Replace specific word between characters using sed?

Does anyone know how to replace specific words between (). So, for example, replace the word and with or in between both sets of parentheseis:

(grade='C' and grade='D' and grade='E') and (int_rate>=10 and int_rate<=20) and pub_rec>=0 and term=' 36 months'

This would be:

(grade='C' or grade='D' or grade='E') and (int_rate>=10 or int_rate<=20) and pub_rec>=0 and term=' 36 months'