works . ABCO’s right to prepare derivative
works under Section 3.1(b) shall be subject to the
following: (i) ABCO may add summary graphics to any General
Counsel Material; (ii) ABCO may modify a particular case study
included in a particular General Counsel Material only upon
obtaining the prior written consent of CEB, which consent shall be
granted or denied in CEB’s sole discretion; (iii) ABCO
shall maintain and shall not otherwise change CEB’s editorial
conclusions contained in a particular General Counsel Material in
any derivative of that General Counsel Material; (iv) ABCO may
remove one or more case studies from any General Counsel Material
that includes more than one case study; (v) ABCO may include
one or more additional case studies in any General Counsel
Material; and (iv) ABCO shall follow any written instructions
provided in advance by CEB concerning the use of a specific General
Counsel Material, provided that both CEB is required to adhere to
the same instructions in its use of the General Counsel Material
and CEB’s failure to adhere to the written instructions in
any material respect could reasonably cause CEB to violate or
breach an obligation of CEB to a Third Party. ABCO in good faith
shall consider issues that a member of a CEB Covered Service has or
will reasonably likely have a particular sensitivity to the
preparation, or a particular manner of distribution or use, of one
or more types of derivative works of a General Counsel Material to
which such member contributed.
(i)
Possible Post-GC Term Obligation . The Parties hereby agree
that, in the event the Non-Compete Period expires or is terminated
prior to the expiration or termination of the GC Term (other than
on account of a termination of this Agreement by ABCO pursuant to
Section 5.1(a) ), during the one-year period following the
expiration or termination of the GC Term, the ABCO General Counsel
Offering (as defined herein) shall also satisfy the standards set
forth in the definition of Industry Covered Service.
3.2 Employer
Health Collaboration . The Parties agree to collaborate during
the EH Term for provision of certain BDP content developed by or on
behalf of ABCO and offered by ABCO through its health care BDP
service offerings (“ Health Care Programs ”) to
Entities that are not Health-Related Companies (the “
Employer Health Collaboration ”) in accordance with
the terms and conditions of this Agreement.
(a)
Term of Employer Health Collaboration . Unless sooner
terminated or extended in accordance with the terms and conditions
of this Agreement, the term of the Employer Health Collaboration
will commence on the Effective Date and will continue through
February 5, 2010 (the “ EH Initial Term ”).
CEB will have the right, exercisable upon written notice to ABCO
given at least thirty (30) days prior to the expiration of the
EH Initial Term or any subsequent EH Extended Term, to extend the
term of the Employer Health Collaboration through February 5,
2012 and thereafter for subsequent two-year renewal terms (such
extension period(s), the “ EH Extended Term ,”
and together with the EH Initial Term, the “ EH Term
”).
8
(b)
Grant by ABCO to CEB of Certain Rights . Subject to the
terms and conditions of this Agreement, ABCO hereby grants to CEB a
nonexclusive, worldwide license to reproduce, prepare derivative
works based on (subject to Section 3.2(h) ), and
distribute certain written BDP research studies and certain written
meeting speeches developed by or on behalf of ABCO in connection
with its Health Care Programs in accordance with the remainder of
this Section 3.2(b) and that are selected by CEB pursuant to
the immediately succeeding sentence for CEB as part of CEB’s
own BDP membership program to serve human resources departments of
Entities that are not Health-Related Companies (the “ CEB
Employer Health Offering ”). CEB will be permitted to
select by written notice to ABCO the BDP research studies and
meeting speeches to be licensed pursuant to the Employer Health
Collaboration from all research studies and meeting speeches that
have been developed by or on behalf of ABCO in connection with its
Health Care Programs (those materials selected by CEB pursuant to
this sentence collectively, the “ Employer Health
Materials ”). CEB in its sole discretion will be entitled
to distribute the Employer Health Materials as part of the CEB
Employer Health Offering, subject to payment of license fees in
accordance with Sec
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