Exhibit 10.4
SETTLEMENT AGREEMENT
This Agreement ("Agreement") is made and entered into by and between Xxx
Xxxxxx, a citizen of the State of California, residing in Palo Alto, California
and Excel, a California partnership with an office at 555 Xxxxxxxx, Suite 300,
Palo Alto, California (collectively referred to as "Xxx Xxxxxx," where
appropriate), and LearnCom, Inc. an Illinois corporation with a principal place
of business at 000 Xxxxxxxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxx, and shall be deemed
effective as of the date of the last signature hereto (the "Effective Date").
WHEREAS, Xxx Xxxxxx is a well-known author and co-author of several
best-selling NEW YORK TIMES books on the subject of excellence in management;
WHEREAS, Xxx Xxxxxx and Excel create and provide training services and
products on the subject of excellence in management, including seminars and
workshops for businesses and individuals, printed matter and audio-visual tapes
used in connection therewith;
WHEREAS, the parties agree that Excel either is or shall be the owner of
the copyright in and to all videotapes and texts featuring Xxx Xxxxxx that have
at any time been distributed by LearnCom, VPH, or any other predecessors,
including, but not limited to, the following video Works and related textual
Works (collectively "Works"):
o Pursuit of Excellence,
o 10 Vital Rules for Giving Incredible Speeches & Why They're
Irrelevant, Reg. No. PA 507-585
o A Passion for Customers, Reg. No. PA 330-098
o A Passion for Excellence, Reg. No. PA 278-655
o Beyond Close to the Customer, Reg. No. PA 408-020
o Business and the Environment: Lean, Green and Clean,
Reg. No. PA 520-903
o Liberation Management (Sale Version 60:00), Reg. No. PA 618-014
o Recession as Opportunity: Smart Moves for Tough Times,
Reg. No. PA 507-580
o Service with Soul with Xxx Xxxxxx, Reg. No. PA 699-233
o The Shape of the Winner with Xxx Xxxxxx, Reg. No. PA 401-163
o World-Class Quality: The Customer Will Decide (Training Version -
72:00 Min.), Reg. No. PA 575-319
WHEREAS, the parties agree that Excel either does or shall own the
following trademarks and service marks:
o Women's Millennium o Speed Is Life
o Leadership Alliance o World Class Quality: The Customer
Will Decide
o Thriving on Chaos
o SERVICE WITH SOUL with Xxx Xxxxxx
o The Shape of the Winner with
Xxx Xxxxxx o Innovate or Die
o The Shape of the Winner with o Business and the Environment Lean,
Xxx Xxxxxx Clean and Green
o Beyond Close to the Customer o 10 Vital Rules for Giving Incredible
Speeches & Why They're Irrelevant [or
o Excellence in the Public Sector How to Give a Speech - Ten Vital Rules]
with Xxx Xxxxxx
o A World Turned Upside Down
o In Search of Excellence
o Stew Xxxxxxx Program
o Liberation Management
o Time Based Competition [Federal Express]
o A Passion for Customers
o Thriving on Chaos
o A Passion for Excellence
o Recession As Opportunity: Smart
Moves for Tough Times
WHEREAS, LearnCom has been in possession of the master copies of the Works
and has reproduced and distributed the Works; and
WHEREAS, Xxx Xxxxxx LearnCom's desire to settle all disputes between them;
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WHEREAS, Xxx Xxxxxx and LearnCom desire to fully and finally settle and
compromise the differences between them on the terms set forth in this
Agreement.
NOW THEREFORE, based upon the premises and covenants set forth herein, and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties agree as follows:
AGREEMENT
1. DISTRIBUTION RIGHTS
1.1 Except as permitted in Paragraph 1.2, within 10 days of the Effective
Date, LearnCom shall cease all reproduction, transmission, distribution, and
display of the Works and use of the Marks in any and all fashion. Without
limiting the foregoing, all pay per view (or free television distribution and
display, including display at any hotel chain) shall cease as specified in
accordance with this Paragraph 1.1. LearnCom further acknowledges and agrees
that it shall immediately return to Excel any and all tape masters of any and
all Xxx Xxxxxx works (in both English and every foreign language) and shall not
retain the masters of any Xxx Xxxxxx Works.
1.2. Notwithstanding Paragraph 1.1, LearnCom must sell off its existing
inventory of the Works. LearnCom represents to the other parties that attached
as Exhibit A is a true and correct copy of a list of all Excel Works in its
current inventory. On and subject to, the terms below, LearnCom may dispose of
its current inventory through sale in the United States until October 11, 2001.
1.3 Any future distribution of the Works by LearnCom shall include a
notice that clearly identifies Excel as the copyright and trademark owner of
such Works. The parties acknowledge that LearnCom shall not be a direct
distributor of any Work. Rather, Excel and Xxxxxx agree that LearnCom may serve
as a subdistributor to Excel's current distributor, if such
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distributor agrees to appoint LearnCom as a subcontractor. Nothing herein does,
or shall be construed to be, an agreement that LearnCom shall be a
subdistributor. Excel will not unreasonably withhold consent to a
sub-distributorship role proposed by LearnCom.
2. FEE
2.1 On all sales of Works by LearnCom in the period from August 1, 2000 to
the Effective Date, LearnCom shall pay to Xxx Xxxxxx a royalty of 30 percent
(30%). As of the Effective Date, LearnCom shall pay to Xxx Xxxxxx a royalty of
20 percent (20%) for any distribution of the Works permitted under Paragraph 1.2
of this Agreement. The royalty rate shall be paid to Excel 45 days following the
end of each quarter; each such quarter shall be measured by three calendar
months starting from the date that this agreement is signed by the parties.
Within 45 days following the end of each quarter, LearnCom shall provide to Xxx
Xxxxxx a statement and payment detailing each Work that LearnCom has sold the
preceding quarter.
2.2 Within 5 days of the Effective Date, LearnCom shall pay to Xxx Xxxxxx
$30,000. This payment shall be made by a certified check or a cashier's check.
2.3 Within sixty (60) days of the Effective Date, LearnCom shall pay to
Excel the principal sum of $45,000 plus interest as set forth below and, on one
hundred twenty (120) days after the Effective Date, LearnCom shall pay an
additional $45,000 plus interest to Excel. Both of these payments shall be made
to Excel via a certified check or a cashier's check. Interest shall accrue at
the rate of nine percent (9%) per annum.
2.4 Excel may, upon reasonable notice to LearnCom, employ an auditor to
review the books and ledgers of LearnCom to verify the sales of the Works and
appropriate payment to Excel as set forth in Paragraph 2.1 of this Agreement.
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3. INTELLECTUAL PROPERTY OWNERSHIP
3.1. LearnCom shall not adopt, use or apply to register any xxxx which
contains the Marks for any goods or services similar to those provided by Xxx
Xxxxxx. LearnCom acknowledges that adoption, use or application to register such
a xxxx would be likely to cause confusion with the Marks and constitute
trademark infringement.
3.2 LearnCom acknowledges the validity of and Excel's and/or Xxxxxx'
ownership of the Marks and shall not directly or indirectly challenge, contest
or otherwise take action adverse to Xxx Xxxxxx' ownership or the validity of the
Marks.
3.3 LearnCom acknowledges Excel's ownership of the copyrights in the Works
and shall not directly or indirectly challenge, contest or otherwise take action
adverse to Excel's ownership or the validity of the Works.
3.4 LearnCom shall execute and all documents necessary to establish or
restore ownership of all rights, titles and interests in the Marks and Works to
Excel or Xxx Xxxxxx, including those documents that will, have been or should be
filed in the U.S. Patent and Trademark Office, the U.S. Copyright Office or any
equivalent offices in a foreign jurisdiction. Without limitation, LearnCom shall
assign all copyrights in all works featuring Xxx Xxxxxx.
3.4 Excel and Xxx Xxxxxx represent that they have not assigned any claims
they may have against the other parties to any other person.
4. RELEASE
4.1 Upon receipt of the final payments due herein and LearnCom's full
compliance with all material terms and conditions of this Agreement, Xxx Xxxxxx
and Excel hereby release, acquit and forever discharge LearnCom, its affiliates,
divisions, subsidiaries, successors and assigns, and their respective present
and former agents, directors, employees, shareholders,
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officers and representatives (collectively, the "Released Parties"), of and from
any and all claims, demands and causes of action of every kind or character, in
every proceeding whatsoever, known or unknown, now existing or which may
hereafter arise, by reason of any act or omission on the part of the Released
Parties occurring at any time up to and including the Effective Date that Xxx
Xxxxxx or Excel had or may have had for any acts occurring prior to the
Effective Date, including acts of copyright infringement, trademark infringement
or unfair competition and invasion of the rights of publicity committed by
LearnCom arising from its use of the Marks and distribution of the Works prior
to the Effective Date.
4.2 LearnCom and its predecessors hereby release hereby release, acquit
and forever discharge Xxx Xxxxxx and Excel, and each and all of their
affiliates, divisions, subsidiaries, predecessors (including but not limited to
VPH and any other company that may be deemed to be a predecessor entity that was
involved in the distribution of Xxx Xxxxxx Works), successors and assigns, and
their respective present and former agents, directors, employees, shareholders,
officers and representatives, including but not limited to Xxx Xxxxxxx
(collectively, the "Released Parties"), of and from any and all claims, demands
and causes of action of every kind or character, in every proceeding whatsoever,
known or unknown, now existing or which may hereafter arise, by reason of any
act or omission on the part of the Released Parties occurring at any time up to
and including the Effective Date, including but limited to any and all claims
arising out of any distribution of the Works, termination of any relationships,
or other matters prior to the Effective Date.
5. TERMINATION
LearnCom's failure to fulfill any of the material covenants set forth in
this Agreement shall be deemed a material breach permitting this Agreement to be
terminated in its entirety, at
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Xxx Xxxxxx' or Excel's option, and preserving to Xxx Xxxxxx and Excel the right
to seek all available relief, including reasonable attorneys' fees, in a court
of competent jurisdiction. LearnCom shall have a seven day period to cure.
6. NOTICES
Any statement, notice, request or other communication required or permitted
hereunder shall be deemed sufficiently given to the addressee when sent by U.S.
Certified Mail, Return Receipt Requested, to the following:
If to Xxx Xxxxxx or Excel: If to LearnCom:
Xxxxxxx X. Xxxxx, Esq. Xxxxxx Xxxxx, Esq.
Xxxx, Xxxx & Xxxxx LLC Xxxxxxx & Xxxxxxxx, Ltd.
00 Xxxx Xxxxxxx Xxxxxx, Xxxxx 0000 000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000 Xxxxxxx, Xxxxxxxx 00000
With a copy to Xxx Xxxxxx at: With a copy to LearnCom at:
000 Xxxxxxxx, Xxxxx 000 000 Xxxxxxxxxx Xxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000 Xxxxxxxxxxx, Xxxxxxxx 00000-000
7. MERGER AND AMENDMENT
This Agreement represents the entire understanding between the parties and
supersedes all previous representations, understandings or agreements, whether
oral or written, between the parties with respect to the subject matter hereof,
EXCEPT with respect to the Copyright and Trademark Assignments executed by Xxxxx
Xxxxxx as President of LearnCom on November 26, 1999 and attached to this
Agreement hereto as EXHIBIT B, which shall become incorporated by this reference
into this Agreement. This Agreement cannot be modified except by a written
instrument signed by the parties.
8. GOVERNING LAW
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This Agreement shall be interpreted according to the laws of the State of
Illinois in the United States of America, excluding its choice of law
provisions.
9. ASSIGNS AND SUCCESSORS
This Agreement shall be binding upon the parties hereto, their parents,
subsidiaries, affiliates, officers, directors, employees, agents, assigns and
successors in interest of any sort.
10. COUNTERPARTS
This Agreement may be signed in one or more counterparts, each of which
shall be deemed an original and all of which shall constitute one and the same
Agreement. The parties acknowledge and agree that signatures by facsimile shall
be acceptable and further agree that they shall exchange signed originals
promptly.
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ACCORDINGLY, the parties hereto have caused this Agreement to be executed
below by their duly authorized representatives, who have read the Agreement and
understand its contents.
XXX XXXXXX, an individual LEARNCOM, Inc., an Illinois Corporation
By: /s/ XXXXXXX X. XXXXX By: /s/ XXXXX X. XXXXXX
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Name: XXXXXXX X. XXXXX Name: XXXXX X. XXXXXX
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Title: ATTORNEY Title: PRES.
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Date: 12/6/2000 Date: 12/5/00
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EXCEL, a California Partnership
By: /s/ XXXXXXX X. XXXXX
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Name: XXXXXXX X. XXXXX
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Title: ATTORNEY
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Date: 12/6/2000
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