Common use of Development Payments Clause in Contracts

Development Payments. 1. On the later of October 1, 1996 or the Effective Date, ReSound shall pay $500,000 to AL2. From January 1, 1997 (for ReSound) and from or immediately after the Effective Date (for Danavox), in each case through the date which is two (2) years from the Effective Date, each of Danavox and ReSound shall pay a total of $5,981,000 to AL2 under this Agreement, to be paid at such times and in such amounts and for the purposes as set forth in the Budget attached hereto as EXHIBIT F, or as otherwise determined by the General Partner of AL2 (the "Initial Payments"). All such amounts paid by ReSound and Danavox shall be paid on a proportional basis as between the two entities. 2. Each of Danavox and ReSound shall provide an additional $1,000,000 of funding during the third and fourth years of the Term in order to develop Base DSP Technology, such amounts to be paid at such times, in such amounts and for the purposes set forth in the Budget. 3. Each of ReSound and Danavox shall pay AL2 [*] for each Hearing Aid DSP IC sold by such party (whether or not as part of a Licensed Product). ReSound and Danavox may credit against the payments made pursuant to this subparagraph (F)(3) any amounts paid to AL2 by third parties under Article V(C)(2), below. Unless otherwise agreed by Danavox and ReSound, at such time as the aggregate royalty payments to AL1 payable under Section V(C)(1), below, total U.S. $5,000,000 (not including any amounts paid under Section V(C)(3), below), no additional payments shall be made to AL2 under this subparagraph (F)(3). Notwithstanding any other provision of this Agreement, the Amended and Restated Agreement of Limited Partnership or any other Related Agreement, the amounts paid to AL2 under this subparagraph (F)(3): (a) shall not be considered as capital contributions to AL2 (and therefore will not affect the proportional partnership interests of AL2's limited partners), and (b) shall not be considered to be payments under the Budget (and therefore will not decrease the amounts otherwise payable by ReSound and Danavox pursuant to this subparagraph (F)). 4. If for any reason this Agreement is terminated prior to the end of the second year of the Term (September 30, 1998), ReSound agrees to pay to Danavox in cash an amount such that the total payments made by ReSound and Danavox under this Agreement (excluding $3,400,000 paid by Danavox hereunder) shall be in the following proportion: one- 5. Danavox and ReSound shall make the payments discussed in subparagraphs (F)(1) and (2) so long as (a) the Hearing Aid Development Committee agrees that AL2 is continuing to make substantial progress on the Development Program, (b) there shall have been no material adverse change in the assets, business, condition (financial or otherwise) or prospects of AL2 which render the development of the Technology by AL2 Impracticable (as defined below), and (c) no provision of any applicable law or regulation and no judgment, injunction, order or decree shall prohibit payment or development activities within AL2. If, at any time during the first two (2) years of the Term, the Hearing Aid Development Committee determines, by majority vote, that a power budget, size budget or cost budget cannot be estimated to fulfill the development specifications set forth in EXHIBIT E hereto, and no practical and reasonable solution is found by the Hearing Aid Development Committee, the Development Program shall be considered "Impracticable."

Development Payments. 1. On the later of October 1, 1996 or the Effective Date, ReSound shall pay $500,000 to AL2. From January 1, 1997 (for ReSound) and from or immediately after the Effective Date (for Danavox), in each case through the date which is two (2) years from the Effective Date, each of Danavox and ReSound shall pay a total of $5,981,000 to AL2 under this Agreement, to be paid at such times and in such amounts and for the purposes as set forth in the Budget attached hereto as EXHIBIT F, or as otherwise determined by the General Partner of AL2 (the "Initial Payments"). All such amounts paid by ReSound and Danavox shall be paid on a proportional basis as between the two entities. 2. Each of Danavox and ReSound shall provide an additional $1,000,000 of funding during the third and fourth years of the Term in order to develop Base DSP Technology, such amounts to be paid at such times, in such amounts and for the purposes set forth in the Budget. 3. Each of ReSound and Danavox shall pay AL2 [*] for each Hearing Aid DSP IC sold by such party (whether or not as part of a Licensed Product). ReSound and Danavox may credit against the payments made pursuant to this subparagraph (F)(3) any amounts paid to AL2 by third parties under Article V(C)(2), below. Unless otherwise agreed by Danavox and ReSound, at such time as the aggregate royalty payments to AL1 payable under Section V(C)(1), below, total U.S. $5,000,000 (not including any amounts paid under Section V(C)(3), below), no additional payments shall be made to AL2 under this subparagraph (F)(3). Notwithstanding any other provision of this Agreement, the Amended and Restated Agreement of Limited Partnership or any other Related Agreement, the amounts paid to AL2 under this subparagraph (F)(3): (a) shall not be considered as capital contributions to AL2 (and therefore will not affect the proportional partnership interests of AL2's limited partners), and (b) shall not be considered to be payments under the Budget (and therefore will not decrease the amounts otherwise payable by ReSound and Danavox pursuant to this subparagraph (F)). 4. If for any reason this Agreement is terminated prior to the end of the second year of the Term (September 30, 1998), ReSound agrees to pay to Danavox in cash an amount such that the total payments made by ReSound and Danavox under this Agreement (excluding $3,400,000 paid by Danavox hereunder) shall be in the following proportion: one- 5. Danavox and ReSound shall make the payments discussed in subparagraphs (F)(1) and (2) so long as (a) the Hearing Aid Development Committee agrees that AL2 is continuing to make substantial progress on the Development Program, (b) there shall have been no material adverse change in the assets, business, condition (financial or otherwise) or prospects of AL2 which render the development of the Technology by AL2 Impracticable (as defined below), and (c) no provision of any applicable law or regulation and no judgment, injunction, order or decree shall prohibit payment or development activities within AL2. If, at any time during the first two (2) years of the Term, the Hearing Aid Development Committee determines, by majority vote, that a power budget, size budget or cost budget cannot be estimated to fulfill the development specifications set forth in EXHIBIT E hereto, and no practical and reasonable solution is found by the Hearing Aid Development Committee, the Development Program shall be considered "Impracticable."