SettlementAgreement, Release And Amendmentto License Agreement

EX-10.8 12 f8k1114ex10vii_legacyedu.htm SETTLEMENT AND AMENDMENT TO THE 2013 LICENSE AGREEMENT, DATED APRIL 22, 2014
 Exhibit 10.7
 
Settlement Agreement, Release And
Amendment to License Agreement
 
This Settlement Agreement, Release and Amendment to License Agreement (“Agreement”) is made by and between (1) Tigrent Inc., a Colorado corporation (“Tigrent”) on the one hand, and (2) Rich Dad Operating Company, LLC, a Nevada limited liability company (“RDOC”), Robert Kiyosaki, in his individual capacity (“R. Kiyosaki”), Darren Weeks, in his individual capacity (“Weeks”), and 1780341 Alberta Ltd., d/b/a Rich Dad:Global Entrepreneurs Organization or Rich Dad GEO (“RD:GEO”) on the other hand. Tigrent, RDOC, R. Kiyosaki, Weeks and RD:GEO are collectively referred to as the “Parties” and individually as a “Party.” This Agreement shall be effective as of April 22, 2014 (“Effective Date”) when executed by all Parties.
 
Recitals
 
A.           RDOC is the owner or licensee, for certain purposes, of valuable intellectual property relating to the Rich Dad name and brand developed by R. Kiyosaki. In September 2013, RDOC and Tigrent entered a License Agreement (“License Agreement”) whereby, among other privileges and obligations, RDOC granted Tigrent “the sole and exclusive right and license in and to the Licensed Intellectual Property for the purpose of allowing [Tigrent] to (i) develop and create Educational Materials and (ii) conduct the Business in the Territory by itself and through its subsidiaries and affiliates.” [Capitalized terms are defined in the License Agreement.] A copy of the License Agreement is attached as Exhibit 1.
 
B.           In March 2014, Tigrent discovered what it believes are violations and infringements upon its rights under the License Agreement by RDOC, R. Kiyosaki, Weeks and RD:GEO In connection with their creation or support of RD:GEO. On March 20, 2014, Tigrent’s outside counsel delivered a letter ( the “Demand Letter”) to RDOC, R. Kiyosaki and Weeks relating to the alleged infringing activities.
 
C.           On March 31, 2014 Tigrent filed a Verified Complaint against RDOC, R. Kiyosaki, Weeks, and RD:GEO in Arizona Superior Court, Maricopa County, captioned Tigrent Inc. v. Rich Dad Operating Company, LLC et. al., Cause No. CV2014-003169 (“the State Court Litigation”). In the State Court Litigation, Tigrent asserted claims for breach of License Agreement, breach of the implied covenant of good faith and fair dealing, tortious interference with, License Agreement, tortious interference with business expectancy, unfair competition and civil conspiracy. Also on March 31, 2014, Tigrent filed a Complaint against Weeks and RD:GEO in the United States District Court for the District of Arizona, captioned Tigrent Inc. v. Weeks et. al., Cause No. 2:14-cv-00660-DGC (“the Federal Court Litigation”). In the Federal Court Litigation, Tigrent asserted violations of 15 U.S.C. § 1114 and 15 U.S.C. § 1125(a) relating to Weeks’s and RD:GEO’s alleged infringement of Tigrent’s rights to the Rich Dad-related trademarks.
 
D.           RDOC, R. Kiyosaki, Weeks, and RD:GEO have not answered or otherwise responded to the State Court Litigation or the Federal Court Litigation but generally deny liability for the claims asserted.
 
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E.           Tigrent, on the one hand, and RDOC, R. Kiyosaki, Weeks and RD:GEO, on the other hand, without admitting any liability, have fully and finally settled the disputes between them described above and have agreed to the terms set forth in this Agreement in full, complete and final settlement of these disputes between them relating to the alleged infringement of Tigrent’s rights under the License Agreement, the issues and events that are the subject of the Demand Letter, the State Court Litigation, and the Federal Court Litigation.
 
NOW THEREFORE, intending to be legally bound and in consideration of the obligations and promises set forth in this Agreement, the Parties agree as follows:
 
1.           Incorporation of Recitals. The Parties affirm that the foregoing Recitals are true and correct, and are incorporated and made part of this Agreement as though set forth in full in this paragraph.
 
2.           Warranties and Representations. Each Party expressly and severally represents and warrants:
     
 
a.
Such Party is correctly described and named in this Agreement.
     
 
b.
Before executing this Agreement, such Party became fully informed of the terms, contents, provisions, and effect of this Agreement.
     
 
c.
The signatory to this Agreement signing on behalf of such Party is fully authorized and legally competent to execute this Agreement as the legal, valid and binding act and deed of such Party, and is a duly authorized representative of such Party.
     
 
d.
This Agreement is fully and forever binding on, and enforceable against, such Party in accordance with its terms.
     
 
e.
The execution and delivery of this Agreement and any other documents, agreements or instruments executed or delivered by such Party pursuant to this Agreement and the consummation of the transactions as provided for in this Agreement or contemplated by this Agreement do not conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, any material agreement or instrument to which such Party is a party or any provision of law, statute, rule or regulation applicable to such Party or any judicial or administrative order or decree by which such Party is bound.
     
 
f.
The claims released in this Agreement by such Party were and are, currently owned solely by such Party. All of such Party’s claims are free and clear of any and all claims, liens or other encumbrances of any kind or nature, of any other person, and there is no other person who could or should have asserted such claims or joined in any settlement or
 
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compromise of such claims.
     
 
g.
Such Party has not assigned, pledged or in any other manner sold, transferred or hypothecated any right, title, interest, cause of action, or claim that arises out of or is provided to be released by such party pursuant to this Agreement.
     
 
h.
In entering into and signing this Agreement, such Party has had the benefit of the advice of attorneys of such Party’s own choosing, and enters into this Agreement freely by such Party’s own choosing and judgment, and without duress or other influence.
     
 
i.
Such Party represents that it has not relied upon, and will not rely upon, any statements, acts or omissions by the other Party, other than as set forth in this Agreement, in making its decision to enter into this Agreement.
     
 
j.
This Agreement is duly executed by such Party with full knowledge and understanding of its terms and meaning, on such Party’s own judgment and upon the advice of such Party’s attorneys and financial and tax advisors.
 
Such Party acknowledges that its foregoing representations are a material inducement to the other Parties to enter into this Agreement
 
3.           RDOC, R. Kiyosaki, Weeks and RD:GEO Agree Not to Infringe. In recognition of Tigrent’s valuable rights under the License Agreement, the Parties agree as follows:
 
  A.           RDOC, R. Kiyosaki, Weeks, and RD:GEO agree to honor and not in any way infringe upon Tigrent’s rights under the License Agreement, as amended. Weeks also agrees to not in any way infringe upon Tigrent’s rights under the License Agreement, both individually and in connection with Weeks’s “Fast Trade to Cash Flow” and “Wealth Community” ventures. This prohibition against any infringement upon Tigrent’s rights under the License Agreement includes, but is not limited to, any further use of the Rich Dad name, brand, trademarks and other Licensed Intellectual Property, or reference to or recognition of Weeks as “Rich Dad Canada,” “Rich Dad in Canada,” or any similar title, designation or affiliation relating to Rich Dad. However, Weeks can use the Rich Dad name, brand, trademarks and other Licensed Intellectual Property to promote a Rich Dad Personality or Rich Dad Advisor for a live in-person event at which the Rich Dad Personality or Rich Dad Advisor is appearing.
 
B.           RDOC shall at all times cooperate fully with Tigrent to protect and prevent infringement of Tigrent’s rights under the License Agreement, as amended..
 
4.           Reimbursement of Tigrent’s Attorneys’ Fees and Expenses. RDOC shall reimburse Tigrent for all attorneys’ fees and expenses Tigrent incurred in connection
 
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with seeking to enforce and prosecute its rights under the License Agreement in connection with Tigrent’s Demand Letter, the State Court Litigation and the Federal Court Litigation. Tigrent’s attorneys’ fees and expenses incurred in these matters through March 31, 2014 total [***]. No later than three (3) business days after the Effective Date of this Agreement, RDOC shall pay Tigrent this sum of [***] directly by wire transfer to Tigrent’s counsel, Cohen Kennedy Dowd & Quigley, P.C. (“CKDQ”), pursuant to wiring instructions to be separately provided by CKDQ to RDOC’s counsel. Tigrent acknowledges that is has received RDOC check number [***] in the amount of [***] in partial payment of the aforementioned [***]. RDOC shall also reimburse Tigrent for the attorneys’ fees and expenses that Tigrent incurs after March 31, 2014 in connection with Tigrent’s Demand Letter, the State Court Litigation and the Federal Court Litigation, including any attorneys’ fees and expenses incurred in connection with the negotiation and preparation of this Agreement. Tigrent may, but is not obligated to, deduct any sums payable to it under this Section 4 from royalties otherwise payable under the License Agreement.

 
5.           Actions Relating to RD:GEO. RDOC, R. Kiyosaki, and Weeks by this Agreement, individually and jointly agree to cease all use of the RD:GEO name in any manner or for any purpose for as long as a licensing relationship exists between RDOC and Tigrent.
 
6.          Amendments to License Agreement. Simultaneously with the execution of this Agreement, RDOC and Tigrent shall execute and deliver to the other a First Amendment to Rich Dad Operating Company, LLC License Agreement in the form attached as Exhibit 2.
 
7.           Termination of Credit Agreement and RDOC’s Forgiveness of Notes Owed by Tigrent. RDOC by this Agreement cancels, forgives and releases Tigrent from, any and all past, present, and future obligations of Tigrent under that certain Rich Dad Operating Company, LLC Credit Agreement dated March 25, 2011 (the “Credit Agreement”), a copy of which is attached as Exhibit 3, and that certain Promissory Note dated March 25, 2011 in the original principal amount of [***] issued by Tigrent to RDOC pursuant to the Credit Agreement (“Promissory Note.”) A copy of the Promissory Note is attached as Exhibit 4.
 
8.           Rich Dad Titles or Designations. RDOC shall provide a copy of the License Agreement, as amended, to all Rich Dad Advisors, as defined in the License Agreement for the purpose of informing the Rich Dad Advisors of Tigrent’s rights.
 
9.           RDOC’s Grant of Proxy to Tigrent. RDOC acknowledges that it is the beneficial owner of [***] shares of common stock of Tigrent (“RDOC’s Shares”). RDOC by this Agreement appoints Tigrent, as Proxy, with full power of substitution, to vote the RDOC Shares, or any of them, on matters coming before any special or annual meetings of Tigrent shareholders occurring in 2014 and 2015, and on matters incidental to such meetings. RDOC acknowledges and agrees that Proxy shall vote RDOC’s Shares, if at all, in a manner believed by Proxy, in Proxy’s sole and absolute discretion, to be in the best
 
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interests of Tigrent’s shareholders as a whole, and that Proxy owes no duty or obligation to RDOC to vote RDOC’s Shares in a manner beneficial to the specific interests of RDOC. RDOC shall not make any claim or demand or seek any liability or damages in connection with Proxy’s exercise of this proxy.
 
10.         Confidentiality. The Parties agree to keep the terms and conditions of this Agreement confidential, except as necessary to effectuate its provisions or as required by law, rule, regulation, court order, tax or other reporting requirement, or as agreed to by the Parties in writing.
 
11.         Releases.
 
  A.           Release of RDOC, R. Kiyosaki, Kim Kiyosaki, Weeks and RD:GEO. Except as provided in this Agreement, Tigrent, on behalf of itself and any and all owners, partners, employees, agents, parents, subsidiaries, representatives, officers, directors, affiliates, attorneys, predecessors, successors and assigns of those entities and individuals, irrevocably and unconditionally releases and forever discharges RDOC, R. Kiyosaki, Kim Kiyosaki, Weeks and RD:GEO, and their past and present owners, employees, agents, spouses, officers, directors, representatives, affiliates, attorneys, predecessors, successors and assigns, from any and all manner of actions, causes of action, claims, lawsuits, debts, dues, sums of money, accounts, judgments, obligations, contracts, liabilities, agreements, promises and damages of whatever kind or nature, foreseen or unforeseen, matured or unmatured, accrued or unaccrued, contingent or fixed, liquidated or unliquidated, known or unknown, whether at law or in equity that are the subject of or relate to matters that are the subject of the Demand Letter, State Court Litigation and the Federal Court Litigation. This release does not extend to any rights granted under this Agreement, to any claims or causes of action arising from a breach of this Agreement, or to claims arising from actions which occur after the Effective Date of this Agreement.
 
  B.           Release of Tigrent. Except as provided in this Agreement, RDOC, R. Kiyosaki, Kim Kiyosaki, Weeks, and RD:GEO, on behalf of themselves and any and all owners, partners, employees, parents, officers, directors, subsidiaries, spouses, agents, representatives, affiliates, attorneys, predecessors, successors and assigns of those entities and individuals, irrevocably and unconditionally release and forever discharge Tigrent, and its past and present owners, employees, agents, officers, directors, representatives, affiliates, attorneys, predecessors, successors and assigns, from any and all manner of actions, causes of action, claims, lawsuits, debts, dues, sums of money, accounts, judgments, obligations, contracts, liabilities, agreements, promises and damages of whatever kind or nature, foreseen or unforeseen, matured or unmatured, accrued or unaccrued, contingent or fixed, liquidated or unliquidated, known or unknown, whether at law or in equity that are the subject of or relate to matters that are the subject of the Demand Letter, State Court Litigation and the Federal Court Litigation. This release does not extend to any rights granted under this Agreement, to any claims or causes of action arising from a breach of this Agreement, or to claims arising from actions which occur after the Effective Date of this Agreement.
 
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12.         Dismissal of Litigations with Prejudice. Upon full execution of this Agreement, the Parties agree to dismiss the State Court Litigation and the Federal Court Litigation in their entirety with prejudice. Accordingly, upon execution of this Agreement, the Parties shall exchange executed Stipulations for Dismissal With Prejudice and related Orders with respect to the State Court Litigation and the Federal Court Litigation, in the forms attached as Exhibit 5, which may be held by Tigrent’s counsel until payment of the amount set forth in Paragraph 4 of this Agreement is received by Tigrent’s counsel. Upon receipt by Tigrent’s counsel of this payment, Tigrent shall promptly file the Stipulations and Orders with the Courts in the State Court Litigation and the Federal Court Litigation. The Parties shall work cooperatively and in good faith to file any other documents as necessary to effectuate the dismissals with prejudice.
 
13.         Choice of Law. This Agreement, and all rights and obligations arising from it, shall be governed by, and construed and enforced in accordance with, the laws of the State of Arizona without application of Arizona’s choice of law rules.
 
14.         Successors. The rights and obligations created by this Agreement inure to and benefit the respective successors of the Parties. The obligations created under this Agreement are binding on any successor to a Party.
 
15.         Assigns. The rights and obligations created under this Agreement are not assignable by any Party without the written consent of the other Parties.
 
16.         Waiver. No breach of any promise in this Agreement can be waived unless done expressly and in writing. Express waiver of any one breach shall not be deemed a waiver of any other breach of the same or any other provision of this Agreement. Further, any delay or omission in enforcing a right created under this Agreement shall not constitute a waiver of that right, and shall not operate to bar the enforcement of that right. Any waiver of a default in performance of an obligation created under this Agreement shall not operate as a waiver of, or excuse any subsequent default in, performance.
 
17.         Counterparts. This Agreement may be executed in counterparts. Execution of this Agreement may be accomplished through electronic transmission of a scanned copy of the applicable signature page. When a counterpart has been executed and delivered by each Party, all counterparts together shall constitute an original binding instrument; provided, however, that this Agreement shall be binding on and enforceable against each Party that has executed and delivered a counterpart immediately upon such delivery even if all Parties have not delivered executed and delivered a counterpart.
 
18.         Entire. Agreement. This Agreement, the License Agreement, and the First Amendment to the License Agreement contain the full and complete statement of the agreement between the Parties on the subject matter of these Agreements and supersede any and all prior discussions, arrangements, proposals, or understandings, whether written or oral, between the Parties on the subject matter of these Agreements. The Parties are not relying on any fact, statement, inducement or representation that is not expressly set forth in these Agreements.
 
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19.          Headings. The paragraph headings used in this Agreement are for convenience and reference only, and are not intended to define or limit the scope or intent of any provision of this Agreement.
 
20.          Additional Acts. The Parties agree that each of them shall take such further action and execute such further documents, if any, which may be reasonably requested, appropriate or necessary to implement this Agreement according to its terms or to carry out the purpose of this Agreement.
 
21.          Severability. If, after the date of this Agreement, any provision is held to be illegal, invalid or unenforceable, such provision shall be fully severable and the remainder of the Agreement shall remain enforceable and not affected; however, in that event, the Parties will immediately negotiate in good faith to attempt to replace the invalid provision with a comparable term which, to the best of the Parties’ abilities, fulfills and effectuates the purpose of the invalid provision.
 
22.          Disputes Concerning Settlement Agreement. In the event of any conflict, claim or dispute between the Parties concerning the obligations set forth in this Agreement, each Party agrees that the Arizona Superior Court, Maricopa County shall have exclusive jurisdiction over the action and the Parties, unless the Arizona state court lacks subject matter jurisdiction, in which case exclusive jurisdiction will be in the United States District Court, District of Arizona located in Phoenix, Arizona. The Parties agree to submit to the personal jurisdiction of the Arizona Superior Court, Maricopa County and the United States District Court as stated above and agree that venue is proper in these courts. By this Agreement and consistent with the scope of this Section 22, the Parties waive any and all objections and challenges to personal jurisdiction and venue in these courts that might otherwise exist. If any action is brought in connection with this Agreement, the prevailing Party or Parties shall be entitled to receive from the non-prevailing Party or Parties all reasonable expenses, including but not limited to reasonable attorneys’ fees and costs, in addition to any other relief to which the successful Party or Parties may be entitled. Costs and attorneys’ fees shall be assessed by a court and not by a jury and shall be included in any judgment obtained by the prevailing Party or Patties.
 
23.          Alteration, Modification or Amendment. This Agreement shall not be altered, modified or amended except by written agreement signed by the Parties.
 
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  Tigrent Inc.
  By:
     
  Its: Chief Administrative Officer & General Counsel

 

  Rich Dad Operating Company, LLC  
       
  By:    
       
  Its:    

 

  Robert Kiyosaki  
     

 

  Kim Kiyosaki  
     

 

  Darren Weeks  
     

 

  1780341 Alberta Ltd. (d/b/a/Rich Dad:
Global Entrepreneurs Organization)		  
       
  By:  
       
  Its:  

  


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  Tigrent Inc.
  By:
     
  Its:  

 

  Rich Dad Operating Company, LLC  
       
  By:  
       
  Its: CEO  

 

  Robert Kiyosaki  
   

 

  Kim Kiyosaki  
   

 

  Darren Weeks  
     

 

  1780341 Alberta Ltd. (d/b/a/Rich Dad:
Global Entrepreneurs Organization)		  
       
  By:    
       
  Its: