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SECURITIES EXCHANGE AND COMMISSION
Washington, D. C. 20549
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FORM 8-K
CURRENT REPORT
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Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report
(Date of earliest event reported): March 19,1996
Truevision, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 000-18404 77-0161747
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(State of (Commission File Number) (IRS Employer
Incorporation) Identification No.)
2500 Walsh Avenue, Santa Clara, California 95051
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(Address of principal executive offices) (Zip Code)
(408) 562-4200
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(Registrant's telephone number, including area code)
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Item 5. Other Events.
On March 19, 1996, Truevision, Inc. ("Truevision") and Matsushita Electric
Industrial Co. Ltd./Video Systems Division ("Matsushita") entered into a Product
Design and Development Agreement (the "Agreement"). Under the Agreement,
Truevision will develop a version of its recently announced TARGA(R)2000 RTX
digital video engines which incorporates Matsushita's DVCPRO technology.
The Agreement will continue until the final payment is made by Matsushita
to Truevision under the Agreement unless the Agreement is earlier terminated by
either party as provided therein. Either party may terminate the Agreement
without cause upon written notice to the other party. In addition, either party
may terminate the Agreement immediately upon the occurrence of certain events
specified therein.
The foregoing description of the Agreement is necessarily incomplete, and
reference is made to the copy of the Agreement attached hereto as Exhibit 1,
which is hereby incorporated by reference herein.
Item 7. Exhibits.
1. Product Design and Development Agreement, dated March 19, 1996, by and
between Truevision, Inc. and Matsushita Electric Industrial Co.
Ltd./Video Systems Division
2.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
TRUEVISION, INC.
Dated: April 24, 1996 By:
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Rondal J. Moore
General Counsel, Vice President
3.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
TRUEVISION, INC.
Dated: April 24, 1996 By: /s/ Rondal J. Moore
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Rondal J. Moore
General Counsel, Vice President
3.
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INDEX TO EXHIBIT
Sequentially
numbered page
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1. Product Design and Development Agreement, dated March 5
19, 1996, by and between Truevision, Inc. and Matsushita
Electric Industrial Co. Ltd./Video Systems Division
4.
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PRODUCT DESIGN AND
DEVELOPMENT AGREEMENT
This Hardware Development Agreement (the "Agreement") is entered into as of
March 19, 1996 (the "Effective Date"), by and between TRUEVISION, INC. a
Delaware corporation having its principal place of business at 2500 Walsh
Avenue, Santa Clara, CA 95051, ("Truevision") and MATSUSHITA ELECTRIC
INDUSTRIAL CO. LTD. / VIDEO SYSTEMS DIVISION, having offices at 2-15 Matsuba-
cho, Kadoma, Osaka 571 Japan ("MEI/VSD").
RECITALS
MEI/VSD desires to have Truevision design and develop a video graphics capture
and processing card for professional use based on Truevision's DVR Architecture
that incorporates MEI/VSD's DVCPro Codec and MEI/VSD's interface strategy and
related materials for ultimate sale to MEI/VSD on an OEM basis.
Truevision desires to design and develop such a product and to make such product
available to MEI/VSD and to third parties, upon the terms and conditions set
forth herein, and in an OEM Agreement to be negotiated between MEI/VSD and
Truevision prior to the time of production purchases.
In consideration of the mutual promises contained herein, MEI/VSD and Truevision
agree as follows:
AGREEMENT
1. DEFINITIONS
1.1 "Product" means the various Video Graphics Cards, Developer Kit, and
related materials, as more fully described in the Specification.
1.2 "Derivative Products" means those Video Graphics Cards, Developer Kits,
and related materials, the design of which is based in whole or in part on
the Product.
1.3 "Specification" means the technical and design specification for the
Product set forth in Exhibit A.
1.4 "Deliverables" means testable EVT (Engineering Validation Test) Units, DVT
(Design Validation Test) Units, PVT (Production Validation Test) Units and
Documentation of the Products, as more fully described in Exhibit D.
TRUEVISION TRUEVISION MEI/VSD D&D AGREEMENT MEI/VSD
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1.5 "Documentation" means that specified in Exhibit D.
1.6 "Services" means: the design and development of the Product and the
fabrication and assembly of the Deliverables.
1.7 "Development and Payment Schedule" means the time for the parties'
performance under this Agreement, as set forth in Exhibit C.
1.8 "Errors" means: (i) defects in the Deliverables which cause them not to
operate in conformance with the Specification, and, (ii) defects in the
Documentation which render it inaccurate, erroneous or otherwise
unreliable.
1.9 "Process Technology" means all ideas, inventions, creations, works,
designs, methods, and processes regarding designing, structuring, testing
or producing products generally and all documentation associated
therewith, which are copyrightable, registrable as a mask work,
protectable as a trade secret, or otherwise protectable as an intellectual
property right, excepting patented technology.
1.10 "Product Technology" means all ideas, inventions, creations, works,
designs, and methods incorporated in the design or function of the Product
and all documentation associated therewith, which are copyrightable,
registrable as a maskwork, protectable as a trade secret, or otherwise
protectable as an intellectual property right, excepting patented
technology.
1.11 "MEI/VSD Technology" means all MEI/VSD proprietary Process Technology and
Product Technology provided to Truevision by MEI/VSD, whether in the form
of pre-existing MEI/VSD technology, or technology developed by MEI/VSD and
provided to Truevision during the course of development of the Product and
any derivatives of such technology (i.e. based upon or an extension of any
existing MEI/VSD Technology) that Truevision or its subcontractors create
during the work performed under this Agreement including, without
limitation, derivatives of the MEI/VSD Software set forth in Exhibit H.
Title to all MEI/VSD Technology will be vested in MEI/VSD; however,
Truevision will have rights to the MEI/VSD Process Technology as specified
in Section 5.4.
1.12 "Truevision Process Technology" means all proprietary Process Technology
of Truevision or its subcontractors utilized by Truevision in development
and production of the Product, whether in the form of pre-existing
proprietary technology or technology concurrently or subsequently
developed by Truevision and/or its subcontractors in the course of this
development and/or any other
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development efforts unrelated to the Services being performed hereunder.
Title to Truevision Process Technology shall remain vested in Truevision
or its subcontractors.
1.13 "Truevision Product Technology" means all proprietary Product Technology
provided by Truevision for incorporation into the design of the Product,
whether in the form of pre-existing proprietary technology or technology
concurrently or subsequently developed by Truevision and/or its
subcontractors in the course of this development, and/or any other
development efforts unrelated to the Services being performed hereunder.
Title to Truevision Product Technology shall remain vested in Truevision.
1.14 "Developer's Kit" means the complete instructions and software tools for
use by third party developers of software for the Product, as more fully
described in Exhibit E.
2. SCOPE OF WORK
2.1 SERVICES
(a) PURCHASE ORDERS. MEI/VSD agrees to issue purchase orders to
Truevision for the Services in accordance with the Development and Payment
Schedule. On the terms and conditions set forth in this Agreement,
Truevision agrees to perform the Services for which MEI/VSD has issued
purchase orders in accordance with the Development and Payment Schedule.
Truevision will be responsible for obtaining all the technology, labor,
material, tooling and facilities necessary for the completion of the
Services.
(b) SUPPORT. In support of the Services, MEI/VSD shall pursuant to
Section 5 provide Truevision with access to pre-existing MEI/VSD
Technology as reasonably required by Truevision for the completion of the
Services. Additionally, MEI/VSD shall provide to Truevision the equipment
set forth in Exhibit B. All equipment loaned to Truevision by MEI/VSD
shall remain the property of MEI/VSD and at the conclusion of the
development or upon termination of this Agreement, such equipment shall be
returned to MEI/VSD in its original condition, normal wear and tear
excepted. Truevision shall reimburse MEI/VSD for any lost, stolen or \
damaged loaned equipment.
(c) THIRD PARTY DEVELOPERS. Truevision agrees to assist third party
software developers who are interested in providing application software
for use in connection with the Products, in making such developers'
software supportive of
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the Products. Truevision will give priority support to MCI/AVSD, an
MEI/VSD affiliated company with respect to the adaptation of POSTBOX
software to the Products.
2.2 PROGRESS REPORTS Truevision shall provide MEI/VSD with written progress
reports, as requested by MEI/VSD, starting one week after the Effective
Date and ending on the date of MEI/VSD'S final acceptance of all
Deliverables. Each report shall indicate:
(a) the status of progress to current scheduled milestone;
(b) a short description of problems in meeting such milestone;
(c) a proposed recovery method to meet next milestone if needed;
(d) the probability of meeting next milestone;
(e) any changes in truevision's estimate of recurring
manufacturing costs for the product; and
(f) any other information related to the services reasonably
requested by MEI/VSD.
2.3. AGENCY APPROVALS. Truevision shall, at no additional cost to MEI/VSD,
obtain any agency approvals or certifications required in the
Specification.
2.4 REPORT REQUIREMENTS. Truevision shall provide copies of the product
safety reports and licenses required in the Specification to MEI/VSD as
soon as practical after completion of each report or the issuance of each
license by each agency. MEI/VSD may request updated copies of the
Reports/Licenses from time to time.
2.5 DERIVATIVE PRODUCTS.
(a) TRUEVISION OBLIGATION. For a period of Two (2) years from the
completion of the development of the Product, should MEI/VSD so request,
Truevision will develop Derivative Products. Truevision will develop
Derivative Products that are minor variations of the Product at a cost not
to exceed its reasonable costs of labor and materials and out of pocket
expenses, without provision for the opportunity cost of engineering time
expended. Derivative Produces that are major variations of the Product
shall be quoted with costs to include the opportunity cost of engineering
time required. The parties shall decide
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through good faith discussion the status of proposed Derivative Products
as a minor or major variation of the Product.
(b) TRUEVISION RIGHT. Truevision has the right to manufacture
Derivative Products for its own benefit for sale or other transfer to
third parties hereunder without the request or approval of MEI/VSD;
provided that Truevision will bear all costs therefor.
2.6 NEW PRODUCTS. Should MEI/VSD so request, the parties agree to negotiate
in good faith to include new products under this Agreement or to enter
into separate development agreements; provided that the parties agree that
the
development of such product would be to their mutual benefit.
2.7 SUSTAINING DEVELOPMENT. Both parties acknowledge their obligations to the
other party regarding sustaining engineering of the Product. For a period
of Two (2) years from the date of first production shipment of the
Product, both parties will make available to the other party any
improvements to the Product Technology of that party for incorporation
into the Product. Truevision agrees to conduct a reasonable amount of
sustaining engineering on the Product as necessary to maintain its
competitiveness.
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3. DESIGN REVIEW AND SPECIFICATION CHANGES
3.1 DESIGN REVIEW MEI/VSD is entitled to conduct periodic reviews to ensure
its satisfaction with the Services. Upon reasonable notice Truevision
shall allow MEI/VSD, during Truevision's normal business hours, to visit
its places of business for development and manufacturing to discuss and
inspect the status of the development of the Product, provided however,
that MEI/VSD will not have access to Truevision's confidential and
sensitive areas unrelated to the development of the Product.
3.2 CHANGES TO THE SPECIFICATION MEI/VSD is entitled to request modifications
in the form of changes or additions to the Specifications at any time
during the term of this Agreement. Such requests shall be submitted by
MEI/VSD to Truevision in writing. If any such modification of the
Specifications increases or decreases the cost or time of performance of
the Services or the estimated recurring manufacturing costs for the
Product, the parties will negotiate an equitable adjustment to this
Agreement. Upon written agreement by MEI/VSD and Truevision as to said
adjustment to this Agreement, Truevision will proceed with the
implementation of the prescribed changes, and the Specifications and other
Exhibits to this Agreement shall be modified accordingly by an amendment
to this Agreement executed in writing by both parties.
4. DELIVERABLES AND DELIVERY; ACCEPTANCE; REJECTION
4.1 DELIVERABLES Truevision agrees to deliver the Deliverables for which
MEI/VSD has issued purchase orders, in accordance with the Development and
Payment Schedule. Deliverables shall be delivered to the MEI/VSD Project
Manager accompanied by a written statement listing the items delivered and
stating that they are ready for MEI/VSD'S acceptance testing. Except as
otherwise specified in the Development and Payment Schedule, all
Deliverables shall be delivered F.O.B. Truevision's facilities in either
Indianapolis, Indiana, or Santa Clara, California. Truevision's liability
for loss or damage shall cease upon delivery to the F.O.B. Point.
4.2 PROCEDURES.
(a) ACCEPTANCE/REJECTION. MEI/VSD, with the assistance of
Truevision if requested by MEI/VSD, will examine and test each
Deliverable upon delivery to determine whether the Deliverable
conforms to the Specifications applicable to such Deliverable.
MEI/VSD shall, within the acceptance period for each Deliverable set
forth in Exhibit D: (i) accept
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the Deliverable and so inform Truevision in writing; or (ii) reject
the Deliverable and provide Truevision with a written statement of
Errors. Notwithstanding the Development and Payment Schedule, MEI/VSD
shall not be obligated to pay for any Deliverable for which MEI/VSD
has submitted to Truevision a statement of Errors until Truevision has
corrected such Errors to the reasonable satisfaction of MEI/VSD.
4.2 (b) TRUEVISION RESPONSE. Within fifteen (15) working days after
receipt of the statement of errors, Truevision will, as mutually
agreed either (i) accept return of the Deliverables and correct the
Errors in any Deliverable as set forth in the Statement of Errors,
(ii) if practical, have Truevision's engineer(s) visit MEI/VSD's
premises and correct any such Errors, (iii) deliver new Deliverables
without Errors, or (iv) provide MEI/VSD with a schedule and a plan for
recovery ("Recovery Plan") providing for the resolution of such
Errors. Such schedule and plan shall be subject to the agreement of
MEI/VSD.
(c) OMISSION. If MEI/VSD fails to give a statement of Errors within
the specified time, MEI/VSD will be deemed to have accepted the
Deliverables.
4.3 FAILURE OF PROCEDURES If, within a reasonable time Truevision is unable
to correct the Errors or deliver new Deliverables as provided in Section
4.2(b), or if the parties are unable to agree upon a Recovery Plan or
Truevision is unable to carry out such Recovery Plan, MEI/VSD may: (i)
terminate this Agreement for cause pursuant to Section 10.3(c) whereupon
Truevision shall have no obligation to continue the Services thereafter;
or (ii) suspend its performance under this Agreement until the parties can
mutually agree on a revised schedule.
4.4 PAYMENT. MEI/VSD will make payments to Truevision in accordance with the
Development and Payment Schedule, provided that: (i) MEI/VSD has issued
the necessary purchase orders to Truevision, (ii) Truevision has completed
the milestones set forth therein; and (iii) MEI/VSD has accepted the
Deliverables. Such payments will be due net 30 days from the later of
MEI/VSD's acceptance of the Deliverables or MEI/VSD's receipt of
Truevision's invoice. MEI/VSD agrees to issue any necessary purchase
orders required for payments in a timely manner to allow payments as
scheduled in this Agreement.
5. RIGHTS IN TECHNOLOGY
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5.1 MEI/VSD'S OWNERSHIP. Truevision hereby grants and assigns to MEI/VSD,
without reservation, all worldwide ownership rights, title and interest in
and to any MEI/VSD Technology created by Truevision or its subcontractors
during development of the Product. Such rights include, but are not
limited to, patents, copyrights, trade secret rights, trademark rights,
mask work rights, and other proprietary rights throughout the world.
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5.2 TRUEVISION'S ASSISTANCE. During and subsequent to the term of this
Agreement, at MEI/VSD's request, Truevision will document the assignment
to MEI/VSD of all rights, title, and interest in any MEI/VSD Technology
developed by Truevision or its subcontractors and assist MEI/VSD and its
nominees in every proper way to secure, maintain, and defend for MEI/VSD's
benefit all copyrights, patents, mask work rights, and other proprietary
rights in such MEI/VSD Technology. As part of Truevision's obligations,
Truevision will require its employees and subcontractors to assign to
MEI/VSD through appropriate assignment of rights agreements any right,
title and interest they may have in and to any MEI/VSD Technology. In the
event the expenses associated with Truevision's documentation obligations
under this Section 5.2 become significant, MEI/VSD and Truevision shall
meet and discuss an appropriate way to reduce the expenses to a minimal
level, or to reimburse Truevision in some manner for expenses incurred.
5.3 APPORTIONING OF FEES PAID BY MEI/VSD. Truevision acknowledges that a
portion of the non-recurring engineering fees to be paid by MEI/VSD under
this Agreement is related to Truevision's acquisition of knowledge about
the DVCPro Codec and various digital interface methods. The parties agree
that, pursuant to a separate OEM Agreement (the "OEM Agreement") for the
sale of the Product that the parties will negotiate in good faith,
Truevision will pay MEI/VSD an amount equal to such portion of the non-
recurring engineering fees if Truevision's sales of products that
incorporate DVCPro technology exceed a mutually agreed minimum threshold.
5.4 LICENSING OF MEI/VSD TECHNOLOGY. MEI/VSD hereby grants to Truevision the
right to all MEI/VSD Technology for the purpose of development,
manufacture, service, sale. use, demonstration, and support of the Product
to MEI/VSD and to third parties. To the extent that the parties may later
decide that the specific MEI/VSD Technology involves patents owned by
MEI/VSD, such patented MEI/VSD Technology will, when identified, be listed
in Exhibit G, and Truevision's rights to such patented MEI/VSD Technology
will be governed by separate license agreement(s) as provided in Section
5.8
5.5 TRUEVISION'S RIGHT TO PURCHASE COMPONENTS. MEI/VSD will provide
Truevision with all MEI/VSD proprietary integrated circuits required for
incorporation into the Product or Derivative Products under a separate
agreement that the parties will negotiate in good faith. To the extent
that MEI/VSD is not able to directly supply such integrated circuits as
Truevision requires, however, under certain terms and conditions that the
parties will negotiate and agree upon, MEI/VSD will provide authorization
to Truevision to purchase such integrated circuits directly from third
parties.
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5.6 MEI/VSD'S PURCHASE OF THE PRODUCT. For One (1) year from MEI/VSD's
acceptance of the PVT Unit Deliverables, MEI/VSD will have the right to
purchase from Truevision such quantities of the Product as MEI/VSD may
reasonably require, pursuant to the OEM Agreement. Any such purchases
will be made pursuant to the OEM Agreement; provided that MEI/VSD will
have no obligation to enter into such an agreement or to make purchases
thereunder.
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5.7 MEI/VSD'S RIGHT TO DELIVERABLES. MEI/VSD shall receive title to the
Deliverables upon payment to Truevision in accordance with the Development
and Payment Schedule, except as otherwise provided in Section 10. MEI/VSD
may duplicate and distribute the Documentation for the purpose of
MEI/VSD's internal use. Except as otherwise expressly provided herein,
nothing contained in this Agreement shall be construed as granting or
conferring any rights, licenses or otherwise for any technology
incorporated in the Deliverables.
5.8 PATENTED TECHNOLOGY LICENSES. The parties acknowledge that patented
technology, that is the property of, or under the control of, MEI/VSD,
either existing patents or patents that may be issued in the future, may
be required to allow Truevision to perform its obligations and exercise
its rights as contemplated hereunder and in the OEM Agreement
("Truevision's Use"). At the time of execution of this Agreement, each
party acknowledges that the exact nature or specific patentable technology
is unknown. As such patented technology is identified as necessary for
Truevision's Use, the parties agree to negotiate in good faith a separate
patent license agreement or agreements to allow Truevision's Use.
6. WARRANTIES AND LIMITATION
6.1 TRUEVISION'S WARRANTIES. Truevision warrants that: (i) all Deliverables
delivered to MEI/VSD hereunder will conform, as qualified in Exhibit D, to
such portions of the Specifications applicable to each such Deliverable
for a period of ninety (90) days after acceptance by MEI/VSD; (ii) in
connection with Truevision's performance of the Services, Truevision will
not infringe any patent, copyright, trade secret, mask work right, or any
other proprietary right of any third party; (iii) Truevision has not
previously granted and will not grant any rights in the Product,
Truevision Product Technology, or Truevision Process Technology to any
third party which grant is inconsistent with the rights granted by
Truevision to MEI/VSD herein; and (iv) the Product can be efficiently
manufactured by Truevision.
6.2 MEI/VSD'S WARRANTIES. MEI/VSD warrants that MEI/VSD has not previously
granted and will not grant any rights in the Product or the MEI/VSD
Technology to any third party which grant is inconsistent with the rights
granted by MEI/VSD to Truevision herein.
6.3 LIMITATION. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS SECTION 6,
NO WARRANTIES, EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, INCLUDING ANY
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, ARE
MADE BY EITHER
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PARTY TO THE OTHER PARTY HEREUNDER, AND ALL SUCH WARRANTIES ARE EXPRESSLY
EXCLUDED. NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, IN
NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY SPECIAL,
INCIDENTAL, OR CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING BUT NOT
LIMITED TO, LOSS OF PROFITS OR DAMAGES TO THE OTHER PARTY'S BUSINESS
REPUTATION.
7. INDEMNIFICATION AND LIMITATION
7.1 GENERAL. The party obliged to indemnify hereunder, (the "Indemnifying
Party") will, at its own expense, indemnify the other party (the
"Indemnified Party") and hold the Indemnified Party harmless from any
loss, cost, liability or expense (including costs and reasonable fees
including attorneys and other professionals) ("Claims"), arising out of
any claims that may be instituted against the Indemnified Party including
from any alleged infringement of any patents trademarks, copyrights,
licenses or trade secrets or other proprietary right provided that:
(a) such claim is not based upon the combination, operation, or use of the
Product, or Derivative Product, with devices, parts, or software not
supplied by the Indemnifying Party or its subcontractors,
(b) such claim or suit would have been avoided but for the combination,
operation, or use of the Product, or Derivative Product, with
devices, parts, or software not supplied by the Indemnifying Party or
its subcontractors,
(c) the Indemnified Party gives the Indemnifying Party prompt notice in
writing of the Claim and permits the Indemnifying Party, through
counsel of its choice, to answer the charge of infringement and
defend the Claim, and
(d) the Indemnified Party gives the Indemnifying Party all necessary
information, assistance and authority, to enable the Indemnifying
Party to defend the Claim.
The Indemnifying Party will pay such award, but will not be responsible
for any settlement made without its written permission.
7.2 MEI/VSD'S OBLIGATION. Subject to the limitations contained in Section
7.7 of this Agreement, MEI/VSD will indemnify Truevision for Claims
against the MEI/VSD Technology that are brought that are not dependent
on Truevision's
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combination of such MEI/VSD Technology with Truevision Product or Process
Technology into the Product or Derivative Products. MEI/VSD shall have
the right to pass onto Truevision forward going costs of indemnification
that are attributable to Truevision's future manufacture, use and/or sale
of Products and Derivative Products that incorporate components to be
provided by MEI/VSD, through the future cost of such components provided
to Truevision by MEI/VSD pursuant to this Agreement and the agreement to
be negotiated between the parties referred to in Section 5.5. MEI/VSD
agrees to give Truevision a minimum of Six (6) months prior written notice
of its intention to pass on such costs.
7.3 TRUEVISION'S OBLIGATION. Truevision will indemnify MEI/VSD for Claims
against: (i) the Truevision Process Technology; (ii) the Truevision
Product Technology; and (iii) the MEI/VSD Technology that would not have
been brought but for Truevision's combination of such MEI/VSD Technology
with Truevision Product or Process Technology into the Product or
Derivative Products.
7.4 CONSULTATION. If the parties cannot agree on their respective
responsibilities regarding the Claim under Section 7.2 or Section 7.3, the
parties agree to meet and discuss in good faith the allocation of their
responsibilities pursuant to this Section 7 and to carry out such
responsibilities accordingly.
7.5 INJUNCTION. If the use or sale of the Product or components thereof
supplied by the Indemnifying Party to the Indemnified Party is enjoined,
or the Indemnified Party reasonably believes is likely to be enjoined, at
the Indemnified Party's request and option, and without prejudice to the
Indemnified Party's rights and remedies, the Indemnifying Party at its
expense will:
(a) procure from the person or persons claiming or likely to claim
infringement, a license for the Indemnified Party to continue to
exercise all rights implicit in the purchase of the Products or
components thereof from the Indemnifying Party, or
(b) modify the allegedly infringing item to avoid the infringement,
without materially impairing performance or compliance with the
Product Specification or the specification of the components thereof,
or
(c) if the parties agree that neither option a) or b) are practicable,
accept return of such infringing Products, or components thereof, and
refund the purchase price, transportation costs and any other costs
reasonably associated with such return.
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7.6 LIMITATION. The Indemnifying Party's indemnity obligations hereunder
will be limited to the total amount paid by MEI/VSD to Truevision
hereunder. The foregoing states the entire liability of the Indemnifying
Party for infringement of any third party rights.
7.7 LIMITATION ON MEI/VSD'S OBLIGATION TO INDEMNIFY. If Truevision develops
and offers Derivative Products for sale to third parties and receives
revenues of greater than XXXXXXXXXXXX per unit for such Derivative
Products, MEI/VSD's obligation to provide future indemnification to
Truevision for such Derivative Products under Section 7.2 of this
Agreement shall be limited to the ratio of XXXXXXXXXXXX to the actual
revenue Truevision receives for each unit of such Derivative Products.
The limitation with respect to the indemnification obligations of MEI/VSD
contained in this Section 7.7 shall only apply to the indemnification
obligations of MEI/VSD under Section 7.2 regarding costs which are (i)
directly related to, and calculated with respect to, the per unit
revenues of Derivative Products sold by Truevision that are to be paid
to the party making the Claims, and (ii) related to sales of Derivative
Products by Truevision after the date that Truevision receives notice that
MEI/VSD has entered into an agreement to settle a Claim, or has had a
final judgment with respect to which MEI/VSD does not intend to or does
not have the right to appeal, that requires payments to such a party
making a Claim.
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8. CONFIDENTIALITY.
A separate non-disclosure agreement has been executed by the parties to
cover confidential information of either party disclosed in furtherance of
the development of the Product. That agreement is incorporated as Exhibit
F hereto and made a material part of this Agreement provided that the term
of such agreement shall be modified so as to continue until three years
after the expiration or termination of this Agreement.
9. TERM
This Agreement will commence on the Effective Date and will continue until
the final payment by MEI/VSD to Truevision hereunder is completed unless
terminated as provided in Section 10.
10. TERMINATION
10.1 TERMINATION FOR CONVENIENCE Either party may terminate this Agreement for
its convenience at any time prior to MEI/VSD'S final acceptance of the
Deliverables, for any reason or for no reason by giving the other party
prior written notice of termination. Termination will become effective
upon receipt of such notice.
10.2 TERMINATION FOR CAUSE BY EITHER PARTY Either party will have the
right to terminate this Agreement immediately upon written notice at any
time if:
(a) the other party is in material breach of any warranty, term,
condition or covenant of this Agreement other than those
contained in Section 8 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 8; or
(c) the other party: (i) becomes insolvent; (ii) fails to pay its
debts or perform its obligations in the ordinary course of
business as they mature; (iii) admits in writing its insolvency
or inability to pay its debts or perform its obligations as they
mature; or (iv) makes an assignment for the benefit of
creditors; provided such condition has not been remedied within
thirty (30) days after receiving written notice of the first
party's intention to terminate.
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10.3 EFFECT OF TERMINATION
(a) TERMINATION FOR CONVENIENCE BY MEI/VSD If MEI/VSD terminates
this Agreement pursuant to Section 10.1, Truevision will, as soon
as reasonably practicable after receipt of such notice, cease all
work under this Agreement and prepare a list of expenses both
already incurred and to be incurred in the future that is not
avoidable. Truevision shall be entitled to payment by MEI/VSD of
the amount of the expenses so listed.
(b) TERMINATION FOR CONVENIENCE BY TRUEVISION If Truevision
terminates this Agreement pursuant to Section 10.1, Truevision
shall promptly refund to MEI/VSD all payments made by MEI/VSD to
Truevision under this Agreement and the Letter of Intent signed
by the parties dated December 28, 1995.
(c) TERMINATION FOR CAUSE BY MEI/VSD If MEI/VSD terminates this
Agreement pursuant to Section 10.2, MEI/VSD will have no
liability for any milestone or other payments beyond the last
payment due for completion of the last milestone accepted by
MEI/VSD prior to the notice given by MEI/VSD pursuant to Section
10.2.
(d) TERMINATION FOR CAUSE BY TRUEVISION If Truevision terminates
this Agreement pursuant to Section 10.2, Truevision will prepare
a list of expenses both already incurred and to be incurred in
the future that is not avoidable. Truevision shall be entitled
to payment by MEI/VSD of the amount of the expenses so listed.
(e) FURTHER EFFECTS OF TERMINATION IN ALL CASES Upon termination of
this Agreement for any reason and by either party, each party
will be released from all obligations and liabilities to the
other occurring or arising after the date of such termination,
except that any termination of this Agreement will not relieve
Truevision or MEI/VSD of their respective obligations under
Sections. 2.5, 2.7, 5, 6, 7, 8, 10.3, 11 hereof, nor will any
such termination relieve Truevision or MEI/VSD from any liability
arising from any breach of this Agreement. 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.
11. GENERAL
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11.1 RIGHT TO INDEPENDENT DEVELOPMENT. Nothing in this Agreement will impair
either party's right to acquire, license, develop, manufacture or
distribute for itself, or have others develop, manufacture or distribute
for it, technology performing the same or similar functions to the
Products or Derivative Products, or to market and distribute such similar
technology in addition to, or in lieu of the Product or Derivative
Products.
11.2 PROPRIETARY RIGHTS NOTICE. If any of the technology in the printed
circuit boards or circuit substrates of the Product, as appropriate, is
copyrightable, Truevision will cause such printed circuit boards or
circuit substrates to bear a copyright notice as follows "-C- 19XX
Truevision, Inc."
11.3 PERIODIC MEETINGS. The parties agree to meet periodically at mutually
agreed times and places to review technology and market developments.
11.4 FORCE MAJEURE Neither party will be liable for any failure or delay in its
performance under this Agreement due to causes, including, but not limited
to, acts of God, acts of civil or military authority, fires, epidemics,
floods, earthquakes, riots, wars, sabotage, labor shortages or disputes,
and governmental actions, which are beyond its reasonable control;
provided that the delayed party: (i) gives the other party written notice
of such cause promptly, and in any event within fifteen (15) days of
discovery thereof; and (ii) uses its reasonable efforts to correct such
failure or delay in its performance. The delayed party's time for
performance or cure under this Section 11.4 Shall be extended for a period
equal to the duration of the cause.
11.5 RELATIONSHIP OF PARTIES Truevision is an independent contractor. Neither
Truevision nor Truevision's employees, consultants, contractors or agents
are agents, employees or joint venturers of MEI/VSD, nor do they have any
authority to bind MEI/VSD by contract or otherwise to any obligation.
They will not represent to the contrary, either expressly, implicitly, by
appearance or otherwise. Truevision will determine, in Truevision's sole
discretion, the manner and means by which the services are accomplished,
subject to the express condition that Truevision will at all times comply
with applicable law and the provisions of this Agreement.
11.6 USE OF NAME Neither party may, without the prior written consent of the
other party, use the name of the other party in promotional, advertising
and other materials.
11.7 PERSONNEL Each party's employees, consultants, contractors and agents
will observe the working hours, working rules and holiday schedule of the
other party while working on the other party's premises.
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11.8 EMPLOYMENT TAXES AND BENEFITS As between Truevision and MEI/VSD, it will
be Truevision's obligation to report as income all compensation received
by Truevision pursuant to this Agreement and pay all taxes due on such
compensation. Truevision will indemnify MEI/VSD against and hold it
harmless from any obligation imposed on MEI/VSD to pay any withholding
taxes, social security, unemployment insurance, workers' compensation
insurance, disability insurance or similar items, including interest and
penalties thereon, in connection with any payments made to Truevision by
MEI/VSD pursuant to this agreement.
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11.9 OTHER TAX IMPLICATIONS The purpose of development of the Deliverables
under this Agreement is to demonstrate that the Product developed
hereunder will conform to the Specifications. The Deliverables have no
intrinsic value as an item. As such, no value added, sales, or use taxes
have been assessed or are anticipated to be required as a result of the
Services performed under this Agreement. To the extent any such taxes
are ultimately assessed to Truevision as a retailer, MEI/VSD shall have
responsibility to discharge the claim with the assistance of Truevision.
11.10 INSURANCE Truevision will maintain insurance to protect itself from
claims: (i) by Truevision's employees, agents and subcontractors
under workers' compensation and disability acts (ii) for damages
because of bodily injury, sickness, disease or death of its employees
or of any other person that arise out of any negligent act or omission
of Truevision or Truevision's employees, agents or subcontractors; and
(iii) for damages because of injury to or destruction of tangible or
intangible property including loss of use resulting therefrom that
arise out of any negligent act or omission or willful misconduct of
Truevision or Truevision's employees, agents or subcontractors.
Truevision will insure all MEI/VSD property in its possession or
control, including but not limited to any loan equipment, against all
loss and damage and will reimburse MEI/VSD for any such loss or
damage.
11.11 ASSIGNMENT The rights and liabilities of the parties under this
Agreement will bind and inure to the benefit of the parties'
respective successors, executors and administrators, as the case may
be; provided that, as MEI/VSD has specifically contracted for
Truevision's services, Truevision may not assign or delegate its
obligations under this Agreement either in whole or in part, without
the prior written consent of MEI/VSD. Notwithstanding the foregoing,
either party may assign this Agreement to its parent, subsidiary, or
affiliates effective upon written notice of such assignment to the
other party. Any attempted assignment in violation of the provisions
of this Section 11.11 will be void.
11.12 EQUITABLE RELIEF Because the Services are personal and unique, and
because each party will have access to and become acquainted with
confidential and proprietary information of the other party, the
unauthorized use or disclosure of which would cause irreparable harm
and significant injury which would be difficult to ascertain and which
would not be compensable by damages alone, Both parties agree that
either party will have the right to enforce this Agreement and any of
its provisions by injunction, specific performance or other equitable
relief without prejudice to any other rights and remedies that the
party may have for the other party's breach of this Agreement.
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11.13 APPLICABLE LAW This Agreement shall be governed by and construed in
accordance with the laws of the State of California, U.S.A., except
that body of California law concerning conflicts of law. Any
litigation or other dispute resolution between the parties relating to
this Agreement shall take place in California.
11.14 SEVERABILITY If for any reason a court of competent jurisdiction
finds any provision of this Agreement, or portion thereof, to be
unenforceable, that provision of the Agreement shall be enforced to
the maximum extent permissible so as to effect the intent of the
parties, and the remainder of this Agreement shall continue in full
force and effect.
11.15 NOTICES All notices required or permitted under this Agreement shall
be in writing, reference this Agreement and be deemed given when:
(i) delivered personally; (ii) when sent by confirmed telex or
facsimile; (iii) five (5) days after having been sent by registered or
certified mail, return receipt requested, postage prepaid; or (iv) one
(1) day after deposit with a commercial overnight carrier, with
written verification of receipt. All communications will be sent to
the addresses set forth below. Either party may change its address by
giving notice pursuant to this Section 11.15.
Truevision: MEI/VSD:
Truevision , Inc. Matsushita Electric Industrial Co. Ltd.
2500 Walsh Avenue Video Systems Division
Santa Clara, California 95015 2-15 Matsuba-cho, Kadoma
Osaka 571 Japan
Attn: Laurin Herr Attn: M. Higuchi
Copy To General Counsel
At The Same Address
11.16 NO WAIVER Failure by either party to enforce any provision of this
Agreement shall not be deemed a waiver of future enforcement of that
or any other provision.
11.17 NO RIGHTS IN THIRD PARTIES This Agreement is made for the benefit of
Truevision and MEI/VSD and their respective subsidiaries and
affiliates, if any, and not for the benefit of any third parties. This
Agreement will be binding only on the parties to the Agreement and
will not be binding on any parent, subsidiary, affiliate or internal
division of either party.
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11.18 COUNTERPARTS This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but
collectively shall constitute but one and the same instrument.
11.19 HEADINGS AND REFERENCES The headings and captions used in this
Agreement are used for convenience only and are not to be considered
in construing or interpreting this Agreement.
11.20 CONSTRUCTION This Agreement has been negotiated by the parties and
their respective counsel. This Agreement will be fairly interpreted
in accordance with its terms and without any strict construction in
favor of or against either party.
11.21 TRADEMARK USAGE Neither party shall make use of any trademark or
trade name of the other in connection with it's advertising,
promotional material or packaging for the Product or any product
incorporating the Product, without the express written permission of
the other party.
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11.22 EXPORT CONTROL. Each party understands and acknowledges that it is
subject to regulation by agencies of the U.S. Government, including,
but not limited to, the U.S. Department of Commerce, which prohibit
export or diversion of certain products and technology to certain
countries. Any and all obligations of either party to provide the
Products, documentation, components, technology, or any media in which
any of the foregoing is contained, as well as any other technical
assistance shall be subject in all respects to such United States laws
and regulations as shall from time to time govern the license and
delivery of technology and products abroad by persons subject to
jurisdiction of the United States, including the Export Administration
Act of 1979, as amended, any successor legislation, and the Export
Administration Regulations issued by the Department of Commerce,
Bureau of Export Administration. Each party agrees to cooperate with
the other party, including, without limitation, providing required
documentation, in order to obtain export licenses or exemptions
therefrom. Each party warrants that it will comply with the Export
Administration Regulations and other United States laws and
regulations governing exports in effect from time to time. Without in
any way limiting the provision of this Agreement, each party agrees
that unless prior written authorization is obtained from the Bureau of
Export Administration or the Export Administration Regulations
explicitly permit the re-export without such written authorization, it
will not export, re-export, or transship, directly or indirectly, the
Products or any technical data disclosed or provided to that party, or
the direct product of such technical data, to any country as to which
the U.S. Government prohibits the transfer of such items or to which
the U.S. Government has placed an embargo against the shipments of
products, which is in effect during the term of this Agreement. The
parties also agree to comply with similar export control regulations
of other governments, including, without limitation, the government of
Japan, and agree to cooperate with each other to allow each party to
exercise its rights under this Agreement to the maximum extent
possible while in compliance with all applicable laws, rules and
regulations.
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11.23 COMPLETE AGREEMENT This Agreement, including all Exhibits,
constitutes the entire agreement between the parties with respect to the
subject matter hereof, and supersedes and replaces all prior or
contemporaneous understandings or agreements, written or oral, regarding
such subject matter. No amendment to or modification of this Agreement
shall be binding unless in writing and signed by a duly authorized
representative of both parties. To the extent any terms and conditions
of this Agreement conflict with the terms and conditions of any invoice,
purchase order or purchase order acknowledgment placed hereunder, the
terms and conditions of this Agreement shall govern and control.
IN WITNESS WHEREOF, the parties have caused this agreement to be
executed by their duly authorized representatives.
MEI/VSD: Truevision:
BY: /s/ Katsuhiko Yamamoto BY: /s/ Louis Doctor
-------------------------------------- -----------------------------
Katsuhiko Yamamoto Louis J. Doctor
Director, Video Systems Division President and Chief Executive
Matsushita Electric Industrial Co. Ltd. Officer
Truevision, Inc.
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EXHIBIT A
SPECIFICATION
The applicable specifications for EVT Units, DVT Units, and PVT Units are
qualified by the definitions set forth in Exhibit D of the Agreement. The
specification will be incorporated herein as Exhibit A.
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EXHIBIT B
LIST OF EQUIPMENT MEI/VSD TO LOAN TO TRUEVISION
Initial loan by XXXXXXX, shipped to Truevision/Indianapolis
XX sets (XX boards) DVCPRO Codec Evaluation Boards
X pcs DVCPRO Studio VTR with 259M option
X pcs DVCPRO Camera
X case DVCPRO Cassettes
Second stage loan by XXXXXXXXX (in addition to first stage loan)
X pcs DVCPRO VTR with built-in 1394
X pcs 1394 interface upgrade for Studio VTR
X pcs DVCPRO Camera (should be ENG or EFP camera)
X cases DVCPRO Cassettes
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EXHIBIT C
DEVELOPMENT AND PAYMENT SCHEDULE
Total Payment of XXXXXXXXXX from MEI/VSD to Truevision, as follows:
MILESTONE COMPLETION DATE PAYMENT
- --------- --------------- -------
XXXXXXXXXXXXXXXXXXXXX XXXXXXXXXX XXXXX
XXXXXXXXXXXXXXXXXXXXX XXXXXXXXXX XXXXX
XXXXXXXXXXXXXXXXXXXXX XXXXXXXXXX XXXXX
XXXXXXXXXXXXXXXXXXXXX XXXXXXXXXX XXXXX
XXXXXXXXXXXXXXXXXXXXX XXXXXXXXXX XXXXX
XXXXXXXXXXXXXXXXXXXXX XXXXXXXXXX XXXXX
XXXXXXXXXXXXXXXXXXXXX XXXXXXXXXX XXXXX
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EXHIBIT D
DELIVERABLES
I. HARDWARE DELIVERABLES
1. Provided Truevision receives the following items from MEI/VSD on or before
the dates indicated:
XXXXX XXXXXXXXXXXXXXXX Qty XX
XXXXX XXXXXXXXXXXXXXXX Qty XX
Then:
EVT UNIT DELIVERABLES - consisting of XXXXXXX of the EVT Units and
associated Documentation, on or before XXXXXXX, XXXXXXXXXXXXXXX
2. Provided Truevision receives the following items from MEI/VSD on or before
the dates indicated:
XXXXXX XXXXXXXXXXXXXXXX Qty XX
XXXXXX XXXXXXXXXXXXXXXX Qty XX
Then:
DVT UNIT DELIVERABLES - consisting of XXXXXX DVT Units and associated
Documentation, on or before XXXXXXXXXXX, XXXXXXXXXXXXXXXX.
3. PVT UNIT DELIVERABLES - consisting of XXXXXXX PVT Units and associated
Documentation, on or before XXXXXXXXXX, XXXXXXXXXXXXXXX.
I. SOFTWARE DELIVERABLES
1. EVT UNIT SOFTWARE DELIVERABLE - consisting of XXXXXXXXX on or before
XXXXXXXXX.
2. DVT UNIT SOFTWARE DELIVERABLE - consisting of XXXXXXXXX on or before
XXXXXXXXXXXX.
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3. PVT UNIT SOFTWARE DELIVERABLE - consisting of XXXXXXXXXXXX on or before
XXXXXXXXXXXXX.
Acceptance period for all deliverables will be within Fifteen (15) days of
receipt of the deliverable.
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EXHIBIT E
DEVELOPER'S KIT DESCRIPTION
A software toolkit for use by application developers that provides the software
tools necessary to build high performance products that take maximum advantage
of the Product's DVR architecture. Truevision will develop a functional group
for the Product to be incorporated within the toolkit with functionality being
substantially similar to the attached data sheet for Truevision's DVR Developer
Toolkit (PC Version) which is hereby incorporated by reference.
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EXHIBIT F
NON-DISCLOSURE AGREEMENT
THE MUTUAL CONFIDENTIAL DISCLOSURE AGREEMENT ENTERED INTO BY AND BETWEEN THE
PARTIES ON MAY 12, 1995 IS HEREBY INCORPORATED BY REFERENCE AS A PART OF THIS
EXHIBIT F AND THIS AGREEMENT.
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EXHIBIT G
LIST OF MEI/VSD TECHNOLOGY REQUIRED
XXXXXXXXXXXXX
XXXXXXXXXXXX
XXXXXXXXXXXX
XXXXXXXXXXXX
XXXXXXXXXXXX
XXXXXXXXXXXX
XXXXXXXXXXXX
XXXXXXXXXXXX
KNOW-HOW
XXXXXXXXXXXXX
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EXHIBIT H
MEI/VSD SOFTWARE TO BE INCORPORATED IN THE PRODUCT
XXXXXXXXXXXXXXXXXXXXX
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