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EXHIBIT 10.4
[CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A DOUBLE ASTERISK
(**). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE COMMISSION.]
PCC Manufacturing License
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CERTIFIED COMPUTER
MANUFACTURING AGREEMENT
This Certified Computer Manufacturing Agreement (this "Agreement") is effective
as of December 16, 1994 (the "Effective Date"), by and between APPLE COMPUTER,
INC., a California corporation having its principal place of business at Xxx
Xxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxx 00000, X.X.X. ("Apple") and POWER
COMPUTING CORPORATION, a Delaware corporation having its principal place of
business at 0000 Xxxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxx 00000 ("PCC").
RECITALS
o Apple and PCC have entered into the Mac OS Agreement permitting PCC to
incorporate the Mac OS into Certified Computers. Apple has certain
intellectual property rights that PCC requires in order to legally
manufacture Approved Boards and Certified Computers. PCC also requires
the right to purchase certain Proprietary Components from MASs. The
parties desire Apple to license those rights to PCC under the terms of
this Agreement.
AGREEMENT
1. DEFINITIONS
1.1 Except as expressly modified in this Agreement, the definitions in the
Mac OS Agreement will have the same meaning in this Agreement.
1.2 "Apple Intellectual Property" means any patent applications or patents
(including utility models, but excluding design patents and
registrations) which are essential to comply with the Certification
Requirements, and which Apple now has or hereafter obtains the right
to grant licenses to PCC without being obligated to pay royalties or
other consideration to third parties.
1.3 "Approved Boards" means primary printed circuit boards (i.e.,
"motherboards") manufactured by PCC for Certified Computers for which
the design has been approved in writing by Apple.
1.4 "Certified Computers" means hardware products manufactured by PCC, in
the form they will be used by End Users, which satisfy the
Certification Requirements.
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1.5 "Mac OS Agreement" means the Mac OS License Agreement entered into
between PCC and Apple, effective December 16, 1994.
1.6 "Mac OS Licensee" means a party that has signed a Mac OS License
Agreement with Apple.
1.7 "Proprietary Components" means components in which Apple has some
proprietary rights to be used for incorporation in Certified
Computers
2. LICENSE
2.1 Apple hereby grants to PCC, under Apple's Intellectual Property, a
non-exclusive, non-transferable, royalty-bearing, worldwide license to
design, develop, make, have made (for resale by PCC), use, and import
Certified Computers and Approved Boards and to lease, sell and
otherwise transfer Approved Boards to Mac OS Licensees and to lease,
sell or otherwise transfer Certified Computers to third parties.
2.2 Apple reserves all intellectual property rights, including but not
limited to patent rights, not expressly licensed to PCC under this
Agreement. PCC has no right to sublicense the rights granted under
this Agreement.
3. MASS
3.1 Apple will authorize MASs to sell certain Proprietary Components to
PCC. The terms and conditions of the purchase and sale of the
Proprietary Components shall be determined by agreement between the
MASs and PCC. Apple is not a party to the purchase and sale
transactions for the Proprietary Components between the MASs and PCC
and Apple has no responsibility for such transactions, including but
not limited to, the quality, condition or delivery of the components
or any payment obligation of PCC. Apple may charge MASs reasonable
royalties in connection with the sale of Proprietary Components to
PCC.
3.2 PCC will use the Proprietary Components solely for incorporation into
or servicing of Certified Computers or Approved Boards and not for
other purposes, including resale to others.
4. ROYALTIES
4.1 Royalty Payments and Statements.
(a) PCC will pay to Apple royalty payments for each unit of a
Certified Computer or Approved Board manufactured by or for
PCC in accordance with the royalty rates set forth on Exhibit
A.
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(b) Within thirty (30) days of the end of each quarter, PCC will
pay the royalty payments due for that quarter to Apple
accompanied by a statement certified correct by an officer of
PCC, indicating the number of Approved Boards and Certified
Computers sold by PCC during the quarter and the amount of
royalty due.
(c) PCC shall keep and maintain all appropriate books and records
necessary for verification that the applicable license and
purchase fees and royalties have been paid. During the term
of this Agreement and for three years thereafter, Apple
shall be entitled, not more than once annually and on
thirty (30) days notice, to retain independent certified
public accountants to review PCC's books and records for
the purpose of verifying the accuracy of the statements
provided and amounts paid pursuant to this Section 3. Any
underpayment or overpayment determined as a result of the
review will be reflected in the following quarter's
statement and Royalty Payments. If such review verifies an
underpayment error of greater than 3%, PCC shall pay the
cost of such review. PCC shall pay all amounts when due,
and any amounts not paid when due shall accrue interest at
the annual rate of twelve percent (12%) or the highest rate
allowed by law, if lower, from the date when the payment
should have been paid and ending when paid.
4.2 Taxes. PCC is responsible for payment of any taxes on payments made
under this Agreement except taxes based on Apple's income for which
Apple shall be responsible.
4.3 Form of Payment. All payments will be made in U.S. dollars via
electronic transfer to Apple Computer, Inc., c/o ** , or as
otherwise directed in writing by the AppleSoft Director of Finance.
5. DISCLAIMER OF WARRANTY
APPLE MAKES NO WARRANTIES, EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE,
INCLUDING ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE, WITH RESPECT TO CERTIFIED COMPUTERS OR PROPRIETARY COMPONENTS
DELIVERED TO COMPANY.
6. TERM AND TERMINATION
6.1 Term. This Agreement will continue in effect until five (5) years from
the Effective Date, unless (i) the Agreement is terminated earlier
pursuant to Section 6.2, or (ii) the Mac OS Agreement is terminated by
Apple because of breach by PCC, in which case this Agreement will
terminate at the same time as the Mac OS Agreement.
6.2 Termination for Cause By Either Party. Either party will have the
right to terminate this Agreement immediately upon written notice at
any time if:
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(a) The other party is in material breach of any warranty, term,
condition or covenant of this Agreement other than those
contained in Section 5.1 of the Mac OS Agreement and fails to
cure that breach within thirty (30) days after receiving
written notice of that breach and of the first party's
intention to terminate;
(b) The other party is in material breach of any warranty, term,
condition or covenant of Section 5.1 of the Mac OS Agreement;
or
(c) The other party: (i) becomes insolvent; (ii) admits in writing
its insolvency or inability to pay its debts or perform its
obligations as they mature; or (iii) makes an assignment for
the benefit of creditors.
6.3 Effect of Termination. Upon any termination of this Agreement, the
license granted under Section 2 will automatically terminate and each
party will be released from all obligations and liabilities to the
other occurring or arising after the date of such termination, except
that the provisions of Sections 1, 2.2, 3.2, 4, 5, 6.3, and 7 and any
liability arising from any breach of this Agreement will survive
termination of this Agreement. Termination of this Agreement will not
affect the rights of PCC's End User customers to continue to use
Certified Computers. For termination other than for PCC's breach of
this Agreement, PCC may sell reasonable quantities of Certified
Computers, which are in inventory at the time of termination, for up
to six (6) months after termination. Any obligation to pay incurred
prior to termination will survive termination. Neither party will be
liable to the other for damages of any sort solely as a result of
terminating this Agreement in accordance with its terms. Termination
of this Agreement will be without prejudice to any other right or
remedy of either party.
7. INCORPORATION OF MAC OS AGREEMENT PROVISIONS
The following provisions of the Mac OS Agreement are hereby incorporated into
this Agreement: Sections 1, 5, 11, and 12.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives.
APPLE: PCC:
BY: /s/ BY: /s/
------------------------------ ----------------------------------
PRINT NAME: Xxx Xxxxxxxxxx PRINT NAME: Xxxxxxx X. Xxxxx
----------------------- ----------------------------
TITLE: Vice President, Licensing TITLE: President & CEO
--------------------------- --------------------------------
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ROYALTIES AND CONTRIBUTIONS
BOARD DESIGN ROYALTY*
** ** $ **
* PCC will pay Apple a royalty in this amount for each unit of a Certified
Computer or Approved Board manufactured by or for PCC.
** Catalyst and Tsunami are the current Apple code names for Power Macintosh
computers that have not yet been released.
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ADDENDUM TO
MANUFACTURING AGREEMENT
The following is an addendum to the December 16, 1994 Certified Manufacturing
Agreement by and between Apple Computer, Inc., a California corporation having
its principal place of business at Xxx Xxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxx
00000, XXX ("Apple") and Power Computing Corporation, a Delaware corporation
having a principal place of business at 0000 Xxxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxx
00000 ("PCC").
BOARD DESIGN ROYALTY
** $ **
