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3/4/82
XXXXXX/FUJITSU 1982 AGREEMENT
This Agreement is made and entered into as of March 4, 1982, by and between
FUJITSU LIMITED, a corporation of Japan, having a registered place of business
at 0000 Xxxxxxxxxxxx, Xxxxxxxx-xx, Xxxxxxxx, Xxxxx (hereinafter referred to as
"FJ"), and XXXXXX CORPORATION, a corporation formed under the laws of the State
of Delaware, having a principal place of business at 0000 Xxxx Xxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxxxx 00000, Xxxxxx Xxxxxx of America (hereinafter referred to
as "AC").
W I T N E S S E T H:
WHEREAS, FJ and AC (hereinafter sometimes referred to collectively as "the
parties" and individually as a "party") have made and entered into the
XXXXXX/FUJITSU Licensing Agreement, effective as of April 8, 1977 (hereinafter,
together with all amendments and supplements thereto, referred to as the "1977
Agreement"); and
WHEREAS, FJ and AC have made and entered into the XXXXXX/FUJITSU 1978
Agreement, effective as of September 7, 1978 (hereinafter, together with all
amendments and supplements thereto, including, without limitation, the
XXXXXX/FUJITSU 1979 Supplement dated October 1, 1979, referred to as the "1978
Agreement"); and
WHEREAS, the 1977 Agreement and the 1978 Agreement each provide for
cross-licensing by the parties under certain present and future patents, in
some instances on an exclusive, and in other instances on a non-exclusive,
basis; and
WHEREAS, the parties wish to enter into this Agreement which, among other
things, would provide for possible modification of certain licenses granted
under the 1977 Agreement and the 1978 Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual covenants
contained herein, FJ and AC agree as follows:
1. In the event that any of the following events shall occur and be
continuing for any reason whatsoever (and whether such occurrence
shall be voluntary or come about or be effected by operation of law or
otherwise):
(a) Except as specified in subparagraphs (ii) and (vi) below, AC
hereafter issues shares of stock or securities convertible
into, or rights to acquire, stock having voting power in the
election of directors without first having offered to FJ the
right to purchase the type of stock, securities, or rights,
proposed to be issued, for cash, in an amount that will permit
FJ to maintain "FJ's Percentage Ownership" for the same price
as the stock, securities, or rights are to be offered to
others.
(i) As used herein, the phrase "AC Equity Securities"
shall mean all shares of AC stock and stock issuable
upon conversion or exercise
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of securities convertible into, and rights to acquire,
AC stock having voting power in the election of
directors, other than: (x) AC Series B Common Stock
and any other stock having not more than one-quarter
of a vote per share issued to employees of AC or its
affiliates; and (y) employee or director stock options
and rights to purchase AC stock pursuant to employee
benefit plans and AC stock issuable under such options
or rights approved by or subject to the approval of AC
stockholders. As used herein, the phrase "FJ's
Percentage Ownership" shall mean the percentage
determined by dividing the total number of AC Equity
Securities then held by FJ by the total number of AC
Equity Securities then outstanding; provided, that for
purposes of this computation, FJ's Percentage
Ownership shall not exceed 31.3%, unless such
ownership is increased above 31.3% upon the purchase
of AC Equity Securities directly from AC, except a
purchase made pursuant to subparagraph (iv) of this
paragraph (a).
(ii) The issuance of: (x) shares of AC Series B Common
Stock and of any other stock having not more than
one-quarter of one vote per share to employees of AC
or its affiliates pursuant to the authorization of
AC's Board of Directors and (y) employee stock
options and rights to purchase AC stock pursuant to
employee benefit plans approved by or subject to the
approval of AC's stockholders shall be exempt from
the requirements of this paragraph (a), but the
issuance of shares of AC stock having more than
one-quarter of one vote in the election of directors
("AC Voting Stock") upon conversion of such
securities or exercise of such rights is the subject
to the provisions hereof.
(iii) FJ's rights to purchase stock, securities and rights
pursuant to this paragraph (a) shall be applicable
whether the consideration to be received by AC upon
issuance thereof is cash or property (including
securities). If such consideration shall be other
than cash, the price to be paid by FJ for such stock,
securities and rights that it is offered shall be
equal to the per share fair market value in cash of
the AC stock, securities or rights being issued.
(iv) Notwithstanding the provisions of subparagraph (ii)
above, FJ's rights to purchase AC Voting Stock upon
the issuance of such stock pursuant to the conversion
of securities or exercise of rights as described
therein shall be subject to the limitations specified
in this subparagraph (iv), as follows:
(aa) Such rights of FJ to purchase AC Voting Stock
shall accumulate until FJ shall have the
right to purchase not less
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than 125,000 shares (subject to adjustments
for stock splits, stock dividends and similar
capital adjustments);
(bb) When FJ may purchase pursuant to subparagraph
(aa) above, FJ may effect a purchase of all
or any of the AC Voting Stock that it is
entitled to purchase (provided that all
purchases must be in amounts of at least
125,000 shares) during the week (a "Purchase
Period") following the period that ends on
the tenth trading day after the third day
following the public release of AC's
quarterly financial results at a price equal
to the average of the closing prices of such
AC Voting Stock for such ten trading day
period, provided that such AC Voting Stock is
publicly traded, or if such securities are
not publicly traded, at the fair market value
thereof determined in good faith by the Board
of Directors of AC.
(cc) In the event that FJ's rights to purchase
described in this subparagraph (iv) shall
accumulate to the point (that FJ has the
unexercised right to purchase the FJ
Percentage Ownership of four percent or more
of the outstanding AC Voting Stock) and FJ
shall fail to exercise its purchase rights
during the next succeeding Purchase Period to
reduce its accumulated rights to less than
the FJ Percentage Ownership of four percent,
then for the purpose of computing FJ's
Percentage Ownership in the future, the
number of shares of AC Voting Stock that FJ
holds will be reduced by the number of shares
of AC Voting Stock that FJ could have
acquired if it had exercised all of its
purchase rights during such Purchase Period.
(v) AC shall give FJ written notice of its right to
purchase stock, securities or rights pursuant to this
paragraph (a), and such offer may only be accepted by
FJ (except as provided in subparagraph (iv) hereof)
within 30 days after receipt of such notice. All
purchase and sales shall be completed promptly after
such acceptances. The right to purchase stock,
securities or rights shall not be assignable by FJ
except to wholly-owned subsidiaries of FJ.
(vi) Notwithstanding anything to the contrary in this
paragraph (a) FJ shall have no rights to purchase AC
stock, securities, or rights in connection with: (x)
AC stock, securities or rights being issued pursuant
to any stock split, stock dividend or
recapitalization of AC (it being the parties'
understanding that such actions will not
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affect relative ownership interest of AC Voting
Stock), or (y) AC Common Stock issued pursuant to the
exercise of all warrants to purchase AC stock
presently outstanding, or issued pursuant to
securities convertible into, or rights to acquire AC
Common Stock offered to FJ pursuant to this paragraph
(a).
(vii) If AC inadvertently fails to offer to FJ the right to
purchase stock, securities or rights in the manner
required by this paragraph (a), FJ may not elect to
modify licenses pursuant to this Agreement if AC
corrects such a failure and makes an offer to FJ to
purchase the correct amount of stock, securities or
rights promptly after AC discovers such failure.
(b) All or substantially all of AC's business of selling large
scale mainframe computers having a performance in excess of
two times the IBM 158 Model III ("Large Scale Computers"), in
the United States and Canada, or all or substantially all of
AC's business throughout the world of developing or
manufacturing Large Scale Computers is transferred to a third
party in a single transaction or a series of related
transactions; or
(c) A party effects a transaction (or a series of related
transactions) whereby outstanding shares (or securities
convertible into such shares) having more than 50 percent of
the voting power in the election of directors of such party,
or of any entity into which such party is merged, or of which
such party becomes a subsidiary, are held, directly or
indirectly, by shareholders upon the closing of such
transaction (other than the other party hereto) who were not
holders of 50 percent or more of such voting stock of such
party prior to such consummation; provided that, if AC is the
party effecting such transaction, this paragraph (c) will not
be applicable if FJ votes any of its shares of AC Voting Stock
in favor of such transaction; or
(d) AC terminates all or substantially all of its business of
manufacturing Large Scale Computers; or
(e) A party makes an assignment for the benefit of creditors, or
becomes unable to pay its debts generally as they become due;
or
(f) Any order, judgment or decree is entered adjudicating a party
bankrupt or insolvent; or
(g) A party commences any proceedings relating to itself under any
bankruptcy or insolvency laws of any jurisdiction, including
any reorganization proceedings under such laws; or
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(h) In connection with and as a part of a corporate combination of
AC, the Chief Executive Officer of the combined companies
shall be other than the Chief Executive Officer of AC
immediately prior to such combination, provided that this
paragraph (h) will not be applicable if FJ votes any of its
shares of AC Voting Stock in favor of such transaction; or
(j) FJ shall become unable to elect individuals to serve as
directors of AC in a number proportionate to its ownership of
their outstanding AC Voting Stock pursuant to cumulative
voting (disregarding fractions) as a result of AC amending its
Certificates of Incorporation or by-laws; or
(k) AC enters into a transaction to acquire a computer from a
third party for resale as a product substantially in the form
acquired and not as part of a larger system and as a
substitute for any model of ALTA Series (as defined in the
1978 Agreement) that is then subject to the purchase
commitments specified in Section 10 of the 1978 Agreement; or
after such purchase commitment has terminated, AC enters into
a transaction to acquire such a computer from a third party
for resale as a product substantially in the form acquired and
not as part of a larger system and as a model in a series of
computers that is developed to succeed ALTA Series, or to
succeed any series of computers developed to succeed ALTA
Series and its successors, or as a substitute for any such
model; provided that FJ may not elect to modify licenses
pursuant to this Agreement if AC has first offered to purchase
any such computer from FJ, affording FJ a reasonable period of
time to consider such offer, and, after good faith
negotiations, AC and FJ have not entered into an agreement
pursuant to which FJ will sell and AC will purchase a
substantially equivalent product on terms and conditions that
are substantially comparable to those offered by any such
third party, unless AC shall enter into such an agreement with
a Japanese company which at the date of this Agreement is
manufacturing and selling large scale IBM compatible
computers, in which latter event FJ will have the right to
elect to modify licenses in the manner provided in this
Agreement.
Then FJ, or in the case of subparagraphs (c), (e), (f), and (g), the
party which has not taken the action described, or is not the subject
of the events specified, in such subparagraphs, may, at its option,
elect to cause the following modifications to be made to licenses
granted under the 1977 Agreement and the 1978 Agreement:
(aa) Each exclusive right and license granted by a
party to the other under Article II of the
1977 Agreement shall become a non-exclusive
right and license, and the exclusions
affecting the existing non-exclusive licenses
shall be deleted, and each party shall
automatically grant to the other party,
without necessity of any further action, a
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worldwide non-exclusive, non-transferable,
paid-up, royalty-free right and license to
make, have made, import, use, lease, sell and
otherwise dispose of Licensed Products and any
other product made under Licensed Patents and
to utilize in connection therewith any of the
Technical Information and Know-How (as such
capitalized terms are defined in the 1977
Agreement); and
(bb) The exclusive right and license granted by FJ
to AC pursuant to Section 5.2 of the 1978
Agreement and the exclusive right and license
granted by AC to FJ pursuant to Section 5.3
of the 1978 Agreement shall become
non-exclusive rights and licenses,
provided, however, that a party hereto shall not be entitled to make
such election if prior to its notice of election it shall have
substantially breached (not through events beyond its control) the
1978 Agreement or the Manufacturing Agreements entered into pursuant
to Section 10 of the 1978 Agreement, and such substantial breach has
not been cured so that the non-breaching party will be in the same
economic position as though the breach had not occurred; and provided
further that in the event that after a modification of licenses shall
have occurred pursuant to this Agreement, a party hereto shall be
found by a judicial authority to have substantially breached (not
through events beyond its control) the 1978 Agreement or the
Manufacturing Agreement entered into pursuant to Section 10 of the
1978 Agreement, the following shall result:
(x) if the party found to have breached is FJ:
(aa) The conversion of exclusive rights and
licenses under the 1977 Agreement and the
1978 Agreement to non-exclusive licenses
shall not be affected and such rights and
licenses shall continue as non-exclusive
licenses; and
(bb) The modification of the non-exclusive
licenses granted to FJ under the 1977
Agreement previously effected by FJ shall be
terminated, and FJ shall have no additional
rights under the 1977 Agreement non-exclusive
licenses than it enjoyed prior to the initial
modification of licenses; and
(y) if the party found to have breached is AC:
(aa) The conversion of exclusive rights and
licenses under the 1977 Agreement and the
1978 Agreement to non-exclusive licenses
shall not be affected and such rights and
licenses shall continue as non-exclusive
licenses; and
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(bb) The modifications of the non-exclusive
licenses granted to AC under the 1977
Agreement previously effected shall be
terminated, and AC shall have no additional
rights under the 1977 Agreement non-exclusive
licenses than it enjoyed prior to the initial
modification of licenses;
provided, however, that a claim of a right of termination of modification of
licenses pursuant to subparagraphs (x)(bb) and (y)(bb) above shall not be the
grounds for issuance of an injunction as a remedy for patent infringement prior
to such termination, and that in the event of such termination the parties
shall cooperate to provide maintenance and other support to customer
installations of products that, as a result of such termination are no longer
subject to valid licenses; and provided further, however, that should FJ make
such election, AC will have an option to modify its obligations under the 1978
Agreement to purchase specified quantities of computer subsystems and
semiconductor devices, but AC may not reduce by more than one-half its
obligation to purchase subsystems and semiconductor devices under Section 10 of
the 1978 Agreement, and in any event FJ will remain obligated to sell products
to AC pursuant to the terms of the 1978 Agreement and the Manufacturing
Agreement entered into pursuant to Section 10 of the 1978 Agreement.
2. Notice of election to exercise the option specified in Section 1
hereof shall be given, if at all, within six months after a party
entitled to exercise such option has become aware of the occurrence of
such event, and shall be given in writing by registered air mail to
the President of the respective party at the address set forth at the
start of this Agreement. Such notice shall be deemed to have been
received on the fifth day after the date of the postmark.
3. The terms and conditions of this Agreement shall control where they
may be inconsistent with terms and conditions of the 1977 Agreement or
the 1978 Agreement, each of which shall be hereby amended to the
extent necessary to carry out the provisions hereof. All matters of
interpretation shall be construed so as to give full effect to the
provisions and intentions of this Agreement.
IN WITNESS WHEREOF, both parties hereto have caused this Agreement to
be executed by duly authorized representatives as of the date first
set forth above.
XXXXXX CORPORATION FUJITSU LIMITED
By /s/ Xxxx X. Xxxxx By /s/ Xxxxx Xxxxxxxxx
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