AMENDED AND RESTATED LICENSE OF INTELLECTUAL PROPERTY
Exhibit
10.2
AMENDED
AND RESTATED LICENSE OF INTELLECTUAL PROPERTY
This
AMENDED AND RESTATED LICENSE OF
INTELLECTUAL PROPERTY (the “License Agreement”) is
effective as of December 31, 2008 (the “Effective Date”) and is
entered into by and among ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Co. (“FranklinCovey”), a Utah
corporation; ▇▇▇▇▇/Link, LLC (“CL”), a Utah limited
liability company; ▇▇▇▇ ▇▇▇▇, (“Link”), an individual
residing in Utah; and ▇▇▇▇▇▇▇ ▇. ▇. ▇▇▇▇▇ (“▇▇▇▇▇”), an individual
residing in Utah. Each of FranklinCovey, CL, Link and ▇▇▇▇▇ are
referred to herein as a “party” and collectively as the “parties.”
RECITALS:
WHEREAS, ▇▇▇▇▇ is the author
of the book The Speed of
Trust, (as defined herein, the “Book”) published by
Simon & ▇▇▇▇▇▇▇▇, Inc., and has conveyed to CL all right, title and
interest therein which he did not grant to Simon & ▇▇▇▇▇▇▇▇, Inc.,
which retained rights include without limitation all Audio Rights (as defined
herein) and the right to create Workbooks (as defined herein);
WHEREAS, ▇▇▇▇▇ and Link have
(a) developed certain training courses based on the Book (as defined herein, the
“Courses”), (b)
registered trademarks (as defined herein and including certain unregistered
trademarks, the “CL
Trademarks”), (c) created collateral materials (as defined herein, “CL Copyrights”) and (d)
conveyed to CL all right, title and interest in the Courses, CL Trademarks and
CL Copyrights;
WHEREAS, concurrently
herewith, CL, its affiliate CoveyLink Worldwide LLC (“CL Worldwide”), FranklinCovey
and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Client Sales, Inc. (“FC Client Sales”) a
wholly-owned subsidiary of FranklinCovey, have entered into that certain Asset
Purchase Agreement (the “Purchase Agreement”) pursuant
to which FC Client Sales has purchased certain assets of CL Worldwide related to
the Book, the Courses and other intellectual property of CL;
WHEREAS, also concurrently
herewith, each of ▇▇▇▇▇ and Link has entered into a consulting agreement with
FranklinCovey and FC Client Sales (the “Practice Leader Consulting
Agreements”), and each of ▇▇▇▇▇ and Link has entered into a speaker
services agreement with FC Client Sales (the “Speaking Agreements”);
and
WHEREAS, CL and FranklinCovey
previously entered into the Original Agreement (as defined below) pursuant to
which CL granted certain non-exclusive licenses relating to the Book and the
Courses and a desire to amend and restate the Original License to grant
exclusive licenses to the Licensed Materials, subject to all the terms and
conditions herein.
NOW, THEREFORE, in
consideration of the foregoing premises and the mutual covenants, terms and
conditions herein, the parties agree as follows:
1. Defined
Terms.
1.1. Use of Defined
Terms. Capitalized terms used in this License Agreement and
not otherwise defined when used shall have the meanings set forth on Exhibit
A.
2. Interpretation.
2.1. Relationship of
Agreements.
(a) This
License Agreement amends and restates that certain License of Intellectual
Property effective January 1, 2006 (the “Original Agreement”) by and
between FranklinCovey and CL. As of the Effective Date, the Original
Agreement shall be amended and restated in its entirety to include, without
limitation, ▇▇▇▇▇ and Link as parties and shall continue in full force and
effect without interruption.
(b) In all
cases where possible, this License Agreement shall be interpreted consistently
with the Contemporaneous Agreements. If any term of any
Contemporaneous Agreement conflicts with this License Agreement, this License
Agreement shall control unless otherwise stated in the Contemporaneous
Agreement.
3. License
Grant.
3.1. The Licensed
Materials. Subject to the terms and conditions of this License
Agreement, each of CL, ▇▇▇▇▇ and Link hereby grant to the FranklinCovey Entities
an exclusive, perpetual, worldwide, transferable, sublicensable, royalty-bearing
license to use, reproduce, display, distribute, sell, prepare derivative works
of, and perform the Licensed Materials in any format or medium and through any
market or distribution channel. As used in this Section 3.1,
“exclusive” means that CL, ▇▇▇▇▇ and Link may not, after the Effective Date,
grant to any third party the right to, and shall not themselves, use, reproduce,
display, distribute, sell, or prepare derivative works of the Licensed Materials
except as expressly permitted by this License Agreement. The license
granted pursuant to this Section 3.1 shall be subject to that certain
Publishing Agreement by and between ▇▇▇▇▇ and ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, Inc.
(the “Publishing
Agreement”) and to any permitted publishing agreement entered into by
▇▇▇▇▇, Link or CL for any Sequel under Section 3.2(a).
3.2. Reservations.
(a) The Book;
Sequels. ▇▇▇▇▇, Link and CL each reserves the exclusive right,
in their sole discretion, to write, publish and distribute, directly or through
third-party publishers, a Sequel or Sequels to the Book. Any
publishing agreement for a Sequel (i) shall be on terms comparable to the
Publishing Agreement, (ii) shall exclude rights to Workbooks and Audio Rights,
except for a right of the Publisher to prepare and distribute a single audio
version of such Sequel, (iii) shall permit the FranklinCovey Entities all of the
same rights to distribute such Sequel as have been granted under this License
Agreement to distribute the Book. ▇▇▇▇▇, Link and CL may negotiate
any commercially reasonable royalty rate with the third-party publisher and
shall have all rights to retain such royalties. At least ten (10)
days prior to entering into a publishing agreement for a Sequel, ▇▇▇▇▇, Link or
CL, as appropriate, shall send to FranklinCovey a copy of the publishing
agreement in its final form, provided that the parties to the publishing
agreement may any needed non-substantive change. During such period,
FranklinCovey may provide comments to ▇▇▇▇▇, Link or CL, as appropriate, if
FranklinCovey determines in good faith that any term may conflicts with this
License
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Agreement
and ▇▇▇▇▇, Link or CL, as appropriate, shall consider such comments in good
faith.
(b) The
Courses. ▇▇▇▇▇, Link and CL each reserves a non-exclusive
right to make derivative works of the Courses from time to time, provided that
any such modification by any of them to the Courses shall be automatically
deemed a part of the Courses and Licensed Materials and subject to the license
granted in Section 3.1.
(c) Allowed Actions Following
Term of Practice Leader Consulting Agreements. Following the
term of either of the Practice Leader Consulting Agreements, ▇▇▇▇▇, Link and CL
may speak, consult, coach and advise with respect to the Book and the Speed of
Trust concepts, provided that each of them does so with the intent of (I) driving training to
FranklinCovey (and not to replace training nor to become a defacto substitute
for training), (II)
enhancing brand awareness of the Speed of Trust concepts, or (III) increasing sales of the
Book.
(d) The CL Trademarks and CL
Copyrights. CL, ▇▇▇▇▇ and Link each reserves a non-exclusive
right to use the CL Trademarks and CL Copyrights in connection with any Sequel
and as necessary for biographical or historical reference and for speaking and
practice activities necessary to carry out their activities provided for or
allowed in the Speaking Agreements and Practice Leader Consulting
Agreements.
(e) Scope of
Reservation. As used in Sections 3.2(b) and 3.2(d),
“non-exclusive” means the reservation of rights permits each of ▇▇▇▇▇, Link and
CL to use the Courses, CL Trademarks and CL Copyrights as described therein and
does not restrict or limit the rights granted to the FranklinCovey Entities by
▇▇▇▇▇, Link and CL in Section 3.1 to use the Courses, CL Trademarks and CL
Copyrights as permitted in this License Agreement.
3.3. Restrictions on
Use. The FranklinCovey Entities shall use the Licensed
Materials only in connection with the Practice and the business of
FranklinCovey.
3.4. International
Markets. Within six months following the Effective Date and on
terms reasonably acceptable to CL, FranklinCovey will use commercially
reasonable efforts to amend those certain license and distribution agreements
(collectively, the “International Licenses”) with
the International Licensees to permit ▇▇▇▇▇ and Link to conduct the Practice as
permitted in the Contemporaneous Agreement in the geographical territories that
are the subject of such International Licenses. The parties agree
that an amended International License will be deemed reasonable if ▇▇▇▇▇, Link
and CL, as appropriate, receive non-exclusive rights to conduct or promote
Courses in such territory in exchange for reasonable compensation payable to the
International Licensee. If FranklinCovey is unable to amend any
International License as provided in this Section 3.4, FranklinCovey shall
forfeit the rights granted in Section 3.1 as those rights apply to the territory
of such International Licensee. Notwithstanding the foregoing,
FranklinCovey shall have not be deemed to have breached this Section 3.4 if any
website owned or operated by the FranklinCovey Entities is visible in a
terminated territory or if a customer in a terminated territory makes incidental
purchases Books or Sequels through any such websites.
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3.5. Rights of
Publicity. ▇▇▇▇▇ and Link each hereby grants to the
FranklinCovey Entities a non-exclusive, worldwide, fully paid-up right to use
images of each of their persons and to use their names in connection with the
Practice. At any time after ▇▇▇▇▇ or Link, as applicable, ceases to
be a Practice Leader, such person may object in writing to the use of his own
name or image if ▇▇▇▇▇ or Link, as applicable, reasonably determines that the
use undermines the commercial value of the Practice, the Book, Sequels or a New
Work. The affected parties shall cooperate in good faith to resolve
any such disputes. If this License Agreement terminates for any
reason, the license granted in this Section 3.5 shall survive termination with
respect to products, materials and designs in existence on the effective date of
the termination, but FranklinCovey shall have no right to place the images or
use names of ▇▇▇▇▇▇▇ ▇. ▇. ▇▇▇▇▇ or ▇▇▇▇ ▇▇▇▇ on any new product, material or
design.
3.6. Distribution Rights for FC
Products, LLC. The parties acknowledge that FranklinCovey has
entered into that certain Master License Agreement by and between FranklinCovey
and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Products, LLC (“FC Products, LLC”), pursuant
to which FranklinCovey may, under certain circumstances, be required to make
Licensed Materials available to FC Products, LLC for distribution in certain
channels. Each of ▇▇▇▇▇, Link and CL agrees to permit FC Products,
LLC to distribute Licensed Materials according to the Master License Agreement
so long as doing so does not reduce any Payment under this License
Agreement.
4. Ownership; Derivative
Works.
4.1. CL
Property. As between ▇▇▇▇▇, Link and CL on the one hand and
FranklinCovey on the other hand, ▇▇▇▇▇, Link and CL shall retain ownership of
all CL Intellectual Property. “CL Intellectual Property” means the
Intellectual Property Rights to the Licensed Materials, all CL Derivative Works
and all New Works.
4.2. FranklinCovey
Property. As between ▇▇▇▇▇, Link and CL on the one hand and
FranklinCovey on the other hand, FranklinCovey shall retain ownership of all
FranklinCovey Intellectual Property. “FranklinCovey Intellectual
Property” means all Intellectual Property Rights of FranklinCovey prior to the
Effective Date, all FC Derivative Works, and all Intellectual Property Rights of
FranklinCovey created or licensed after the Effective Date other than
Intellectual Property Rights that include the Licensed Materials and are owned
by ▇▇▇▇▇, Link or CL under this License Agreement.
4.3. Creation of Derivative
Works.
(a) By
FranklinCovey. FranklinCovey may, at its option and at its own
expense, create derivative works, directly or through third parties, based on
the Licensed Materials, including without limitation derivative works that
include both the Licensed Materials and FranklinCovey Intellectual
Property. Subject to Section 4.3(d), such derivative works shall be
deemed FC Derivative Works.
(b) By CL, ▇▇▇▇▇ and
Link. Each of ▇▇▇▇▇, Link and CL may, at their option and
their own expense, create derivative works (a) based solely on the Licensed
Materials or
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(b) based
in part on the Licensed Materials and in part on FranklinCovey Intellectual
Property, subject to the provisions of Section 4.3(c).
(c) Procedures. If
any of ▇▇▇▇▇, Link or CL desires to create a new derivative work based solely on
the Licensed Materials, ▇▇▇▇▇, Link or CL, as appropriate, may do so without
FranklinCovey’s approval, provided that CL maintains reasonable records that
describe the project and other pertinent information and makes such records
available as reasonably requested by FranklinCovey. If any of ▇▇▇▇▇,
Link or CL proposes to develop a new derivative work based in part of the
Licensed Materials and in part of FranklinCovey Intellectual Property (a “Proposed FC Derivative
Work”), ▇▇▇▇▇, Link or CL, as appropriate, shall deliver to FranklinCovey
a written request to FranklinCovey describing in reasonable detail the proposed
work, including the FranklinCovey Intellectual Property that would be used (a
“Proposal”).
(i) If the
work described in the Proposal includes any FranklinCovey Intellectual Property,
FranklinCovey may, in its sole discretion, approve or reject the Proposal within
twenty one (21) days of its receipt of the Proposal.
(ii) If
FranklinCovey accepts such a Proposal, ▇▇▇▇▇, Link or CL, as appropriate, shall
have the right to create the proposed derivative work and such derivative work
will be deemed part of the Licensed Materials. If FranklinCovey
rejects such a Proposal, ▇▇▇▇▇, Link or CL, as appropriate, shall promptly cease
work on the Proposed FC Derivative Work and shall have no right to use the
FranklinCovey Intellectual Property for such Proposal. If
FranklinCovey fails to respond such a Proposal within the twenty one (21) day
period, FranklinCovey will be deemed to have rejected the Proposal.
(d) Ownership of Derivative
Works. Any derivative work of the Licensed Materials that is
based solely upon the Licensed Materials shall be deemed a CL Derivative Work
and, for purposes of clarity, shall be deemed part of the Licensed Materials for
all purposes. Any revision or customization of the Courses Listed in
Exhibit B, whether by FranklinCovey, ▇▇▇▇▇, Link or CL, shall be deemed part of
the Licensed Materials for all purposes. Any permitted derivative
work created by ▇▇▇▇▇, Link or CL that is based in part on the Licensed
Materials and in part on FranklinCovey Intellectual Property shall be deemed an
FC Derivative Work, and ▇▇▇▇▇, Link and CL hereby convey to FranklinCovey, its
successors and assigns all right, title and interest it may have in such FC
Derivative Work; provided, however, that FranklinCovey’s rights to the
underlying Licensed Materials incorporated into such FC Derivative Works are
subject to the license of Licensed Materials granted to FranklinCovey in this
License Agreement. Notwithstanding anything else in this License
Agreement, FC Derivative Works shall be subject to the license provided in
Section 4.3(e) and the royalty provisions set forth in Section
8.2(b).
(e) Grant-back
License. FranklinCovey hereby grants to ▇▇▇▇▇, Link and CL,
during the term of this License Agreement, a worldwide, royalty-free,
nontransferable, non-sublicenseable right to use FC Derivative Works in
connection with the Practice and, subject to the provisions of Section 4.3(c),
to create derivative works based on FC Derivative Works.
4.4. Perfecting
Ownership.
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(a) CL Intellectual
Property. Upon CL’s reasonable request and at CL’s expense,
FranklinCovey shall assist CL in any action that may be necessary to record,
register or otherwise perfect CL’s rights in and to the CL Intellectual
Property, including without limitation CL Derivative Works.
(b) FranklinCovey Intellectual
Property. Upon FranklinCovey’s reasonable request and at
FranklinCovey’s expense, each of ▇▇▇▇▇, Link and CL shall assist FranklinCovey
in any action that may be necessary to record, register or otherwise perfect
FranklinCovey’s rights in and to FranklinCovey Intellectual Property, including
without limitation FC Derivative Works.
5. Quality Control; Trademark
Notices.
5.1. Quality
Standards. The parties agree that the Licensed Materials are
distinctive and the goods and services associated therewith have distinctive
goodwill and a reputation for high quality and standards. The parties
agree to maintain the high quality standards of the Licensed Materials and the
goods and services that incorporate or reference the Licensed
Materials.
5.2. Right to
Inspect. CL shall have the right to request samples of written
documents used in and distributed at the Courses. If CL reasonably
determines that FranklinCovey’s use of the Licensed Materials undermines the
commercial value of the Licensed Materials or the Practice, the parties shall
cooperate in good faith to resolve the dispute.
5.3. Marking and
Notice. Subject to and in accordance with CL’s reasonable
written approval, FranklinCovey shall, on all significant Course materials
distributed to participants of the Course and all Workbooks, give written
attribution to CL for ownership of such Licensed Materials and provide copyright
notices that attribute ownership to CL and state that the Licensed Materials are
used by FranklinCovey pursuant to a license from CL.
5.4. Trademark
Use. If, after the Effective Date, CL, ▇▇▇▇▇ or Link registers
or in any way designates its ownership of a new trademark in connection with the
Licensed Materials or a Sequel (a “New Trademark”), such New
Trademark will be deemed a CL Trademark subject to all the rights, terms and
conditions of this License Agreement . All trademark rights, other
than trademark rights already obtained by FranklinCovey or CL prior to the
execution of this License Agreement, in and to any class of goods or services
developed by reason of FranklinCovey’s use of the Licensed Materials, within the
terms of and subject to the conditions of this License Agreement, shall be owned
by and inure to the benefit of either CL or FranklinCovey as
follows: FranklinCovey shall give CL written notice of its desire to
pursue Federal registration of any New Trademark (the “Notice of Intent”) and CL
shall, within ten (10) business days after receiving such Notice of Intent,
notify FranklinCovey in writing (the “Response to Notice”) that it
will register the New Trademark in its own name, at CL’s expense, or that
FranklinCovey is entitled to register the New Trademark in FranklinCovey’s name,
at FranklinCovey’s expense. CL’s failure to give FranklinCovey a
Response to Notice within ten (10) business days of the date of a Notice of
Intent, shall constitute CL’s permission to FranklinCovey to register the
subject New Trademark in FranklinCovey’s name, at FranklinCovey’s
expense. If FranklinCovey obtains Federal registration of a New
Trademark pursuant to this Section 5.4, FranklinCovey shall grant to CL a
limited, worldwide, non-exclusive
6
and
royalty-free license to use the New Trademark in connection with the Licensed
Materials or any Sequel or CL Derivative Work, except as such right is
restricted herein. Each party agrees to execute such documentation as
shall reasonably be required to effectuate the intent of this Section
5.4.
5.5. No Inconsistent Contractors
or Relationships. FranklinCovey shall not employ or contract
with any person or entity, including a government employee or representative, to
assist or become involved in developing a derivative work based upon the
Licensed Materials if that person or entity has a contractual or legal
relationship, the effect of which encumbers any proprietary rights to the
Licensed Materials or which purports to transfer any proprietary rights in the
Licensed Materials to another entity. FranklinCovey shall not enter
into agreements to receive funding or grants which purport to transfer to a
third party any proprietary rights or which would result in any other entity
besides CL owning such proprietary rights.
5.6. Action by ▇▇▇▇▇ and
Link. Notwithstanding anything to the contrary in this License
Agreement, so long as either ▇▇▇▇▇ or Link remains a Practice Leader of the
Practice, FranklinCovey shall be deemed to have complied in all respects with
the requirements of this Section 5 and CL, ▇▇▇▇▇ and Link shall be deemed to
have agreed to the actions of FranklinCovey under this Section 5.
6. Distribution
Rights.
6.1. Distribution
Rights. Except as limited by the Publishing Agreement and
permitted publishing agreements for Sequels subject to the terms of Section
3.2(a), FranklinCovey shall have an exclusive, worldwide and transferable right
to distribute the Licensed Materials directly or through third
parties. If ▇▇▇▇▇, Link or CL enters into any publishing agreement
for the distribution of a Sequel as provided in Section 3.2(a), such agreement
shall be limited by the rights of the FranklinCovey Entities to distribute the
Sequel on terms substantially the same as the FranklinCovey Entities may
distribute the Book.
7. Website
Agreement.
7.1. Website
Agreement. The parties shall cooperate to establish protocols
and links to connect the CL Website to websites operated by FranklinCovey and to
set general website policies (“Website
Protocols”). The initial Website Protocols are set forth on
Exhibit G,
which may be amended from time to time by mutual agreement of the
parties.
7.2. CL Website
Sales. During the term of this License Agreement, and for one
year after termination of this License Agreement, ▇▇▇▇▇, Link and CL shall not,
directly or indirectly, sell products or services relating to the Licensed
Materials through the CL Website or any other website operated by any of them
and shall direct all such inquiries to FranklinCovey, except as provided below
in this Section 7.2. Nothing in this Section 7.2 shall prevent ▇▇▇▇▇,
Link or CL from (a) selling any New Book or offering services connected to any
New Course not subject to an agreement with FranklinCovey so long as ▇▇▇▇▇, Link
and CL, as applicable, have complied with all of the terms and conditions of
Sections 11, 12 and 13 of this License Agreement, or (b) following the term
of either of the Practice Leader Consulting Agreements, selling the Book or
Sequels or offering speaking, consulting, coaching or advisory services with
respect to the
7
Book and
the Speed of Trust concepts, provided that such services are provided with the
intent of (I) driving
training to FranklinCovey (and not to replace training nor to become a defacto
substitute for training), (II) enhancing brand awareness
of the Speed of Trust concepts, or (III) increasing sales of the
Book.
8. Fees and
Royalties.
8.1. Royalty
Formula. Each month, FranklinCovey shall pay to CL a royalty
payment (the “Royalty”)
which shall be equal to the sum of 7.5% of FranklinCovey Gross Revenue accrued
during a given monthly period as provided in Section 9; plus 5% of Licensee
Gross Revenue accrued during a given monthly period as provided in Section 9;
plus an equitable royalty percentage as mutually agreed by FranklinCovey and CL,
acting in good faith, of Derivatives Gross Revenue.
8.2. “FranklinCovey
Gross Revenue” means all revenues accrued according to its regular accounting
principles and practices by the FranklinCovey Entities during the applicable
month that derive from the Licensed Materials other than FC Derivative
Works. However, “FranklinCovey Gross Revenues” does not include (i)
accruals of payments by FranklinCovey from International Licensees, or (ii)
revenues accrued by FranklinCovey relating to speeches given by ▇▇▇▇▇ or Link
pursuant to their Speaking Agreements. For purposes of clarity, all revenue from
the 2006 Courses listed in Exhibit B as constituted on the Effective Date shall
be included as part of the FranklinCovey Gross Revenue in computing the Royalty
under Section 8.1 above.
(a) “Licensee
Gross Revenue” means all revenues accrued according to its regular accounting
principles and practices by FranklinCovey by any International Licensee during
the applicable month that derive from the Licensed Materials.
(b) “Derivatives
Gross Revenue” means all revenues accrued by the FranklinCovey Entities during
the applicable month that derive from FC Derivative Works. However,
“Derivatives Gross Revenues” does not include (i) revenues accrued by
FranklinCovey from International Licensees, or (ii) revenues accrued by
FranklinCovey relating to speeches given by ▇▇▇▇▇ or Link pursuant to their
Speaking Agreements.
9. Royalty Reporting and
Payment.
9.1. Reporting. No
later than thirty (30) days after the close of every FranklinCovey month during
the Term, FranklinCovey shall submit a report to CL (in a format acceptable to
CL, in its reasonable discretion) identifying (a) FranklinCovey Gross Revenue
accrued during the period, (b) Licensee Gross Revenue accrued during the period,
(c) Derivatives Gross Revenue accrued during the period and the applicable
royalty rate agreed upon by CL and FranklinCovey, acting in good faith, and (d)
the Royalty owed to CL during the period. The Royalty payment for
each month (“Payments”)
shall accompany each such report. All Payments will be made in
immediately available U.S. dollars.
9.2. Payment. FranklinCovey
will make all Payments free and clear of any tax, deduction, tax offset or
withholding of any kind. All taxes and penalties (other than those
associated with the income of CL, ▇▇▇▇▇ or Link) levied on any Payments will be
fully borne by
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FranklinCovey. If
FranklinCovey or any other person is required by law to make any deduction or
withholding on account of any tax, assessment, duty or levy charged against any
Payments, FranklinCovey will pay any such tax, assessment, duty or levy before
the date on which a penalty for nonpayment or late payment
attaches. Payment of such tax, levy, duty or assessment is to be made
(if the liability to pay is imposed on FranklinCovey) for FranklinCovey’s own
account or (if the liability to pay is imposed on CL) on behalf of and in the
name of CL. Payments by FranklinCovey in respect of which the
relevant deduction, withholding or payment (including any penalties) is required
will be increased to the extent necessary to ensure that, after the making of
the deduction, withholding or payment of such tax, levy, duty or assessment, CL
receives on the due date and retains (free from any liability in respect of the
deduction, withholding or payment) a net sum equal to what CL would have accrued
and retained had no such deduction, withholding or payment been required or
made. FranklinCovey will promptly furnish to CL receipts showing the
payment of any deduction, withholding or payment made, on its account or CL’s
account. FranklinCovey agrees to defend, indemnify and hold harmless
CL from all claims, suits, liabilities and expenses (including without
limitation legal fees) suffered or incurred by CL as a result of FranklinCovey’s
failure, for whatever reason, duly to pay any such taxes (other than those
associated with the income of CL, ▇▇▇▇▇ or Link).
9.3. Interest. Interest
shall accrue on all undisputed Payments not paid by FranklinCovey when due under
this License from the due date until the date of payment, at the lesser of the
rate of one and one-half percent (1.5%) per month or the maximum legal rate
allowed under applicable law. Interest shall accrue on all undisputed
Payments not paid by CL when due under this License from the due date until the
date of payment, at the lesser of the rate of one and one-half percent (1.5%)
per month or the maximum legal rate allowed under applicable law.
9.4. Audit. Except
during the period that ▇▇▇▇▇ or Link remains a Practice Leader of the Practice,
and no more than once in any calendar year thereafter, CL shall have the right,
upon reasonable notice to FranklinCovey and at its own expense, to audit
FranklinCovey’s books and records reasonably necessary to determine the accuracy
of the Royalties made hereunder, provided that if CL engages an outside firm to
conduct the audit such firm shall first execute a confidentiality agreement
reasonably satisfactory to FranklinCovey. In the event the audit
reveals an aggregate underpayment in excess of five percent (5 %) for the year,
FranklinCovey shall pay the costs incurred by CL in performing the
audit.
9.5. Equitable Agreement on
Royalties for Derivative Gross Revenue.
(a) FranklinCovey
and CL, through their respective authorized agents acting in good faith will
reasonably consider the facts and circumstances of each instance where
Derivative Gross Revenue is accrued and agree on the component of Derivative
Gross Revenue fairly attributable to the Licensed Materials and the reasonable
royalty rate attributable to such Licensed Materials component of Derivative
Gross Revenue. If FranklinCovey’s and CL’s authorized agents are
unable to agree on the foregoing by the date the report required in Section 9.1
is due, the CEO of CL and the CEO of FranklinCovey will meet to attempt to reach
agreement on any disputed matters. If they are unable to agree on
such matters within 30 days, either party may submit the matter to
arbitration.
9
(b) Arbitration.
(i) In the
event that a party demands arbitration pursuant to Section 9.5(a) or Section
17.2(b), such dispute shall be finally settled by binding arbitration in Salt
Lake City, Utah under the Commercial Arbitration Rules of the American
Arbitration Association (the “Rules”) by one arbitrator
appointed in accordance with such Rules. Judgment on the award
rendered by the arbitrator may be entered in any court having jurisdiction
thereof.
(ii) The
arbitrator shall apply the laws of the State of Utah to the merits of the
particular dispute, without reference to rules of conflict of
law. The arbitration proceedings shall be governed by the Rules,
without reference to any state arbitration law.
(iii) Either of
the parties may apply to any court of competent jurisdiction for a temporary
restraining order, preliminary injunction, or other interim or conservatory
relief, as necessary, without breach of this arbitration provision and without
any abridgment of the powers of the arbitrator. The arbitrator may,
in its discretion, award to the prevailing party, if any, as determined by the
arbitrator, all of its costs and fees, including, without limitation,
administrative fees, arbitrator’s fees, attorneys’ fees, experts’ fees,
witnesses’ fees, travel expenses, and out-of-pocket expenses (including, without
limitation, such expenses as copying, telephone, facsimile, postage, and courier
fees); otherwise, the costs of the arbitration, including administrative and
arbitrator’s fees, shall be borne by the parties to the particular arbitration
in proportion their relative success, as determined by the arbitrator, in
connection with the resolution of the disputed claims, and each party shall bear
the cost of its own attorneys’ fees and expert witness fees. The
parties agree that, any provision of applicable law notwithstanding, they will
not request, and the arbitrator shall have no authority to award, punitive or
exemplary damages against any party.
(iv) The
decision of the arbitrator as to the validity and amount of any claim shall be
binding and conclusive upon the parties. Such decision shall be
written and shall be supported by written findings of fact and conclusions which
shall set forth the award, judgment, decree or order awarded by the
arbitrator.
(v) The
requirements of this Section 9.5(b) will apply only to disputes raised pursuant
to this Section 9.5 and Section 17.2(b).
10. Performance by
FranklinCovey.
10.1. FranklinCovey Due
Diligence. FranklinCovey shall use Best Efforts to exploit for
profit the Licensed Materials for the purpose of maximizing Royalty payments to
CL. FranklinCovey shall, according to good business judgment and
based on market conditions and in keeping with FranklinCovey’s practices,
advertise its services associated with the Courses and Content in the United
States and in all direct offices in appropriate advertising media and in a
manner ensuring proper and adequate publicity for such
services. FranklinCovey shall perform its duties and obligations set
forth in this License Agreement in a manner consistent with the highest industry
standards and shall do nothing that would materially and adversely affect the
reputation of CL. During and following the period that either ▇▇▇▇▇
or Link remains a Practice Leader of the Practice, FranklinCovey shall be deemed
to have complied in all respects with this Section 10
10
if
FranklinCovey acts and performs in a manner substantially similar to its actions
and performance during the period that either ▇▇▇▇▇ or Link remained a Practice
Leader of the Practice For purposes of this License Agreement, “Best
Efforts” shall mean the efforts that a prudent person acting diligently and
desirous of achieving a result would use in similar circumstances to achieve
that result as expeditiously as reasonably practicable, provided, however, that a
Person required to use Best Efforts under this License Agreement will not be
thereby required to take actions that would result in a material adverse change
in the benefits to such person under this License Agreement or to dispose of or
make any material change to its business.
10.2. Course
Materials. In connection with each Course offered by
FranklinCovey, other than the Course entitled “Inspiring Trust,” FranklinCovey
will provide to each Course participant a participant kit consisting of, at a
minimum, a Workbook and a copy of the Book, provided that this Section 10.2
shall not apply if the Course is offered through the Internet or other medium
where delivery of the Workbook and Book is not commercially
practical.
11. New Books; New
Courses.
11.1. New
Books. During the Extended Restricted Period and thereafter,
each of ▇▇▇▇▇, Link and CL, or any of them together, shall have the right to
create a New Book. ▇▇▇▇▇, Link and CL, as applicable, may negotiate
any commercially reasonable agreement with a third-party publisher for the New
Book and shall have all rights to retain all royalties thereunder. If
the agreement with the third-party publisher is entered into during the Extended
Restricted Period, the third party publisher shall not be a Competitor or an
affiliate of a Competitor. At least ten (10) days prior to entering
into a publishing agreement for a New Book, ▇▇▇▇▇, Link or CL, as appropriate,
shall send to FranklinCovey a notice indicating that a New Book may be
published, listing the working title to the New Book, and providing an abstract
of the contents of the New Book. During such period, FranklinCovey
may provide comments to ▇▇▇▇▇, Link or CL, as appropriate, if FranklinCovey
reasonably believes that the proposed book may be a Sequel subject to the terms
of this License Agreement.
11.2. New
Courses. During the Extended Restricted Period and thereafter,
each of ▇▇▇▇▇, Link and CL, or any of them together, shall have the right to
create a New Course, subject to the terms and conditions of Section
12.
12. Right of First Negotiation
for New Work.
12.1. Right of First
Negotiation. During the Extended Restricted Period and
thereafter if CL, ▇▇▇▇▇ or Link, as applicable, desires to design, develop,
manufacture, market, promote, advertise, distribute, lease or sell or otherwise
commercialize such New Work (except for distribution of a New Book pursuant to a
publishing agreement with a third-party publisher), CL, ▇▇▇▇▇ or Link, as
applicable, shall provide notice to FranklinCovey of such desire (a “New License
Notice”). Upon receipt of the New License Notice,
FranklinCovey and CL, ▇▇▇▇▇ or Link, as applicable, shall enter into exclusive
negotiations relating to a license for the New Work (a “New License”). The
parties to such negotiation shall engage in exclusive, good-faith discussions
regarding a possible New License for a period of at least sixty (60) days (the
“Initial Negotiation
Period”), which Initial Negotiation Period may be extended as provided
in
11
Section 13
(the Initial Negotiation Period, together with any extension to the Initial
Negotiation Period, is referred to herein as the “Negotiation
Period”).
12.2. Third-Party
Agreement. If the parties to such negotiation fail to reach an
agreement in principle for a New License within the Negotiation Period, CL,
▇▇▇▇▇ or Link, as applicable, may thereafter negotiate and enter into a final,
binding agreement with respect to the New Work with a third-party (a “Third-Party Agreement”),
provided, however, that CL, ▇▇▇▇▇ or Link, as applicable, shall not (a) during
the Extended Restricted Period, enter into a Third-Party Agreement with a
Competitor or an affiliate of a Competitor or (b) enter into a Third-Party
Agreement on terms equal to or less favorable to CL, ▇▇▇▇▇ or Link, as
applicable, than the final written offer, if any, made by
FranklinCovey.
13. Option to Extend Negotiation
Period.
13.1. Option
Grant. If FranklinCovey, CL, ▇▇▇▇▇ or Link, as applicable, are
unable to enter into an agreement in principle for a New License for a New Work
during the Initial Negotiation Period, FranklinCovey shall have the option (the
“Option”) in its sole
discretion to extend the Negotiation Period with respect to the applicable New
Work by following the procedures set forth in Sections 13.2 and
13.3. CL, ▇▇▇▇▇ or Link, as applicable, shall not, during such
extended Negotiation Period, discuss, negotiate with or enter into a binding
agreement with respect to the New Work with any third party.
13.2. Option Exercise; Termination
of Option. FranklinCovey may exercise the Option during the
Initial Negotiation Period by delivering to CL, ▇▇▇▇▇ or Link, as applicable, a
written notice of exercise, effective upon delivery. Once exercised,
FranklinCovey may terminate any Option immediately by delivering to CL, ▇▇▇▇▇ or
Link, as applicable, a written notice of termination. Neither the
exercise of an Option with regard to a particular New Work nor the termination
of any Option shall be deemed a waiver of FranklinCovey’s right to Option the
contents of any additional or other New Work.
13.3. Option
Payments. As consideration for the Option, FranklinCovey shall
make a payment (the “Option
Payment”) to CL (on behalf of CL, ▇▇▇▇▇ or Link, as applicable) equal to:
(i) $5,000.00 per month, paid in advance, for each month during the first
year following the Initial Negotiation Period that FranklinCovey elects to
extend the Negotiation Period; (ii) $10,000.00 per month, paid in advance,
for each month during the second year following the Initial Negotiation Period
that FranklinCovey elects to extend the Negotiation Period; and
(iii) $15,000.00 per month, paid in advance, for each month during the
third year and each subsequent year that FranklinCovey elects to extend the
Negotiation Period. Notwithstanding the foregoing, FranklinCovey’s
obligation to the make the Option Payment shall cease when (y) FranklinCovey
terminates the Option pursuant to Section 13.2, or (z) FranklinCovey and CL,
▇▇▇▇▇ and Link, as applicable, enter into a New License with respect to the New
Work with terms mutually agreeable to FranklinCovey and CL, ▇▇▇▇▇ or Link, as
applicable.
14. Representations and
Warranties.
14.1. CL Representations and
Warranties and Covenants. CL represents and warrants that
(a) it has (or with respect to Sequels will have) good and valid title to
all of the Licensed
12
Materials
and Sequels, if any, licensed herein, free and clear of all liens, encumbrances
and restrictions; (b) the Licensed Materials constitute all of the
intellectual property of CL, ▇▇▇▇▇ and Link relating to the Book and the
Courses, except the Speed of Trust simulation board game co-owned with Tango
Learning; (c) the Licensed Materials and Sequels, if any, licensed under this
License Agreement do not and, to the knowledge of CL, will not infringe upon or
violate any copyright, trademark, right of privacy, right of publicity, trade
secret or any other intellectual property right of any third party; (d) no
agreement it has or will have with any other party will conflict with the terms
of this License Agreement or prevent CL’s performance of any of its obligations
hereunder, (e) its performance hereunder will not violate any other
agreement, whether oral or written, to which it is a party, and (f) it has
complied and will comply with all applicable laws and regulations relating to
the Licensed Materials and Sequels, if any, and its performance
hereunder. CL makes no warranties of merchantability or fitness for a
particular purpose of the Course or any other warranty other than that
explicitly stated herein.
14.2. ▇▇▇▇▇ and Link
Representations, Warranties. Each of ▇▇▇▇▇ and Link, severally
and not jointly, represent and warrant that (a) he has transferred to CL all his
rights to the Licensed Materials and will transfer to CL all rights to any
Sequel and, if applicable, any New Work, (b) to his knowledge, the Licensed
Materials do not violate any copyright, trademark, right of privacy, right of
publicity, trade secret or any other intellectual property right of any third
party and (c) he will take all such actions as may be necessary to perfect
ownership of any Licensed Materials, Sequel in CL if requested by
FranklinCovey.
14.3. FranklinCovey
Representations, Warranties and Covenants. FranklinCovey
agrees, represents and warrants that (a) it will use the Licensed Materials and
Sequels, if any, licensed herein in a manner conforming to the terms and
conditions of this License Agreement, and (b) the FranklinCovey Intellectual
Property appropriate for the creation of FC Derivative Works does not, as of the
Effective Date of this License Agreement, violate any copyright, trademark,
right of privacy, right of publicity, trade secret or any other intellectual
property right of any third party.
14.4. FranklinCovey
Covenant. FranklinCovey will not, during the term of this
License Agreement, authorize any FranklinCovey employee or contractor to design
or create a work that is primarily intended to allow FranklinCovey to avoid
paying royalties to CL under this License Agreement. Notwithstanding
the foregoing, FranklinCovey may, without violating this
Section 14.4: (a) refresh, redesign or relaunch the “Speed of
Trust” Practice product and service offerings through its Speed of Trust
Practice Leaders and employees from time to time; (b) acquire other
companies, businesses, assets, product lines, service offerings, licensed
content or works that contain “trust” or “trust-related” concepts, content,
works, products, services or offerings; (c) offer products and services and
create practice groups that contain “trust” and “trust-related” concepts and
ideas in their respective materials and offerings; or (d) take actions
substantially similar in nature to those actions permitted under clauses (a) –
(c) of this Section 14.4.
15. Confidentiality.
15.1. Definition. For
purposes of this License Agreement, “Confidential Information” of a party (the
“Disclosing Party”)
means any non-public, commercially sensitive information in
13
its
broadest context, including without limitation all programs, courses, manuals,
electronic works, data, samples, computer records, specifications, processes,
strategies, plans, know-how related to the business of such Disclosing
Party. Confidential Information shall not include any information
known generally to the public (other than as a result of unauthorized disclosure
by the party obtaining such information from the Disclosing Party (the “Receiving Party”)) or in the
Receiving Party’s possession prior to disclosure or independently developed by
the Receiving Party without use of the Confidential Information.
15.2. Obligation. The
parties acknowledge that the Confidential Information of the other parties
derives independent economic value, actual or potential, from not being
generally known to, and not being readily ascertainable by proper means by,
other persons who can obtain economic value from its disclosure or
use. The parties agree that, except for the disclosure and use of
Confidential Information contemplated within the scope of this License
Agreement, they (i) shall at all times keep the Confidential Information
strictly confidential and shall not divulge, furnish, or make accessible the
Confidential Information to any third party (except as set forth below), (ii)
shall not use the Confidential Information for its benefit or the benefit of any
third party, and (iii) shall use the Confidential Information solely and
exclusively for the purpose of carrying out the purposes of this License
Agreement.
15.3. Legal
Proceedings. In the event the Receiving Party is requested or
required (by oral question or request for information or documents in any legal
proceeding, interrogatory, subpoena, civil investigative demand or similar
process) to disclose any Confidential Information, the Receiving Party will
notify the Disclosing Party promptly of the request or requirement so that the
Disclosing Party may seek an appropriate protective order or waive compliance
with the provisions of this Section 15. If, in the absence of a
protective order or the receipt of a waiver from the Disclosing Party, the
Receiving Party is, on the advice of counsel, compelled to disclose any
Confidential Information to any tribunal, the Receiving Party may disclose the
Confidential Information to the tribunal; provided, however, that the Receiving
Party will use its Best Efforts to obtain, at the request of the Disclosing
Party, an order or other assurance that confidential treatment will be accorded
to such portion of the Confidential Information required to be disclosed as the
Disclosing Party designates.
15.4. Injunctive
Relief. The parties acknowledge that the Confidential
Information constitutes a unique and valuable asset of the Disclosing Party, and
that any disclosure or use of the Confidential Information by the Receiving
Party, except as expressly permitted herein, would be wrongful and would cause
irreparable harm to the Disclosing Party. Accordingly, in the event
of any actual or threatened breach of such provisions, the Disclosing Party
shall (in addition to any other remedies that it may have) be entitled to
temporary and/or permanent injunctive relief to enforce such provisions, and
such relief may be granted without the necessity of proving actual damages or
posting a bond.
16. Indemnification; Limitation
of Liability.
16.1. Indemnification by
CL. CL, ▇▇▇▇▇ and Link, jointly and severally, will indemnify
and hold FranklinCovey harmless from and against any and all actions, suits,
proceedings (including by third parties), losses, liabilities, damages, costs,
and expenses (including attorneys’ fees) that FranklinCovey may incur or suffer
by reason of any breach of any
14
of CL’s,
▇▇▇▇▇’▇ or Link’s respective agreements, warranties or representations under
this License Agreement or any action by a third party against FranklinCovey by
reason of any breach by CL, ▇▇▇▇▇ or Link of any of their respective agreements,
warranties or representations under this License Agreement.
16.2. Indemnification by
FranklinCovey. FranklinCovey will indemnify and hold CL, ▇▇▇▇▇
and Link harmless from and against any and all actions, suits, proceedings
(including by third parties), losses, liabilities, damages, costs, and expenses
(including attorneys’ fees) that CL, ▇▇▇▇▇ or Link may incur or suffer by reason
of any breach of any of FranklinCovey’s agreements, warranties or
representations under this License Agreement or any action by a third party
against CL, ▇▇▇▇▇ or Link based upon an actual or alleged use of the Licensed
Materials by FranklinCovey in violation of the terms of this License Agreement
or by reason of any breach by FranklinCovey of any of its respective agreements,
warranties or representations under this License Agreement.
16.3. No Consequential
Damages. In no event shall either party be liable under any
contract negligence, strict liability or other legal or equitable theory to the
other for any incidental, consequential, special, punitive, exemplary or other
indirect damages, or for lost profits, lost revenues, or loss of business
arising out of the subject matter of this License Agreement, regardless of the
cause of action, even if the party has been advised of the likelihood of
damages.
16.4. Limitations of
Liability.
(a) IF ANY
PARTY IS HELD OR FOUND TO BE LIABLE TO ANY OTHER PARTY FOR ANY MATTER RELATING
TO OR ARISING FROM ANY BREACH OF THIS LICENSE AGREEMENT, WHETHER BASED ON AN
ACTION OR CLAIM IN CONTRACT, NEGLIGENCE, TORT OR OTHERWISE, THE AMOUNT
RECOVERABLE FROM THE BREACHING PARTY WILL NOT EXCEED $200,000 FOR EACH INCIDENT
OR SERIES OF RELATED INCIDENTS GIVING RISE TO SUCH LIABILITY, PROVIDED THAT THIS
SECTION 16.4(a) SHALL NOT APPLY TO ANY CLAIM FOR PAYMENT OF ROYALTIES UNDER
SECTION 8 OR ANY CLAIM ARISING FROM A BREACH OF A REPRESENTATION OR WARRANTY BY
CL, ▇▇▇▇▇, OR LINK RELATING TO CL’S TITLE TO, OR ABILITY TO LICENSE TO
FRANKLINCOVEY, THE LICENSED MATERIALS.
(b) IF ANY OF
CL, ▇▇▇▇▇ OR LINK IS HELD OR FOUND TO BE LIABLE TO ANY OTHER PARTY FOR ANY
MATTER RELATING TO OR ARISING FROM ANY BREACH OF A REPRESENTATION OR WARRANTY BY
ANY OF CL, ▇▇▇▇▇ OR LINK RELATING TO CL’S TITLE TO, OR ABILITY TO LICENSE TO
FRANKLINCOVEY, THE LICENSED MATERIALS, THE AMOUNT RECOVERABLE FROM THE BREACHING
PARTY WILL NOT EXCEED THE CAP AMOUNT FOR EACH INCIDENT OR SERIES OF RELATED
INCIDENTS GIVING RISE TO SUCH LIABILITY. AS USED IN THIS PARAGRAPH
16.4(b), “THE CAP AMOUNT” SHALL MEAN THE AGGREGATE OF THE AMOUNTS (1) PAID BY
THE BUYER TO THE SELLER UNDER SECTION 2.3(a) OF THE PURCHASE AGREEMENT, (2) THE
EARNOUT PAID TO THE SELLER UNDER SECTION 2.8 OF THE PURCHASE
15
AGREEMENT,
AND (3) THE DIRECT COSTS AND DAMAGES INCURRED BY FRANKLINCOVEY IN CONNECTION
WITH SUCH BREACH OF REPRESENTATION OR WARRANTY BY CL, ▇▇▇▇▇ OR LINK RELATING TO
CL’S TITLE TO, OR ABILITY TO LICENSE THE LICENSED MATERIALS TO ▇▇▇▇▇▇▇▇
▇▇▇▇▇.
17. Term;
Termination.
17.1. Effectiveness;
Term. This License Agreement shall become effective upon the
Effective Date and shall continue perpetually in full force and effect unless
and until terminated according to the provisions of this Section
17.
17.2. FranklinCovey’s
Breach.
(a) CL shall
have the right to terminate this License Agreement upon the occurrence of a
FranklinCovey Material Breach.
(b) A
“FranklinCovey Material Breach” means exclusively a failure by FranklinCovey to
pay any royalties due and payable pursuant to this License Agreement (and such
failure is not cured within the ninety (90) day period following delivery of
written notice by CL (a “Breach Notice”)); provided,
however, that the following shall not be a FranklinCovey Material
Breach: FranklinCovey’s failure to (A) pay any portion of a payment
that is the subject of a good faith, bona fide dispute, so long as FranklinCovey
pays any undisputed portion of such payment, or (B) make a payment that in its
entirety is the subject of a good faith, bona fide dispute. ▇▇▇▇▇▇▇▇
▇▇▇▇▇ shall provide a notice (a “Dispute Notice”) to CL if
FranklinCovey disputes a payment, or any portion of a payment, within thirty
(30) days after receipt of a Breach Notice from CL relating to such
payment. Such Dispute Notice shall contain a description of the
reasons why such payment is disputed and a certification by the CEO of
FranklinCovey that such dispute is a good faith, bona fide
dispute. FranklinCovey and CL, through their respective authorized
agents and acting in good faith, will work to resolve the dispute relating to
the payment, or the portion of a payment, to which the Dispute Notice
relates. If FranklinCovey’s and CL’s authorized agents are unable to
resolve such dispute within thirty (30) days after CL receives a Dispute Notice,
the CEO of CL and the CEO of FranklinCovey will meet to attempt to reach
agreement on any disputed matters. If they are unable to agree on
such matters within thirty (30) days, either party may submit the matter to
arbitration as provided in Section 9.5(b).
17.3. CL’s
Breach. FranklinCovey shall have the right to terminate this
License Agreement in the event of a CL Material Breach that is not cured within
ninety (90) days after FranklinCovey provides written notice to CL of
the alleged breach. A “CL Material Breach” means a breach by CL,
▇▇▇▇▇ or Link of any of their respective representations, warranties, covenants
or agreements in this License Agreement, a breach of Section 4 or Section 7 of
the Practice Leader Consulting Agreements, or a breach of Section 9 of the
Speaker Agreements.
17.4. Insolvency. If
either of CL or FranklinCovey becomes insolvent, files for bankruptcy, ceases to
do business or is generally unable to meet its financial obligations, the other
party may terminate this License Agreement immediately by providing written
notice to the other party.
16
17.5. Effect of
Termination.
(a) The
expiration or termination of this License Agreement shall not discharge or
relieve either party from any obligation which accrued before expiration or
termination and shall not relieve any breaching party from liability for actual
damages resulting from such breach.
(b) Within
sixty (60) days of the termination of this License Agreement, FranklinCovey
shall deliver to CL any unpaid Payment following the applicable procedures of
Section 9, less any Termination Setoffs. If within thirty (30)
days after receipt of the final Payment and the accompanying report, CL, ▇▇▇▇▇
and Link do not object in writing to the calculations and amounts, all Royalties
under this License Agreement will be deemed satisfied and fully
paid.
(c) Within
sixty (60) days of the termination of this License Agreement, FranklinCovey
shall return to CL all merchantable Course materials, and Workbooks and shall
destroy all other Licensed Materials except for Books and
Sequels. FranklinCovey shall have the right to set off against the
final Payment its fully allocated costs of acquiring the Workbooks, and
merchantable Course Materials (“Termination Setoffs”),
provided that FranklinCovey shall describe its calculations in reasonable
detail.
(d) Within
thirty (30) days after the termination of this License Agreement, FranklinCovey
shall deliver to CL a written inventory of its Books and Sequels (“Termination
Inventory”). CL shall have the option, exercisable within ten
(10) days after receipt of the written inventory to purchase all or any portion
of the items in the inventory for a purchase price equal to FranklinCovey’s
fully allocated cost, which shall be set forth on the written
inventory. FranklinCovey shall deliver to CL the items of Termination
Inventory to be purchased, within five (5) days after receipt of notice from CL
exercising its option to purchase. If CL purchases any Termination
Inventory, no payment shall be made to FranklinCovey and the purchase price for
the Termination Inventory shall be included in Termination Setoffs.
(e) During
the six (6) month period following the expiration or exercise of CL’s option to
purchase Termination Inventory, FranklinCovey shall have the right to distribute
and sell any remaining Termination Inventory in a commercially reasonable
manner.
(f) Upon termination
of this Agreement, except for FC Derivative Works, each party may continue to
use its own intellectual property, including the portion each party contributed
to all derivative works created pursuant to this Agreement.
18. Remedies. The parties
agree that money damages may not be an adequate remedy for any breach of the
provisions of this License Agreement and that any party may, in its discretion,
apply to any court of law or equity of competent jurisdiction for specific
performance and injunctive relief in order to enforce or prevent any violations
this License Agreement, and any party against whom such proceeding is brought
hereby waives the claim or defense that such party has an adequate remedy at law
and agrees not to raise the defense that the other party has
17
an
adequate remedy at law. The rights and remedies of the parties to
this License Agreement are cumulative and not alternative.
19. Miscellaneous.
19.1. Notices. All
notices under this License Agreement are completed upon mailing, if mailed by
registered or certified mail, postage prepaid or by confirmed receipt facsimile
transmission, with proof of receipt. The addresses of the parties,
unless subsequently changed by written notice to the other, are as given
hereunder.
|
If
to FranklinCovey:
|
▇▇▇▇▇▇▇▇
▇▇▇▇▇ Co.
▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
Fax: (▇▇▇)
▇▇▇-▇▇▇▇
|
|
With
a copy to (which shall not constitute notice):
|
|
|
▇▇▇▇▇
▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇
& ▇▇▇▇▇▇▇ LLP
▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇)
▇▇▇-▇▇▇▇
|
|
|
If
to CL:
|
▇▇▇▇▇/Link,
LLC
▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇
▇▇▇▇
Fax: (▇▇▇)
▇▇▇-▇▇▇▇
|
|
If
to ▇▇▇▇▇▇▇ ▇. ▇. ▇▇▇▇▇:
|
▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇)
▇▇▇-▇▇▇▇
|
|
If
to ▇▇▇▇ ▇▇▇▇:
|
▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇)
▇▇▇-▇▇▇▇
|
|
With
a copy to (which shall not constitute notice):
|
|
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▇▇▇▇▇▇▇
▇. ▇▇▇▇
▇▇▇▇,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇.▇.
RiverView
Plaza, Suite 300
▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇)
▇▇▇-▇▇▇▇
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18
19.2. Survival. The
provisions of Sections 3.5, 4.1, 4.2, 7.2, 14, 15, 16, 17, 18, and 19, and
all defined terms, shall survive termination of this License
Agreement.
19.3. Independent
Entities. The parties are independent contractors and not
partners, joint venturers, or otherwise affiliated. FranklinCovey and
CL are independent entities engaged in independent businesses. Each
shall bear all the costs and expenses incurred in the performance of their
respective duties under this License Agreement. Neither FranklinCovey
nor CL, nor any agent or employee of either, is an agent or employee of the
other, nor shall anything contained herein be deemed to create a partnership or
joint venture between the parties. Neither party has the right to
control the other, except as expressly provided in this License Agreement and
any Consulting Agreement. Neither party to this License Agreement has
the right or authority to make any promise or representation or to assume or
incur any liability or other obligation against or on the behalf of the
other.
19.4. Complete Agreement,
Amendment. This License Agreement expressly amends and
restates the Original Agreement. This License Agreement and the
Contemporaneous Agreements are the complete and exclusive statement of the
agreement by and among CL, ▇▇▇▇▇, Link and FranklinCovey and together they
supersede all proposals or prior or contemporaneous agreements and
understandings, whether oral or written, and all other communications relating
to the specific subject matters of this License Agreement and the
Contemporaneous Agreements. This License Agreement may only be
amended, or any provision herein waived, by written instrument executed by each
party. No waiver of any provision hereof shall constitute a waiver of
any other provision, nor shall such waiver constitute a continuing waiver unless
otherwise expressly provided. The invalidity or unenforceability of
any provision of this License Agreement shall not affect the validity or
enforceability of any other provision of this License Agreement.
19.5. Captions. The
captions of the various sections and subsections of this License Agreement are
for the convenience of reference only and are not binding provisions of this
License Agreement, nor shall they have any limiting effect or interpretive
weight hereunder.
19.6. Assignment. FranklinCovey
may assign this License to (a) any entity it controls or which controls or is
under common control with FranklinCovey now or in the future, or (b) any entity
that acquires all of or substantially all of its capital stock or its assets,
whether through purchase, merger, consolidation or otherwise. Except
as allowed by the foregoing sentence, this License is personal and specific to
FranklinCovey and shall not be transferred or assigned by FranklinCovey except
upon the express prior written consent of CL. CL shall not transfer
or assign this License except upon the express prior written consent of
FranklinCovey. Any such attempt to transfer or assign this License in
violation of this Section 19.6 shall be null and void. This License
will be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
19.7. Applicable Law and
Forum. This License Agreement shall be governed by and
construed in accordance with the applicable federal laws of the United States
and with Utah law, without regard to Utah’s rules regarding conflicts of
law. Each of the parties consents to the jurisdiction of the courts
located in the State of Utah with respect to all matters relating to this
License Agreement.
19
19.8. Prevailing Party
Recovery. Except as provided in Section 9.5(b), if a party
brings an action in any court of law to enforce any of the terms of this License
Agreement, the prevailing party shall be entitled to recover its attorney’s
fees, costs and expenses incurred in connection with such action in addition to
any other or further relief awarded by the court.
19.9. Signatures,
Counterparts. This License Agreement may be executed in one or
more counterparts, any one of which need not contain the signatures of more than
one party, but all such counterparts taken together will constitute one and the
same instrument. A facsimile signature will be considered an original
signature.
[signature page
follows]
20
IN
WITNESS WHEREOF, the parties have signed and entered into the Agreement as of
the Effective Date.
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▇▇▇▇▇▇▇▇
▇▇▇▇▇ CO.
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▇▇▇▇▇/LINK,
LLC
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/s/
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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/s/
▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇
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▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
President
|
▇▇▇▇▇▇▇
▇. ▇. ▇▇▇▇▇
Its
Manager
|
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▇▇▇▇▇▇▇
▇. ▇. ▇▇▇▇▇
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▇▇▇▇
▇▇▇▇
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/s/
▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇
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/s/
▇▇▇▇ ▇▇▇▇
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▇▇▇▇▇▇▇
▇.▇. ▇▇▇▇▇
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[Signature Page to Amended and
Restated License Agreement]
EXHIBIT
A
DEFINED
TERMS
“2006
Courses” means the Courses based on the Book and listed on Exhibit
B.
“2006
Licensed Materials” means the Book and all rights thereto, including its Audio
Rights and the right to create Workbooks, the 2006 Courses, the 2006 Workbooks
and any derivative work based on the foregoing, including, without limitation,
the 2006 Courses as constituted on the Effective Date.
“2006
Workbooks” means any Workbook based on the Book and in existence as of the
Effective Date.
“Audio
Rights” means all rights to create, use and perform an audio version of a book
in any media, including without limitation through a website.
“Best
Efforts” has the meaning set forth in Section 10.1.
“CL” has
the meaning set forth in the first paragraph of this License
Agreement.
“CL
Copyrights” means the copyrighted materials relating to the Licensed Materials
and listed on Exhibit
D.
“CL
Derivative Work” means derivative works that are based solely on the Licensed
Materials, whether created by CL, ▇▇▇▇▇, Link or FranklinCovey.
“CL
Intellectual Property” has the meaning set forth in Section 4.1.
“CL
Material Breach” has the meaning set forth in Section 17.3.
“CL
Trademarks” means registered and unregistered trademarks relating to the
Licensed Materials and listed on Exhibit C and any New
Trademark.
“CL
Websites” means the websites registered to CL and located at the domain names
▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
and ▇▇▇.▇▇▇▇▇▇▇▇▇.▇▇▇
along with all related web pages under the control of CL.
“CL
Website Content” means the content, records and data available on the CL
Websites.
“CL
Worldwide” has the meaning set forth in the Recitals.
“Competitor”
means those entities listed on Exhibit E and any
successor to such entities.
“Contemporaneous
Agreements” means the Purchase Agreement, the Speaking Agreements, and the
Practice Leader Consulting Agreements.
A-1
“Courses”
means all Workbooks, CL Website Content and other assessments, profiles, slides,
posters, audios, videos and other materials created by ▇▇▇▇▇, Link or CL and
based on the Book or a Sequel.
“▇▇▇▇▇”
has the meaning in set forth in the first paragraph.
“Derivatives
Gross Revenue” has the meaning set forth in Section 8.1.
“Disclosing
Party” has the meaning set forth in Section 15.1.
“Dispute
Notice” has the meaning set forth in Section 17.2(b).
“Effective
Date” has the meaning set forth in the first paragraph of this License
Agreement.
“Extended
Restricted Period” has the meaning set forth in the Practice Leader Consulting
Agreements.
“FC
Client Sales” has the meaning set forth in the Recitals.
“FC
Derivative Work” means derivative works based in part on the Licensed Materials
and in part on FranklinCovey Intellectual Property, whether created by CL,
▇▇▇▇▇, Link or FranklinCovey directly or through third parties.
“FC
Products, LLC” has the meaning set forth in Section 3.6.
“FranklinCovey”
has the meaning set forth in the first paragraph of this License
Agreement.
“FranklinCovey
Entities” means FranklinCovey and its wholly owned subsidiaries.
“FranklinCovey
Gross Revenue” has the meaning set forth in Section 8.1.
“FranklinCovey
Intellectual Property” has the meaning set forth in Section 4.2.
“FranklinCovey
Material Breach” has the meaning set forth in Section 17.2(b).
“International
Licensee” means all independent entities outside the United States, excluding
direct offices, which have a current right to offer training services under
licenses from FranklinCovey or its affiliates, as set forth on Exhibit
F.
“International
Licensee Gross Revenues” has the meaning set forth in Section 8.1.
“Initial
Negotiation Period” has the meaning set forth in Section 12.1.
“Licensed
Materials” means the 2006 Licensed Materials, the CL Trademarks, the CL
Copyrights, the CL Website Content, any Sequel and any derivative works based on
the Sequel, including for purposes of clarity, Courses and Workbooks, CL
Derivative Works and FC Derivative Works.
“Link”
has the meaning set forth in the first paragraph.
A-2
“Negotiation
Period” has the meaning set forth in Section 12.1.
“New
Book” means any book written by ▇▇▇▇▇ or Link after the Effective Date that is
not a Sequel.
“New
Course” means any new course, training program, product, service, seminar,
webinar or similar offering that is not a derivative work of the Courses, the
Book or any Sequel.
“New
License” has the meaning set forth in Section 12.1.
“New
License Notice” has the meaning set forth in Section 12.1.
“New
Trademark” has the meaning set forth in Section 5.4.
“New
Work” means any New Book and/or any New Course.
“Notice
of Intent” has the meaning set forth in Section 5.4.
“Option”
has the meaning set forth in Section 13.1.
“Option
Payment” has the meaning set forth in Section 13.3.
“Original
Agreement” has the meaning set forth in Section 2.1.
“Payments”
has the meaning set forth in Section 9.1.
“Practice”
has the meaning set forth in the Practice Leader Consulting
Agreements.
“Practice
Leader Consulting Agreements” has the meaning set forth in the
Recitals.
“Proposal”
has the meaning set forth in Section 4.3.
“Proposed
FC Derivative Work” has the meaning set forth in Section 4.3.
“Publishing
Agreement” has the meaning set forth in Section 3.1.
“Purchase
Agreement” has the meaning set forth in the Recitals.
“Receiving
Party” has the meaning set forth in Section 15.1.
“Response
to Notice” has the meaning set forth in Section 5.4.
“Royalty”
has the meaning set forth in Section 8.1.
“Rules”
has the meaning set forth in Section 9.5(b)(i).
“Sequel”
means an e-book or a book in printed form that substantially incorporates the
concepts of the Book and that uses a derivation of the words “Speed of Trust” in
its title or subtitle.
A-3
“Speaking
Agreements” has the meaning set forth in the Recitals.
“Termination
Inventory” has the meaning set forth in Section 17.5.
“Termination
Setoffs” has the meaning set forth in Section 17.5.
“Third
Party Agreement” has the meaning set forth in Section 12.2.
“Website
Protocols” has the meaning set forth in Section 7.1 and are set forth on Exhibit G, as amended
from time to time by mutual agreement of the parties.
“Workbook”
means any bound or unbound set of materials that is organized around the Book or
a Sequel and is intended as a teaching tool in a Course or other
training-oriented setting.
A-4
EXHIBIT
B
2006
COURSES
Course
titles:
“The
Speed of Trust”
“Leading
at the Speed of Trust”
“Leading
at the Speed of Trust – Individual Contributor Kit”
“Working
at the Speed of Trust”
“Selling
at The Speed of Trust”
“Inspiring
Trust”
B-1
EXHIBIT
C
CL
TRADEMARKS
CL
Trademarks are all trademarks covered by US and foreign trademark laws
associated with the 2006 Courses, including the following federal trademark
applications and registrations and foreign trademark registrations:
|
US
Trademark Registrations:
|
|||
|
2,984,853
|
class
41
|
Reg.
Aug 16, 2005
|
THE
SPEED OF TRUST
|
|
3,087,015
|
class
16
|
Reg.
May 2, 2006
|
THE
SPEED OF TRUST
|
|
3,209,914
|
class
41
|
Reg.
Feb 20, 2007
|
Ripple
logo
|
|
US
Trademark Applications:
|
|||
|
77/447,459
|
class
9
|
Filed
Apr. 14, 2008
|
THE
SPEED OF TRUST
|
|
77/567,575
|
class
35
|
Filed
Sep. 11, 2008
|
THE
SPEED OF TRUST
|
|
Foreign
Trademark Registrations:
|
|||
|
Japan
– 4,986,064
|
class
16
|
Reg.
Sep 8, 2006
|
THE
SPEED OF TRUST
|
|
Europe
– 004650181
|
classes
16, 35, 41
|
Reg.
Sep 20, 2005
|
THE
SPEED OF
TRUST
|
C-1
EXHIBIT
D
CL
COPYRIGHTS
CL
Copyrights are all works covered by the US and foreign copyright laws associated
with the 2006 Courses, including course materials, marketing materials and sales
materials.
D-1
EXHIBIT
E
COMPETITORS
Vital
Smarts
The ▇▇▇
▇▇▇▇▇▇▇▇▇ Companies
The
Center for Creative Leadership
True
North
Gallup
Inside-Out
Character
Counts
▇▇▇
▇▇▇▇▇▇
Achieve
Global
DDI
Center
for Creative Link
AMA
Colleges,
Universities executive training programs
E-1
EXHIBIT
F
INTERNATIONAL
LICENSEES
LFCA,
SA
DOOR
Nederland B.V.
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
Chromart,
S.R.L.
▇▇▇▇▇▇▇▇
▇▇▇▇▇ Brazil, Ltda.
FCPL
Ltd.
Leadership
Technologies Latin America, Inc.
CLC
Columbia
▇▇▇▇▇
Leadership Center
Egyptian
Leadership Training Center
CEGOS
(France)
Leadership
Institut GmbH
DMS
Hellas Group S.A.
Leadership
Knowledge Consulting Private Limited
P.T.
Dunamis Intermaster
Momentum
Training Ltd.
CEGOS
(Italy)
Korea
Leadership Center
Starmanship
& Associate
360
Acumen Group F2, LLC
Leadership
Resources (Malaysia) Sdn. Bhd.
Leadership
Technologies Latin America, Inc.
▇▇▇▇
▇▇▇▇▇▇
Nordic
Approach Finance APS
Leadership
Technologies, Inc.
Center
for Leadership and Change, Inc.
CEGOS
(Portugal)
Advantage
Management International Puerto Rico, Inc.
Retiro
Holdings Limited
Leadership
Skills Development Company d/b/a Qiyaada Consultants
▇▇▇▇▇
Leadership Center (S) Pte Ltd.
FCSA
Organisation Services (Pty) Ltd.
CEGOS
(Spain)
PacRim
Leadership Center Co., Ltd.
BilgiLink
Ltd.
▇▇▇▇▇
Leadership Centre Limited
Leadership
Resources (Malaysia) sdn. Bhd.
F-1
EXHIBIT
G
WEBSITE
PROTOCOLS
To be
agreed upon by the parties.
G-1