EXHIBIT 10.5
Confidential
MASTER TECHNOLOGY LICENSE AGREEMENT
This Master Technology License Agreement is entered into and is effective
as of the 23rd day of September, 1994 by and among M-R Assets Corporation, a
California corporation ("MAC"), Hewlett-Packard Company, a California
corporation ("HP"), Komag, Incorporated, a Delaware corporation ("Komag"), and
Asahi Glass America, Inc., a Delaware corporation ("AGA").
RECITALS
WHEREAS, MAC desires to develop and produce the Product utilizing the HP MR
Technology, the Dastek MR Technology, the Joint MR Technology and the Komag MR
Technology; and
WHEREAS, HP desires to license to MAC the HP MR Technology and to obtain
from MAC a license to the MAC MR Technology and certain Product price and
production commitments and from each of Komag and AGA a license to the Dastek MR
Technology and a license to the Joint MR Technology and from Komag a license to
the Komag MR Technology; and
WHEREAS, Komag desires to license to MAC the Dastek MR Technology, the
Joint MR Technology and the Komag MR Technology and to obtain from MAC a license
to the MAC MR Technology and from HP a license to the HP MR Technology; and
WHEREAS, AGA desires to license to MAC the Dastek MR Technology and the
Joint MR Technology and to obtain from MAC a license to the MAC MR Technology,
from HP a license to the HP MR Technology and from Komag a license to the Komag
MR Technology; and
WHEREAS, each of MAC, HP, Komag and AGA desires to cooperate with the other
parties hereto for the purpose of creating a manufacturing capability for the
Product and making the Product successful and widely accepted in the industry;
and
WHEREAS, MAC has contributed and is contributing significant development
resources to bring the Product to readiness for mass production; and
WHEREAS, HP has contributed and is contributing significant development
resources to MAC to bring the Product to readiness for mass production; and
[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
WHEREAS, Komag and AGA have contributed and are contributing significant
resources to bring the Product to readiness for mass production;
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants hereinafter set forth, the parties hereto agree as follows:
1. CERTAIN DEFINITIONS
The following terms not defined elsewhere herein shall have following
meanings:
"AKCL" shall mean Asahi Komag Co., Ltd., a Japanese corporation.
"Confidential Information" shall mean confidential or proprietary
information of any party hereto which is disclosed to any other party hereto by
reason of the parties' relationship hereunder or pursuant hereto, including
without limitation (a) Intellectual Property, (b) information about or related
to the specification, design, manufacture, test and implementation of the
Product, and (c) the business plans, vendors and customers of the respective
parties.
"Dastek" shall mean Dastek, Inc., a California corporation.
"Dastek" MR Technology" shall mean Intellectual Property related to the
Product developed or acquired and, with respect to patents, conceived or first
reduced to practice or acquired and formerly owned by Dastek, in which each of
Komag and AGA owns an undivided right.
"Discloser" shall mean any party hereto which discloses Confidential
Information under this Agreement.
"HP MR Technology" shall mean Intellectual Property related to dual-stripe
magnetoresistive heads, including without limitation air-bearings, head gimble
attachments and wire bonding processes, developed or acquired and, with respect
to patents, conceived or first reduced to practice or acquired by HP on or
before the termination of the Restriction Period.
"Intellectual Property" shall mean any and all (a) documentation; (b)
computer programs in source code or object code form; (c) works of authorship
(whether copyrightable or not); (d) inventions (whether patentable or not),
know-how, technology, trade secrets, mask works, designs, processes and
technical data; (e) patents, design patents, utility models,
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industrial designs, copyrights, mask work registrations and applications
therefor, foreign counterparts thereof and similar rights and assets in any
country.
"Inventing Parties" shall have the meaning set forth in Section 15.5 below.
"Joint Authors" shall have the meaning set forth in Section 15.5 below.
"Joint Inventions" shall have the meaning set forth in Section 15.5 below.
"Joint MR Technology" shall mean Intellectual Property related to the
Product developed or acquired and, with respect to patents, conceived or first
reduced to practice or acquired jointly by Dastek and Komag as of the date of
this Agreement.
"Joint Works" shall have the meaning set forth in Section 15.5 below.
"Komag MR Technology" shall mean Intellectual Property related exclusively
to the Product developed or acquired and, with respect to patents, filed or
acquired by Komag prior to the closing date.
"MAC MR Technology" shall mean Intellectual Property related to the Product
developed or acquired and, with respect to patents, filed or acquired by MAC
prior to the closing date.
"MAC Technical Information" shall mean all information, data, engineering
drawings and other design specifications and documentation for those aspects of
any dual-stripe magnetoresistive Product and its manufacturing process which are
developed or acquired by MAC, including without limitation any such information,
data, drawings and other design specifications and documentation developed or
acquired by Xxxxx.
"Product" shall mean a disk drive component, namely any recording head.
"PTO" shall mean the U.S. Patent and Trademark office.
"Recipient" shall mean any party hereto which receives Confidential
Information from any other party hereto under this Agreement.
"Restriction Period" shall mean the period beginning on the date hereof and
ending on the date two (2) years thereafter.
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"Xxxxx" shall mean Xxxxx, Inc., a Delaware corporation.
"Third Party MR Technology" shall mean Intellectual Property related to
dual-stripe magnetoresistive heads, including without limitation air-bearings,
head gimble attachments and wire bonding processes, developed or acquired and,
with respect to patents, conceived or first reduced to practice or acquired by
third parties and licensed on or before the termination of the Restriction
Period to HP or at any time to Komag or AGA, as the case may be.
2. HP LICENSE TO MAC
2.1 (i) Grant of License under the HP MR Technology. HP hereby grants
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to MAC a perpetual, exclusive, royalty-free (subject to Section 2.2(ii) below),
worldwide license under the HP MR Technology to develop, manufacture (including
the right to have manufactured subject to Section 2.1(ii) below), test, use,
modify, reproduce, sell, market and distribute Product and to modify and create
derivative works of the HP MR Technology for the purpose of developing,
manufacturing (including the right to have manufactured subject to Section 2.1
(ii) below) , testing, using, modifying, reproducing, selling, marketing and
distributing Product, with the right to sublicense and assign subject to
Sections 2.1(iii) and 16 below.
(ii) Have Made Restriction. The right of MAC to have Product made
---------------------
contained in Section 2.1(i) above is subject to the restriction that, during the
Restriction Period, MAC shall have obtained HP's prior written approval, which
shall not be unreasonably withheld.
(iii) Sublicense and Assignment Restrictions. The right of MAC to
--------------------------------------
sublicense or assign the rights contained in Section 2.1(i) is subject to the
restriction that, during the Restriction Period, except with respect to any
sublicense to be granted by MAC pursuant to Section 16 below, MAC may grant a
sublicense of commensurate scope only to AKCL, and no other party, unless prior
written approval is obtained from HP, which shall not be unreasonably withheld.
Factors which HP may consider in determining whether to grant such approval
include without limitation (a) whether the proposed sublicense includes an
option for HP to purchase a minimum of [*] percent ([*]%) of the sublicensee's
Product production output containing the sublicensed HP MR Technology, and (b)
the right of HP to receive the lowest price such sublicensee charges any
customer for similar volumes of such Product.
[*]=CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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2.2 Sublicense under the Third Party MR Technology.
----------------------------------------------
(i) HP hereby grants to MAC a sublicense under the Third Party MR
Technology licensed by the third party to HP, commensurate in scope with such
license, to the extent and for as long as permitted by such license, to develop,
manufacture (including the right to have manufactured), test, use, modify,
reproduce, sell, market and distribute Product and to modify and create
derivative works of such Third Party MR Technology for the purpose of
developing, manufacturing (including the right to have manufactured), testing,
using, modifying, reproducing, selling, marketing and distributing Product.
(ii) To the extent HP has an obligation to pay any royalties or
other fees to any third party pursuant to the license to HP under any Third
Party MR Technology sublicensed by HP to MAC under Section 2.2(i) above, HP
shall so inform MAC and MAC shall pay HP all such applicable royalties and other
fees due to such third parties under such sublicense.
3. KOMAG AND AGA LICENSES TO MAC
3.1 Grant of License under the Dastek MR Technology. Each of Komag and AGA
-----------------------------------------------
hereby grants to MAC a perpetual, exclusive, royalty-free, worldwide license
under the Dastek MR Technology to develop, manufacture (including the right to
have manufactured), test, use, modify, reproduce, sell, market and distribute
Product and to modify and create derivative works of the Dastek MR Technology
for the purpose of developing, manufacturing (including the right to have
manufactured), testing, using, modifying, reproducing, selling, marketing and
distributing Product, with the right to sublicense and assign.
3.2 Grant of License under the Joint MR Technology. Each of Komag and AGA
----------------------------------------------
hereby grants to MAC a perpetual, non-exclusive, royalty-free, worldwide license
under the Joint MR Technology to develop, manufacture (including the right to
have manufactured), test, use, modify, reproduce, sell, market and distribute
Product and to modify and create derivative works of the Joint MR Technology for
the purpose of developing, manufacturing (including the right to have
manufactured), testing, using, modifying, reproducing, selling, marketing and
distributing Product, with the right to sublicense and assign.
3.3 (i) Grant of License under the Komag MR Technology. Komag hereby
----------------------------------------------
grants to MAC a perpetual, non-exclusive, royalty-free (subject to Section
3.3(iii) (b) below), worldwide license under the Komag MR Technology to develop,
manufacture (including the right to have
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manufactured), test, use, modify, reproduce, sell, market and distribute Product
and to modify and create derivative works of the Komag MR Technology for the
purpose of developing, manufacturing (including the right to have manufactured),
testing, using, modifying, reproducing, selling, marketing and distributing
Product, with the right to sublicense or assign subject to Sections 3.3(ii) and
16 below.
(ii) Sublicense and Assignment Restrictions. During the Restriction
--------------------------------------
Period, the right of MAC to sublicense or assign the rights contained in Section
3.3(i) above is limited and subject to, except with respect to sublicenses to be
granted by MAC pursuant to Section 16 below (a) Komag's providing, in its sole
discretion, prior written approval of any such proposed sublicense or
assignment, including approval of the terms and of the parties to any such
sublicense, such approval not to be unreasonably withheld, and (b) any such
sublicense being of a scope commensurate with the rights granted herein, without
further right of sublicense. Notwithstanding the foregoing, MAC may sublicense
rights of a scope commensurate with the rights granted herein, without further
right of sublicense, to AKCL, without such prior written approval.
(iii) Sublicense under the Third Party MR Technology.
----------------------------------------------
(a) Komag hereby grants to MAC a sublicense under the Third Party
MR Technology licensed by the third party to Komag, commensurate in scope with
such license, to the extent and for as long as permitted by such license, to
develop, manufacture (including the right to have manufactured), test, use,
modify, reproduce, sell, market and distribute Product and to modify and create
derivative works of such Third Party MR Technology for the purpose of
developing, manufacturing (including the right to have manufactured), testing,
using, modifying, reproducing, selling, marketing and distributing Product.
(b) To the extent Komag has an obligation to pay any royalties or
other fees to any third party pursuant to the license to Komag under any Third
Party MR Technology sublicensed by Komag to MAC under Section 3.3(iii)(a) above,
Komag shall so inform MAC and MAC shall pay Komag all such applicable royalties
and other fees due to such third parties under such sublicense.
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4. MAC LICENSES TO HP, KOMAG AND AGA
Except as provided in Section 5 below with respect to the license of the HP
MR Technology, the Dastek MR Technology, the Joint MR Technology and the Komag
MR Technology, which shall not be included in the licenses granted pursuant to
Sections 4.1-4.3:
4.1 Grant of License under the MAC MR Technology to HP. MAC hereby grants
--------------------------------------------------
to HP a perpetual, non-exclusive, royalty-free, worldwide license under the MAC
MR Technology to develop, manufacture (including the right to have
manufactured), test, use, modify, reproduce, sell, market and distribute Product
and to modify and create derivative works of the MAC MR Technology for the
purpose of developing, manufacturing (including the right to have manufactured)
, testing, using, modifying, reproducing, selling, marketing and distributing
Product, with the right to sublicense and assign.
4.2 Grant of License under the MAC MR Technology to Komag. MAC hereby
-----------------------------------------------------
grants to Komag a perpetual, non-exclusive, royalty-free, worldwide license
under the MAC MR Technology to develop, manufacture (including the right to have
manufactured), test, use, modify, reproduce, sell, market and distribute Product
and to modify and create derivative works of the MAC MR Technology for the
purpose of developing, manufacturing (including the right to have manufactured),
testing, using, modifying, reproducing, selling, marketing and distributing
Product, with the right to sublicense and assign.
4.3 Grant of License under the MAC MR Technology to AGA. MAC hereby
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grants to AGA a perpetual, non-exclusive, royalty-free, worldwide license under
the MAC MR Technology to develop, manufacture (including the right to have
manufactured) , test, use, modify, reproduce, sell, market and distribute
Product and to modify and create derivative works of the MAC MR Technology for
the purpose of developing, manufacturing (including the right to have
manufactured), testing, using, modifying, reproducing, selling, marketing and
distributing Product, with the right to sublicense and assign.
5. CROSS-LICENSES AMONG HP, KOMAG AND AGA
5.1 (i) Grant of Cross-License under the HP MR Technology to Komag. HP
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hereby grants to Komag a perpetual, non-exclusive, royalty-free (subject to
Section 5.1(v)(b) below), worldwide license under the HP MR Technology to
develop, manufacture (including the right to have manufactured), test, use,
modify, reproduce, sell, market and distribute Product and to modify and create
derivative works of the HP MR Technology for the purpose of developing,
7
manufacturing (including the right to have manufactured), testing, using,
modifying, reproducing, selling, marketing and distributing Product, with the
right to sublicense and assign subject to Section 5.1(iii)-(iv) below.
(ii) Grant of Cross-License under the HP MR Technology to AGA. HP
--------------------------------------------------------
hereby grants to AGA a perpetual, non-exclusive, royalty-free (subject to
Section 5.1(v)(b) below), worldwide license under the HP MR Technology to
develop, manufacture (including the right to have manufactured), test, use,
modify, reproduce, sell, market and distribute Product and to modify and create
derivative works of the HP MR Technology for the purpose of developing,
manufacturing (including the right to have manufactured), testing, using,
modifying, reproducing, selling, marketing and distributing Product, with the
right to sublicense and assign subject to Section 5.1(iii)-(iv) below.
(iii) Sublicense and Assignment Restrictions. Neither Komag nor AGA
--------------------------------------
may sublicense or assign under the HP MR Technology without the prior written
consent of HP, which shall not be unreasonably withheld. Notwithstanding the
foregoing, in the event that MAC has not already granted a sublicense under the
HP MR Technology to AKCL pursuant to Section 2.1(iii) above, each of Komag and
AGA may sublicense rights of a scope commensurate with the rights granted in
this Section 5.1, without further right of sublicense, to AKCL, without such
prior written approval.
(iv) Price and Production Commitments. In further consideration of
--------------------------------
the licenses granted in this Section 5.1, each of Komag and AGA hereby agrees
that, if it elects to practice the licensed technology, it shall sell Product to
HP with the same price protection and volume commitments as govern MAC's
obligation to sell to HP pursuant to Section 9 below. The obligations contained
in this Section 5.1(iv) shall be subject to independent audit, during normal
business hours upon reasonable notice, by a third party of HP's choosing, and at
HP's expense.
(v) Sublicense under the Third Party MR Technology.
----------------------------------------------
(a) HP hereby grants to each of Komag and AGA a sublicense
under the Third Party MR Technology licensed by the third party to HP,
commensurate in scope with such license, to the extent and for as long as
permitted by such license, to develop, manufacture (including the right to have
manufactured), test, use, modify, reproduce, sell, market and distribute Product
and to modify and create derivative works of such Third Party MR Technology for
the purpose of developing, manufacturing (including the right to have
manufactured), testing, using, modifying, reproducing,
8
selling, marketing and distributing Product.
(b) To the extent HP has an obligation to pay any royalties or
other fees to any third party pursuant to the license to HP under any Third
Party MR Technology sublicensed by HP to Komag and AGA under Sections 5.1(i)-
(ii) above, HP shall so inform each of Komag and AGA and each of Komag and AGA
shall pay HP all such applicable royalties and other fees due to such third
parties under such sublicense.
5.2 (i) Grant of Cross-License under the Dastek MR Technology to HP.
-----------------------------------------------------------
Each of Komag and AGA hereby grants to HP a perpetual, non-exclusive, royalty-
free, worldwide license under the Dastek MR Technology to develop, manufacture
(including the right to have manufactured), test, use, modify, reproduce, sell,
market and distribute Product and to modify and create derivative works of the
Dastek MR Technology for the purpose of developing, manufacturing (including the
right to have manufactured), testing, using, modifying, reproducing, selling,
marketing and distributing Product, with the right to sublicense and assign
subject to Section 5.2(ii) below.
(ii) Sublicense and Assignment Restriction. HP may not sublicense or
-------------------------------------
assign the Dastek MR Technology without the prior written consent of Komag and
AGA, which shall not be unreasonably withheld. Notwithstanding the foregoing, in
the event that MAC has not already granted a sublicense under the Dastek MR
Technology to AKCL pursuant to Section 3. 1 above, HP may sublicense rights of a
scope commensurate with the rights granted in Section 5.2(i), without further
right of sublicense, to AKCL, without such prior written approval.
5.3 (i) Grant of Cross-License under the Joint MR Technology to HP.
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Each of Komag and AGA hereby grants to HP a perpetual, non-exclusive, royalty-
free, worldwide license under the Joint MR Technology to develop, manufacture
(including the right to have manufactured), test, use, modify, reproduce, sell,
market and distribute Product and to modify and create derivative works of the
Joint MR Technology for the purpose of developing, manufacturing (including the
right to have manufactured), testing, using, modifying, reproducing, selling,
marketing and distributing Product, with the right to sublicense and assign
subject to Section 5.3(ii) below.
(ii) Sublicense and Assignment Restrictions. HP may not sublicense
--------------------------------------
or assign under the Joint MR Technology without the prior written consent of
Komag and AGA, which shall not be unreasonably withheld. Notwithstanding the
foregoing, in the event that MAC has not already granted a sublicense under the
Joint MR Technology to AKCL pursuant to Section 3.2 above, HP may sublicense
rights of a scope commensurate with the rights granted in section 5.3(i),
without further right of
9
sublicense, to AKCL, without such prior written approval.
5.4 (i) Grant of Cross-License under the Komag MR Technology to HP.
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Komag hereby grants to HP a perpetual, non-exclusive, royalty-free (subject to
Section 5.4(iv) (b) below) , worldwide license under the Komag MR Technology to
develop, manufacture (including the right to have manufactured), test, use,
modify, reproduce, sell, market and distribute Product and to modify and create
derivative works of the Komag MR Technology for the purpose of developing,
manufacturing (including the right to have manufactured), testing, using,
modifying, reproducing, selling, marketing and distributing Product, with the
right to sublicense and assign subject to Section 5.4(iii) below.
(ii) Grant of Cross-License under the Komag MR Technology to AGA.
-----------------------------------------------------------
Komag hereby grants to AGA a perpetual, non-exclusive, royalty-free (subject to
Section 5.4(iv) (b) below) , worldwide license under the Komag MR Technology to
develop, manufacture (including the right to have manufactured), test, use,
modify, reproduce, sell, market and distribute Product and to modify and create
derivative works of the Komag MR Technology for the purpose of developing,
manufacturing (including the right to have manufactured), testing, using,
modifying, reproducing, selling, marketing and distributing Product, with the
right to sublicense and assign subject to Section 5.4(iii) below.
(iii) Sublicense and Assignment Restrictions. Neither HP nor AGA may
--------------------------------------
sublicense or assign under the Komag MR Technology without the prior written
consent of Komag, which shall not be unreasonably withheld. Notwithstanding the
foregoing, in the event that MAC has not already granted a sublicense under the
Joint MR Technology to AKCL pursuant to Section 3.2 above, HP and AGA may
sublicense rights of a scope commensurate with the rights granted in Section
5.4(i) and (ii) , respectively, without further right of sublicense, to AKCL,
without such prior written approval.
(iv) Sublicense under the Third Party MR Technology.
----------------------------------------------
(a) Komag hereby grants to each of HP and AGA a sublicense
under the Third Party MR Technology licensed by the third party to Komag,
commensurate in scope with such license, to the extent and for as long as
permitted by such license, to develop, manufacture (including the right to have
manufactured), test, use, modify, reproduce, sell, market and distribute
Product and to modify and create derivative works of such Third Party MR
Technology for the purpose of developing, manufacturing (including the right to
have manufactured), testing, using, modifying, reproducing, selling, marketing
and distributing Product.
10
(b) To the extent Komag has an obligation to pay any royalties
or other fees to any third party pursuant to the license to Komag under any
Third Party MR Technology sublicensed by Komag to HP and AGA under Sections
5.4(i) and (ii), respectively, above, Komag shall so inform each of HP and AGA
and each of HP and AGA shall pay Komag all such applicable royalties and other
fees due to such third parties under such sublicense.
6. CONTRIBUTIONS OF HP, KOMAG AND AGA
6.1 HP Contribution. Except with respect to the HP MR Technology which
---------------
HP is licensing to MAC pursuant to Section 2.1 (i) above, HP has contributed and
will contribute to MAC the information, data, engineering drawings and other
design specifications and documentation for the dual-stripe magnetoresistive
heads which have been developed or acquired by HP on or before the termination
of the Restriction Period.
6.2 Komag and AGA Contribution. Except with respect to the Dastek MR
--------------------------
Technology and Joint MR Technology which Komag and AGA are licensing to MAC
pursuant to Section 3.1 and 3.2 above, Komag and AGA have contributed and will
contribute to MAC the information, data, engineering drawings and other design
specifications and documentation for magnetoresistive heads which have been
developed or acquired by Dastek, or Dastek and Komag, as the case may be.
6.3 Komag Contribution. Except with respect to the Komag MR Technology
------------------
which Komag is licensing to MAC pursuant to Section 3.3(i) above, Komag has
contributed and will contribute to MAC the information, data, engineering
drawings and other design specifications and documentation for magnetoresistive
heads which have been developed or acquired by Komag on or before the date of
this Agreement.
7. MAC TECHNICAL INFORMATION
7.1 Storage. MAC will store, at its own expense, at a location other than
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any of its offices, warehouses or manufacturing, service or other sites, copies
of the MAC Technical Information and will update and store such MAC Technical
Information no less frequently than once every six (6) months beginning on the
date hereof.
7.2 Delivery. MAC will make available to any of other parties hereto, at
--------
such party's expense, at the request of such party but no more frequently than
once every six (6) months, copies of the MAC Technical Information to be
retrieved by such party or its authorized agent at the
11
location where such MAC Technical Information is stored by MAC. The party
retrieving any MAC Technical Information shall pay all expenses related to such
retrieval, including without limitation any taxes, and MAC shall use reasonable
efforts to minimize such expenses.
7.3 Site Visits. No more frequently than once every six (6) months, MAC
-----------
will make available to each of the other parties hereto such technical personnel
at MAC's sites as are reasonably necessary to explain to them MAC's Product
manufacturing processes. Such other parties will use reasonable efforts to
coordinate such visits to MAC in order to minimize any disruption to MAC's
business.
8. PROTOTYPE UNITS
8.1 Delivery to HP and AGA. MAC will deliver to each of HP and AGA, on
----------------------
mutually agreeable terms, sufficient quantities of prototypes of the Product at
each level of development completed, for use for the purpose of assembling and
testing prototype drive units containing the Product. The prototype units will
be used only for internal development and testing purposes on behalf of MAC and
will not be sold, leased or otherwise transferred or made available to third
parties.
8.2 Delivery to Komag. MAC will deliver to Komag, on mutually agreeable
-----------------
terms, sufficient quantities of prototypes of the Product at each level of
development completed, for use for the purpose of developing, testing and
manufacturing magnetic recording media for use with the Product. The prototypes
will be used only for internal development and testing purposes and will not be
sold, leased or otherwise transferred or made available to third parties.
9. PRODUCTION
For a period of three (3) years from the date hereof, MAC shall sell
Product to HP at a price equal to or less than the lowest price for Product of
similar technical specifications that MAC receives from any other customer of
such Product irrespective of volumes. During the term of this Agreement, MAC
shall sell Product to HP in such volumes as are established pursuant to the
procedures set forth in Exhibit A attached hereto. The obligations contained in
---------
this Section 9 shall be subject to independent audit, during normal business
hours upon reasonable notice, by a third party of HP's choosing, and at HP's
expense.
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10. CONFIDENTIAL INFORMATION
10.1 Disclosure Period. This Section 10 applies to Confidential
-----------------
Information which is disclosed prior to, during or after the effective period of
this Agreement.
10.2 Confidentiality Period. A Recipient's duty to protect Confidential
----------------------
Information disclosed under this Agreement expires five (5) years after the date
of disclosure of such Confidential Information to such Recipient.
10.3 Use. Recipient shall use the Confidential Information only for the
---
purposes and objectives of this Agreement and shall not disclose any
Confidential Information to any third party except as expressly permitted in
this Agreement.
10.4 Standard of Care. In order to protect certain Confidential
----------------
Information which may be disclosed among them, the parties hereto agree that the
Recipient shall protect the disclosed Confidential Information by using at least
the same degree of care, but no less than a reasonable degree of care, to
prevent the unauthorized use, dissemination or publication of the Confidential
Information as the Recipient uses to protect its own Confidential Information of
a like nature. Such reasonable degree of care shall include at a minimum:
(i) insuring that each individual person employed by or providing
consulting services to a Recipient who receives another party's Confidential
Information shall have executed a binding contract as specified in Section 11.3
to protect such Confidential Information. A standard Employee Agreement or a
Professional Services Agreement in the case of a consultant which contains terms
protecting trade secrets of the employer shall meet this requirement; and
(ii) requiring that all access to Confidential Information of the
other party be strictly controlled and that the number of copies of proprietary
documents be limited to those individuals having a "need to know" in order to
perform their respective duties. The individuals responsible for the
establishment and maintenance of this protection program at each party hereto
are:
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(a) MAC:
Xxxxx Xxxxx
Vice President Slider/HGA Development
M-R Assets Corporation
000 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Fax no. (000) 000-0000;
(b) HP:
Xxxx Xxxxxxx
R&D Section Manager
Disk Memory Division
Hewlett-Packard Company
00000 Xxxxxxx Xxxxxxxxx
Xxxxx, XX 00000
Fax no. (000) 000-0000;
(c) Komag:
Xxx Xxxxx
Group Vice President of R&D
Komag, Incorporated
000 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Fax no. (000) 000-0000; and
(d) AGA:
Xxxxx Xxxxxxxxx
President
Asahi Glass America, Inc.
000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000-0000
Fax no. (000)000-0000
10.5 Marking. A Recipient shall have a duty to protect only that
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Confidential Information which is:
(i) disclosed by the Discloser in writing and is marked as
confidential at the time of disclosure; or
(ii) disclosed by the Discloser in any other manner and is identified
as confidential at the time of disclosure and is also summarized and designated
as confidential in a written memorandum delivered to the Recipient's
representative named in Section 10.4(ii) above within thirty (30) days of the
disclosure.
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10.6 Exceptions. This Agreement imposes no obligation upon a Recipient
----------
with respect to Confidential Information which:
(i) was in the Recipient's possession before receipt from the
Discloser without any obligation of confidentiality;
(ii) is or becomes a matter of public knowledge through no fault of
the Recipient;
(iii) is rightfully received by the Recipient from a third party
without a duty of confidentiality;
(iv) is disclosed by the Discloser to a third party without a duty
of confidentiality on the third party;
(v) is independently developed, without the use of any Confidential
Information of the Discloser, by employees of the Recipient;
(vi) is disclosed under operation of law; or
(vii) is disclosed by the Recipient with the Discloser's prior
written approval.
10.7 Warranty. Each Discloser warrants that it has the right to make the
--------
disclosures under this Agreement.
11. ADDITIONAL AGREEMENTS REGARDING THE LICENSES
11.1 (i) HP Support. HP shall make commercially reasonable efforts to
----------
provide support to MAC for the HP MR Technology during the term of this
Agreement.
(ii) Komag Support. Komag shall make commercially reasonable efforts
-------------
to provide support to MAC for the Dastek MR Technology, the Joint MR Technology
and the Komag MR Technology during the term of this Agreement.
(iii) AGA Support. AGA shall make commercially reasonable efforts to
-----------
provide support to MAC for the Dastek MR Technology and the Joint MR Technology
during the term of this Agreement.
15
11.2 HP Giant Magnetoresistive Technology. In the event that:
------------------------------------
(i) giant magnetoresistive technology (a) is developed or acquired
and, with respect to patents, conceived or first reduced to practice by HP, or
-----
(b) is developed and, with respect to patents, conceived or first reduced to
practice for or on behalf of HP (except with respect to Joint Inventions where
----------------------
MAC is an Inventing Party and Joint Works where MAC is a Joint Author); and
(ii) in case of either subsection (i)(a) or (b) above, HP has
determined in good faith that MAC has reasonably satisfied HP's Product needs;
then HP agrees to negotiate with MAC in good faith for the license of such
future generations of MR technology to MAC on terms and conditions that are
mutually acceptable.
11.3 Agreements with Employees and Consultants. Each of the parties
-----------------------------------------
represents and warrants to the others that it has agreements with, or policies
with respect to, its respective employees and consultants, such that the
ownership of any and all inventions made by an employee or consultant in the
course of work pursuant to this Agreement vests in the employing party, subject
to the provisions of applicable law governing ownership of such inventions.
11.4 No Further Obligation. Nothing contained in this Agreement shall be
---------------------
construed as a requirement to file or prosecute in any country any application
for patent rights, opposition, interference, conflict proceeding or other
contest of priority, or obligation to obtain or maintain in force any patent
rights, or to institute or defend any litigation, or to apply for or obtain any
reissue, renewal, validation or extension of any patent rights.
11.5 Termination of Prior Agreement. The MR Head Development Agreement,
------------------------------
dated as of March 26, 1992, by and among HP and Komag Technology, is hereby
terminated in accordance with Section 13 thereof.
12. RELATIONSHIP OF THE PARTIES
12.1 Independent Contractors. Each of the parties shall conduct the work
-----------------------
to be performed under this Agreement as an independent contractor and not as an
agent or employee of any of the other parties. Subject to the terms and
conditions of this Agreement, each party shall, at its sole discretion, choose
the means to be employed and the manner of carrying out its obligations
hereunder.
16
12.2 No Marketing. Nothing in this Agreement shall be construed as an
------------
obligation on any of the parties hereto to market or not to market the Product,
and there shall not be any explicit or implied "best efforts" standard upon any
of the parties hereto in marketing the Product.
13. ENFORCEMENT OF INTELLECTUAL PROPERTY RIGHTS
Nothing in this Agreement shall be construed as an agreement or obligation
to institute or prosecute or confer any right to institute or prosecute actions
or suits against third parties for infringement of any patent, copyright,
trademark, trade secret or other intellectual property right relating to this
Agreement.
14. REPRESENTATIONS AND WARRANTIES
14.1 (i) HP.
--
(a) HP has the right and authority to grant the licenses to the
HP MR Technology provided herein and to perform its obligations hereunder.
(b) Except pursuant to general cross-licenses between HP and
certain other companies, HP has not granted rights to manufacture, produce,
assemble, license, distribute, market or sell, or otherwise exploit, the HP MR
Technology to any other person or entity and is not bound by any agreement that
affects MAC's right to use and exploit the HP MR Technology as provided in this
Agreement or to manufacture, produce, assemble, distribute, market or sell the
Product.
(c) HP has not received any notice that the HP MR Technology
infringes the rights of others or is being infringed by others.
(d) HP has the right and authority to grant the sublicenses
provided herein.
(ii) Komag.
-----
(a) Komag owns, with AGA, an undivided right in the Dastek MR
Technology and the Joint MR Technology and has the right and authority to grant
the licenses to the Dastek MR Technology, the Joint MR Technology and the Komag
MR Technology provided herein and to perform its obligations hereunder.
(b) Except pursuant to general cross-licenses between Komag and
certain other companies, Komag has not
17
granted rights to manufacture, produce, assemble, license, distribute, market or
sell, or otherwise exploit, the Dastek MR Technology, the Joint MR Technology or
the Komag Technology to any other person or entity and is not bound by any
agreement that affects MAC's right to use and exploit the Dastek MR Technology,
the Joint MR Technology or the Komag MR Technology as provided in this Agreement
or to manufacture, produce, assemble, distribute, market or sell the Product.
(c) Komag AGA has not received any notice that the Dastek MR
Technology, the Joint MR Technology or the Komag MR Technology infringes the
rights of others or is being infringed by others.
(d) Komag has the right and authority to grant the sublicenses
provided herein.
(iii) AGA.
---
(a) AGA owns, with Komag, an undivided right in the Dastek MR
Technology and the Joint MR Technology and has the right and authority to grant
the licenses to the Dastek MR Technology and the Joint MR Technology provided
herein and to perform its obligations hereunder.
(b) AGA has not granted rights to manufacture, produce, assemble,
license, distribute, market or sell, or otherwise exploit, the Dastek MR
Technology or the Joint MR Technology to any other person or entity and is not
bound by any agreement that affects MAC's right to use and exploit the Dastek MR
Technology or the Joint MR Technology as provided in this Agreement or to
manufacture, produce, assemble, distribute, market or sell the Product.
(c) AGA has not received any notice that the Dastek MR Technology
or the Joint MR Technology infringes the rights of others or is being infringed
by others.
14.2 Disclaimer. No party hereto makes any express or implied warranty of
----------
any kind with regard to the operability or functionality of any aspect of the
respective technologies or services delivered or provided hereunder. All Product
warranties shall be the subject of the purchasing contracts for that Product.
EACH OF THE PARTIES HERETO SPECIFICALLY DISCLAIMS ALL OTHER WARRANTIES OF ANY
KIND WHATSOEVER, AND IN PARTICULAR, WITHOUT LIMITATION, THE IMPLIED WARRANTIES
OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. ALL DOCUMENTATION
DELIVERED OR PROVIDED HEREUNDER IS STRICTLY PROVIDED "AS IS."
18
14.3 Release.
-------
(i) No Infringement. Subject to Section 14.3 (ii) below, no party
---------------
hereto shall have any liability for infringement of any patent, copyright,
trademark, trade secret or other intellectual property rights resulting from the
use of any other party's technology licensed hereunder or compliance with any
other party's designs, specifications or instructions, or from modifications of
the Product not performed by that party, or from use of the Product other than
as specified or from use of the Product with products not supplied by that
party.
(ii) Limitation. With respect to Products made, used or sold by MAC
----------
which infringe any Intellectual Property rights of HP, Komag or AGA, the release
provided to MAC by the other parties hereto pursuant to Section 14.3 (i) above
shall apply solely to (a) dual-stripe magnetoresistive Products, (b) inductive
Products, and (c) soft adjacent layer Products.
14.4 Future Patent Indemnity. MAC agrees to negotiate with HP in good
-----------------------
faith (i) whether to include, in any purchase order to be issued by HP to MAC
for Products or purchase or supply agreement to be entered into by HP and MAC
for Products, patent indemnity from MAC to HP with respect to the Products
purchased, and (ii) if HP and MAC agree to include such patent indemnity in any
such purchase order or purchase or supply agreement, the terms and conditions of
such patent indemnity.
15. INDEPENDENTLY AND JOINTLY DEVELOPED TECHNOLOGY
15.1 HP Property. All discoveries, improvements and inventions, conceived
-----------
or first reduced to practice (as such terms are used before the PTO) solely by
HP employees, shall be the sole and exclusive property of HP, and HP shall
retain any and all rights to file patent applications or seek any other form of
protection therefor. HP shall be the sole and exclusive owner of all rights,
including without limitation copyrights, in and to all derivative works and
other works of authorship created solely by HP hereunder, and HP shall retain
any and all rights to file any copyright applications or seek any other form of
protection therefor.
15.2 Komag Property. All discoveries, improvements and inventions,
--------------
conceived or first reduced to practice (as such terms are used before the PTO)
solely by Komag employees, shall be the sole and exclusive property of Komag,
and Komag shall retain any and all rights to file patent applications or seek
any other form of protection therefor. Komag shall be the sole and exclusive
owner of all rights, including without
19
limitation copyrights, in and to all derivative works and other works of
authorship created solely by Komag hereunder, and Komag shall retain any and all
rights to file any copyright applications or seek any other form of protection
therefor.
15.3 AGA Property. All discoveries, improvements and inventions, conceived
------------
or first reduced to practice (as such terms are used before the PTO) solely by
AGA employees, shall be the sole and exclusive property of AGA, and AGA shall
retain any and all rights to file patent applications or seek any other form of
protection therefor. AGA shall be the sole and exclusive owner of all rights,
including without limitation copyrights, in and to all derivative works and
other works of authorship created solely by AGA hereunder, and AGA shall retain
any and all rights to file any copyright applications or seek any other form of
protection therefor.
15.4 MAC Property. All discoveries, improvements and inventions, conceived
------------
or first reduced to practice (as such terms are used before the PTO) solely by
MAC employees, shall be the sole and exclusive property of MAC, and MAC shall
retain any and all rights to file patent applications or seek any other form of
protection therefor. MAC shall be the sole and exclusive owner of all rights,
including without limitation copyrights, in and to all derivative works and
other works of authorship created solely by MAC hereunder, and MAC shall retain
any and all rights to file any copyright applications or seek any other form of
protection therefor.
15.5 Joint Property.
--------------
(i) All discoveries, improvements and inventions, conceived or first
reduced to practice (as such terms are used before the PTO) jointly ("Joint
Inventions"), by employees of any parties hereto ("Inventing Parties"), shall
be the property jointly of the Inventing Parties, each of such Inventing Parties
having an equal and undivided interest therein. The Inventing Parties shall
mutually determine whether an application or applications shall be filed on any
Joint Inventions, which of the Inventing Parties shall prepare and file such
application or applications and the country or countries in which such
application or applications shall be filed. The expenses incurred in connection
with the preparation and filing of such application or applications shall be
divided equally between and paid by the Inventing Parties. If the Inventing
Parties are unable to agree to file an application or applications on any Joint
Inventions, one or more of the Inventing Parties may prepare and file, and shall
pay the expenses of preparing and filing, such application or application at its
or their own expense. The other Inventing Parties shall automatically have a
perpetual, nonexclusive,
20
royalty-free, worldwide license under any patent or patents that may be granted
on such application or applications; provided, however, that such other
Inventing Parties shall not have the right to sublicense under the patent or
patents.
(ii) All rights, including without limitation copyrights, in and to
all derivative works and other works of authorship that constitute joint works
(as defined in the U.S. Copyright Act (17 U.S.C. 101 et seq.) ("Joint Works")
created jointly by any of the parties hereto ("Joint Authors") shall be owned
jointly by the Joint Authors, each of such Joint Authors having an equal and
undivided interest therein, and each of such Joint Authors having the right to
do the following without the consent of and without accounting to the other
Joint Authors: (a) reproduce such Joint Works, (b) prepare derivative works
based upon such Joint Works, (c) distribute copies of such Joint Works, and (d)
perform and display such Joint Works publicly. The Joint Authors shall mutually
determine whether an application or applications shall be filed on any Joint
Works, which of the Joint Authors shall prepare and file such application or
applications and the country or countries in which such application or
applications shall be filed. The expenses incurred in connection with the
preparation and filing of such application or applications shall be divided
equally between and paid by the Joint Authors. If the Joint Authors are unable
to agree to file an application or applications on any Joint Works, one or more
of the Joint Authors may prepare and file, and shall pay the expenses of
preparing and filing, such application or applications at its or their own
expense.
(iii) The rights and obligations of each of the Inventing Parties and
Joint Authors under this Section 15.5 shall survive the termination of this
Agreement for any reason.
16. BUSINESS PERFORMANCE MEASURES
In the event that MAC fails to achieve the business performance measures
set forth in Exhibit B attached hereto, HP shall have the right to cause MAC,
---------
in accordance with such exhibit: (i) to sublicense the HP MR Technology, the
Dastek MR Technology, the Joint MR Technology and the Komag MR Technology and
to license the MAC MR Technology to a third party designated by HP upon such
reasonable terms and conditions as are mutually acceptable to HP, MAC and such
third party and as are approved by an affirmative vote of at least eighty
percent (80%) of the members of MAC's Board of Directors; and (ii) within six
(6) months of the execution of such sublicense, to transfer to such sublicensee
all Intellectual Property related thereto. MAC will use its
21
diligent efforts (x) to begin negotiations with such third party promptly
following its designation by HP, and (y) to conclude such negotiations and
execute such license and sublicenses within forty-five (45) days following
commencement of such negotiations.
17. RELEASE OF INFORMATION
Except as required by operation of law, no party hereto, without first
securing the written consent of the other parties hereto, shall advertise or
release any publicity in regard to the existence of this Agreement or its
contents. The parties agree that press releases shall be conducted as
appropriate to further the industry acceptance of the Product.
18. LIMITATION OF LIABILITY
NO PARTY HERETO SHALL BE LIABLE UNDER ANY PROVISION OF THIS AGREEMENT OR
UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE
THEORY FOR SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF
ANY BREACH OF THIS AGREEMENT.
19. GENERAL
19.1 No Purchases. Except as provided herein, no party hereto has an
------------
obligation under this Agreement to purchase any service or item from any of the
other parties hereto.
19.2 Exports. Each party hereto shall adhere to the U.S. Export
-------
Administration Laws and Regulations and shall not export or re-export any
technical data or products received from any other party or the direct product
of such technical data to any proscribed country listed in the U.S. Export
Administration Regulations unless properly authorized by the US Government.
19.3 Force Majeure. No party hereto shall be liable for any delay in
-------------
performance or failure to perform in whole or in part the terms of this
Agreement due to causes beyond the reasonable control of such party, and any
such delay or failure shall not be considered a breach of this Agreement.
19.4 No Waiver. The failure to enforce or the delay in enforcement of any
---------
provision, right or option of this Agreement by any party hereto shall in no way
be construed to be a waiver of such provision, right or option, unless set forth
in writing and signed by all of the parties hereto, nor shall such action be
deemed a waiver of any other right which
22
that party may otherwise have at law or in equity.
19.5 Headings. The headings to sections of this Agreement are to
--------
facilitate reference only and do not form a part of this Agreement and shall not
in any way affect the construction or interpretation hereof.
19.6 Notices. Any notice, request, instruction or other document required
-------
or permitted to be given hereunder shall be in writing addressed to the person
named in Section 10. 4 above and shall be valid and sufficient if dispatched by
registered or certified mail, postage prepaid, in any post office in the United
States, by confirmed facsimile or by courier, with copies similarly dispatched
to the following persons, as appropriate:
to MAC: M-R Assets Corporation
000 X. Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attn: President
Fax No.: (000) 000-0000
and Xxxxxxx, Xxxxxxx & Xxxxxxxx
Two Embarcadero Place
0000 Xxxx Xxxx
Xxxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx, Esq.
Fax No. (000) 000-0000
to HP: Hewlett-Packard Company
Disk Memory Division
00000 Xxxxxxx Xxxxxxxxx, XX: 445
Xxxxx, XX 00000
Attn: General Manager
Fax No.: (000) 000-0000
and: Hewlett-Packard Company
0000 Xxxxxxx Xxxxxx, XX: 20BQ
Xxxx Xxxx, XX 00000
Attn: General Counsel
Fax No.: (000) 000-0000
to Komag: Komag, Incorporated
000 X. Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attn: Chief Financial Officer
Fax No.: (000) 000-0000
23
and: Xxxxxxx, Xxxxxxx & Xxxxxxxx
Two Embarcadero Place
0000 Xxxx Xxxx
Xxxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx, Esq.
Fax No. (000) 000-0000
to AGA: Asahi Glass America, Inc.
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000-0000
Attn: President
Fax No.: (000) 000-0000
and: Xxxxxx & Xxxxx
5 Palo Alto Square, Suite 1000
0000 Xx Xxxxxx Xxxx
Xxxx Xxxx, XX 00000
Attn: Xxx X. Xxxxxxxx
Fax No.: (000) 000-0000
19.7 Taxes. All taxes imposed as a result of the existence of this
-----
Agreement or the performance of the parties hereunder shall be borne and paid by
the party required to do so by applicable law.
19.8 Governing Law. This Agreement and matters connected with the
-------------
performance thereof shall be construed, interpreted, applied, and governed in
all respects in accordance with the laws of the State of California, without
regard to the conflicts of laws provisions thereof.
19.9 Assignment. Except as specifically provided herein, no party may
----------
assign this Agreement in whole or in part without the prior written consent of
the other parties hereto, which will not be unreasonably withheld, and any
purported assignment, sublicense or transfer of any kind not expressly permitted
hereunder shall be void. Any (i) acquisition of MAC by another person or entity
by means of any transaction or series of related transactions (including without
limitation any reorganization, merger or consolidation but excluding any merger
effected exclusively for the purpose of changing the domicile of MAC or a merger
into a wholly-owned subsidiary of MAC), or (ii) sale of all or substantially all
of the assets of MAC, unless in the case of clause (i) or (ii) above MAC's
shareholders of record as constituted immediately prior to such acquisition or
sale will hold (immediately after such acquisition or sale by virtue of
securities issued as consideration for MAC's acquisition or sale or otherwise)
at least fifty percent (50%) of the voting power of the surviving or acquiring
entity, shall be deemed an assignment subject to this Section 19.9.
24
19.10 Entire Agreement. This Agreement sets forth the entire understanding
----------------
and agreement between the parties hereto as to the subject matter of this
Agreement and merges and supersedes all previous communications, negotiations,
warranties, representations and agreements, either oral or written, with respect
to the specific subject matter hereof, and no addition to or modification of
this Agreement shall be binding on any party hereto unless reduced to writing
and duly executed by each of the parties hereto.
19.11 Severability. In the event that any provision of this Agreement
------------
shall be invalid, illegal or unenforceable for any reason, the validity,
legality and enforceability of the remaining provisions of this Agreement shall
not be affected or impaired in any way thereby and such remaining provisions
shall be given full effect and enforced to the broadest extent possible.
19.12 Compliance with Law. Each party hereto shall comply with all
-------------------
applicable federal, state, local and foreign laws and regulations in connection
with its activities pursuant to this Agreement.
19.13 Remedies Not Exclusive. The rights and remedies of a party set forth
----------------------
herein with respect to the failure of another party hereto to comply with the
terms of this Agreement (including without limitation rights of termination of
this Agreement) are not exclusive, the exercise thereof shall not constitute an
election of remedies and the aggrieved party shall in all events be entitled to
seek whatever additional remedies may be available in law or equity (including
without limitation appropriate injunctive relief).
19.14 Further Assurances. Each party hereto shall execute, acknowledge and
------------------
deliver such further instruments and do all such other acts as may be reasonably
necessary or appropriate to carry out the purposes of this Agreement.
19.15 Term. This Agreement shall be perpetual.
----
25
IN WITNESS WHEREOF, the parties have caused this Master Technology License
Agreement to be duly executed as of the date first written above.
M-R ASSETS CORPORATION HEWLETT-PACKARD COMPANY
By:___________________________ By:_____________________________
Print Print
name:_______________________ name:_________________________
Title: _______________________ Title: _________________________
KOMAG, INCORPORATED ASAHI GLASS AMERICA, INC.
By:___________________________ By:_____________________________
Print Print
name:_______________________ name:_________________________
Title: _______________________ Title: _________________________
Exhibits
--------
A Procedures for Volume Shipments by MAC to HP
B Business Performance Measures of MAC
IN WITNESS WHEREOF, the parties have caused this Master Technology License
Agreement to be duly executed as of the date first written above.
M-R ASSETS CORPORATION HEWLETT-PACKARD COMPANY
By: /s/ Xxxxx Xxxxxxxxx By: /s/ Xxxxx Xxxxxxx
------------------------- --------------------------
Print Print
name: Xxxxx Xxxxxxxxx name: Xxxxx Xxxxxxx
--------------------- ---------------------
Title: President and Chief Title: General Manager
--------------------- ---------------------
Executive Officer
KOMAG, INCORPORATED ASAHI GLASS AMERICA, INC.
By: /s/ Tu Chen By: /s/ Xxxxx Xxxxxxxx
------------------------- --------------------------
Print Print
name: Tu Chen name: Xxxxx Xxxxxxxx
--------------------- ---------------------
Title: Chairman of the Board Title: Xxxxx Xxxxxxxx, attorney-
---------------------- ---------------------
in-fact for Xxxxx
Xxxxxxxxx, President
Exhibits
--------
A Procedures for Volume Shipments by MAC to HP
B Business Performance Measures of MAC
EXHIBIT A
TO
MASTER TECHNOLOGY LICENSE AGREEMENT
PROCEDURES FOR VOLUME SHIPMENTS BY MAC TO HP
HP will provide MAC every month a twelve (12) month rolling shipment
forecast of HP's projected Product requirements. At any time, either HP or MAC
may request a specific review of HP's forecast, MAC's capacity commitment to HP,
and MAC's total capacity and shipment forecast.
MAC will make commercially reasonable efforts to meet on a timely basis the
volumes in HP's forecasts based on MAC's entire capacity before MAC supplies
volume shipments of Product to any other customer, and HP will purchase Product
from MAC in such forecasted volumes, subject to such adjustments as HP, after
conferring with MAC, shall make in good faith based upon HP's reasonable
business needs.
EXHIBIT B
TO
MASTER TECHNOLOGY LICENSE AGREEMENT
BUSINESS PERFORMANCE MEASURES OF MAC
1. Volume. If total deliveries from MAC fall short of MAC's delivery
------
commitment to HP by an amount equal to or greater than [*] percent ([*]%) over a
period of four (4) or more consecutive months, then MAC will present a written
recovery plan to HP within ten (10) days of the end of such second month. If the
plan, in HP's sole, reasonable determination, does not demonstrate that MAC will
be able to deliver to HP [*] percent ([*]%) of MAC's prior commitment for
Product within a reasonable period of time, then MAC, in HP's sole, reasonable
discretion, will grant the licenses and sublicenses set forth in Section 16.
2. Defects. Commencing with MAC's normal commercial volume production of
-------
a Product, if a joint engineering team composed of, but not limited to, HP and
MAC engineers determines (based upon reasonable statistical samplings and
testing methodologies) that such Product is solely responsible for [*] or more
percentage points yield loss measured at HP's drive level burn-in test point
over a period of two (2) or more consecutive months, then MAC will present a
written recovery plan to HP within ten (10) working days of the end of such
second month. If the plan, in HP's sole, reasonable discretion, does not
demonstrate that MAC will be able to deliver such Product to HP that produces
five (5) or fewer percentage points yield loss (as measured at HP's drive level
burn-in test point) within a reasonable period of time, then MAC, in HP's sole,
reasonable discretion, will grant the licenses and sublicenses set forth in
Section 16.
[*]=CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
HP/Headway/Komag and AGA Confidential
HEADWAY TECHNOLOGIES, INC.
AMENDMENT TO MASTER TECHNOLOGY LICENSE AGREEMENT
AND SIDE AGREEMENT
Headway Technologies, Inc., a California corporation ("Headway"), Hewlett-
Packard Company, a California corporation ("HP"), Komag, Incorporated, a
Delaware corporation ("Komag"), and Asahi Glass America, Inc., a Delaware
corporation ("AGA"), entered into a Master Technology License Agreement
effective September 23, 1994 ("MTLA"); and HP, Komag, AGA, and Headway entered
into a Side Agreement effective September 23, 1994 ("Side Agreement"); now the
parties intend to amend both agreements as follows to be effective as of the
Closing Date (hereinafter defined):
I. The Master Technology License Agreement ("MTLA") shall be amended as
follows:
1. Section 1.
(a) The definition of "MAC MR Technology" is modified by deleting
"conceived or first reduced to practice or acquired by MAC" and
replacing it with "filed or acquired by MAC prior to the Closing
Date."
(b) The definition of "Komag MR Technology" is modified by deleting
"conceived or first reduced to practice or acquired by Komag,"
and replacing it with "filed or acquired by Komag prior to the
Closing Date."
(c) Add a new definition, "Closing Date," which is the closing date
as contemplated in the Series A Preferred Stock Purchase
Agreement dated February 4, 1997.
2. Delete the following sections in their entirety:
(a) Section 7.
(b) Section 9.
(c) Section 11.1 and 11.2.
(d) Section 16.
3. The following licensing provisions of the MTLA shall be modified as
follows :
(a) In addition to the exclusive and non-exclusive rights already
granted to Headway, HP hereby licenses the HP MR Technology
pursuant to Section 2.1 of the MTLA, Komag and AGA hereby
licenses the Dastek MR Technology and the Joint MR Technology
pursuant to Sections 3.1 and 3.2, respectively, and Komag hereby
licenses the Komag MR Technology pursuant to Section 3.3 of the
MTLA to Headway on a perpetual, non-exclusive, royalty-free,
worldwide basis to develop, manufacture (including the right to
have manufactured), test, use, modify, reproduce, offer to sell,
sell, import and export, market and distribute recording heads
for tape drives and to modify and create derivative works of the
HP MR Technology, Dastek MR Technology, Joint MR Technology and
Komag MR Technology for the purpose of developing, manufacturing
(including the right to have manufactured), testing, using,
modifying, reproducing, selling, marketing and distributing
recording heads for tape drives, with the right to sublicense and
assign the forgoing rights.
(b) Section 4 shall be amended to include the following license
granted by Headway to HP: Headway hereby grants to HP the rights
to the HP MR Technology to the extent required for HP to
manufacture (including the right to have manufactured), test,
use, modify, reproduce, offer to sell, sell, import, export,
market and distribute recording heads for tape drives or floppy
disk drives of any capacity for use solely in floppy disk drives,
tape drives, floppy disk drive mechanisms, or tape drive
mechanisms, all of which are either: (i) manufactured by HP, or
(ii) manufactured for HP and sold as an HP logo product (the "HP
Field of Use"). The license granted HP in Section 4.1 to MAC MR
Technology shall be replaced in its entirety with a license to
use MAC MR Technology within the "HP Field of Use." The licenses
to the MAC MR Technology granted to Komag and AGA pursuant to
Section 4.2 and 4.3 are replaced in their entirety with the
following license: Headway hereby grants to Komag and AGA the
rights to the MAC MR Technology to the extent required for Komag
or AGA to manufacture (including the right to have manufactured)
test, use, modify, reproduce, offer to sell, sell, import,
export, market and distribute media products (but not Products or
recording heads for disk drives, tape drives, disk drive
mechanisms, or tape drive mechanisms)(the "Komag/AGA Field of
Use").
(c) The cross licenses by HP of the HP MR Technology to Komag and AGA
pursuant to Sections 5.1(i) and (ii), respectively, of the MTLA
and by Komag and AGA to HP of the Dastek MR Technology pursuant
to Section 5.2(i) of the MTLA are replaced in their entirety with
licenses to the applicable technology that are limited to use of
the applicable technology in the HP Field
-2-
of Use in the case of the cross license to HP, and in the
Komag/AGA Field of Use in the case of the cross license to Komag
and AGA.
(d) The cross licenses by Komag and AGA of the Joint MR Technology to
HP pursuant to Section 5.3(i) of the MTLA and by Komag of the
Komag MR Technology to HP and AGA pursuant to Sections 5.4(i) and
(ii), respectively, of the MTLA are replaced in their entirety
with licenses to the applicable technology that are limited to
the use of the HP Field of Use in the case of the cross license
to HP and the Komag/AGA Field of Use in the case of the cross
license to AGA.
4. Headway shall retain its exclusive licenses to the HP MR Technology
and the Dastek MR Technology, and neither HP nor Komag nor AGA shall
have any rights to such technology, except for the licenses granted to
HP, Komag and AGA by Headway as set forth in 3(b) above, for as long
as such licenses remain in effect. Headway's licenses to the Joint MR
Technology, the Komag MR Technology and the Third Party MR Technology
shall remain nonexclusive. All of the licenses granted HP under the
MTLA as amended shall be contingent on HP first entering into good
faith negotiations with Headway for at least ninety (90) days to allow
Headway to develop and manufacture such tape drive and/or floppy disk
drive heads for HP. If HP and Headway can not reach agreement after
such ninety (90) day period, then HP may exercise its license rights
granted in the MTLA as amended. Notwithstanding anything to the
contrary herein or in the MTLA, the MAC MR Technology, HP MR
Technology, Dastek MR Technology, Joint MR Technology and Komag MR
Technology licenses, as amended, shall be limited to the technology
already in the possession of the receiving party and the patent
applications and issued patents in existence as of the Closing Date.
5. In Section 19.9 line 2, replace "no party" with "neither HP, Komag or
AGA" and replace the second sentence (which begins with "Any (i)
acquisition") with the following: " Headway may assign this Agreement
in whole or in part or grant sublicenses without the consent of the
other parties, except that Headway may not assign this Agreement in
whole or in part or grant any sublicenses with regards to the Komag MR
Technology to a company which develops or manufactures disk media
products for a period of two (2) years from the Closing Date, without
Komag's consent, which shall not be unreasonably withheld or delayed.
Any assignment or sublicense cannot exceed the scope of the licenses
granted to Headway in this Agreement.
6. Except for those provisions expressly modified or deleted, all the
provisions of the MTLA remain in force and effect.
-3-
II. The Side Agreement shall be terminated in its entirety as of the
effective date of this Amendment.
IN WITNESS WHEREOF, the parties have caused this Master Technology License
Amendment to be duly executed as of the date first written above.
HEADWAY TECHNOLOGIES, INC. HEWLETT-PACKARD COMPANY
By:__________________________ By:__________________________
_____________________________ _____________________________
(Print Name) (Print Name)
_____________________________ _____________________________
(Title) (Title)
KOMAG, INCORPORATED ASAHI GLASS AMERICA, INC.
By:__________________________ By:__________________________
_____________________________ _____________________________
(Print Name) (Print Name)
_____________________________ _____________________________
(Title) (Title)
-4-
II. The Side Agreement shall be terminated in its entirety as of the
effective date of this Amendment.
IN WITNESS WHEREOF, the parties have caused this Master Technology License
Amendment to be duly executed as of the date first written above.
HEADWAY TECHNOLOGIES, INC. HEWLETT-PACKARD COMPANY
By: /s/ Xxxx X Xxxxxx By: /s/ Xxx X. Xxxxxxx
------------------------- ------------------------
XXXX X XXXXXX XXX X. XXXXXXX
----------------------------- ----------------------------
(Print Name) (Print Name)
Assistant Secretary
President & C.E.O. and managing ??^^
----------------------------- -----------------------------
(Title)
KOMAG, INCORPORATED ASAHI GLASS AMERICA, INC.
By: /s/ Xxxxxxx Xxxxxxx By: /s/ X. Xxxx
-------------------------- --------------------------
XXXXX XXXX
_____________________________ _____________________________
(Print Name) (Print Name)
President
_____________________________ -----------------------------
(Title) (Title)
