Document:

EXHIBIT 10.30

 

CONSULTING AGREEMENT

 

THIS AGREEMENT (“Agreement”) made as of this 1st day of June, 2010 by and between Digital Domain, a Delaware corporation (hereinafter called  "Consultant") and Digital Domain Holdings Corporation (f/k/a Wyndcrest DD Florida, Inc.), a Florida corporation (the “Company”).  The Consultant and Company are sometimes individually referred to herein as a “party” and collectively referred to herein as the “parties”.

 

WITNESSETH:

 

WHEREAS,  the Company is in the business of creating, developing, producing and marketing animated feature films, live action feature films, video games and simulation for the military and medical industries (the “Company’s Business”).

 

WHEREAS, the Consultant desires to work for the Company as an independent contractor consultant in order to develop the Company’s Business, on a work for hire basis.

 

WHEREAS, the Company desires to hire Consultant for the aforementioned purposes on a work for hire basis upon the terms hereof.

 

NOW, THEREFORE, in consideration of the premises and the mutual promises and covenants set forth below, the parties hereby agree as follows:

 

1.           Term of Consultation.

 

(a)           Term.  The Company hereby hires the Consultant, and the Consultant hereby accepts its hire by the Company for a period commencing on the date of this Agreement and ending on the day that is sixteen months after the date of this Agreement (the “Term”).  Notwithstanding the foregoing, the Company shall have the option to terminate this Agreement in the event of a change in control of Consultant.

(b)           Continuing Effect.  Notwithstanding any termination of this Agreement at the end of the term or otherwise, the provisions of Sections 6-9, 10, 16-17 shall remain in full force and effect and shall be binding upon the legal representatives, successors and assigns of the Consultant.

 

2.           Duties.

 

(a)           General Duties.  The Consultant will provide to the Company the following consulting services (the “Services”):

(1)           Advising the Company with respect to management of employees providing services in Company’s production studio;

(2)           Advising the Company with respect to recruiting personnel for its production studio;

(3)           Advising the Company with respect to development of technology for its production studio;

 

 

(4)           Advising the Company with respect to construction of the facility for its production studio;

(5)           Advising the Company with respect to creative, design or artistic efforts performed by Company, or proposed to be performed by the Company, for the Company’s clients or prospective clients;

  

  

  

(6)           Advising the Company with respect to bidding for potential projects including estimation of project costs for bidding purposes;

(7)           Advising the Company with respect to financial reporting and planning that relates to its production activities or the development of its production studio;

As used herein, “Advising” shall mean communicating advice or guidance for high-level, executive decision-making with respect to matters that visual effects, animation, and game development studios commonly address and shall exclude actual execution or performance of the advice or guidance, or direct supervision of Company’s employees executing on the advice or guidance, unless Consultant agrees to do so.  Consultant may perform the Services via telephone or other forms of oral or written remote communication.  Consultant shall perform the Services only upon Company's request, provided that Consultant may decline a request to provide Services by the Company if Consultant reasonably believes that the performance of the Services would conflict with Consultant’s obligations or relationships in the industry.  The performance of the Services shall require not more than an aggregate of 500 hours per month of time provided by Consultant’s employees.

(b)           The Consultant shall designate members of its management team and designate certain of its employees (but not any of its independent contractors) to execute and provide the aforementioned Services.  The Consultant and its employee designees shall report directly to the Company’s Chief Executive Office, John Textor or in his absence, or as otherwise directed by the Company, to such other persons of the Company as directed by Company.  The Consultant shall use commercially reasonable efforts to perform the Services and discharge its responsibilities pursuant to this Agreement competently, carefully and faithfully.  The Company shall provide in a timely and professional manner, and at no cost to Consultant, assistance, cooperation, complete and accurate information, data, materials and equipment (if unavailable to Consultant and necessary for Consultant to perform the Services), programs, files, documentation, and other resources reasonably requested by Consultant to enable it to perform the Services (collectively, “Assistance”).  The Consultant shall not be liable for any deficiency in performing the Services if such deficiency results from Company’s failure to provide full Assistance as required hereunder.

(c)           Devotion of Time.  Subject to the last sentence of Section 2(a), the Consultant shall devote as much of its time, attention and energies as may be necessary to provide and effectively accomplish the Services.  Consultant shall set its own hours concerning all work and Services performed hereunder.

(d)           Location of Office. The Consultant is an independent contractor of the Company.  The Consultant shall maintain a suitable office at Consultant’s expense located at Consultant’s place of business or other suitable location in which to perform its duties and discharge its responsibilities pursuant to this Agreement.  Subject to its professional availability, Consultant shall meet with the Company’s officers, directors and employees, as may be necessary, either over the telephone or in person at the offices of the Company or at such other location that is mutually agreed between the parties.  The parties shall use commercially reasonable efforts to schedule such meetings and/or telephonic communications in order to minimize travel time and expenses.

 

(e)           Restriction on Use of Names of Company Employees.  Nothing herein shall grant the Company the right to use the names of or biographical information about any of Consultant’s employees for any purpose including marketing, promotion, advertising, or publicity, without the written consent of the Consultant’s employee whose name the Company seeks to use.

 

3.           Compensation and Expenses.

 

(a)           Compensation.  In consideration for the Consultant’s Services, the Company shall pay the Consultant One Hundred Thousand and NO/100 Dollars ($100,000.00) per month (“Monthly Payments”).  Company shall make the first payment hereunder to Consultant upon its receipt of this Agreement signed by Consultant in the amount of $500,000, which is equal to five (5) Monthly Payments for the services that Consultant has provided to the Company between January 1, 2010 and May 31, 2010.  Thereafter, the Company shall pay the Consultant Monthly Payments on the first business day of each month during the Term beginning on June 1, 2010 with the final payment being due on April 1, 2011.

  

  

  

(b)           Expenses.  The Consultant shall be entitled to reimbursement for all reasonable and ordinary expenses incurred by Advisor in the course of, and directly related to, the rendering of the Services.  The Company shall make reimbursement payments to the Consultant for such expenses within thirty (30) days of receipt of invoices supported by reasonable documentation.

(c)           Taxes.  Consultant is an independent contractor, and as such, Company shall not be responsible for withholding any taxes from Consultant’s pay during the Term.  Company will furnish Consultant with a Form 1099 at the end of the tax year for all payments made to Consultant in the form of compensation hereunder during the Term.  It is Consultant’s duty to report and pay all taxes that arise from the receipt of all compensation received hereunder.

(d)           Satisfaction of Judgment Held by The Company.  The Company presently owns all right, title and interest in the judgment that was rendered by the Los Angeles Superior Court on September 9, 2009 in case number SC 091347 (the “Judgment”).  The parties agree that the Company will pay the Consultant the Monthly Payments by deeming the full amount of each Monthly Payment that becomes due as a partial satisfaction of the Judgment until such time, if ever, the total amount of the Judgment that is deemed satisfied from the Monthly Payments equals $1,600,000.  Company agrees to execute documents that are reasonably required to confirm partial satisfaction of the Judgment at the amount that the Judgment is then deemed partially satisfied until the aggregate amount of the Monthly Payments that partially satisfy the Judgment equals $1,600,000, at which time Company agrees to execute documents that are reasonably necessary to confirm full satisfaction of the Judgment.  After the Judgment is fully-satisfied, any further Monthly Payments that Company may be required to pay Consultant shall be paid by wire transfer of cash to Consultant’s designated bank account.

4.           Work-For-Hire.  Nothing contained herein shall be construed as granting or conferring any rights by license or otherwise by Company to Consultant in any work by Consultant, confidential information or trade secrets belonging to the Company or for any invention, discovery or improvement made, conceived by Consultant hereunder or acquired by Company occurring prior to, during or after the Term of this Agreement.  No licenses or rights under any patent, copyright, trademark, or trade secret or application for same are granted by the Company to the Consultant hereunder or are to be implied or deemed created in the Consultant by virtue of the dissemination of any confidential information or trade secret by the Company to the Consultant or by virtue of the creation or receipt of any confidential information or trade secret by Consultant hereunder.  It is the express intent of the parties that Consultant’s work for the Company is a work-for-hire arrangement.

 

5.           Termination.  Either the Company or the Consultant, in their sole discretion, may terminate this Agreement without cause at any time upon 30 days written notice. Upon effectiveness of such termination, the Consultant shall have no right to compensation or reimbursement under Section 4 for any period subsequent to the effective date of termination.  The parties’ obligations under Section 6-8 shall survive termination for a period one (1) additional year.

 

6.           Non-Solicitation Agreements of Consultant.

 

(a)           Solicitation of Company Customers.  During the periods in which the provisions of Section 6(a) shall be in effect, the Consultant, directly or indirectly shall not seek business from any Company Customer (as defined below) on behalf of any enterprise or business other than the Company.  For purposes of this Agreement, the term “Company Customer” means any person, firm, corporation, partnership, association or other entity to which the Company sold or provided goods or services during the 24-month period prior to the time at which any determination is required to be made as to whether any such person, firm, corporation, partnership, association or other entity is a Company Customer, or who or which has been approached by or who or which has approached an employee of the Company for the purpose of soliciting business from the Company or the third party, as the case may be.  Any person, firm, corporation, partnership, association or other entity who is either a Consultant Customer (as defined below) at the time of such determination or whom the Company referred to the Consultant shall not be deemed Company Customers.

 

  

  

  

(b)           Solicitation of Employees.  During the periods in which the provisions of Section 6(a) shall be in effect, the Consultant, directly or indirectly including through any Affiliated Entity shall not solicit, hire or contact any employee of the Company for the purpose of hiring them or causing them to terminate their employment relationship with the Company without the written consent of the Company.

 

7.           Non-Solicitation Agreements of Company.

 

(a)           Solicitation of Consultant Customers.  During the periods in which the provisions of Section 7(a) shall be in effect, the Company, directly or indirectly shall not seek business from any Consultant Customer (as defined below) on behalf of any enterprise or business other than the Consultant using a trade name that includes any of the Digital Domain Marks (as defined in the Trademark License Agreement, dated as of March 23, 2010, between the parties).  For purposes of this Agreement, the term “Consultant Customer” shall include the list of customers of Consultant during the last 24 months that is attached hereto as Exhibit A.  Notwithstanding anything to the contrary in the foregoing, the Company shall be able to solicit any business from any company, including without limitation those included on Exhibit A, for any business so long as the Company does not conduct such solicitation or business using a trade name that includes or infringes any of the Digital Domain Marks.  For the avoidance of any confusion, Consultant acknowledges that the Company will be pursuing full length animated feature film work from and with film studios under a trade name that does not include or infringe any of the Digital Domain Marks and nothing in this Agreement prohibits the Company from engaging in such business so long as such business is conducted under a trade name that does not include or infringe any of the Digital Domain Marks.

 

 (b)           Solicitation of Employees.  During the periods in which the provisions of Section 7(a) shall be in effect, the Company, directly or indirectly including through any Affiliated Entity shall not solicit, hire or contact any employee of the Consultant for the purpose of hiring them or causing them to terminate their employment relationship with the Consultant without the written consent of Consultant.

 

8.           Non-Disclosure of Confidential Information.

 

(a)           Confidential Information. The parties may from time to time, and at their respective sole discretions, disclose to the other certain Confidential Information (as defined below) for the sole purpose of the other’s use in connection with this Agreement and the parties may from time to time through Consultant’s work as consultant for the Company create or receive Confidential Information concerning any aspect of the other’s business, whether within or outside the course and scope of Consultant’s duties as a consultant, which Confidential Information, regardless of whether generated by Company, Consultant or a third-party, constitute valuable and protectable assets. The parties each agree that it shall hold all Confidential Information in strict confidence and such Confidential Information shall not be used by such party, either directly or indirectly, nor disseminated, published, or transferred by such party to any person or entity. The parties each also agree that it will undertake all necessary and appropriate steps to ensure that the secrecy of the other party’s Confidential Information received, generated or obtained in connection with this Agreement will be maintained at all times.  “Confidential Information” includes, but is not limited to, trade secrets as defined by the common law and statute in Florida or California or any future Florida or California statute, patent applications,  processes, policies, procedures, techniques including recruiting techniques, designs, drawings, know-how, show-how, technical information, business models or plans, branding strategies, projections, manufacturers, vendors, specifications, computer software and source code, market research, vendor research, product prototypes, product research and development information, information and data relating to the development, research, testing, costs, pricing, marketing and sale of the parties’ respective products or services, the parties’ respective budgets and strategic plans, and the identity and special needs of the Company Customers, Consultant Customers, databases, data, all technology relating to the parties’ respective businesses, systems, methods of operation, client or customer lists, customer information, solicitation leads, marketing and advertising materials, methods and manuals and forms, all of which pertain to the activities or operations of the parties, names, home addresses and all telephone numbers and e-mail addresses of the Company's and Consultant’s respective employees, former employees, clients and former clients, vendors and former vendors.  In addition, Confidential Information also includes the identity of the Company Customers, the Consultant Customers, and the identity of and telephone numbers, e-mail addresses and other addresses of employees or agents of the Company Customers and Consultant Customers who are the persons with whom the Company’s or the Consultant’s employees and agents, as the case may be, communicate in the ordinary course of business.

 

  

  

  

 

For purposes of this Agreement, the following will not constitute Confidential Information (i) information which is or subsequently becomes generally available to the public through no act of the Consultant or Company, as the case may be, and (ii) information which is lawfully obtained by a party after the Term of this Agreement in writing from a third party (excluding any Affiliates of the Company or Consultant, as applicable) who did not acquire such confidential information or trade secret, directly or indirectly, from the Consultant or the Company, as the case may be.

 

(b)           Confidentiality.  During the term of and after the termination of this Agreement, the Confidential Information shall be held by each of the parties in the strictest confidence and shall not, without the prior written consent of the other party, be disclosed to any person.  The parties further acknowledge that such Confidential Information as is acquired and used by the other is a special, valuable and unique asset.  The parties shall exercise all due diligence precautions to protect the integrity of the Confidential Information and to keep it confidential whether it is in written form, on electronic media or oral.  The parties shall not copy any Confidential Information except to the extent necessary for its work in connection with this Agreement nor remove any Confidential Information or copies thereof from the other party’s premises or utilize any Confidential Information or copies thereof except to the extent necessary to accomplish the Services under this Agreement.  All records, files, materials and other Confidential Information obtained, maintained or created by the Consultant in the course of its work for the Company are confidential and proprietary.  The parties shall not, except in connection with and as required by Consultant’s performance of its duties under this Agreement, for any reason use for its own benefit or the benefit of any person or entity with which it may be associated or disclose any such Confidential Information to any person, firm, corporation, association or other entity for any reason or purpose whatsoever without the prior written consent of an officer of the other party.

 

9.           Qualifications of Restrictive Covenants.

 

(a)           Sufficiency of Consideration.  The restrictive covenants contained in paragraphs 6, 7 and 8 of this Agreement (“Restrictive Covenants”) are given and made by the parties to induce each other to enter into this Agreement and perform their obligations hereunder. The parties hereby acknowledges the sufficiency of the consideration received for the Restrictive Covenants.

 

(b)           Independent Covenants.  Each of the Restrictive Covenants  of paragraph 6, 7 and 8 shall be construed as independent covenants independent of all other terms of this Agreement and any other agreements between the parties, and not as dependent covenants, and the existence of any claim or cause of action of or by one party against the other party, whether predicated upon an alleged breach of this Agreement or any other agreement, shall not constitute a defense to the enforcement by either party of any of the Restrictive Covenants in paragraphs 6, 7 and/or 8 against any party.

 

(c)           Judicial Blue-pencil.  If any portion of the Restrictive Covenants in paragraphs 6, 7 or 8 are held by a court of competent jurisdiction to be unreasonable, arbitrary, or against public policy for any reason, each party shall be bound to the greatest extent possible to a narrower line of business, a lesser period, a smaller geographic area, etcetera, which ever the case may be, that is determined by the Court to be reasonable, non-arbitrary, and not against public policy for any reason.

 

  

  

  

10.          Equitable Relief.

 

(a)           In the event of a breach by either party of any of the Restrictive Covenants contained in paragraphs 6, 7 and/or 8 of this Agreement, such a breach would irreparably injure the non-breaching party and would leave the non-breaching party without an adequate remedy at law.  If legal proceedings should have to be brought by the one party against the other party to enforce any of these Restrictive Covenants, then the non-breaching party shall be entitled to all available civil remedies, including without limitation: (i) preliminary and permanent injunctive relief, without the necessity of posting a bond, restraining the breaching party from violating, directly or indirectly, either on its account or as a partner, joint venturer, employee, agent, salesperson, contractor, officer, director, shareholder or otherwise, the restrictions of the Restrictive Covenant(s); (ii) compensatory damages;  (iii) attorneys’ fees in the trial and appellate courts; and (iv) costs and expenses of investigation, and litigation, including expert witness fees, deposition costs (appearance fees and transcript charges), injunction bond premiums (if required contrary to this Agreement), travel and lodging expenses, and all other reasonable costs and expenses.

 

(b)           Nothing in this Agreement shall be construed as prohibiting any party from pursuing any other legal or equitable remedies available to it for breach or threatened breach of this Agreement or the Restrictive Covenants.

 

(c)           Should legal proceedings have to be brought by any party against any other party to enforce the Restrictive Covenant(s), the period of restriction shall be deemed to begin to run on the date of entry of an order granting the Company preliminary injunctive relief, or if not sought, permanent injunctive relief, and shall continue uninterrupted, from the date thereof for the period of restriction.

 

11.           Inventions, Ideas, Processes, Designs and Work Product.  All inventions, ideas, processes, programs, software, data and designs (including all improvements) and all work product (i) conceived or made by the Consultant directly and exclusively resulting from the performance of the Services under this Agreement, and (ii) related to the business of the Company, shall be the sole and exclusive property of the Company.  An invention, idea, process, program, software, data or design (including an improvement) and work product shall be deemed related to the business of the Company if (a) it was made with the Company’s equipment, supplies, facilities, or Confidential Information or (b) results directly and exclusively from the Services under this Agreement.  The Consultant shall cooperate with the Company and its attorneys in the preparation of patent and copyright applications for such developments and, upon request, shall promptly irrevocably assign all such inventions, ideas, processes, programs, data and designs to the Company.  The decision to file for patent or copyright protection or to maintain such development as a trade secret shall be in the sole discretion of the Company, and the Consultant shall be bound by such decision.

 

12.           Assignability.  The rights and obligations of the Company under this Agreement shall inure to the benefit of and be binding upon the successors and assigns of the Company.  The rights and obligations of each of the parties hereunder may not be assigned.

 

13.           Severability.   Subject to paragraph 9(c), if any provision of this Agreement otherwise is deemed to be invalid or unenforceable or is prohibited by the laws of the state or jurisdiction where it is to be performed, this Agreement shall be considered divisible as to such provision and such provision shall be inoperative in such state or jurisdiction and shall not be part of the consideration moving from either of the parties to the other.  The remaining provisions of this Agreement shall be valid and binding and of like effect as though such provision were not included.

 

14.           Notices and Addresses.  All notices, offers, acceptance and any other acts under this Agreement (except payment) shall be in writing, and shall be sufficiently given if delivered to the addressees in person, by Federal Express or similar receipted delivery, by facsimile delivery or, if mailed, postage prepaid, by certified mail, return receipt requested, as follows:

 

To the Company:  Digital Domain Holdings Corporation, 10521 SW Village Center Drive, Suite 201, Port St. Lucie, Florida 34987; Attention:  Jonathan Teaford, CFO; Facsimile: (772) 345 - 8113.

 

With copy to:        Eavenson & Kairalla, P.L., 2000 PGA Boulevard, Suite 3200, Palm Beach Gardens, FL 33408; Attention:   Bradley B. Eavenson, Esquire; Facsimile: (561) 626-1042.

 

To the Consultant:  Digital Domain, 300 Rose Avenue, Venice, CA 90291; Attention:  Cliff A. Plumer, CEO; Facsimile: (310) 314 - 2943.

 

  

  

  

or to such other address as either of them, by notice to the other may designate from time to time.  The transmission confirmation receipt from the sender's facsimile machine shall be evidence of successful facsimile delivery.  Time shall be counted to, or from, as the case may be, the delivery in person, facsimile with confirmation sheet reflecting successful delivery, or by mailing.

 

15.           Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.  The execution of this Agreement may be by actual or facsimile signature.

 

16.           Attorney's Fees.  In the event that there is any controversy or claim arising out of or relating to this Agreement, or to the interpretation, breach or enforcement thereof, and any action or proceeding is commenced to enforce the provisions of this Agreement, the prevailing party shall be entitled to a reasonable attorney's fee, costs and expenses.

 

17.           Governing Law.  This Agreement and any dispute, disagreement, or issue of construction or interpretation arising hereunder whether relating to its execution, its validity, the obligations provided therein or performance shall be governed or interpreted according to the internal laws of the State of Florida without regard to choice of law considerations.  Venue for the resolution of any disputes arising hereunder shall be in the Circuit Court of St. Lucie County, Florida.  Consultant hereby submits to personal jurisdiction in the Courts of St. Lucie County, Florida.

 

18.           Entire Agreement.  This Agreement constitutes the entire agreement between the parties and supersedes all prior oral and written agreements between the parties hereto with respect to the subject matter hereof, except all prior written restrictive covenants between the parties concerning confidentiality, non-solicitation, non-circumvention entered into between the parties prior to entering into this Agreement and during the period in which Consultant evaluated its potential business opportunities with Company, shall remain in full force and concurrent effect so at to afford Company the maximum protection against any prohibited conduct by Consultant occurring  both before entering into this Agreement and afterwards.  Neither this Agreement nor any provision hereof may be changed or waived except by a statement in writing signed by the party or parties against which change or waiver is sought, no such change or waiver shall result from a mere course of performance without the requisite signed writing.

 

IN WITNESS WHEREOF, the Company and the Consultant have executed this Consulting Agreement as of the date and year first above written.

 

	  	  	
DIGITAL DOMAIN HOLDINGS

	  	  	
CORPORATION

	  	  	  
	 	 	 
	  	  	
/s/ John Textor

	 	 	 
	  	  	
By:  John Textor

	  	  	
As its:  Chief Executive Officer

	  	  	  
	  	  	
DIGITAL DOMAIN

	 	 	 
	  	  	  
	 	 	 
	  	  	
/s/ Cliff A. Plumer

	  	  	  
	  	  	
By:  Cliff A. Plumer

	  	  	
As its:  Chief Executive Officer

  

  

  

Exhibit A

 

Consultant Customers

 

Warner Bros. Entertainment

 

Sony Pictures Entertainment, Inc.

 

NBC Universal

 

Paramount Motion Pictures Group

 

Walt Disney Company Motion Pictures Group

 

Fox Filmed Entertainment

 

Dreamworks StudiosEXHIBIT 10.31

 

TRADEMARK LICENSE AGREEMENT

 

THIS TRADEMARK LICENSE AGREEMENT (the "Agreement"), dated and effective as of the 1st day of June, 2010, is entered into by and between Digital Domain Productions, Inc., a Delaware corporation with offices at 300 Rose Avenue, Venice, California 90291 (“Licensor”), and Digital Domain Holdings Corporation (f/k/a Wyndcrest DD Florida, Inc.), a Florida corporation with offices at 10521 SW Village Center Drive, Suite 201, Port St. Lucie, Florida 34987 (“Licensee”).  Licensor and Licensee are sometimes individually referred to herein as a “party” and collectively referred to herein as the “parties.”

RECITALS

WHEREAS, Licensor is the owner of the trademark and tradename “Digital Domain” and the registrations therefor in the forms set forth on Schedule A attached hereto (sometimes collectively referred to herein as the “Digital Domain Marks"); and

WHEREAS, Licensor has established substantial secondary meaning in the Digital Domain Marks due to its long and widespread use and promotion of the Digital Domain Marks and the goods and services for which they are used, as a result of which the Digital Domain Marks have become well-known and recognized by the general public and associated in the public mind with Licensor; and

WHEREAS, Licensee desires to license from Licensor the non-transferable and nonexclusive use of the Digital Domain Marks for the specific purposes set forth herein, and Licensor is willing to grant to Licensee such a license, upon the terms and conditions set forth in this Agreement; and

WHEREAS, Licensee is a common stockholder of Digital Domain (“Parent Company”), the corporate parent of Licensor and, through its direct ownership of common stock and its ownership of Series C Preferred Stock in Parent Company, controls the majority of common stock interests in Parent Company.

NOW, THEREFORE, in consideration for the promises and covenants contained herein, and for other good and valuable consideration, and intending to be legally bound hereby, the parties agree as follows:

TERMS

1.  Grant of License.  Licensor hereby grants to Licensee a non-transferable, non-exclusive license to use the Digital Domain Marks (which may be amended from time to time in Licensor’s sole discretion), in connection with:

 

 

(a)  Uses reasonably related to the operation of any business described in Sections 1(b) – (d) below for which Licensee uses the corporate name and tradename "Digital Domain Holdings Corporation";

(b)  Licensee’s production of animated feature films, live action feature films (except for those services described in Section 1(d) below), video games and simulation for the military and medical industries;

  

  

  

(c)  Licensee’s operations of any university, school or educational facility relating to the production of films, the production of visual effects and animation for all media and for the production and design of video games; and

(d)  The production of visual effects for feature films, but only if and when Licensor participates in such production as a paid consultant or outsourcing partner.

The license granted hereunder does not include a right for Licensee to use marketing and advertising materials developed by Licensor without the prior written consent of Licensor.  This Agreement acknowledges Licensor’s prior use of the Digital Domain Marks for its activities in Florida and hereby grants a retroactive right to Licensee for all of the rights contained in this Agreement beginning on October 13, 2009, the date of Licensor’s press release announcing its expansion into Florida.

 

2.   Territory.  The license granted pursuant to this Agreement is the United States of America and its territories.  Any use of the Digital Domain Marks outside the territory identified in this Section shall be with Licensor’s prior written consent only, which consent shall not be unreasonably withheld.

3.  License Fee.  Licensee will pay Licensor an annual license fee equal to six percent (6%) of Licensee's annual cash receipts for all business conducted under a trade name that includes the Digital Domain Marks (“License Fee”) which amount shall not be less than an annual minimum of $3 million (“Minimum Fee”).  The Minimum Fee will be subject to a valuation by an independent third party appraiser who is experienced in the area of trademark licensing and mutually acceptable to the parties (the “Appraiser”).  The parties hereby agree to amend this Agreement to adopt the opinion of the Appraiser on the amount of the Minimum Fee.  The Appraiser will be engaged by both parties who will each pay half of the Appraiser’s compensation.  Until such time as this Agreement is amended as set forth above, the Minimum Fee shall be paid (i) with respect to 2010, as soon as practicable after December 31, 2010 but no later than March 31, 2011 and (ii) with respect to 2011 and 2012, by January 31, 2012 and January 31, 2013, respectively.  The balance of the License Fee that is in excess of the Minimum Fee, if any, for each year during the Term shall be payable to Licensor the earlier of thirty (30) days after the completion of Licensee’s financial audit for that year or May 30 of the following calendar year.  The Licensee shall keep full and accurate records of all cash receipts which it shall allow Licensor or its authorized representative to audit on reasonable notice delivered to Licensee within ninety (90) days of Licensor’s receipt of a payment of any License Fee that is in excess of the Minimum Fee for the corresponding year.  Such audit shall take place during regular business hours at the location where Licensee’s cash receipt records are maintained.

4.  Use of the Marks.  Licensee's use of the Digital Domain Marks as described in Section 1 will comply with all style sheets, corporate identity manuals, and other guidelines for the use of the Digital Domain Marks provided by Licensor to Licensee from time to time, and Licensee shall cause the County and other third parties to comply with all style sheets, corporate identity manuals, and other guidelines for the use of the Digital Domain Marks provided by Licensor to Licensee from time to time.  In connection with the use as granted herein, Licensee will submit to Licensor for Licensor's approval in its reasonable sole discretion, prior to use, representative samples of all logos, merchandise, advertisements, brochures, displays, and other advertising or promotional materials bearing any Digital Domain Marks, and all logos, merchandise, advertisements, brochures, displays, and other advertising and promotional materials created and used thereafter will not materially vary in quality, content, or design from those originally approved by Licensor.  Nothing herein shall grant Licensee the right to use the names of or biographical information about any of Licensor’s employees for any purpose including marketing, promotion, advertising, or publicity, without the written consent of Licensor’s employee whose name the Company seeks to use.

  

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5.  Quality Control.

(a)           Licensee shall use the Digital Domain Marks only with respect to the goods and/or services manufactured and sold or otherwise provided by Licensee that are identified in Paragraphs 1(a)-(d), which goods and/or services shall each be of a quality reasonably satisfactory to Licensor.  The quality of all services performed by Licensee with respect to which the Digital Domain Marks are used shall be consistent with the quality of the services performed by Licensor.  Licensor shall have the right to review materials used in connection with Licensee's operation of its educational facilities and, upon reasonable notice, to visit such facilities to observe their operations; and Licensor shall have the right to review any content produced by Licensee to insure that it meets the requisite quality standards.  Licensor shall have the right to require from time to time that the Licensee submit samples of these goods or services or exemplars of the use of the Digital Domain Marks to Licensor for inspection.

(b)           In order for Licensor to avoid conflicts with respect to the use of the Digital Domain Marks, Licensee will obtain Licensor’s consent to Licensee’s use of the Digital Domain Marks in connection with any new business activity of Licensee (e.g., a new film project, an acquisition of an operating entity, starting a new division) as provided in this Section.  At least seven (7) days prior to Licensee’s initial public use of the Digital Domain Marks in connection with such new business activity, Licensee shall send written notice to Licensor describing the new business activity and requesting Licensor’s consent to use the Digital Domain Marks in connection therewith (“New Use Request”).  Licensor shall be deemed to have granted consent to the New Use Request only if such approval is communicated to Licensee in writing.

(c)           Licensee shall deliver final versions of any press releases that it intends to distribute to any media outlet or to otherwise make available to the public at least 48 hours prior to release so that Licensor has a sufficient opportunity to give Licensee meaningful comments to them.  Licensee agrees to make reasonable and good faith efforts to address any comments or concerns that Licensor communicates by, among other things, making appropriate changes to the press releases.

           6.  Ownership and Maintenance of the Marks; Infringement Claims.

(a)  Licensee recognizes and acknowledges the great value of the goodwill associated with the Digital Domain Marks, and acknowledges that the Digital Domain Marks and all rights therein and goodwill pertaining thereto belong exclusively to Licensor, and that the Digital Domain Marks have a secondary meaning in the mind of the public.  Licensor therefore retains the right to use or to license the use of the Digital Domain Marks for any and all goods or services.  Licensee acknowledges that the ownership of all right, title and interest in and to the Digital Domain Marks is vested solely in Licensor.  Licensee agrees that it will not, during the term of this Agreement, or thereafter, attack or otherwise challenge, directly or indirectly, the title or any rights of Licensor in and to the Digital Domain Mark, the validity of Licensor's ownership or registration of any Digital Domain Marks, or the validity of this license.  Licensee shall take no action that would prejudice or interfere with the validity of or Licensor's ownership of any Digital Domain Marks, and Licensee shall not enter into any agreement with any third party which in any way alters, diminishes or restricts the rights of Licensor in any Digital Domain Marks or places any restrictions or conditions upon the use or appearance of any Digital Domain Marks.

  

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(b)  Licensor shall have the sole responsibility in its sole discretion for maintaining and defending the validity of the Digital Domain Marks and Licensor's ownership of the Digital Domain Marks as Licensor deems advisable, for seeking and maintaining in Licensor's name such registrations of the Digital Domain Marks as Licensor deems advisable, and for taking such steps as Licensor deems advisable to protect the Digital Domain Marks against infringement.  Licensee shall cooperate with Licensor in the taking of any such actions.  Licensee shall promptly notify Licensor of (i) any unauthorized use or infringement by any third party of any Digital Domain Marks and (ii) any assertion by any third party that Licensee's use of any Digital Domain Marks constitutes trademark, service mark, trade dress or tradename infringement, unfair competition or any other tortious act (collectively, "Claims").  If Licensor chooses to initiate or defend any legal action with regard to any Claims, Licensee shall reasonably cooperate with Licensor in the prosecution or defense of such action.  Licensor will bear the expenses of any such action (including legal fees) and will be entitled to retain all amounts recovered.  Licensee shall not prosecute any application for registration, or prosecute or defend any action involving any Digital Domain Marks without the prior written consent of Licensor.  If Licensor notifies Licensee that the use of any Digital Domain Marks is adjudicated infringing on a third party’s trademark or service mark, then Licensee will immediately cease the use of such Digital Domain Marks or modify such Digital Domain Marks consistent with Licensor's instructions at Licensee's expense.

7.  Term and Termination.

(a)  This Agreement shall remain in full force and effect, unless and until terminated pursuant to Sections 5(b), 5(c), 5(d), 5(e) or 5(f) below.

(b)  The Board of Directors of Parent Company may terminate this Agreement: (i) in the event of a material breach of any of the terms of this Agreement by Licensee, or (ii) in the event the Board of Directors of Parent Company determines, in its reasonable discretion, that Licensee has used the Digital Domain Marks in an immoral, or offensive manner, has used the Digital Domain Marks in a manner that has tarnished the Digital Domain Marks in any material fashion or engages in business competition, directly or indirectly, with Licensor or its subsidiaries or affiliated entities other than as permitted by the Consulting Agreement between the parties dated June [___], 2010 or as permitted by this Agreement (each of (i), (ii) and (iii) is an “Event of Termination”).  In any such Event of Termination, Licensor shall deliver written notice of such Event of Termination to Licensee and allow Licensee ninety (90) days after the delivery of such notice in which to cure any Event of Termination.  If the Event of Termination is not cured to the reasonable satisfaction of Licensor within such forty-five (45) day period after delivery of written notice, then this Agreement shall terminate forty-five (45) days after the date of delivery of such notice.

(c)  Licensor may terminate this Agreement at any point after the third anniversary of the date of this Agreement by providing written notice to Licensee.

(d)  Licensee may terminate this Agreement, by and upon providing written notice thereof to the other party, if Licensee’s voting rights through equity ownership in Parent Company at any time falls below 51% of the total equity voting rights of Parent Company or in the event of a sale of 100% of the equity interests or assets of Parent Company.

(d)  If Licensee makes any assignment of its assets or business for the benefit of creditors, or a trustee or receiver is appointed to conduct its business or affairs, or if Licensee is adjudged in any legal proceeding to be in either a voluntary or involuntary bankruptcy, then all rights granted herein shall forthwith automatically cease and terminate without prior notice or legal action by Licensor.

8.  Effect of Termination.  Upon the termination of this Agreement:

(a)  The license of the Digital Domain Marks to Licensee, all of Licensee's rights under this Agreement, and the rights under any sublicenses of the Digital Domain Marks granted by Licensee, shall immediately cease;

  

4

  

(b)  Licensee shall immediately discontinue, and forever thereafter cease, any and all uses of the Digital Domain Marks or of any materials bearing the Digital Domain Marks, including the removal or obliteration of the Digital Domain Marks from any products or services of Licensee that have not, at the time of termination, been released to the public;

(c)  Licensee shall change its corporate name and tradename within ninety (90) days of termination so that it does not include any of the Digital Domain Marks;

(d)   All of the other rights, duties and obligations of the parties hereunder shall terminate except with respect to Licensees obligation to pay Licensor the License Fee to the extent the License Fee has accrued but remains unpaid.

9.  Assignment; Sublicensing.  Except as expressly set forth herein, Licensee may not, without prior written consent of Licensor, assign, sublicense or transfer to any third party any or all of its rights or duties under this Agreement.

10.  Indemnification.  Licensee will indemnify Licensor against any liability, and hold Licensor harmless from any loss, damage, cost and expense (including without limitation reasonable legal fees) which Licensor incurs (i) arising out of any failure by Licensee to perform its obligations under this Agreement, and/or (ii) arising out of Licensee’s use of the Digital Domain Marks.

11.  Relationship Of The Parties.  This Agreement creates no agency relationship between the parties hereto, and nothing herein contained shall be construed to place the parties in the relationship of partners or joint venturers, and Licensee shall have no power to obligate or bind Licensor in any manner whatsoever.  However, Licensee shall be considered a related company for the purposes of establishing trademark rights in the Digital Domain Marks based on Licensee’s use thereof, and Licensee’s use of the Digital Domain Marks shall inure to the benefit of Licensor.

12.  Miscellaneous.

(a) Any notice or consent required to be given under this Agreement shall be in writing and shall be deemed given if personally delivered, sent by facsimile transmission with confirmation of receipt, sent by overnight courier, or sent by first class mail to the parties at the following addresses:

	
If to Licensor:

	  
	
Digital Domain Productions, Inc.

	
300 Rose Avenue

	
Venice, CA 90291

	
Attention: Joseph M. Gabriel, Vice-President and General Counsel

	
Fax:  (310) 314-2943

	  
	
With a copy to:

	  
	
Rosenfeld, Meyer & Susman, LLP

	
9601 Wilshire Boulevard, Suite 710

	
Beverly Hills, CA 90210

	
Attention: Todd W. Bonder, Esq.

	
Fax:  (310) 860-2430

  

5

  

	
If to Licensee:

	  
	
Digital Domain Holdings Corporation

	
10521 SW Village Center Drive, Suite 201

	
Port St. Lucie, Florida 34987

	
Attention: Jonathan Teaford, CFO

	
Fax:  (772) 345-8113

	  
	
With a copy to:

	  
	
Eavenson & Kairalla, P.L.

	
2000 PGA Boulevard, Suite 3200

	
Palm Beach Gardens, FL 33408

	
Attention:  Bradley B.  Eavenson, Esq.

	
Fax:  (561) 626-1042

or to such other addresses or recipients as each party may designate in writing from time to time.

(b)  This Agreement is governed by and shall be construed in accordance with the law of the state of California, excluding any conflict-of-laws rule or principle that might refer the governance or the construction of this Agreement to the law of another jurisdiction.  This Agreement may be amended or modified only by a writing executed by all parties, and shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns.  None of the terms of this Agreement can be waived or modified except by an express agreement in writing signed by both parties.  The failure of either party hereto to enforce, or the delay by either party in enforcing, any of its rights under this Agreement shall not be deemed a continuing waiver or a modification thereof and either party may, within the time provided by applicable law, commence appropriate legal proceedings to enforce any or all of such rights.  No person, firm, group or corporation other than Licensee and Licensor shall be deemed to have acquired any rights by reason of anything contained in this Agreement.

(c)  This Agreement sets forth all of the promises and undertakings between the parties relating to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings, express or implied, oral or written with respect to the subject matter hereof.

[SIGNATURES APPEAR ON THE FOLLOWING PAGE]

  

6

  

IN WITNESS WHEREOF, the parties hereto have executed this Trademark License Agreement on the date and year first above written.

	
Digital Domain Productions, Inc.

	  
	
By:

	
/s/ Cliff Plumer

	
Name: Cliff Plumer

	
Title: CEO

	  
	
Digital Domain Holdings Corporation

	  
	
By:

	
/s/ John Textor

	
Name: John Textor

	
Title: Chairman and CEO

  

7

  

 

SCHEDULE A

REGISTRATIONS

	
Serial 

Number

	 	
Reg.  Number

	 	
Word Mark

	  	 	  	 	  
	
76204881

	 	
2536273

	 	
DIGITAL DOMAIN

	 	 	 	 	 
	
76206510

	 	
2617189

	 	
DIGITAL DOMAIN

	 	 	 	 	 
	
76206509

	 	
2658134

	 	
DIGITAL DOMAIN

	 	 	 	 	 
	
76204882

	 	
2534100

	 	
DIGITAL DOMAIN

	 	 	 	 	 
	
76202547

	 	
2534088

	 	
DIGITAL DOMAIN

	 	 	 	 	 
	
76202546

	 	
2536263

	 	
DIGITAL DOMAIN

	 	 	 	 	 
	
76202548

	 	
2651292

	 	
DIGITAL DOMAIN

	 	 	 	 	 
	
76202545

	 	
2948483

	 	
DIGITAL DOMAIN

	 	 	 	 	 
	
75193853

	 	
2260207

	 	
DIGITAL DOMAIN

	 	 	 	 	 
	
74366293

	 	
2015945

	 	
DIGITAL DOMAIN

	 	 	 	 	 
	
74365845

	 	
2018031

	 	
DIGITAL DOMAIN

 

  

8

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