MANUFACTURING LICENSE AGREEMENT
This Agreement is entered into as of December 30, 1994, between Truevision,
Inc. ("Truevision"), an Indiana corporation, and Avid Technology, Inc. ("Avid"),
a Delaware corporation.
RECITALS
The parties wish to enter into an agreement pursuant to which Avid shall
have the right to manufacture and distribute computer circuit boards and other
products from time to time the rights to which are owned or licensed by
Truevision. The parties therefore agree as follows:
SECTION 1. MANUFACTURING LICENSE.
(a) LICENSE GRANT. Truevision hereby grants to Avid a manufacturing
and distribution license for all products which Truevision
supplies to Avid for Avid's use in incorporating such
products into Avid's products whether pursuant to the
Development, Manufacturing And Supply Agreement dated
December 7, 1993 between Truevision and Avid, as amended and
in effect from time to time, or otherwise from time to time,
including, without limitation, the NuVista+, the HUB1 and
HUB2 versions of Targa 2000N, Targa 2000E and Xxxxx 0000X,
XXX Compression Module and Composite A/V Module (a.k.a. CAV
Top) (collectively, the "Products"). Avid's rights will also
include Avid's unencumbered right to purchase Truevision's
proprietary parts directly from Truevision's suppliers for
those Products being manufactured by Avid. All rights and
licenses granted under or pursuant to this Agreement by
Truevision to Avid are, and shall otherwise deemed to be, for
purposes of Section 365(n) of the U.S. Bankruptcy Code,
licenses of rights to "intellectual property" as defined
under Section 101 of the Bankruptcy Code. The parties agree
that Avid, as a licensee of such rights under this Agreement,
shall retain and may fully exercise all of its rights and
elections under the Bankruptcy Code.
(b) DOCUMENTATION. Truevision shall deliver to Avid on execution of this
Agreement and as required by Avid from time to time copies of
any and all designs, documentation, source code and know-how
relating to Products and any modifications (including without
limitation, Design Modifications as described below) and
enhancements thereto necessary or desirable for the purpose
of manufacturing the Product which Truevision owns or
otherwise has the right to furnish to Avid, together with any
valid Engineering Change Orders as they may exist from time
to time (the "Manufacturing Documentation"), all for the
limited purpose of allowing Avid to exercise its rights under
this Agreement and to ensure that Products are manufactured
by Avid and by Truevision using the same Manufacturing
Documentation. Truevision and Avid shall cooperate in
assigning appropriate serial numbers to Products allowing
identification of the place of manufacture.
c) TECHNICAL SUPPORT. On request by Avid, Truevision shall furnish to Avid (or
its manufacturing subcontractor) a reasonable amount of
technical support (not to exceed two person-weeks) in
establishing manufacturing operations at a location within
the United States. Thereafter, Truevision shall furnish
technical manufacturing and other Product-related support at
its usual and customary rates.
(d) PCI PRODUCTS. Truevision agrees to negotiate with Avid in good faith to
develop specifications for and include hereunder as Products
circuit boards for use in connection with Apple PCI bus
architecture based systems. The parties further agree to
negotiate in good faith to have an Avid first customer ship
date for such Products not later than June 1, 1995.
(e) PERMITTED DESIGN MODIFICATIONS.
(i) All Design Modifications shall be categorized into one of
three types which are (1) Truevision Routine Changes, (2) Truevision
Emergency Changes, and (3) Avid Requested Changes.
(ii) Truevision Emergency Changes shall be all changes in design
initiated by Avid or Truevision to (1) avoid intellectual property
infringement, (2) allow the Products to meet design specifications in the
event they do not then meet such specifications, (3) avoid the use of
parts that are no longer reliably available for purchase from third party
vendors, or (4) address product safety issues.
(iii) Truevision Routine Changes shall be all changes in design
initiated by Truevision that are not Truevision Emergency Changes that do
not change the form, fit, or function of the then existing Product design
and specifications.
(iv) Avid Requested Changes shall be all changes in design
initiated by Avid.
(v) In the instance of Truevision's Routine Changes, Truevision
shall be obligated to provide Avid with sufficient notice to allow Avid to
exhaust any reasonable amount of parts on hand that would be obsolete
under the new design, and to support manufacturing of the preexisting
design until Avid exhausts their reasonable supply of any discontinued
parts.
(vi) In the instance of Truevision's Emergency Changes,
Truevision shall give Avid as much notice as is reasonably possible and
shall not be obligated to support manufacturing of the preexisting design
beyond a reasonable time period.
(vii) In the instance of Avid's Requested Changes, such changes
may be implemented in Truevision's sole discretion. Except, if Avid
agrees to reimburse Truevision for the reasonable costs (including
opportunity costs) of providing such design changes in the form of a pre-
approved amount of non recurring engineering charges to complete such
design changes, Truevision shall negotiate in good faith with Avid to
establish a mutually agreeable schedule for implementation of such
changes.
(viii) Regardless of the source or form of any requested
engineering changes, any changes made by Truevision to the Products shall
be the property of Truevision, excepting that (i) if a request is made by
Avid, AND (ii) the request includes the incorporation of a design or part
that is the intellectual property of Avid, AND (iii) that fact is
explicitly made known at the time of the initial request or otherwise
agreed to, THEN that portion of that design or the design of that part
shall remain the exclusive property of Avid and Truevision shall be
granted a royalty free license to use and incorporate such design and/or
part into the Products, but only for sale and repair support to Avid.
(f) ADDITIONAL RESPONSIBILITIES OF AVID.
(i) Avid shall only manufacture Products hereunder that are
incorporated by Avid into or for use on computer systems or kits for use
on computer systems which Avid sells and/or licenses, whether directly,
through distributors or otherwise, in a manner which shall add substantial
value to such Products in the form of hardware, software, service support
and/or training, which value added shall significantly augment the
functions, capabilities, and marketability of the Products.
(ii) Avid shall be responsible for securing any required U.S.
export licenses relating to Products.
(g) LICENSES SUBJECT TO PAYMENT OF ROYALTIES. The licenses granted to Avid by
Truevision under this Agreement shall be subject to Avid's payment of
royalties due under this Agreement.
SECTION 2. ROYALTY PAYMENT.
(a) PAYMENT.
(i) Avid shall pay a royalty for Products manufactured by Avid
pursuant to this Agreement within 30 days of the end of each calendar
quarter in which Avid accepts completed Products from its manufacturing
subcontractor(s) or Avid completes manufacturing of Products, as the case
may be. The royalty payable shall be calculated as set forth on Schedule
A to this Agreement.
(ii) If Truevision fails to deliver a confirmed order for Products
to Avid on or before the specified delivery date, and Avid manufactures
the ordered Products, the delayed order shall be counted as if it were
delivered and invoiced by Truevision on time for purposes of computing the
royalty due under the Royalty Percentage Table set forth on Schedule A to
this Agreement.
(iii) Notwithstanding the immediately preceding subparagraph (ii),
if the order Truevision failed to deliver on or before the specified
delivery date was scheduled for delivery less than Ninety (90) days after
the date the order was placed, then the amount of the delayed order shall
not be counted as if it were delivered and invoiced by Truevision on time
for purposes of computing the royalty due under the Royalty Percentage
Table so long as Truevision used its reasonable best efforts to meet the
less-than-90-day delivery schedule. Any order delayed in delivery shall
count for the purposes of computing the royalty due under the Royalty
Percentage Table when delivered to Avid and invoiced by Truevision.
(b) AUDIT. Truevision shall have the right to have a firm of nationally-
recognized independent certified public accountants audit Avid's relevant
books and records, and those of Avid's third party manufacturing
subcontractors, at Truevision's expense, no more often than twice per year
and on at least five business days' prior written notice to determine
whether Avid's royalty payments (if any) comply with this Section. IN the
event that the audit indicates that the payments by Avid to Truevision
have been Ten Percent (10%) or more lower than the correct amounts
payable, then Avid shall pay the costs associated with the audit together
with interest on the unpaid amounts at an interest rate of One Percent
(1%) per month on the amount due but not paid.
(c) BEST PRICE. Truevision represents and covenants that the royalty amounts
payable hereunder will be no greater than the royalty amounts it is
charging and will charge other customers for substantially similar
products in similar quantities.
(d) COST REDUCTION. Each of Truevision and Avid agrees to work with each other
in good faith to reduce the manufacturing costs of the Products, such
cooperation shall include but not be limited to using the combined
purchasing volumes and relationships where appropriate.
(e) PREPAYMENT. Upon execution of this Agreement, Avid shall pay to
Truevision the sum of One Million Two Hundred Thousand Dollars
($1,200,000). Such amount shall be credited on a monthly basis to royalty
payments due under this Agreement by Avid in amounts not to exceed Thirty
Five Thousand Dollars ($35,000) in May of 1995 and One Hundred Sixty Seven
Thousand Dollars ($167,000) per month thereafter until the entire
prepayment is credited.
SECTION 3. [INTENTIONALLY OMITTED]
SECTION 4. [INTENTIONALLY OMITTED]
SECTION 5. TERM.
The term of this Agreement shall commence on the date of this Agreement
first above written and shall end on the third anniversary thereof.
Thereafter, this Agreement shall automatically be renewed for successive
one year periods, unless either party shall have given written notice to
the other at least one month prior to the date at which this Agreement
would otherwise have been automatically renewed, in which case this
Agreement shall terminate on such automatic renewal date, unless earlier
terminated as provided herein.
SECTION 6. WARRANTIES.
(a) Truevision warrants and covenants that it has the right to grant to
Avid the rights purported to be granted hereby and that the Manufacturing
Documentation will allow a person of reasonable skill in the industry to
manufacture the Products free of defects in material, workmanship and
design and which will function substantially in accordance with and will
conform to the applicable specifications and shall otherwise be suitable
for the purposes for which they are intended (the "Product Warranty").
(b) Truevision also warrants that the Products and each component
thereof, and the manufacture, use, sale, and other distribution thereof
does not and shall not infringe any patent, copyright, mask work,
trademark, trade secret or other proprietary right of any third party.
(c) Truevision shall extend no warranty of non-infringement under this
Section 6 to the extent: (1) infringement is attributable to Truevision's
incorporation of Avid-supplied designs into the Products and (2) such
claim or suit would have been avoided but for the combination, operation,
or use of the Products with devices, parts, or software not supplied by
Truevision or its subcontractors.
(d) After one year from the date of delivery of any Product
manufactured by Truevision and sold to Avid, or for any Product
manufactured by Avid regardless of when manufactured, Truevision agrees to
provide repair services for the Products. Such repair service during the
term of this agreement shall be provided at Truevision's then current out
of warranty repair rates, which shall not exceed the prices Avid would pay
for a new Product of that type. Upon expiration of the agreement and for
a term of 5 years thereafter, Truevision shall provide repair or
replacement service for the Products to Avid at Truevision's then
prevailing prices for such service, subject to availability of parts
required to effect the repair of the defective product.
SECTION 7. INDEMNIFICATION.
(a) Truevision shall indemnify, hold harmless and defend Avid from and
against any and all liability, loss, cost, damage, expense, or claim
(including reasonable attorneys fees) incurred by or made against Avid
in connection with claims that [the Products or components thereof or the
manufacture, use, sale or distribution thereof infringes any patent,
copyright, mask work, trademark, trade secret or other proprietary right
of any third party, provided that Truevision is notified in writing of
such claim within a reasonable period after Avid becomes aware of the
same.
(b) In the event that, because of a claim of infringement as described
above which is not excluded by the operation of subsection (c) below, the
manufacture, use, sale or distribution of any Product or component thereof
furnished hereunder is or is threatened to be enjoined, Truevision shall
(in addition to its obligations set forth above in the immediately
preceding paragraph) at its expense and at the option of Avid, either (i)
procure for Avid and its customers and distributors and their customers
the right to continue such use, manufacture, distribution or sale; or (ii)
redesign such Product or component thereof with a non-infringing Product
or component that contains substantially the same functionality; or (iii)
modify the design of such Product or component thereof so that it becomes
non-infringing yet contains substantially the same functionality.
(c) Truevision shall have no liability under this Section 7 for any
claim or suit to the extent: (1) infringement is attributable to
Truevision's incorporation of Avid-supplied designs into the Products
and (2) such claim or suit would have been avoided but for the
combination, operation, or use of the Products with devices, parts,
or software not supplied by Truevision or its subcontractors.
SECTION 8. NON-DISCLOSURE.
Each party hereto acknowledges that the transactions contemplated by this
Agreement will require an exchange of confidential information, including,
without limitation trade secrets, proprietary technological information and
customer lists (collectively, "Confidential Information"). With respect to such
Confidential Information Truevision and Avid agree as follows:
(a) Each party shall hold in confidence all Confidential Information
of the disclosing party and shall not disclose to any other person or use
such Confidential Information for any purpose other than to prepare a
necessary response or to perform work for the disclosing party as may be
subsequently necessary. Avid may disclose confidential information of
Truevision to subcontractors of Avid in order to manufacture Products for
Avid pursuant to the manufacturing rights granted under this Agreement
provided that Avid obtain an agreement from such third parties to maintain
the confidentiality of the information.
(b) The obligations of Subparagraph (a) above shall not apply to
information which is proved using tangible evidence to:
(i) be or have become available to the public from a source
other than the receiving party;
(ii) be or have been released in writing by the disclosing party
as being no longer subject to this Agreement;
(iii) be or have been lawfully obtained by the receiving party
from a third party not subject to any nondisclosure
obligation;
(iv) have become lawfully known to the receiving party prior
to such disclosure; or
(v) have been developed by the receiving party completely
independently of disclosure from the disclosing party.
Each party acknowledges that a violation of this Section would constitute
irreparable damage to the disclosing party and that any remedy at law would be
inadequate and thereby consents to the entry of injunctive relief against such
violation.
(c) The parties acknowledge that the receiving party shall obtain no
rights of any kind in connection with trade secrets revealed to it and
that any additional know-how, process, or improvements based upon the
trade secrets of the disclosing party shall be subject to ownership and
other rights of the disclosing party, except as may be provided in this
Agreement.
(d) Upon the written request of the disclosing party, the receiving
party shall promptly return any and all materials furnished to it
containing trade secrets. Without the express permission of the
disclosing party, the receiving party agrees not to make or authorize the
making of any copies of such information.
SECTION 9. MARKS, ETC....
(a) Truevision grants Avid permission to utilize the appropriate
trademarks, trade names, insignia, symbols, identification and logotypes
and other trade names and trademarks of Truevision ("Marks") in Avid
advertising and promotion of Products provided such use conforms to
Truevision's standards and guidelines, set forth in writing from time to
time, with respect to but not limited to style, appearance and manner of
use of Marks, including Truevision's standards and guidelines concerning
acknowledgment of ownership of the Marks. Avid shall not do business
under any of the Marks or derivative or variation thereof. The Marks may
only be used by Avid to advertise and promote the Products themselves.
(b) Nothing in this Agreement will create in Avid any rights in the
Marks of Truevision.
SECTION 10. TERMINATION.
(a) Either party may terminate this Agreement by immediate written
notice if the other party breaches any provision of this Agreement and
does not remedy such breach within thirty (30) days after written notice
thereof is given provided that no 30 day cure period shall be required if
the same provision shall have been breached more than twice in any 12
month period.
(b) Either party may terminate this Agreement forthwith by written
notice in the event that the other party: (a) intentionally makes (or is
discovered to have made) any material false representations, reports, or
claims in connection with the business relationship of the parties; (b)
engages in (or is discovered to have engaged in) fraud, criminal or
negligent conduct in connection with the business relationship of the
parties; or (c) becomes insolvent, or becomes involved in any liquidation
or termination of business, adjudication as bankrupt, assignment for the
benefit of creditors, invoking of the provisions of any law for the relief
of debtors, or the filing, against a party in any similar proceedings.
(c) Notwithstanding any other terms or provisions of this Agreement or
other arrangements agreed to by the parties, termination of this Agreement
shall automatically accelerate the due date of all royalties due in
respect of Products such that they shall become immediately due and
payable in the case of bankruptcy.
(d) The occurrence of either of the following and failure by Truevision
to cure the same after thirty (30) days written notice, constitutes a
breach and is cause for termination by Avid at its option of this
Agreement; provided, that such 30 day cure period shall not be required
and Avid may terminate on immediate written notice if the same provision
shall have been breached more than twice in any 12 month period:
(i) Truevision fails to perform any material obligation under
this Agreement or any representation or warranty of
Truevision shall have been found to be false or misleading.
(ii) Truevision becomes insolvent, files a petition in
bankruptcy, or has filed against it a petition in
bankruptcy and such petition has not been dismissed within
sixty (60) days of such filing, makes an assignment for the
benefit of creditors, or is the subject of receivership or
similar proceedings.
(e) The occurrence of any of the following and failure by Avid to cure
the same after thirty (30) days written notice, constitutes a breach and
is cause for termination by Truevision of this Agreement pursuant hereto;
provided, that such 30 day cure period shall not be required and
Truevision may terminate on immediate written notice if the same provision
shall have been breached more than twice in any 12 month period:
(i) Avid fails to perform any material obligation under this
Agreement or any representation of Avid shall have been
found to be false or misleading.
(ii) Avid becomes insolvent, files a petition in bankruptcy, or
has filed against it a petition in bankruptcy and such
petition has not been dismissed within sixty (60) days of
such filing, makes an assignment for the benefit of
creditors, or is the subject of receivership or similar
proceedings.
(iii) Avid fails to make royalty payments as agreed upon and
provided for in this Agreement.
SECTION 11. MISCELLANEOUS PROVISIONS.
(a) Any announcements or similar publicity with respect to this
Agreement or the transactions contemplated herein shall be only at such
time and in such manner and shall consist of such contents as both parties
shall mutually determine.
(b) Truevision and Avid agree that their relationship is not that of
joint ventures, principal and agent, or franchiser and franchisee.
Truevision and Avid are independent contractors acting for their own
accounts and neither is authorized to make any commitment or
representation, express or implied, on the other's behalf unless
authorized in writing.
(c) The waiver by either party of any breach of this Agreement by the
other party in a particular instance shall not operate as a waiver of
subsequent breaches of the same or a different kind. Either party's
exercise or failure to exercise any rights under this Agreement in a
particular instance shall not operate as a waiver of said party's right to
exercise the same or different rights in subsequent instances.
(d) The paragraph headings contained herein are for convenience only
and are not intended to affect the meaning or interpretation of this
Agreement.
(e) All notices and demands of any kind, that either Truevision or Avid
may be required or desire to serve upon the other party under the terms of
this Agreement, shall be in writing and shall be served by personal
delivery or by U.S. first class mail at the following respective
addresses:
Truevision, Inc. Avid Technology, Inc.
0000 Xxxxx Xxxxxx Metropolitan Technology Park
Santa Clara, CA 95051 One Park West
Attn: Chief Executive Officer Xxxxxxxxx, XX 00000
Attn: Director of Purchasing
with a copy to:
RasterOps
0000 Xxxxx Xxxxxx
Xxxxx Xxxxx, XX 00000
Attn: General Counsel
Service shall be deemed complete upon such delivery. The above addresses
may be changed at any time by giving written notice.
(f) Neither party shall be responsible for failure to perform hereunder
due to causes beyond its reasonable control, including, but not limited to
government requirements, work stoppages, fires, civil disobedience,
embargo, war, riots, rebellions, earthquakes, strikes, floods, water and
the elements, inability to secure products (despite best efforts to do so),
raw materials, or transport, acts of God and similar occurrences.
Performance shall be resumed as soon as reasonably practicable after the
cessation of such cause.
(g) In case any one or more of the provisions contained herein shall, for
any reason, be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other
provision of this Agreement, but this Agreement shall be construed as if
such invalid, illegal or unenforceable provisions had never been contained
herein unless the deletion of such provision or provisions would result in
such a material change as to cause completion of the transactions
contemplated herein to be unreasonable.
(h) This agreement, together with any other documents and exhibits
incorporated herein by reference, constitutes the entire agreement between
the parties hereto pertaining to the subject matter hereof. Any and all
written or oral agreements heretofore existing between parties pertaining
to the subject matter of this Agreement are expressly canceled.
(i) This Agreement may be executed in one or more counterparts, and all
such counterparts will constitute one and the same document.
(j) Truevision and Avid have previously entered into a Development,
Manufacturing And Supply Agreement dated December 7, 1993 as amended for
the manufacture and supply of Products. In the event there is a conflict
between the terms of this Agreement and the Development, Manufacturing And
Supply Agreement dated December 7, 1993, the terms of this Agreement shall
prevail. To the extent that this Agreement has conflicting provisions,
this Agreement shall be deemed a modification in writing between the
parties regarding such provisions.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement by their
respective officers thereunto duly authorized as of the date first above
written.
TRUEVISION, INC. AVID TECHNOLOGY, INC.
By /s/ Xxxxx X. Doctor By /s/ Xxxxxx X. Xxxxxxx
--------------------------------- ---------------------------------
Name: Xxxxx X. Doctor Name: Xxxxxx X. Xxxxxxx
Title: President and Chief Title: Director of Purchasing
Executive Officer
RasterOps, as the sole owner of Truevision, guarantees the full and prompt
performance of all Truevision's obligations under this Agreement.
RasterOps
By: /s/ Xxxxx X. Doctor
-------------------------
Name: Xxxxx X. Doctor
Title: President and Chief Executive Officer
SCHEDULE A
% Xxxx-up End of Ql End OF Q2 End of Q3 End OF Q4
From 1996 1996 1996 1996
Avid's Cost Run Rate Run Rate Run Rate Run Rate
57 $0 $0 $0 $0
56 $290,178 $312,500 $334,821 $357,143
55 $580,357 $625,000 $669,643 $714,285
54 $870,535 $937,500 $1,004,464 $1,071,428
53 $1,160,714 $1,249,999 $1,339,285 $1,428,571
52 $1,450,892 $1,562,499 $1,674,106 $1,785,713
51 $1,741,071 $1,874,999 $2,008,928 $2,142,856
50 $2,031,249 $2,187,499 $2,343,749 $2,499,999
49 $2,321,427 $2,499,999 $2,678,570 $2,857,141
48 $2,611,606 $2,812,499 $3,013,391 $3,214,284
47 $2,901,784 $3,124,998 $3,348,213 $3,571,427
46 $3,191,963 $3,437,498 $3,683,034 $3,928,569
45 $3,482,141 $3,749,998 $4,017,855 $4,285,712
44 $3,772,319 $4,062,498 $4,352,676 $4,642,855
43 $4,062,500 $4,375,000 $4,687,500 $5,000,000
42 $4,468,750 $4,812,500 $5,156,250 $5,500,000
41 $4,875,000 $5,250,000 $5,625,000 $6,000,000
40 $5,281,250 $5,687,500 $6,093,750 $6,500,000
39 $5,687,500 $6,125,000 $6,562,500 $7,000,000
38 $6,093,750 $6,562,500 $7,031,250 $7,500,000
37 $6,500,000 $7,000,000 $7,500,000 $8,000,000
36 $6,906,250 $7,437,500 $7,968,750 $8,500,000
35 $7,312,500 $7,875,000 $8,437,500 $9,000,000
34 $7,718,750 $8,312,500 $8,906,250 $9,500,000
33 $8,125,000 $8,750,000 $9,375,000 $10,000,000
32 $8,395,833 $9,041,667 $9,687,500 $10,333,333
31 $8,666,667 $9,333,333 $10,000,000 $10,666,667
30 $8,937,500 $9,625,000 $10,312,500 $11,000,000
29 $9,208,333 $9,916,667 $10,625,000 $11,333,333
28 $9,479,167 $10,208,333 $10,937,500 $11,666,667
27 $9,750,000 $10,500,000 $11,250,000 $12,000,000
26 $10,020,833 $10,791,667 $11,562,500 $12,333,333
25 $10,291,667 $11,083,333 $11,875,000 $12,666,667
24 $10,562,500 $11,375,000 $12,187,500 $13,000,000
23 $10,833,333 $11,666,667 $12,500,000 $13,333,333
22 $11,736,111 $12,638,889 $13,541,666 $14,444,444
21 $12,638,888 $13,611,110 $14,583,333 $15,555,555
20 $13,541,666 $14,583,332 $15,624,999 $16,666,665
19 $14,444,443 $15,555,554 $16,666,665 $17,777,776
18 $15,347,220 $16,527,776 $17,708,331 $18,888,887
17 $16,249,998 $17,499,998 $18,749,998 $19,999,997
SCHEDULE A (cont.)
% Xxxx-up End of Ql End of Q2 End of Q3 End of Q4
From 1997 1997 1997 1997
Avid's Cost Run Rate Run Rate Run Rate Run Rate
57 $0 $0 $0 $0
56 $379,464 $401,786 $424,107 $446,428
55 $758,928 $803,571 $848,214 $892,857
54 $1,138,392 $1,205,357 $1,272,321 $1,339,285
53 $1,517,856 $1,607,142 $1,696,428 $1,785,713
52 $1,897,320 $2,008,928 $2,120,535 $2,232,142
51 $2,276,785 $2,410,713 $2,544,642 $2,678,570
50 $2,656,249 $2,812,499 $2,968,748 $3,124,998
49 $3,035,713 $3,214,284 $3,392,855 $3,571,427
48 $3,415,177 $3,616,070 $3,816,962 $4,017,855
47 $3,794,641 $4,017,855 $4,241,069 $4,464,283
46 $4,174,105 $4,419,641 $4,665,176 $4,910,712
45 $4,553,569 $4,821,426 $5,089,283 $5,357,140
44 $4,933,033 $5,223,212 $5,513,390 $5,803,568
43 $5,312,500 $5,625,000 $5,937,500 $6,250,000
42 $5,843,750 $6,187,500 $6,531,250 $6,875,000
41 $6,375,000 $6,750,000 $7,125,000 $7,500,000
40 $6,906,250 $7,312,500 $7,718,750 $8,125,000
39 $7,437,500 $7,875,000 $8,312,500 $8,750,000
38 $7,968,750 $8,437,500 $8,906,250 $9,375,000
37 $8,500,000 $9,000,000 $9,500,000 $10,000,000
36 $9,031,250 $9,562,500 $10,093,750 $10,625,000
35 $9,562,500 $10,125,000 $10,687,500 $11,250,000
34 $10,093,750 $10,687,500 $11,281,250 $11,875,000
33 $10,625,000 $11,250,000 $11,875,000 $12,500,000
32 $10,979,167 $11,625,000 $12,270,833 $12,916,667
31 $11,333,333 $12,000,000 $12,666,667 $13,333,333
30 $11,687,500 $12,375,000 $13,062,500 $13,750,000
29 $12,041,667 $12,750,000 $13,458,333 $14,166,667
28 $12,395,833 $13,125,000 $13,854,167 $14,583,333
27 $12,750,000 $13,500,000 $14,250,000 $15,000,000
26 $13,104,167 $13,875,000 $14,645,833 $15,416,667
25 $13,458,333 $14,250,000 $15,041,667 $15,833,333
24 $13,812,500 $14,625,000 $15,437,500 $16,250,000
23 $14,166,667 $15,000,000 $15,833,333 $16,666,667
22 $15,347,222 $16,250,000 $17,152,777 $18,055,555
21 $16,527,777 $17,499,999 $18,472,221 $19,444,443
20 $17,708,332 $18,749,999 $19,791,665 $20,833,332
19 $18,888,887 $19,999,998 $21,111,109 $22,222,220
18 $20,069,442 $21,249,998 $22,430,553 $23,611,108
17 $21,249,997 $22,499,997 $23,749,997 $24,999,997
SCHEDULE A (cont.)
Avid shall pay a royalty on each unit of Product manufactured by Avid in
accordance with this Agreement. The royalty shall be calculated based on a
markup from Avid's Manufacturing Cost. Avid's Manufacturing Cost shall include
direct manufacturing labor, and material costs of Avid or its third party
manufacturer as applicable. In addition, if a third party manufacturer is used,
the reasonable and customary markup of such third party manufacturer as Avid
normally pays such third party shall also be included in Avid's Manufacturing
Cost. Avid warrants that when calculating Avid's Manufacturing Cost when a third
party manufacturer is used, the cost shall reflect Avid's cost of fully
assembled, completed, tested, packed out Products that are fully marked up by
such third party to reflect their overhead, material burden, and profit margin
in an arms length business transaction.
For Products manufactured by or for Avid during calendar year 1995, the Xxxx Up
percentage shall be fixed at 23%. Thereafter, at the end of each calendar
quarter, Avid's purchases from Truevision (as measured by Truevision's invoicing
of products to Avid or as otherwise calculated under this Agreement) during the
just completed and the prior three calendar quarters shall be aggregated and the
total referenced in the appropriate column from the table above to determine the
Xxxx Up percentage applicable to that calendar quarter.
The applicable Xxxx Up percentage multiplied by Avid's Manufacturing Cost for
each Product shall be the per unit royalty payable for the applicable Product
during that quarter. Only one royalty payment per unit of Product shall be due.
