Note: this agreement was terminated and has been superseded by the hashgraph intellectual property purchase agreement. Read more here: How was the hashgraph IP purchase price calculated? – Hedera Help
The financial terms of the MLA incorporate terms previously agreed to by the parties under the original license agreement, as well as some changes to account for the new exclusivity term and other modifications to the parties’ rights and obligations. The MLA license fees now consist of the following: (1) ten percent (10%) of the SAFT proceeds, which has already been paid; (2) a one-time allocation of 2.5 billion coins (5% of total supply), which was already transferred*; (3) a total payment of $5M to be owed in installments based on meeting four milestones (the majority ($3M) upon meeting the acceptance criteria for Open Access, and the remaining installments for open review of the code base, acceptance of a paper about hashgraph in a peer-reviewed conference or journal, and satisfactory delivery of all pre-defined features and services set out in the MLA, i.e., the four major network services, state proofs, mirror nodes, and various node management features); and (4) ten percent (10%) of Hedera revenue, with monthly minimums. For purposes of the MLA, “revenue” is defined to mirror the definition of Prior Period Sales, i.e., to mean the total number of hbars that Hedera sold over a period of time, whether those sales are of coins received as network transaction fees or coins sold from Hedera’s treasury. The MLA provides for monthly minimums of $625,000 worth of hbars (at fair market value) when paid in coins and $500,000 when paid in dollars. Because distributions of coins are subject to Council approval and regulatory considerations, the parties remain in discussions about effectuating the minimum payments. If Hedera pays the monthly minimums to Swirlds in hbars instead of dollars, the number of hbars transferred to Swirlds will be included in calculating the Prior Period Sales for the purposes of this Offer.
The MLA further provides that Swirlds must provide Hedera with a non-binding schedule setting out its expected plan for the sale of coins (if any) over the subsequent twelve months and must provide Hedera with at least 24-hour notice and right of first refusal prior to any such sale. The current coin distribution schedule provided by Swirlds to Hedera, which is for calendar year 2020, states that Swirlds has no coin sales planned for the entirety of that period.
* More information about the terms of this allocation: https://help.hedera.com/hc/en-us/articles/360006851217