AC/5440075.4
LICENSE TERMINATION AGREEMENT
THIS LICENSE TERMINATION AGREEMENT
(the “Agreement”) is executed as of the 31
st
day
of March, 2017, by and among Eight Technologies Inc.
(“Licensor”), Prime Focus Limited ("Licensee's
Parent") and Gener8 Digital Media Services Ltd.
(“Licensee”) (the Licensee,
Licensor and Licensee's
Parent each a "Party").
WHEREAS
, Licensor and Licensee exec
uted that certain License Agreement, dated as of March
23, 2015 (the “License Agreement”), whereby Lice
nsor granted Licensee the right to use the 3D
Technology (as defined in the License Agreement) (the "License");
WHEREAS
, the payments and obligations described in the License Agreement include, among
other things, an annual royalty payable in accordan
ce with the terms and conditions set forth in
Section 3.1 of the License Agreement (the “Annual Ro
yalty”) and a revenue royalty in connection with
revenues generated by the Licensee and the Licens
ee's Parent in connection with 2D-3D conversion
business in accordance with the terms and conditions
set out in Section 3.2 (the “Annual Royalty”) (the
Annual Royalty and the Revenue Royalty colle
ctively the “Royalty Obligations”);
WHEREAS,
the maximum Royalty Obligations under the Annual Royalty and Revenue Royalty
were $8,000,000 in total as of March 22, 2017; and
WHEREAS
, Licensee desires to terminat
e the license in order to be relieved of all liability for
future Royalty Obligations, and Licensor has agreed to terminate the License and release Licensee in
accordance with the terms hereof.
NOW THEREFORE
in consideration of the representati
ons, covenants and mutual promises set
forth in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Parties hereby agree as follows:
1.
License Termination Payment
The Parties hereby agree and confirm that, in full
and final settlement of the Royalty Obligations
amounting to a maximum of $8,000,000 on the Closing Date (as defined herein), Licensee shall pay to
the Licensor the sum of $3,000,000
(the “Royalty Termination Payment”)
by wire transfer, bank draft or
certified cheque or other form of pay
ment accepted by the Licensor in t
heir sole discretion, in accordance
with the following schedule:
(i) $1,000,000 on or before March 31, 2017 (the
"Initial Payment"). The Licensor hereby
acknowledges receipt of $1,000,000 of
the Initial Payment on March 23, 2017;
(ii) $1,000,000 on or before April
4, 2017 (the "Second Payment"); and
(iii) $1,000,000 on or before the Closing Date. The Parties acknowledge and agree that
$1,000,000 of the Royalty Termination Payment
s to be received by the Licensor on the
Closing Date shall be held in escrow by Dentons Canada LLP until the Closing Date.
2.
Termination of the Agreement.
(a)
Notwithstanding anything to the contrary
in the License Agreement (including, without
limitation, any minimum transition or notice
periods specified in the License Agreement),
the Parties agree that subject to the comple
tion of the closing conditions set out in (c)
below, the License Agreement shall terminat
e on May 30, 2017 or such other date as
mutually agreed by the Parties (the "Closing Date").
(b)
Subsequent to the Closing Date, all of
the Parties’ duties and obligations under the
License Agreement and under the Technolog
y Support Agreement (the “2015 Support
Agreement”) shall terminate and the Parties shall have no further rights or obligations
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AC/5440075.4
under the License Agreement or the 2015 Suppo
rt Agreement other than to enforce the
terms and conditions of this Agreement. For the avoidance of doubt, all of the Parties'
obligations to perform under this Agreem
ent expressly survive the Closing Date.
(c)
The effectiveness of this Agreement, and t
he termination of the License as described
herein, is contingent upon the following:
(i) Licensee’s delivery to Licensor, on or
prior to the Closing Date, of the Royalty
Termination Payment;
(ii) Eight Solutions Inc. ("Licensor's Pare
nt") shall have obtained, on or prior to the
Closing Date, shareholder approval of
this Agreement and the transactions
contemplated in this Agreement;
(iii) Licensor's Parent shall have obtai
ned, on or prior to the Closing Date, all
required consents or approvals from the TSX Venture Exchange of this
Agreement and the transactions contemplated in this Agreement;
(iv) Licensor shall have comp
leted, on or before the Closing Date, the sale of the 3D
Technology (as defined in the License
Agreement) to the Licensee or its
assignee, who is an a
ffiliate of Licensee's Parent
for consideratio
n of not less
than $2,000,000 to the Licensor;
(v) the Licensor and Licensee's Parent w
ill have executed and delivered, or caused
to be executed and delivered, to the Li
censor, the following documents and
instruments, in form satisfactory to the Licensor acting reasonably the 3D
technology support agreement substantially in the form attached as Schedule
"A" hereto; and
(vi) the Licensor, Licensee's
Parent and Roderick Armes,
will, concurrent with the
execution of this Agreement, have ex
ecuted and delivered, or caused to be
executed and delivered, to the Licensee, the voting agreement in the form
attached as Schedule "B" hereto.
Unless the foregoing conditions are satisfied on or prior to the Closing Date, this
Agreement shall be deemed null and void and the License Agreement shall remain in
full force and effect.
3.
Representations and Warranties
Each of the Parties represents and warrants as
follows, and acknowle
dges and confirms that
each of the Parties is relying upon such representati
ons and warranties in connection with entering into
this Agreement:
(a) such Party has full capacity and power to enter into this Agreement;
(b) such Party has sufficient knowledge and experience to evaluate and understand the terms
and conditions of this Agreement;
(c) such Party has conducted its own analysis and made its own decision to enter into this
Agreement and has obtained such independent profes
sional advice, including legal advice, in this
regard as it deems appropriate;
(d) such Party has entered into this Agreem
ent voluntarily and without reliance upon any
inducement, agreement, condition, representation or
warranty from any person whatsoever, save
and except as expressly set out herein;
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