INTELLECTUAL PROPERTY LICENSE AGREEMENT by and between HITACHI, LTD. and OPTO- DEVICE, LTD. Dated as of October 1, 2002
Exhibit 10.19
by and between
HITACHI, LTD.
and
OPTO-DEVICE, LTD.
Dated as of October 1, 2002
TABLE OF CONTENTS
Section 1. Definitions |
1 | |||
(a) “Added Products” |
1 | |||
(b) “Affiliate” |
1 | |||
(c) “Assets” |
2 | |||
(d) “Assigned IP” |
2 | |||
(e) “Business” |
2 | |||
(f) “Commercially Reasonable Efforts” |
2 | |||
(g) “Closing” |
2 | |||
(h) “Closing Date” |
2 | |||
(i) “Cure Period” |
2 | |||
(j) “Dispute Notice” |
2 | |||
(k) “Existing Third Party License Agreements” |
2 | |||
(l) “Future Hitachi IP” |
2 | |||
(m) “Future Third Party License Agreements” |
2 | |||
(n) “HTS Business” |
2 | |||
(o) “Indemnified Party” |
2 | |||
(p)“Intellectual Property” |
2 | |||
(q) “Licensed IP” |
3 | |||
(r) “Losses” |
3 | |||
(s) “Material Adverse Effect” |
3 | |||
(t) “Minority-Owned Affiliate” |
3 | |||
(u) “Non-Transferred License Agreements” |
3 | |||
(v) “OpNext Japan” |
3 | |||
(w) “OpNext Japan R&D Agreement” |
3 | |||
(x) “OpNext Parties” |
3 | |||
(y) “Opto-Device IP” |
4 | |||
(z) “Opto-Device Third Party License Agreement” |
4 | |||
(aa) “Person” |
4 | |||
(bb) “SIC Business” |
4 | |||
(cc) “Subsidiary” |
4 | |||
(dd) “Third Party Claim” |
4 | |||
(ee) “Third Party License Agreements” |
4 | |||
(ff) “Wholly-Owned Subsidiaries” |
4 | |||
Section 2. Assigned Intellectual Property |
5 | |||
(a) License |
5 | |||
(b) Review of Obligations |
5 | |||
(c) Status of Wholly-Owned Subsidiaries |
5 | |||
Section 3. Licensed Intellectual Property |
5 | |||
(a) Definition |
5 | |||
(b) License |
6 | |||
(c) Sublicense |
7 | |||
(d) Review of Obligations |
8 |
i
(e) Obligation to Maintain Intellectual Property |
8 | |||
(f) Future Hitachi IP |
8 | |||
(g) Transfer of Licensed IP |
9 | |||
(h) Change in Status |
9 | |||
Section 4. Opto-Device Intellectual Property |
9 | |||
(a) Definition |
9 | |||
(b) License |
9 | |||
(c) Termination Conditions |
9 | |||
(d) Review of Obligations |
10 | |||
(e) Status of Wholly-Owned Subsidiaries |
10 | |||
Section 5. Third-Party License Agreements |
11 | |||
(a) Definition |
11 | |||
(b) Existing Third Party License Agreements |
11 | |||
(c) Future Third Party License Agreements |
11 | |||
(d) Other Agreements |
12 | |||
(e) Termination of Obligations |
13 | |||
Section 6. Representations and Warranties of Hitachi |
13 | |||
(a) Assigned IP and Licensed IP |
13 | |||
(b) Authority |
13 | |||
(c )No Conflicts |
14 | |||
(d) Litigation, etc |
14 | |||
(e)Infringement of Licensed IP |
14 | |||
(f) Product Clearance Searches |
14 | |||
Section 7. Covenants of Hitachi |
15 | |||
(a) Ordinary Course |
15 | |||
(b) Covenant Not to Xxx |
15 | |||
(c) Confidentiality |
15 | |||
(d) Opto-Device’s and Hitachi’s Trademark, Trade Names, etc |
16 | |||
(e) Taxes |
17 | |||
(f) New Product Clearance Searches |
17 | |||
(g) Guaranty |
17 | |||
Section 8. Representations and Warranties of Opto-Device |
17 | |||
(a) Authority |
17 | |||
(b) No Conflicts |
17 | |||
Section 9. Covenants of Opto-Device |
18 | |||
(a) Confidentiality |
18 | |||
(b) No Additional Representations |
18 | |||
(c) Covenant Not to Xxx |
19 | |||
(d) Guaranty |
19 |
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Section 10. Mutual Covenants |
19 | |||
(a) Consents |
19 | |||
(b) Non-Transferred License Agreements |
20 | |||
(c) Press Releases |
20 | |||
(d) Commercially Reasonable Efforts |
20 | |||
(e) Injunctive Relief |
20 | |||
Section 11. Indemnification |
20 | |||
(a) Previously Disclosed Claims |
20 | |||
(b)Intellectual Property Indemnification and Defense |
21 | |||
(c) Indemnification by Hitachi |
21 | |||
(d) Indemnification by Opto-Device |
22 | |||
(e) Losses Net of Insurance |
22 | |||
(f) Limitations on Indemnification |
22 | |||
(g) Procedures Relating to Indemnification |
23 | |||
(h) Duty to Mitigate |
24 | |||
Section 12. Dispute Resolution |
24 | |||
Section 13. Assignment |
24 | |||
Section 14. Third-Party Beneficiaries |
24 | |||
Section 15. Termination |
25 | |||
Section 16. Survival of Representations and Warranties |
25 | |||
Section 17. Expenses |
25 | |||
Section 18. Export Control |
25 | |||
Section 19. Amendment and Waiver |
25 | |||
Section 20. Notices |
25 | |||
Section 21. Interpretation |
26 | |||
Section 22. Counterparts |
27 | |||
Section 23. Entire Agreement |
27 | |||
Section 24. Relationship to Other Agreements |
27 | |||
Section 25. Schedules or Exhibits |
27 | |||
Section 26. No Strict Construction |
27 | |||
Section 27. Severability |
27 | |||
Section 28. Governing Law |
28 | |||
Section 29. Submission to Jurisdiction; Waivers |
28 | |||
Section 30. Delivery by Xxxxxxxxx |
00 | |||
Xxxxxxx 00. Exhibits and Schedules |
29 | |||
Section 32. Recordation |
29 | |||
iii
Section 33. Third Parties |
29 | |||
Section 34. Survival |
29 | |||
Section 35. Hitachi Communication Technologies, Ltd |
29 |
iv
THIS INTELLECTUAL PROPERTY LICENSE AGREEMENT (the “IP License Agreement”), dated as of
October 1, 2002, is entered into by and between HITACHI, LTD., a corporation existing under the
laws of Japan (“Hitachi”), and OPTO-DEVICE LIMITED, a corporation existing under the laws
of Japan (“Opto-Device”), pursuant to the terms of the Business Transfer Agreement, dated
July 24, 2002 (the “Business Transfer Agreement”), entered into between Hitachi and
Opto-Device and the Stock Purchase Agreement, dated October 1, 2002 (the “Stock Purchase
Agreement”), entered into between Hitachi and OpNext, Inc., a Delaware corporation
(“OpNext”). All capitalized terms used herein but not defined herein shall have the
meanings ascribed to such terms in the Stock Purchase Agreement.
WITNESSETH
WHEREAS, the Business Transfer Agreement provides the terms and conditions under which Hitachi
sold to Opto-Device all of the Assets (as defined below), which are necessary or reasonably
required for the operation of the opto-device business of Hitachi’s Semiconductor and Integrated
Circuits Group (“SIC”) and Hitachi Tohbu Semiconductor, Ltd., a corporation existing under
the laws of Japan and a Wholly-Owned Subsidiary of Hitachi (“HTS”). This IP License
Agreement provides the terms and conditions under which Hitachi will be licensing to Opto-Device
the Intellectual Property (as defined below) rights, which are necessary or reasonably required for
the operation of the Business (as defined below) and which were not transferred/assigned under the
Business Transfer Agreement;
WHEREAS, simultaneously with the execution of this IP License Agreement, Hitachi is entering
into the Stock Purchase Agreement pursuant to which OpNext will acquire all of the outstanding
capital stock of Opto-Device; and
WHEREAS, as part of the transfer of Assets related to the Business pursuant to the Business
Transfer Agreement, Hitachi and Opto-Device desire to enter into this IP License Agreement to set
forth the terms and conditions regarding the license of the Intellectual Property related to the
Business.
NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
to this IP License Agreement hereby agree as follows:
Section 1. Definitions. The following terms, when used herein with initial capital
letters, shall have the respective meanings set forth in this Section 1.
(a) “Added Products” shall have the meaning as set forth in Section 3(a) of this IP
License Agreement.
(b) “Affiliate” of any particular Person shall mean any other Person controlling,
controlled by or under common control with such particular Person, where “control” means the
possession, directly or indirectly, of the power to direct the management and policies of a Person
whether through the ownership of voting securities, contract or otherwise.
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(c) “Assets” shall have the meaning as set forth in Section 1(c) of the Stock Purchase
Agreement.
(d) “Assigned IP” shall have the meaning as set forth in Section 9(b) of the Stock
Purchase Agreement.
(e) “Business” shall mean, collectively, the HTS Business and the SIC Business.
(f) “Commercially Reasonable Efforts” shall mean diligent and commercially reasonable and
expeditious efforts to accomplish a task or objective in a manner that is at least equal to the
efforts, quality and resources devoted by a party that such party would apply to its own high
priority task or objective under similar circumstances.
(g) “Closing” shall have the meaning a s set forth in Section 4 of the Stock Purchase
Agreement.
(h) “Closing Date” shall have the meaning as set forth in Section 4 of the Stock Purchase
Agreement.
(i)“Cure Period” shall have the meaning as set forth in Section 3(b)(ii) of this IP
License Agreement.
(j) “Dispute Notice” shall have the meaning as set forth in Section 12 of this IP License
Agreement.
(k) “Existing Third Party License Agreements” shall have the meaning as set forth in
Section 5(a) of this EP License Agreement.
(l) “Future Hitachi IP” shall have the meaning as set forth in Section 3(f) of this IP
License Agreement.
(m) “Future Third Party License Agreements” shall have the meaning as set forth in Section
5(a) of this IP License Agreement.
(n) “HTS Business” shall mean the business of manufacturing opto-device Products for
telecommunication, information application and industrial uses operated by HTS as of the Closing.
(o) “Indemnified Party” shall have the meaning as set forth in Section 11(g) of this IP
License Agreement.
(p) “Intellectual Property” shall mean all: (i) patents, patent applications, patent
disclosures and inventions (including all extensions, reexaminations, reissues, continuations and
renewals related thereto); (ii) copyrights (registered or unregistered and all renewals thereof)
and copyrightable works and registrations and applications for registration thereof; (iii) mask
works and registrations and applications for registration thereof; (iv) computer software, data,
databases and documentation thereof; and (v) trade secrets and other confidential
2
information
(including ideas, formulas, compositions, inventions (whether patentable or
unpatentable and whether or not reduced to practice), know-how, manufacturing and production
processes and techniques, research and development information, drawings, specifications, designs,
plans, proposals, technical data, operating, maintenance and safety materials and drawings, test
procedures, test data, sources of materials and supplies, financial and marketing plans and
customer and supplier lists and information). Intellectual Property, as referred to in this IP
License Agreement, refers to rights throughout the world, including any equivalent of any of the
foregoing in any jurisdiction or under any laws, regulations or treaties.
(q) “Licensed IP” shall have the meaning set forth in Section 3(a) of this IP License
Agreement.
(r) “Losses” shall have the meaning set forth in Section 11(c) of this IP License
Agreement.
(s) “Material Adverse Effect” shall mean a change, effect, event or occurrence with
respect to Opto-Device, the Business or the Assets that, individually or in the aggregate, is/are
reasonably likely to be materially adverse to the financial condition, assets, operations or
business of Opto-Device, the Business or the Assets, other than (i) changes relating to United
States, Japanese or other foreign economies in general or the industry of the Business in general
and not specifically relating to the Business and (ii) to the extent that the Business and the
Assets were operated by Hitachi and HTS in substantially the same manner as the Business and the
Assets were operated by Hitachi and HTS prior to June 11, 2002, changes that are the result of
disruptions to the Business as a result of Hitachi’s review and consideration of a reorganization
of the Business or the execution of this IP License Agreement or the announcement of the
transactions contemplated hereby or by the Stock Purchase Agreement (none of which shall be deemed
to constitute a failure of the condition set forth in this IP License Agreement).
(t) “Minority-Owned Affiliate” shall mean any entity that a party, directly or indirectly,
at any time, owns or controls twenty percent (20%) to fifty percent (50%) of the voting equity
shares or securities convertible into such shares.
(u) “Non-Transferred License Agreements” shall have the meaning as set forth in Section
10(b) of this IP License Agreement.
(v) “OpNext Japan” shall mean OpNext Japan, Inc., a corporation existing under the laws of
Japan and a Wholly-Owned Subsidiary of OpNext.
(w) “OpNext Japan R&D Agreement” shall mean the Research and Development Agreement, dated
as of July 31, 2001, by and between Hitachi and OpNext Japan, as amended on the date hereof by the
First Amendment to OpNext Japan R&D Agreement, by and among Hitachi, OpNext Japan and Opto-Device,
and as otherwise amended, supplemented or modified from time to time.
(x) “OpNext Parties” shall have the meaning as set forth in Section 11(a) of this IP
License Agreement.
3
(y) “Opto-Device IP” shall have the meaning as set forth in Section 4(a) of this IP
License Agreement.
(z) “Opto-Device Third Party License Agreement” shall have the meaning as set forth in
Section 5(d) of this IP License Agreement.
(aa) “Person” shall mean any individual, corporation, partnership, limited liability
company, business trust, association, joint stock company, trust, unincorporated organization,
joint venture, firm or other entity or a government or any political subdivision or agency,
department or instrumentality thereof.
(bb) “SIC Business” shall mean the business of designing, developing, manufacturing,
selling and distributing opto-device Products for telecommunication, information application and
industrial uses operated by Hitachi’s Semiconductor and Integrated Circuits Group as of the
Closing.
(cc) “Subsidiary” shall mean, with respect to any Person, any corporation, limited
liability company, partnership, association or other business entity of which (i) if a corporation,
a majority of the total voting power of shares of stock entitled (without regard to the occurrence
of any contingency) to the vote in the election of directors, managers, or trustees thereof is at
the time owned or controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof or (ii) if a limited liability company,
partnership, association or other business entity, a majority of the limited liability company,
partnership or other similar ownership interest thereof is at the time owned or controlled,
directly or indirectly, by any Person or one or more Subsidiaries of that Person or a combination
thereof. For purposes hereof, a Person or Persons shall be deemed to have a majority ownership
interest in a limited liability company, partnership, association or other business entity if such
Person or Persons shall be allocated a majority of limited liability company, partnership,
association or other business entity gains or losses or shall be or control the managing director
or general partner of such limited liability company, partnership, association or other business
entity.
(dd) “Third Party Claim” shall have the meaning as set forth in Section 11(g) of this IP
License Agreement.
(ee) “Third Party License Agreements” shall have the meaning as set forth in Section 5(a)
of this IP License Agreement.
(ff) “Wholly-Owned Subsidiaries” shall mean, with respect to any Person, any corporation,
limited liability company, partnership, association or other business entity of which (i) if a
corporation, one hundred percent (100%) of the total voting power of shares of stock entitled
(without regard to the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Wholly-Owned Subsidiaries of that Person or a combination
thereof or (ii) if a limited liability company, partnership, association or other business entity,
all of the limited liability company, partnership or total ownership interest thereof is at the
time
4
owned or controlled, directly or indirectly, by any Person or one or more other Wholly-Owned
Subsidiaries of that Person or a combination thereof.
Section 2. Assigned Intellectual Property.
(a) License. Opto-Device shall license, and does hereby license effective as of the
Closing Date, the Assigned IP back to Hitachi arid its Wholly-Owned Subsidiaries on a fully
paid-up, non-exclusive, perpetual and irrevocable basis to use, make, have made, sell, advertise,
offer to sell, lease, import, export and supply products and services throughout the world using
the Assigned IP, unless otherwise terminated according to the provisions in this IP License
Agreement. For the avoidance of doubt, this IP License Agreement does not grant Hitachi or its
Wholly-Owned Subsidiaries the right to sublicense the Assigned IP and Hitachi and its Wholly-Owned
Subsidiaries shall not have the right to sublicense the Assigned IP without the prior written
consent of Opto-Device, not to be unreasonably withheld, unreasonably delayed or unreasonably
conditioned.
(b) Review of Obligations. The obligations set forth in this Section 2 shall expire on
the tenth (10th) anniversary of the Closing Date; provided, however,
that the license under Assigned IP existing as of the tenth (10th) anniversary of the
Closing Date shall continue, under reasonable terms and conditions to be agreed between the
parties, until the expiration of all of such Assigned IP.
(c) Status of Wholly-Owned Subsidiaries.
(i) License to Assigned IP. If at any time a Wholly-Owned Subsidiary of Hitachi ceases to
remain a Wholly-Owned Subsidiary of Hitachi, Hitachi shall provide written notice of such change to
Opto-Device in accordance with Section 20 of this IP License Agreement and the license under
Assigned IP to such Wholly-Owned Subsidiary, shall continue, pursuant to the terms and conditions
of this IP License Agreement.
(ii) Sublicenses. For the avoidance of doubt, this IP License Agreement does not grant
Wholly-Owned Subsidiaries of Hitachi the right to sublicense the Assigned IP and an entity that
ceases to remain a Wholly-Owned Subsidiary of Hitachi shall not have the right to sublicense the
Assigned IP without the prior consent of Opto-Device, not to be unreasonably withheld, unreasonably
delayed or unreasonably conditioned; provided, however, that to the extent any
sublicenses have been granted with Opto-Device’s prior written consent with respect to the Assigned
IP during the time such entity is a Wholly-Owned Subsidiary of Hitachi, such sublicenses shall
continue, pursuant to the terms and conditions of this IP License Agreement and such sublicense.
Section 3. Licensed Intellectual Property.
(a) Definition. “Licensed IP” shall mean: (i) existing, issued patents and
pending patent applications of Hitachi filed prior to the tenth (10th) anniversary of
the Closing Date (including all extensions, reexaminations, reissues, continuations and renewals
related thereto) covering the products of the Business listed on Exhibit B to the Stock
Purchase Agreement and processes of the Business, throughout the world, which cannot be transferred
to
5
Opto-Device due to Hitachi’s reasonable requirements to use such Intellectual Property in
other Hitachi business units; and (ii) all know-how and other Intellectual Property used in
connection with the Business in whatever form that was not capable of assignment pursuant to the
provisions of the Business Transfer Agreement due to Hitachi’s reasonable requirements to use such
Intellectual Property in other Hitachi business units (e.g., product specifications,
manufacturing processes, quality control procedures, instruction and/or operating, maintenance and
safety materials and drawings, test procedures, test data, sources of material and supplies and the
like). Hitachi shall use Commercially Reasonable Efforts to list all material patents that
constitute Licensed IP on Exhibit A hereto, which schedule may be amended by the parties’
mutual written consent, together with an explanation of why each patent cannot be transferred to
Opto-Device pursuant to the Business Transfer Agreement. For nine (9) months following the
Closing, Hitachi and Opto-Device agree to cooperate in supplementing Exhibit B to the Stock
Purchase Agreement to include all products sold by the Business and/or planned as of the Closing
Date, all products planned during the one (1) year period prior to the Closing Date that pertain to
the following research areas: (i) Tunable Lasers; (ii) 40G; (iii) Packaging Technology; and (iv)
Modulators, and all products sold by the Business during the one (1) year period prior to the
Closing Date; provided, however, to the extent any products are added to
Exhibit B of the Stock Purchase Agreement that were not sold or planned as of the Closing
Date (“Added Products”), at that time the parties will negotiate in good faith and on
reasonable terms the extent to which the representations, warranties and covenants, or any other
obligations of Hitachi under this IP License Agreement, the Stock Purchase Agreement and the OpNext
Japan R&D Agreement would apply to such Added Products. For two (2) years following the Closing,
Hitachi and Opto-Device agree to cooperate in supplementing Exhibit A hereof to include all
material patents that are necessary or reasonably required for the purpose of operation of the
Business as conducted on the Closing Date.
(b) License.
(i) Hitachi shall license, and does hereby license effective as of the Closing Date, the
Licensed IP to Opto-Device, on a fully paid-up, non-exclusive, perpetual and irrevocable basis to
use, make, have made, sell, advertise, offer to sell, lease, import, export and supply products and
services throughout the world using the Licensed IP, unless otherwise terminated according to the
provisions in this IP License Agreement.
(ii) Termination Conditions. Such license shall not be terminated or its exploitation
enjoined, until and unless: (i) Opto-Device has committed a material breach of its obligations
under this IP License Agreement, Hitachi has given written notice of such breach to Opto-Device and
such breach remains uncured after sixty (60) days of receiving notice of such breach (the “Cure
Period”), or, in the case of a breach that cannot be cured within such Cure Period, Opto-Device
has not instituted within such Cure Period steps necessary to remedy the default and/or thereafter
has not diligently pursued the same to completion; or (ii) Opto-Device has committed an incurable
material breach. In the event the breach is a curable breach that cannot be cured within the Cure
Period but with respect to which Opto-Device has instituted steps necessary to remedy the default
and is thereafter diligently pursuing such cure, both parties shall negotiate to determine whether
further pursuit of such cure is reasonable. If the parties cannot agree on a resolution in such
negotiations, then this issue shall be referred to arbitration
6
pursuant to the arbitration
procedures set forth in Exhibit B hereto to decide whether such breach
can be cured or any other alternative remedy should be adopted. In the event the breach is an
incurable breach, the parties agree that the matter shall be referred to arbitration pursuant to
the arbitration procedures set forth in Exhibit B hereto to determine the appropriate
remedy. In the event that either party submits the dispute to arbitration, both parties shall
cooperate in such binding arbitration in accordance with Exhibit B.
(c) Sublicense.
(i) Subsidiaries. Hitachi will grant, and does hereby grant effective as of the
Closing Date, to Opto-Device the right to freely sublicense the Licensed IP to its Subsidiaries,
OpNext and OpNext’s Subsidiaries; provided, however, that Opto-Device will not have
the right to sublicense any Licensed IP that is developed or filed for after the Closing Date, to
any entity other than OpNext and Opto-Device’s and OpNext’s Wholly-Owned Subsidiaries, without the
prior written consent of Hitachi, not to be unreasonably withheld, unreasonably delayed or
unreasonably conditioned.
(ii) Minority-Owned Affiliates. Opto-Device shall be permitted to further sublicense
the Licensed IP to its Minority-Owned Affiliates, subject to approval by Hitachi, not to be
unreasonably withheld, unreasonably delayed or unreasonably conditioned, and to commercially
reasonable restrictions to be imposed by Hitachi that will be agreed to by the parties in writing.
(iii) Customers. Opto-Device shall be permitted to further sublicense the Licensed IP
to its customers as necessary or appropriate in connection with the completion of Opto-Device’s
products and services, to complete the sale of products or services in the ordinary course of
business or to enable joint development of a product or system with Opto-Device’s customers to be
manufactured and sold by Opto-Device to such customers, provided Opto-Device proposes the terms and
conditions of such sublicense to Hitachi and agrees that such sublicense shall be subject to
Hitachi’s exercise of one (1) of the following options in Hitachi’s sole discretion, with respect
to the terms and conditions proposed by Opto-Device: (i) Hitachi may consent to the sublicense
terms and conditions as is; (ii) Hitachi may propose that a revised version of the sublicense, with
reasonably modified terms and conditions be utilized; (iii) Hitachi may enter into a direct license
with Opto-Device’s customer under the same terms and conditions as Opto-Device’s proposed
sublicense; (iv) Hitachi may propose to enter into a direct license with Opto-Device’s customer
under reasonably modified terms and conditions; or (v) Hitachi may commence discussions with
Opto-Device to reach a resolution of Hitachi’s concerns with respect to such sublicense, if Hitachi
believes such sublicense is not in the best interest of the parties. Hitachi shall have the sole
discretion to determine which of the five (5) foregoing options Hitachi will exercise in each case.
With respect to Hitachi’s exercise of one (1) of the five (5) foregoing options, Hitachi agrees to
provide consents to and/or notify Opto-Device of Hitachi’s proposed modifications within fifteen
(15) Business Days of receipt of the sublicense terms and conditions from Opto-Device. In the
event that Hitachi exercises one (1) of the five (5) foregoing options, the parties agree to
negotiate in good faith and on reasonable terms to resolve the situation within a reasonable amount
of time, which shall not exceed fifteen (15) Business Days of Hitachi’s provision of such a
response to Opto-Device;
7
provided, however, Hitachi shall not contact such
Opto-Device customers that are the subject of negotiations between Hitachi and Opto-Device, without
the prior written consent of Opto-Device
prior to the resolution of such negotiations. If the parties cannot agree on a resolution in
such negotiations, then this issue shall be referred to arbitration pursuant to the arbitration
procedures set forth in Exhibit B hereto. In the event that either party submits the
dispute to arbitration, both parties shall cooperate in such binding arbitration in accordance with
Exhibit B.
(d) Review of Obligations. The obligations set forth in this Section 3 shall expire on
the tenth (10th) anniversary of the Closing Date; provided, however,
that the license under Licensed IP existing as of the tenth (10th) anniversary of the
Closing Date shall continue, under reasonable terms and conditions to be agreed between the
parties, until the expiration of all of such Licensed IP. Notwithstanding the foregoing, if one
(1) of the conditions set forth in Section 3(b)(ii) is met, Hitachi may elect to be completely
relieved of its obligations set forth in this Section 3. If Hitachi elects to be relieved of its
obligations under this Section 3, the parties shall renegotiate in good faith and on commercially
reasonable terms a new license governing the Licensed 1P.
(e) Obligation to Maintain Intellectual Property. Hitachi shall continue to maintain in
effect all Intellectual Property relating to the Business through the Closing Date in the same
manner as Hitachi has done prior to entering into the Stock Purchase Agreement. After the Closing
Date, the Licensed IP shall be maintained by the division of Hitachi in control of such Licensed IP
in a manner that is equal to the efforts, quality and resources devoted by such division as
applicable in the ordinary course of the business from time to time for similar Intellectual
Property.
(f) Future Hitachi IP. “Future Hitachi IP” shall mean patents that may be issued to
Hitachi and patent applications (including all extensions, reexaminations, reissues, continuations
and renewals related thereto) that may be filed by Hitachi after the Closing Date but prior to the
tenth (10th) anniversary of the Closing Date that are reasonably relevant to the
Business as conducted on the Closing Date and as modified or expanded in the future to the extent
that any such modification or expansion relates to modifications to, extensions of or new versions
of product lines existing or planned as of the Closing Date. The parties agree to cooperate and
consult with each other to develop procedures by which Opto-Device will keep Hitachi informed of
any modifications or expansions to the Business in order for Hitachi to identify Future Hitachi IP
and notify Opto-Device accordingly. If requested by Opto-Device, any of such Future Hitachi IP
will be licensed to Opto-Device under the terms and conditions set forth in Section 3(b)(i). Any
such license pursuant to this Section 3(f) shall be subject to the termination provisions in
Section 3(b)(ii), the sublicensing terms in Section 3(c), the renegotiation terms in Section 3(d)
and the maintenance terms in Section 3(e). Notwithstanding Section 3(c), Opto-Device will have the
right to freely sublicense Future Hitachi IP to its Subsidiaries, OpNext and OpNext’s Subsidiaries
even if such Future Hitachi IP is developed or filed after the Closing Date. In the event that the
parties disagree as to whether any particular Intellectual Property developed by Hitachi after the
Closing constitutes Future Hitachi IP, the parties shall first attempt to resolve the dispute
through good faith and reasonable negotiations in accordance with Section 12 hereof. In the event
that the dispute cannot be resolved through such negotiations, a party shall refer the dispute to
arbitration pursuant to the arbitration procedures
8
set forth in Exhibit B hereto. In the
event that either party
submits the dispute to arbitration, both parties shall cooperate in such binding arbitration in
accordance with Exhibit B.
(g) Transfer of Licensed IP. In the event a division of Hitachi that is the owner of the
Licensed IP or any Future Hitachi IP that is licensed to Opto-Device under Section 3(f) is sold or
otherwise transferred by Hitachi, Hitachi will make necessary arrangements to secure a license
under the terms and conditions of this IP License Agreement for Opto-Device from the new owner such
that Opto-Device can continue to use such Licensed IP and such Future Hitachi IP until such
Licensed IP and/or Future Hitachi IP expires hereunder, unless otherwise terminated according to
the provisions of this IP License Agreement.
(h) Change in Status.
If at any time a Subsidiary, Wholly-Owned Subsidiary or Minority-Owned Affiliate of
Opto-Device or a Subsidiary or Wholly-Owned Subsidiary of OpNext ceases to remain a Subsidiary,
Wholly-Owned Subsidiary or Minority-Owned Affiliate (as appropriate) to the extent any sublicenses
have been granted by Opto-Device or OpNext to such entity with respect to the Licensed IP during
the time such entity is such a Subsidiary, Wholly-Owned Subsidiary or Minority-Owned Affiliate (as
appropriate), such sublicenses of Licensed IP existing as of the date such entity ceases to remain
a Subsidiary, Wholly-Owned Subsidiary or Minority-Owned Affiliate (as appropriate) shall continue,
pursuant to the terms and conditions of this IP License Agreement and such sublicense.
Section 4. Opto-Device Intellectual Property.
(a) Definition. “Opto-Device IP” shall mean patents issued and patent applications
filed after the Closing Date (including all extensions, reexaminations, reissues, continuations and
renewals related thereto) of Opto-Device but filed prior to the tenth (10th) anniversary
of the Closing Date covering products and processes of the Business, throughout the world (but
excluding Assigned IP and Licensed IP).
(b) License. Opto-Device shall license, and does hereby license as of the Closing Date, the
Opto-Device IP to Hitachi and its Wholly-Owned Subsidiaries on a fully paid-up, non-exclusive,
perpetual and irrevocable basis, to use, make, have made, sell, advertise, offer to sell, lease,
import, export and supply products and services throughout the world using the Opto-Device IP,
unless otherwise terminated according to the provisions of this IP License Agreement. For the
avoidance of doubt, this IP License Agreement does not grant Hitachi or its Wholly-Owned
Subsidiaries the right to sublicense the Opto-Device IP and Hitachi and its Wholly-Owned
Subsidiaries shall not have the right to sublicense the Opto-Device IP without the prior written
consent of Opto-Device, not to be unreasonably withheld, unreasonably delayed or unreasonably
conditioned.
(c) Termination Conditions. Such license shall not be terminated or its exploitation
enjoined, until and unless: (i) Hitachi has committed a material breach of its obligations under
this IP License Agreement, Opto-Device has given written notice of such breach to Hitachi and such
breach remains uncured after the Cure Period, or, in the case of a breach, which cannot be cured
within such Cure Period, Hitachi has not instituted within such
9
Cure Period steps necessary to
remedy the default and/or thereafter has not diligently pursued the same to completion; or (ii)
such a material breach is incurable. In the event the breach is a curable breach that cannot be
cured within the Cure Period but with respect to which Hitachi has instituted steps necessary to
remedy the default and is thereafter diligently pursuing such cure, both parties shall negotiate to
determine whether further pursuit of such cure is reasonable. If the parties cannot agree on a
resolution in such negotiations, then this issue shall be referred to arbitration pursuant to the
arbitration procedures set forth in Exhibit B hereto to decide whether such breach can be
cured or any other alternative remedy should be adopted. In the event the breach is an incurable
breach, the parties agree that the matter shall be referred to arbitration pursuant to the
arbitration procedures set forth in Exhibit B hereto to determine the appropriate remedy.
In the event that either party submits the dispute to arbitration, both parties shall cooperate in
such binding arbitration in accordance with Exhibit B.
(d) Review of Obligations. The obligations set forth in this Section 4 shall expire on
the tenth (10th) anniversary of the Closing Date; provided, however, that the
license under Opto-Device IP existing as of the tenth (10th) anniversary of the Closing
Date shall continue, under reasonable terms and conditions to be agreed between the parties, until
the expiration of all of such Opto-Device IP. Notwithstanding the foregoing, if one (1) of the
conditions set forth in Section 4(c) is met, Opto-Device may elect to be completely relieved of its
obligations set forth in this Section 4. If Opto-Device elects to be relieved of its obligations
under this Section 4, the parties shall renegotiate in good faith and on commercially reasonable
terms a new license governing the Opto-Device IP.
(e) Status of Wholly-Owned Subsidiaries.
(i) License to Opto-Device IP. If at any time a Wholly-Owned Subsidiary of Hitachi
ceases to remain a Wholly-Owned Subsidiary of Hitachi, Hitachi shall provide written notice of such
change to Opto-Device in accordance with Section 20 of this IP License Agreement and the license
under Opto-Device IP existing as of the date such Wholly-Owned Subsidiary ceases to remain a
Wholly-Owned Subsidiary, shall continue, pursuant to the terms and conditions of this IP License
Agreement; provided, however, for any Intellectual Property related to the Business
that is developed by Opto-Device after a Wholly-Owned Subsidiary ceases to remain a Wholly-Owned
Subsidiary, the parties shall negotiate in good faith and on commercially reasonable terms a new
license governing such Intellectual Property.
(ii) Sublicenses. For the avoidance of doubt, this IP License Agreement does not
grant Wholly-Owned Subsidiaries of Hitachi the right to sublicense the Opto-Device IP and an entity
that ceases to remain a Wholly-Owned Subsidiary of Hitachi shall not have the right to sublicense
the Opto-Device IP without the prior written consent of Opto-Device, not to be unreasonably
withheld, unreasonably delayed or unreasonably conditioned; provided, however, that
to the extent any sublicenses have been granted with Opto-Device’s prior written consent with
respect to the Opto-Device IP during the time such entity is a
Wholly-Owned Subsidiary of Hitachi, such sublicenses shall continue, pursuant to the terms and
conditions of this IP License Agreement and such sublicense.
10
Section 5. Third-Party License Agreements.
(a) Definition. “Third Party License Agreements” shall mean those rights owned by
Hitachi under any license agreements relating to Intellectual Property owned by third parties and
related to the Business, throughout the world, that cannot be assigned under the Business Transfer
Agreement or licensed under Section 3 hereof. “Existing Third Party License Agreements”
are those that are in existence on the Closing Date. “Future Third Party License
Agreements” are those entered into after the Closing Date.
(b) Existing Third Party License Agreements. To the extent that any Existing Third Party
License Agreement does not provide for an automatic sublicense to Opto-Device, Hitachi shall, upon
Opto-Device’s written request, sublicense, and does hereby sublicense, rights under any such
Existing Third Party License Agreements to Opto-Device but only to the extent that Hitachi has the
right to make available such rights to Opto-Device, subject to the condition that Opto-Device
abides by the terms and conditions of any such Existing Third Party License Agreement. The rights
referred to above will be provided to Opto-Device on a fully paid-up, non-exclusive basis, except
if royalty payments are necessary based specifically on what is being done by Opto-Device, then
Opto-Device shall be liable for such royalty payments. Hitachi shall, upon Opto-Device’s written
request, sublicense rights under Existing Third Party License Agreements to OpNext and OpNext’s and
Opto-Device’s Wholly-Owned Subsidiaries provided: (i) Opto-Device obtains Hitachi’s reasonable
prior written consent; (ii) Hitachi can make available such license rights to OpNext and OpNext’s
and Opto-Device’s Wholly-Owned Subsidiaries; and (iii) OpNext and OpNext’s and Opto-Device’s
Wholly-Owned Subsidiaries abide by the terms and conditions of such Existing Third Party License
Agreements. Notwithstanding the foregoing, if any such sublicense invokes any Japanese tax issues,
then Hitachi shall not be obliged to grant a sublicense to OpNext and OpNext’s and Opto-Device’s
Wholly-Owned Subsidiaries without entering into a separate agreement with OpNext and such
Wholly-Owned Subsidiaries under reasonable terms and conditions to be agreed upon between the
relevant parties to address such tax issues. The sublicense provided in this subsection 5(b) is
subject to the termination provisions of the Existing Third Party License Agreement. The rights
referred to above will be provided to OpNext and such Wholly-Owned Subsidiaries on a fully paid-up,
non-exclusive basis, except if royalty payments are necessary based specifically on what is being
done by OpNext and such Wholly-Owned Subsidiaries, then Opto-Device shall be liable for or shall
cause OpNext and such Wholly-Owned Subsidiaries to be liable for such royalty payments.
(c) Future Third Party License Agreements. Hitachi shall use Commercially Reasonable Efforts
to obtain the right to sublicense rights to Opto-Device under Future Third Party License
Agreements, which may be entered into by Hitachi after the Closing Date, subject to the condition
that Opto-Device abides by the terms and conditions of such Future Third Party License Agreements.
The rights referred to above will be granted to Opto-Device on a fully paid-up, non-exclusive
basis, except if royalty payments are necessary based specifically on what is being done by
Opto-Device, then Opto-Device shall be
liable for such royalty payments. Hitachi shall, upon Opto-Device’s written request, sublicense
rights under Future Third Party License Agreements to OpNext and OpNext’s and Opto-Device’s
Wholly-Owned Subsidiaries provided: (i) Opto-Device obtains Hitachi’s reasonable prior written
consent; (ii) Hitachi can
11
make available such license rights to OpNext and OpNext’s and
Opto-Device’s Wholly-Owned Subsidiaries; and (iii) OpNext and OpNext’s and Opto-Device’s
Wholly-Owned Subsidiaries abide by the terms and conditions of such Future Third Party License
Agreements. Notwithstanding the foregoing, if such sublicense invokes any Japanese tax issues then
Hitachi shall not be obliged to grant a sublicense to OpNext and OpNext’s and Opto-Device’s
Wholly-Owned Subsidiaries without entering into a separate agreement with OpNext and such
Wholly-Owned Subsidiaries under reasonable terms and conditions to be agreed upon between the
relevant parties to address such tax issues. The sublicense provided in this subsection 5(c) is
subject to the termination provisions of the Future Third Party License Agreements. The rights
referred to above will be provided to OpNext and such Wholly-Owned Subsidiaries on a fully paid-up,
non-exclusive basis, except if royalty payments are necessary based specifically on what is being
done by OpNext and such Wholly-Owned Subsidiaries, then Opto-Device shall be liable for or shall
cause OpNext and such Wholly-Owned Subsidiaries to be liable for such royalty payments.
Hitachi shall provide an analysis of its Existing Third Party License Agreements that are
cross-licenses with major competitors of Opto-Device’s products sold as of the Closing Date,
including whether Opto-Device is covered by such cross-license agreement and whether Opto-Device
has the option to be covered, or to not be covered, by such cross-license agreement. In addition,
within one hundred and eighty (180) days after the Closing Date, Hitachi shall cooperate with
Opto-Device in creating a list of all Existing Third Party License Agreements that are material to
the Business. Such a list may be amended from time to time to include Future Third Party License
Agreements that may be material to the Business, as determined by Hitachi and Opto-Device after
reviewing the rights available under such Future Third Party License Agreements. Upon request from
Opto-Device, Hitachi shall consult with and provide reasonable assistance to Opto-Device employees
with respect to the foregoing. Within one hundred and eighty (180) days after the Closing Date,
Hitachi and Opto-Device agree to negotiate in good faith and on a reasonable basis to create a
mechanism whereby: (i) Hitachi can, to the extent it becomes aware of or is notified about
termination, renegotiation or any other material change under an Existing Third Party License
Agreements or Future Third Party License Agreements that Opto-Device includes in its list of
material licenses, communicate to Opto-Device within a reasonable period of time information
relating to such termination, renegotiation or material change to the rights prior to such events
occurring; and (ii) Opto-Device can communicate with Hitachi prior to the termination or material
change to the rights available to be sublicensed by Hitachi to Opto-Device under the Existing Third
Party License Agreements and under any Future Third Party License Agreements. Both parties agree
to cooperate with each other to minimize any impact of such termination and renegotiation events.
(d) Other Agreements. In the event that Opto-Device or one of its Affiliates obtains a
separate license agreement for Intellectual Property related to the Business with the same
unrelated third party with which Hitachi had a Third Party License Agreement (“Opto- Device
Third Party License Agreement”), Opto-Device will cooperate with and reasonably assist Hitachi
in its efforts to obtain a license with that party under substantially the same terms and
conditions as those under such Opto-Device Third Party License Agreement it has obtained with
such third party. If permitted by the terms of such Opto-Device Third Party License
Agreement,
12
Opto-Device will grant a sublicense of the Intellectual Property rights to Hitachi under
such Opto-Device Third Party License Agreement.
(e) Termination of Obligations. The obligations set forth in this Section 5 shall
terminate upon a Change of Control (as defined in the Stockholders’ Agreement, dated July 31, 2001,
among OpNext, Hitachi and Clarity Partners, L.P., a Delaware limited partnership, Clarity OpNext
Holdings I, LLC, a Delaware limited liability company and Clarity OpNext Holdings II, LLC, a
Delaware limited liability company) of Opto-Device.
Section 6. Representations and Warranties of Hitachi.
(a) Assigned IP and Licensed IP. Except as disclosed on Schedule 6(a) or in Section
11(a), Hitachi hereby represents and warrants that:
(i) Hitachi owns or has the right to use and sublicense the Licensed IP, and Hitachi has the
rights to manufacture and/or sell products including the Licensed IP and to license such rights to
Opto-Device and has timely filed and prosecuted patent applications for the Assigned IP and
Licensed IP in accordance with Hitachi’s standard business practices;
(ii) Except as provided in Exhibit C and Section 11(a), no claims, which could
reasonably be expected to have a Material Adverse Effect, are pending in writing or, to the best
knowledge of Hitachi, threatened in writing against Hitachi as of the Closing Date by any Person
with respect to the material patents listed on Exhibit A;
(iii) To Hitachi’s Knowledge, there has been no event or circumstance relating to the Business
that poses an unreasonable risk of infringing a patent. Except with respect to the claims
referenced in Section 11(a) of this IP License Agreement, a list of each warning letter that has
been addressed to Hitachi products made or sold as part of the operation of the Business, and a
list of all attorney opinions that have been obtained regarding non-infringement of patents
relating to the Business, is provided in Exhibit C. A copy of each such letter and opinion
shall be provided to Opto-Device, to the extent that such can be done without waiving any
attorney-client privilege;
(iv) As of the Closing, Hitachi shall have assigned under the terms and conditions of the
Business Transfer Agreement or licensed under the terms and conditions hereof to Opto-Device the
Intellectual Property necessary or reasonably required for the purpose of the operation of the
Business as of the Closing Date; and
(v) Hitachi is in compliance with the terms and conditions related to Intellectual Property
contained in the Stock Purchase Agreement.
(b) Authority. Hitachi is a corporation duly organized under the laws of Japan. Hitachi has
all requisite corporate power and authority to enter into this IP License Agreement and to
consummate the
transactions contemplated hereby. All corporate acts and other proceedings required to be taken by
Hitachi to authorize the execution, delivery and performance of this IP License Agreement and the
consummation of the transactions contemplated hereby have been duly and properly taken. This IP
License Agreement has been
13
duly executed and delivered by Hitachi and constitutes the valid and
binding obligation of Hitachi, enforceable against Hitachi in accordance with its terms.
(c) No Conflicts. The execution and delivery by Hitachi of this IP License Agreement do not,
and the consummation by Hitachi of the transactions contemplated hereby and compliance by Hitachi
with the terms hereof do not and shall not: (i) conflict with or result in a breach of the terms,
conditions or provisions of; (ii) constitute a default under; (iii) result in the creation of any
lien, security interest, charge or encumbrance upon Hitachi’s capital stock or assets under; (iv)
give any third party the right to modify, terminate or accelerate any obligation under; (v) result
in a violation of; or (vi) require any authorization, consent, approval, exemption or other action
by or notice or declaration to, or filing with, any court or administrative or governmental body or
agency pursuant to the charter documents of Hitachi, or any law, statute, rule or regulation to
which Hitachi is subject, or any agreement, instrument, order, judgment or decree to which Hitachi
is subject.
(d) Litigation, etc. Except as set forth in Section 11(a), there are no actions, suits,
proceedings, orders, investigations or claims pending or, to the best of Hitachi’s Knowledge,
threatened against Hitachi, at law or in equity, before or by any governmental department,
commission, board, bureau, agency or instrumentality (including any actions, suits, proceedings or
investigations with respect to the transactions contemplated by this IP License Agreement) or any
facts that are known by Hitachi to form a reasonable basis for any such action, suit, proceeding,
order, investigation or claim, which, in the case of any of the foregoing items, could reasonably
be expected to have material adverse effect on the ability of Hitachi to consummate the
transactions contemplated hereby.
(e) Infringement of Licensed IP. To the extent a competitor of the Business is infringing or
misappropriating the Licensed IP or any Future Hitachi IP that is licensed to Opto-Device under
Section 3(b) or Section 3(f), respectively, in Opto-Device’s reasonable business judgment and such
infringement is material to the Business, Hitachi, in its sole discretion, will protect
Opto-Device’s interest by either: (i) initiating and maintaining legal proceedings with respect to
such alleged infringement or misappropriation against any such Person on behalf of Opto-Device or
(ii) by taking some other appropriate action that will not have a Material Adverse Effect on the
ongoing business of Opto-Device; provided that with respect to clauses (i) and (ii), both parties
shall consult and cooperate with each other in determining how to respond to the infringing
activities. For the avoidance of doubt, Hitachi may or may not consult with Opto-Device prior to
determining whether to pursue (i) or (ii). Upon the resolution of such infringement by settlement
or otherwise, any damages, profits and awards of whatever nature recoverable for such infringement
shall, after deducting the parties’ expenses, be reasonably allocated between the parties based on
the facts and circumstances of the infringement. Both parties will reasonably consider the option
of settling
such matter by granting a sublicense of all or portion of the Licensed IP and any Future Hitachi IP
that is licensed to Opto-Device.
(f) Product Clearance Searches. In accordance with Hitachi’s ordinary business practice
for new product release searches, Hitachi has conducted appropriate patent clearance searches
during the design process and prior to putting on the market those products
14
listed on Exhibit
B to the Stock Purchase Agreement that are sold as of the Closing Date, and based upon the
information obtained during such clearance searches Hitachi does not believe there is a likelihood
that the products listed on Exhibit B to the Stock Purchase Agreement that are on the
market as of the Closing Date infringe the intellectual property of any third party in such markets
in which such products have been introduced.
Section 7. Covenants of Hitachi. Hitachi covenants and agrees as follows:
(a) Ordinary Course. Except as permitted by the terms of this IP License Agreement,
during the period beginning on March 31, 2002 and ending on the Closing Date, Hitachi shall cause
the Business to be conducted in the ordinary course and in accordance with all applicable laws and
regulations.
(b) Covenant Not to Xxx. Hitachi herewith covenants not to xxx Opto-Device or OpNext for
infringement or misappropriation of any Intellectual Property related to the Business, throughout
the world. Hitachi also covenants not to xxx any sublicensees of Opto-Device that are authorized
pursuant to the terms of Section 3(c) or customers of Opto-Device or OpNext for infringement or
misappropriation of any Intellectual Property related to the Business throughout the world;
provided, however, covenants not to xxx customers of Opto-Device or OpNext shall be
applied in accordance with the “exhaustion doctrine” such that it only extends to products or
methods provided by Opto-Device or OpNext to customers and shall not extend to any portions of any
systems or subsystems or any other customer’s products or methods that incorporate such products or
methods provided by Opto-Device or OpNext to the extent such portions are not covered by Assigned
IP, Licensed IP or Third Party License Agreements (to the extent that Hitachi has a right to xxx
thereunder).
(c) Confidentiality
(i) Subject to Section 13(l) of the Stock Purchase Agreement, with respect to any information
furnished to Hitachi and its Affiliates pursuant to the Business Transfer Agreement, the Stock
Purchase Agreement or this IP License Agreement, that Hitachi and its Affiliates reasonably
understands to be proprietary or confidential in nature and any confidential information relating
to the Business, including Assigned IP and Opto-Device IP, Hitachi and its Affiliates shall
maintain the confidentiality of all such information in accordance with Hitachi’s and its
Affiliates’ policies respectively for the protection of their own nonpublic information (which
policies shall provide at least reasonable protection) and the terms and conditions of the Stock
Purchase Agreement and this IP License Agreement. Hitachi agrees to cause its Affiliates to comply
with the terms of this Section 7(c).
(ii) The limitations set forth in this Section 7(c) shall not apply with respect to the
disclosure of any information: (A) to Hitachi’s employees, auditors, counsel or other professional
advisors, sublicensees of Hitachi authorized pursuant to the terms of this IP License Agreement or
suppliers (collectively its “Representatives”) if Hitachi, or any of Hitachi’s authorized
sublicensees under this IP License Agreement, in its sole discretion, determine that it is
reasonably necessary for such party to have access to such information, provided that any such
Person agrees to be bound by the provisions of this Section 7(c) to the same extent as Hitachi; (B)
as has become or previously was generally available to the public
15
other than by reason of a breach
of this Section 7(c) by Hitachi or has become available to Hitachi after the Closing on a
non-confidential basis; (C) as may be required or reasonably necessary in any report, statement or
testimony submitted to any municipal, state or federal regulatory body having or claiming to have
jurisdiction over Hitachi (it being understood that, to the extent practicable, Hitachi shall
provide Opto-Device with prompt notice to any such event and cooperate in good faith to enable
Opto-Device to participate to protect its interest in such confidential information); (D) as may be
required in response to any summons or subpoena or in connection with any litigation; and (E) in
order to comply with any law, order, regulation or ruling applicable to Hitachi, and Hitachi shall
be liable for any breach of the provisions hereof by any of its Representatives. In connection
with any employees or former employees of Hitachi and its Affiliates, Hitachi will and will cause
its Affiliates to, use Commercially Reasonable Efforts, at Opto-Device’s request and at Hitachi’s
expense, to enforce existing confidentiality agreements and rights under United States or Japanese
law requiring employees to keep trade secrets confidential and to assign intellectual property
rights to Hitachi and its Affiliates (as applicable).
(iii) Notwithstanding Section 7(c)(ii), to the extent that after the Closing Date, Hitachi
desires to disclose to Hitachi’s sublicensed Subsidiaries that are not Wholly-Owned Subsidiaries,
sublicensed Affiliates (including sublicensed Minority-Owned Affiliates) and/or suppliers (i)
Opto-Device IP and/or (ii) any information furnished to Hitachi pursuant to this IP License
Agreement, the Stock Purchase Agreement, the Business Transfer Agreement and the OpNext Japan R&D
Agreement, which Hitachi reasonably understands to be proprietary or confidential in nature and any
confidential information relating to the Business that Hitachi did not disclose to its sublicensed
Affiliates and/or suppliers prior to the Closing Date, Hitachi shall notify Opto-Device of such
desire and propose the terms and conditions of an appropriate nondisclosure agreement into which
Opto-Device and the corresponding Hitachi sublicensee may enter. Opto-Device agrees that within
fifteen (15) Business Days of receipt of such request and proposed nondisclosure agreement,
Opto-Device shall, at its sole discretion, either: (i) enter into the proposed nondisclosure
agreement and directly provide the requested confidential information to such Hitachi Affiliate or
supplier; (ii) propose reasonably modified terms and conditions of the nondisclosure agreement
under which Opto-Device will provide the requested confidential information to Hitachi’s Affiliate
or supplier; or (iii) commence discussions with Hitachi to reach a resolution of Opto-Device’s
concerns with respect to such disclosure, if Opto-Device believes such disclosure is not in the
best interest of the parties. In the event that Opto-Device elects to exercise option (ii) or
(iii), the parties agree to negotiate in good faith and on reasonable terms to resolve the
situation within a reasonable amount of time, which shall not exceed fifteen (15) Business Days of
Opto-Device’s provision of such a response. If the parties cannot agree on a resolution in such
negotiations, then this issue shall be referred to arbitration pursuant to the arbitration
procedures set forth in Exhibit B hereto. In the
event that either party submits the dispute to arbitration, both parties shall cooperate in
such binding arbitration in accordance with Exhibit B.
(d) Opto-Device’s and Hitachi’s Trademark, Trade Names, etc. Without limiting any provisions
of the Stock Purchase Agreement or the Indication Agreement, dated as of the Closing Date between
Hitachi and Opto-Device, if necessary, Opto-Device and Hitachi may negotiate in good faith the
terms and conditions under which Hitachi and Opto-Device may
16
use any of the trademarks, trade
names, trade dress, service marks, logos and/or domain names relating to the Business and any other
means of identifying the Business or its products or services from and after the Closing Date.
(e) Taxes. Hitachi will be responsible for the payment of any taxes or duties required in
connection with the licensing or sublicensing of the Licensed IP and Third Party License Agreements
to third parties that are incurred on or prior to the Closing Date.
(f) New Product Clearance Searches. Between the Closing Date and April 1, 2004, Hitachi
shall cooperate with Opto-Device to complete additional clearance searches for modifications to,
extensions of or new versions of products listed on Exhibit B to the Stock Purchase
Agreement in jurisdictions in which such products will be marketed. If during such clearance
searches, the parties discover that such products infringe a third party’s Intellectual Property in
such jurisdictions, the parties shall consult and cooperate with each other in determining how to
respond to the infringing activities.
(g) Guaranty.
(1) Hitachi will use reasonable best efforts to cause its Wholly-Owned Subsidiaries (for so
long as they are Wholly-Owned Subsidiaries) to comply with the terms and conditions of this IP
License Agreement and Hitachi shall be liable for any breach of such terms and conditions.
(2) Hitachi will use reasonable best efforts to cause its Wholly-Owned Subsidiaries that cease
to remain Wholly-Owned Subsidiaries to comply with the terms and conditions of this IP License
Agreement applicable to such entities and Hitachi shall be liable for any breach of such terms and
conditions.
Section 8. Representations and Warranties of Opto-Device. Opto-Device hereby represents
and warrants to Hitachi as follows:
(a) Authority. Opto-Device is a corporation duly organized under the laws of Japan.
Opto-Device has all requisite corporate power and authority to enter into this IP License Agreement
and to consummate the transactions contemplated hereby. All corporate acts and other proceedings
required to be taken by Opto-Device to authorize the execution, delivery and performance of this IP
License Agreement and the consummation of the transactions contemplated hereby have been duly and
properly taken. This LP License Agreement has been duly executed and delivered by Opto-Device and
constitutes the valid and binding obligation of Opto-Device, enforceable against Opto-Device in
accordance with its terms.
(b) No Conflicts. The execution and delivery by Opto-Device of this IP License Agreement
do not, and the consummation by Opto-Device of the transactions contemplated hereby and compliance
by Opto-Device with the terms hereof do not and shall not: (i) conflict with or result in a breach
of the terms, conditions or provisions of; (ii) constitute a default under; (iii) result in the
creation of any lien, security interest, charge or encumbrance upon Opto-Device’s capital stock or
assets under; (iv) give any third party the right to modify, terminate or accelerate any obligation
under; (v) result in a violation of; or (vi) require any
17
authorization, consent, approval,
exemption or other action by or notice or declaration to, or filing with, any court or
administrative or governmental body or agency pursuant to the charter documents of Opto-Device, or
any law, statute, rule or regulation to which Opto-Device is subject, or any agreement, instrument,
order, judgment or decree to which Opto-Device is subject.
Section 9. Covenants of Opto-Device. Opto-Device covenants as follows:
(a) Confidentiality
(i) With respect to (A) any information furnished to Opto-Device pursuant to the Business
Transfer Agreement, the Stock Purchase Agreement or this IP License Agreement that Opto-Device
reasonably understands to be proprietary or confidential in nature and (B) any other confidential
information, in the case of both (A) and (B), relating to Hitachi’s business (other than
information relating to the Business), and (C) any confidential information relating to Licensed IP
and Third Party License Agreements, Opto-Device shall maintain the confidentiality of all such
information in accordance with Opto-Device’s policies for the protection of its own nonpublic
information (which policies shall provide at least reasonable protection).
(ii) The limitations set forth in this Section 9(a) shall not apply with respect to the
disclosure of any information: (A) to Opto-Device’s employees, auditors, counsel or other
professional advisors, sublicensees of Opto-Device authorized pursuant to the terms of this IP
License Agreement or suppliers if Opto-Device or the sublicensees of Opto-Device authorized
pursuant to the terms of this IP License Agreement, in their sole discretion, determine that it is
reasonably necessary for such party to have access to such information, provided that any such
Person agrees to be bound by the provisions of this Section 9(a) to the same extent as Opto-Device;
(B) as has become or previously was generally available to the public other than by reason of a
breach of this Section 9(a) by Opto-Device or has become available to OptoDevice on a
non-confidential basis after the Closing; (C) as may be required or reasonably necessary in any
report, statement or testimony submitted to any municipal, state or federal regulatory body having
or claiming to have jurisdiction over Opto-Device (it being understood that, to the extent
practicable, Opto-Device shall provide Hitachi prompt notice to any such event and cooperate in
good faith to enable Hitachi to participate to protect its interest in such confidential
information); (D) as may be required or reasonably necessary in response to any summons or subpoena
or in connection with any litigation; and (E) in order to comply with any law, order, regulation or
ruling applicable to Opto-Device. In connection with any employees of Opto-Device (including any
Seconded Employees who are hired after the date hereof by Opto
Device), Opto-Device will use Commercially Reasonable Efforts to enforce existing
confidentiality agreements and rights which Opto-Device is a party to under United States or
Japanese law requiring employees to keep trade secrets confidential and to assign intellectual
property rights to Opto-Device.
(b) No Additional Representations. Opto-Device acknowledges that neither Hitachi nor any
other Person has made any representation or warranty, express or implied, as to the accuracy or
completeness of any information regarding the Licensed IP or Third Party
18
License Agreements except
as expressly set forth in this IP License Agreement or the Schedules and Exhibits hereto. Without
limiting the generality of the foregoing, Hitachi makes no representation or warranty with respect
to the Licensed IP or Third Party License Agreements, express or implied, beyond those expressly
made in Section 6, including any implied representation or warranty as to the condition,
merchantability, suitability or fitness for a particular purpose of any of the Licensed IP or Third
Party License Agreements and, except for the express representations and warranties of Hitachi
contained in Section 6, Opto-Device takes the Licensed IP or Third Party License Agreements on an
“as is” and “where is” basis.
(c) Covenant Not to Xxx. Opto-Device herewith covenants not to xxx Hitachi for
infringement or misappropriation of any Intellectual Property related to the Business, throughout
the world. Opto-Device also covenants not to xxx sublicensees of Hitachi authorized pursuant to
the terms of Sections 2(a) and 4(b) of this IP License Agreement or customers of Hitachi for
infringement or misappropriation of any Intellectual Property related to the Business throughout
the world; provided, however, covenants not to xxx customers of Hitachi shall be
applied in accordance with the “exhaustion doctrine” such that it only extends to products or
methods provided by Hitachi to customers and shall not extend to any portions of any systems or
subsystems or any other customer’s products or methods that incorporate such products or methods
provided by Hitachi, to the extent such portions are not covered by the Opto-Device IP, Assigned IP
and Licensed IP (to the extent that Opto-Device has a right to xxx thereunder).
(d) Guaranty. Opto-Device will use reasonable best efforts to cause its sublicensees
authorized pursuant to Section 3(c) to comply with the terms and conditions of this IP License
Agreement applicable to such entities and sublicense, and Opto-Device shall be liable for any
breach of such terms and conditions.
Section 10. Mutual Covenants. Hitachi and Opto-Device covenant and agree as follows:
(a) Consents. Opto-Device acknowledges that certain consents to the transactions
contemplated by this IP License Agreement may be required from parties to Third Party License
Agreements and such consents have not been obtained. Opto-Device agrees that Hitachi and its
Minority-Owned Affiliates shall not have any liability whatsoever to Opto-Device arising out of or
relating to the failure to obtain any consents that may have been or may be required in connection
with the transactions contemplated by this Agreement or because of the default, acceleration or
termination of any contract as a result thereof. Opto-Device further agrees that no
representation, warranty or covenant of Hitachi contained herein shall be breached or deemed
breached and no condition of Opto-Device shall be deemed not to be satisfied as a result of the
failure to obtain any consent or as a result of any such default, acceleration or
termination or any lawsuit, action, claim, proceeding or investigation commenced or threatened
by or on behalf of any Person arising out of or relating to the failure to obtain any consent or
any such default, acceleration or termination. At Opto-Device’s written request prior to the
Closing, Hitachi shall cooperate with Opto-Device in any reasonable manner in connection with
Opto-Device’s obtaining any such consents; provided, however, that such cooperation
shall not include any requirement of Hitachi to expend money, commence any litigation or offer or
grant any accommodation (financial or otherwise) to any Person.
19
(b) Non-Transferred License Agreements. With respect to any Third Party License Agreement
that may not be properly licensed to Opto-Device because of the failure to obtain a required
consent (“Non-Transferred License Agreements”), with respect to which Opto-Device requests
Hitachi’s cooperation and with respect to which Hitachi and Opto-Device are unable to obtain a
separate agreement between Opto-Device and the other party or parties, OptoDevice shall have the
right to require that Hitachi use Commercially Reasonable Efforts to perform any such
Non-Transferred License Agreements, to the extent it relates to the Business, as agent for and for
the account of Opto-Device, for a period up to six (6) months following the Closing Date; provided
that Opto-Device shall indemnify Hitachi for any and all costs, expenses, losses and liabilities
incurred by Hitachi or any of its Affiliates in connection with taking such action.
(c) Press Releases. Each party agrees to consult with the other as to the general nature of
any news releases or public statements with respect to the transactions contemplated by this IP
License Agreement, and use Commercially Reasonable Efforts not to issue any news releases or public
statements inconsistent with results of such consultations. Subject to applicable laws or the
rules of any applicable securities exchange, each party shall use Commercially Reasonable Efforts
to enable the other party to review and comment on all such news releases prior to the release
thereof.
(d) Commercially Reasonable Efforts. Subject to the terms of this IP License Agreement,
each party will use its Commercially Reasonable Efforts to satisfy all of the conditions set forth
in this IP License Agreement and to cause the Closing and this IP License Agreement to occur.
(e) Injunctive Relief. The parties acknowledge and agree that money damages would be
inadequate to remedy any breach of the confidentiality obligations in Sections 7(c) and 9(a) and
that the non-breaching party shall be entitled to obtain equitable or other remedies with respect
to any such breach, including injunctive relief.
Section 11. Indemnification.
(a) Previously Disclosed Claims. Notwithstanding anything to the contrary herein, with
respect to the written claims of Intellectual Property infringement previously disclosed to the
counsel of OpNext, Opto-Device and their respective Subsidiaries (the “OpNext Parties”),
Hitachi shall defend and indemnify the OpNext Parties with respect to any claims or Losses suffered
or incurred by the OpNext Parties as a result of or arising from such previously
written claims regardless of the timing of such claims or Losses, and shall ensure that such
claims will be resolved in a manner that does not adversely affect the ongoing business of
OptoDevice. Furthermore, none of the limitations or other provisions set forth in Section 11(f)
below will apply to the foregoing indemnification obligations. Hitachi shall consult and cooperate
with Opto-Device in determining whether any claim directly related to the previously disclosed
claims referenced to in the preceding sentences shall be covered by the indemnity set forth in this
section.
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(b) Intellectual Property Indemnification and Defense.
(i) Before Closing. Hitachi shall indemnify Opto-Device and its Affiliates and each
of their respective officers, directors, members, stockholders, partners and employees (as
applicable) and hold them harmless from any Losses suffered or incurred by any such Indemnified
Party from any third party patent and copyright infringement claims and trade secret
misappropriation claims regarding products, processes or methods related to the Business as it was
conducted prior to the Closing regardless of the timing of such third party’s claim;
provided, however, that such infringement is not attributable to any Opto-Device
IP.
(ii) After Closing.
(1) With respect to third party patent or copyright infringement claims or trade secret
misappropriation claims regarding products, processes or methods related to the Business as it is
conducted after the Closing, Hitachi and Opto-Device shall jointly defend such action but only to
the extent that such claim involves Assigned IP or Licensed IP.
(2) If a third party patent or copyright infringement claim or trade secret misappropriation
claim is made against Opto-Device and its Affiliates and each of their respective officers,
directors, members, stockholders, partners and employees (as applicable) for a new product design,
process or method that is developed after the Closing Date, Hitachi shall be responsible for the
settlement amount of any such claim (provided that prior written approval is obtained) or the
resulting liability of any such claim only to the extent such claim results from a product design
sold by the Business as of the Closing Date, Assigned IP or Licensed IP, while Opto-Device shall be
responsible for the settlement amount of any such claim (provided that prior written approval is
obtained) or the resulting liability of any such claim to the extent that it is caused by the
product design introduced by Opto-Device irrespective of whether such OptoDevice product design is
covered by Assigned IP or Licensed IP. For avoidance of doubt and notwithstanding the foregoing,
the indemnity under this Section 11(b)(ii) shall not apply to any infringement or misappropriation
claims that do not involve such products, processes or methods described above. To the extent
there is a dispute regarding the allocation of the parties’ liabilities under this subsection, the
parties shall negotiate in good faith, in accordance with the terms set forth in Section 12, what
the allocation of liability should be. If the parties are unable to agree even after good faith
negotiations, the parties shall submit the issue to arbitration pursuant to the arbitration
procedures set forth in Exhibit B hereto. In the event that either party submits the
dispute to arbitration, both parties shall cooperate in such binding arbitration in accordance with
Exhibit B.
(c) Indemnification by Hitachi. From and after the Closing, Hitachi shall indemnify
Opto-Device and its Affiliates and each of their respective officers, directors,
members, stockholders, partners and employees (as applicable) and hold them harmless from any
loss, liability, damage or expense (including court costs and reasonable attorneys’ fees)
(“Losses”) suffered or incurred by any such Indemnified Party to the extent arising from:
(i) any breach of any representation or warranty of Hitachi contained in this IP License Agreement
that survives the Closing Date; and (ii) any breach of any covenant of Hitachi contained in this IP
License Agreement requiring performance before or after the Closing Date.
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(d)
Indemnification by Opto-Device. From and after the Closing, Opto-Device shall
indemnify Hitachi and its Affiliates and each of their respective officers, directors, members,
stockholders, partners and employees (as applicable) against and hold them harmless from any Losses
suffered or incurred by any such Indemnified Party to the extent arising from: (i) any breach of
any representation or warranty of Opto-Device contained in this IP License Agreement that survives
the Closing Date; and (ii) any breach of any covenant of Opto-Device contained in this IP License
Agreement requiring performance before or after the Closing Date; and (iii) any obligation,
liability, action, suit, claim or other proceeding that arises directly or indirectly out of the
operation of the Business or use of the Assigned IP or Licensed IP on or after the Closing or the
manufacture, distribution, marketing or sale of the Products at any time on or after the Closing.
For avoidance of doubt and notwithstanding the foregoing, the indemnity under this Section 11(d)
shall not apply to any infringement or misappropriation claims that are covered under Section
11(b)(ii) above.
(e) Losses Net of Insurance. The amount of any and all Losses under this Section 11 shall
be determined net of any amounts recovered or recoverable by the Indemnified Party under insurance
policies with respect to such Losses. Each party hereby waives, to the extent permitted under its
applicable insurance policies, any subrogation rights that its insurer may have with respect to any
indemnifiable Losses.
(f) Limitations on Indemnification. Notwithstanding the foregoing, in no event shall
either party indemnify the other party under Section 11(b), 11(c)(i) and 11(d)(i) and (iii) of this
IP License Agreement or Sections 17(a)(i), 17(a)(iv), 17(b), 17(c), 17(d)(i) and 17(d)(vi) (as
Sections 17(a) and 17(d) relate to Assigned IP, Licensed IP or any other Intellectual Property
relevant to the Business) of the Stock Purchase Agreement for claims brought on or after one (1)
year from the Closing Date. Neither party shall have any liability under Section 11(b), 11(c)(i)
and 11(d)(i) and (iii) of this IP License Agreement or Sections 17(a)(i), 17(a)(iv), 17(b), 17(c),
17(d)(i) and 17(d)(vi) (as Sections 17(a) and 17(d) relate to Assigned IP, Licensed IP or any other
Intellectual Property relevant to the Business) of the Stock Purchase Agreement, unless the
aggregate of all Losses for which the indemnifying party would, but for this proviso, be liable,
exceeds on a cumulative basis an amount equal to fifty million Yen (¥ 50,000,000), and then only to
the extent of any such excess; provided further, that the indemnifying party’s
liability under Sections 11(b), 11(c)(i) and 11(d)(i) and (iii) of this IP License Agreement or
Sections 17(a)(i) and 17(a)(iv), 17(b), 17(c) and 17(d)(i) and 17(d)(vi) (as Sections 17(a) and
17(d) relate to Assigned IP, Licensed IP or any other Intellectual Property relevant to the
Business) of the Stock Purchase Agreement or Sections 8(g)(i), 8(h) and 8(i)(i) of the OpNext Japan
R&D Agreement in the aggregate shall in no event exceed one billion Yen (¥ 1,000,000,000). The
parties further agree that neither party shall be entitled to assert any claim against the
indemnifying party for indemnification of Losses unless the aggregate Losses asserted in such claim
equal or exceed three million Yen (¥ 3,000,000). To the extent there is a dispute as to whether an
asserted claim (i) exceeds the three million Yen (¥ 3,000,000) threshold and/or (ii) exceeds on a
cumulative basis an amount equal to fifty million Yen (¥ 50,000,000) that has not been resolved
within thirty (30) days after the claim has been asserted, the parties shall refer the dispute to a
partner from an internationally recognized accounting or consulting firm reasonably acceptable to
the parties or to any individual from a valuation firm reasonably acceptable to the parties, and
such partner or individual shall provide within sixty (60) days a
22
binding resolution to such dispute. The party disputing the sufficiency of the claim shall
bear all costs associated with the resolution of the dispute; provided, however,
that if the party disputing the sufficiency of the claim prevails, both parties shall share the
costs of resolving such dispute.
(g) Procedures Relating to Indemnification. In order for a Person (the “Indemnified
Party”) to be entitled to any indemnification provided for under this IP License Agreement in
respect of, arising out of or involving a claim or demand made by any Person against the
Indemnified Party (a “Third Party Claim”), such Indemnified Party must notify the
indemnifying party in writing, and in reasonable detail, of the Third Party Claim as promptly as
reasonably possible after receipt by such Indemnified Party of notice of the Third Party Claim;
provided, however, that failure to give such notification on a timely basis shall
not affect the indemnification provided hereunder except to the extent the indemnifying party shall
have been actually prejudiced as a result of such failure. Thereafter, the Indemnified Party shall
deliver to the indemnifying party, within five (5) Business Days after the Indemnified Party’s
receipt thereof, copies of all notices and documents (including court filings and related papers)
received by the Indemnified Party relating to the Third Party Claim. If a Third Party Claim is
made against an Indemnified Party, the indemnifying party shall be entitled to participate in the
defense thereof and, if it so chooses and acknowledges its obligation to indemnify the Indemnified
Party therefore, to assume the defense thereof with counsel selected by the indemnifying party and
reasonably satisfactory to the Indemnified Party and to settle such suit, action, claim or
proceeding in its discretion with a full release of the Indemnified Party and no admission of
criminal liability. Notwithstanding any acknowledgment made pursuant to the immediately preceding
sentence, the indemnifying party shall continue to be entitled to assert any limitation on its
indemnification responsibility contained in Section 11. Should the indemnifying party so elect to
assume the defense of a Third Party Claim, the indemnifying party shall not be liable to the
Indemnified Party for legal expenses subsequently incurred by the Indemnified Party in connection
with the defense thereof unless the indemnifying party has substantially and materially failed to
defend, contest or otherwise protest in a timely manner against Third Party Claims. If the
indemnifying party assumes such defense, the Indemnified Party shall have the right to participate
in the defense thereof and to employ counsel, at its own expense, separate from the counsel
employed by the indemnifying party, it being understood, however, that the indemnifying party shall
control such defense. The indemnifying party shall be liable for the fees and expenses of counsel
employed by the Indemnified Party for any period during which the indemnifying party has not
assumed the defense thereof. If the indemnifying party chooses to defend any Third Party Claim,
all the parties hereto shall cooperate in the defense or prosecution of such Third Party Claim.
Such cooperation shall include the retention and (upon the indemnifying party’s request) the
provision to the indemnifying party of records and information that are reasonably relevant to such
Third Party Claim, and making employees available on a mutually convenient basis to provide
additional information and explanation of any material provided hereunder. Whether or not the
indemnifying party shall have assumed the defense of a Third Party Claim, the Indemnified Party
shall not admit any liability with respect to, or settle, compromise or discharge, such Third Party
Claim without the indemnifying party’s prior written consent, which consent shall not be
unreasonably withheld, unreasonably delayed or unreasonably conditioned.
23
(h) Duty to Mitigate. With respect to any indemnification provided pursuant to this
Section 11, the Indemnified Party shall have the duty to mitigate any damages resulting from such
Third Party Claim of infringement or misappropriation. In addition, Opto-Device shall make
Commercially Reasonable Efforts to conduct appropriate clearance searches during the design process
and prior to putting a new product on the market in accordance with mutually agreed upon procedures
for new product release searches. Within one hundred and eighty (180) days from the Closing Date,
Hitachi and Opto-Device shall mutually agree upon the procedures to be adopted for conducting new
product release searches and the parties will consider whether the procedures previously agreed to
with respect to OpNext Japan could be adopted for OptoDevice. Between the Closing Date and April
1, 2004, during the design process and prior to putting modifications to, extensions of or new
versions of products listed on Exhibit B to the Stock Purchase Agreement on the market,
Hitachi will cooperate with Opto-Device to conduct appropriate clearance searches. Hitachi shall
provide Opto-Device with copies of the results of searches performed in the past two (2) years by
Hitachi with respect to Licensed IP.
Section 12. Dispute Resolution. In the event of any dispute under this IP License
Agreement, as a condition precedent to either party seeking arbitration (except for actions seeking
injunctive relief), the parties will attempt to resolve such dispute by good faith negotiations.
Such negotiations shall first involve the individuals designated by the parties as having general
responsibility for the IP License Agreement. If such negotiations do not result within thirty (30)
days from written notice of either party indicating that a dispute exists (a “Dispute
Notice”) in a resolution of the dispute, Opto-Device shall nominate one (1) corporate officer
of the rank of vice president or higher and Hitachi shall nominate one (1) corporate officer of the
rank of Board Director or higher, which corporate officers shall meet in person and attempt in good
faith to negotiate a resolution to the dispute. In the event such nominated individuals are unable
to resolve the dispute within forty-five (45) days of receipt by either party of a Dispute Notice,
a party shall refer the matter to arbitration (except for actions seeking injunctive relief)
pursuant to the arbitration procedures set forth in Exhibit B to this IP License Agreement.
In the event that either party submits the dispute to arbitration, both parties shall cooperate in
such binding arbitration in accordance with Exhibit B hereto.
Section 13. Assignment. Except as set forth below, this IP License Agreement and any
rights and obligations hereunder shall not be assignable or transferable by Opto-Device or Hitachi
or Wholly-Owned Subsidiaries (whether or not it is a Wholly-Owned Subsidiary at the time) of
Opto-Device or Hitachi (including by operation of law in connection with a merger or sale of stock,
or sale of substantially all the assets, of Opto-Device or Hitachi or Wholly-Owned Subsidiaries of
Opto-Device or Hitachi) without the prior written consent of the other party and any purported
assignment without such consent shall be void and without effect; provided, however, that this IP
License Agreement, in its entirety, shall be assignable by Opto-Device (or any successor to
Opto-Device) to OpNext or any Wholly-Owned Subsidiary of OpNext.
Section 14. Third-Party Beneficiaries. Opto-Device and Hitachi acknowledge and agree that
this IP License Agreement is intended not only for the benefit of themselves, their Subsidiaries
and for purposes of Section 3(c)(ii), 7(c)(iii) and 10(a) their Minority-Owned Affiliates but also
for the benefit of OpNext and OpNext’s Subsidiaries and Minority-Owned Affiliates.
24
Section 15. Termination. This Agreement will terminate automatically and be of no further
force or effect upon the termination of the Stock Purchase Agreement; provided,
however, that the following provisions of this IP License Agreement survive termination of
this IP License Agreement: (i) Sections 7(c) and 10(e) relating to the obligation of Hitachi to
keep confidential certain information and data and injunctive relief for failure to do same,
respectively; (ii) Sections 9(a) and 10(e) relating to the obligation of Opto-Device to keep
confidential certain information and data and injunctive relief for failure to do same,
respectively; (iii) Section 10(c) relating to press releases; (iv) Sections 11(a), 11(b), 11(c),
11(d) and 11(f) relating to indemnification; and (v) Section 17 relating to expenses.
Section 16. Survival of Representations and Warranties. The representations and warranties
contained in this IP License Agreement and in any other document delivered in connection herewith
shall survive the Closing and shall terminate at the close of business on the first (1st)
anniversary of the Closing Date.
Section 17. Expenses. Whether or not the transactions contemplated hereby are consummated,
and except as otherwise specifically provided in this IP License Agreement, all costs and expenses
incurred in connection with this IP License Agreement and the transactions contemplated hereby
shall be paid by the party incurring such costs or expenses.
Section 18. Export Control. Each party shall comply or have its Subsidiaries or Affiliates
comply with any applicable export laws and regulations and obtain any and all export licenses
and/or governmental approvals, if necessary. In the event a licensee (under Sections 2 and 3
above) is unable to obtain any required export license or other governmental approval, and as a
result the licensor (under Sections 2 and 3 above) suffers or will suffer irreparable harm as a
result of the licensee’s failure, the parties acknowledge and agree that money damages would be
inadequate and that the licensor shall be entitled to obtain injunctive or other similar equitable
remedies with respect to any such breach.
Section 19. Amendment and Waiver. No amendment of any provision of this IP License
Agreement shall be valid unless the same shall be in writing and signed by Opto-Device and Hitachi.
The failure of any party to enforce any of the provisions of this IP License Agreement shall in no
way be construed as a waiver of such provisions and shall not affect the right of such party
thereafter to enforce each and every provision of this IP License Agreement in accordance with its
terms.
Section 20. Notices. Any notice provided for in this IP License Agreement shall be in
writing and shall be either personally delivered, mailed first class mail (postage prepaid) or sent
by reputable overnight courier service (charges prepaid) to the parties at the address set forth
below or at such address or to the attention of such other person as the recipient party has
specified by prior written notice to the sending party. Notices shall be deemed to have been given
hereunder on the date delivered when delivered personally, seven (7) days after deposit in the U.S.
mail or Japanese mail and three (3) days after deposit with a reputable overnight courier service.
The addresses for Opto-Device and Hitachi are:
25
If to Opto-Device:
Opto-Device, Ltd.
6-2 Xxxxxxxx 0-xxxxx
Xxxxxxx-xx
Xxxxx 000-0000 Xxxxx
Opto-Device, Ltd.
6-2 Xxxxxxxx 0-xxxxx
Xxxxxxx-xx
Xxxxx 000-0000 Xxxxx
with a copy, which will not constitute notice to Opto-Device, to:
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Xx., Esq.
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Xx., Esq.
with a copy, which will not constitute notice to Opto-Device, to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: I. Xxxxx Xxxxxxxxxx, Esq.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: I. Xxxxx Xxxxxxxxxx, Esq.
If to Hitachi:
Hitachi, Ltd.
0, Xxxxx-Xxxxxxxxx 0-xxxxx
Xxxxxxx-xx
Xxxxx, 000-0000 Xxxxx
Attention: Senior Group Executive, Semiconductor and Integrated Circuits Group
0, Xxxxx-Xxxxxxxxx 0-xxxxx
Xxxxxxx-xx
Xxxxx, 000-0000 Xxxxx
Attention: Senior Group Executive, Semiconductor and Integrated Circuits Group
with a copy, which will not constitute notice to Hitachi, to:
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Xx., Esq.
Fax: (000) 000-0000
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Xx., Esq.
Fax: (000) 000-0000
with a copy, which will not constitute notice to Hitachi, to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: I. Xxxxx Xxxxxxxxxx, Esq.
Fax: (000) 000-0000
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: I. Xxxxx Xxxxxxxxxx, Esq.
Fax: (000) 000-0000
Section 21. Interpretation. The headings and captions contained in this IP License
Agreement, in any Exhibit or Schedule hereto and in the table of contents to this IP License
26
Agreement are for reference purposes only and do not constitute a part of this IP License
Agreement. The use of the word “including” herein shall mean “including without limitation.”
Section 22. Counterparts. This IP License Agreement may be executed in one or more
counterparts, each of which shall be an original and all of which taken together shall constitute
one and the same agreement.
Section 23. Entire Agreement. Except as otherwise expressly set forth herein and except as
set forth in the other agreements executed in connection with the Stock Purchase Agreement, this IP
License Agreement and the other agreements executed in connection with the Stock Purchase Agreement
embody the complete agreement and understanding among the parties hereto with respect to the
subject matter hereof and supersede and preempt any prior understandings, agreements or
representations by or among the parties, written or oral, which may have related to the subject
matter hereof in any way. The provisions of all of the agreements executed in connection with the
Stock Purchase Agreement shall be construed to give effect to the provisions of all of the
agreements to the greatest extent possible.
Section 24. Relationship to Other Agreements. The parties acknowledge and agree that the
Stock Purchase Agreement sets forth additional terms and conditions and obligations of the parties
with respect to Assigned IP and Licensed IP. The provisions of the Business Transfer Agreement and
Stock Purchase Agreement shall be construed to give effect to the provisions of both agreements to
the greatest extent possible.
Section 25. Schedules or Exhibits. The disclosures set forth in any of the Schedules or
Exhibits attached hereto that related to any exception to a particular representation and warranty
made hereunder shall be taken to relate to each other Schedule or Exhibit setting forth an
exception to a representation and warranty made hereunder to the extent it is reasonable to expect
that such disclosure relates to such other representation and warranty. The inclusion of
information in the Schedules or Exhibits hereto shall not be construed as an admission that such
information is material to the Licensed IP, the Business or Hitachi. In addition, matters
reflected in the Schedules or Exhibits are not necessarily limited to matters required by this IP
License Agreement to be reflected in such Schedules or Exhibits. Such additional matters are set
forth for informational purposes only and do not necessarily include other matters of a similar
nature. Prior to the Closing, Hitachi shall have the right to supplement, modify or update the
Schedules or Exhibits hereto to reflect changes in the ordinary course of the Business prior to the
Closing Date.
Section 26. No Strict Construction. Notwithstanding the fact that this IP License
Agreement has been drafted or prepared by one of the parties, Hitachi and OpNext confirm that they
and their respective counsel have reviewed, negotiated and adopted this IP License Agreement as the
joint agreement and understanding of the parties, and the language used in this IP License
Agreement shall be deemed to be language chosen by the parties hereto to express their mutual
intent and no rule of construction shall be applied against any Person.
Section 27. Severability. Whenever possible, each provision of this IP License Agreement
shall be interpreted in such manner as to be effective and valid under applicable law, but if any
provision of this IP License Agreement is held to be invalid, illegal or unenforceable in any
27
respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or
unenforceability shall not affect the validity, legality or enforceability of any other provision
of this IP License Agreement in such jurisdiction or affect the validity, legality or
enforceability of any provision in any other jurisdiction, but this IP License Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision had never been contained herein.
Section 28. Governing Law. Except for the last two (2) sentences of Section 3(a), Section
5(c), Sections 6(a)(i), 6(a)(ii) and 6(e), Sections 7(c)(iii), 7(d) and 7(e) and Sections 10(a) and
10(b), this IP License Agreement shall be governed by and construed in accordance with the laws of
Japan without giving effect to any choice-of-law or conflict-of-law provision or rule (whether of
Japan or any other jurisdiction) that would cause the application of the laws of any jurisdiction
other than Japan. The last two (2) sentences of Section 3(a), Section 5(c), Sections 6(a)(i),
6(a)(ii) and 6(e), Sections 7(c)(iii), 7(d), and 7(e) and Sections 10(a) and 10(b) shall be
governed by and construed in accordance with the laws of the State of New York without giving
effect to any choice-of-law or conflict-of-law provision or rule (whether of the State of New York
or any other jurisdiction) that would cause the application of the laws of any other jurisdiction
other than the State of New York. Regardless of the law applied, because this contract is in
English, the terms and conditions of this contract will be interpreted in accordance with the
meaning of the words in American colloquial English.
Section 29. Submission to Jurisdiction; Waivers. With respect to disputes not required to
be submitted to arbitration hereunder (including actions seeking injunctive relief), each party to
this IP License Agreement (including any third-party beneficiaries to this IP License Agreement)
hereby irrevocably and unconditionally:
(i) submits for itself and its property in any legal action or proceeding relating to this IP
License Agreement, or for recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the courts of Japan situated in Tokyo, Japan;
(ii) consents that any such action or proceeding may be brought in such courts, and waives any
objection that it may now or hereafter have to the venue of any such action or proceeding in any
such court or that such action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(iii) agrees that service of process in any such action or proceeding may be effected by
mailing a copy thereof by registered or certified mail (or any substantially similar form of mail),
postage prepaid, to such party at its address set forth herein or at such other address of which
the agent shall have been notified pursuant thereto, to the extent permitted by the laws of Japan;
and
(iv) agrees that nothing contained herein shall affect the right to effect service of process
in any other manner permitted by law or shall limit the right to xxx in any other jurisdiction.
28
Section 30. Delivery by Facsimile. This IP License Agreement, the agreements referred to
herein, and each other agreement or instrument entered into in connection herewith or therewith or
contemplated hereby or thereby, and any amendments hereto or thereto, to the extent signed and
delivered by means of a facsimile machine, shall be treated in all manner and respects as an
original agreement or instrument and shall be considered to have the same binding legal effect as
if it were the original signed version thereof delivered in person. At the request of any party
hereto or to any such agreement or instrument, each other party hereto or thereto shall reexecute
original forms thereof and deliver them to all other parties. No party hereto or to any such
agreement or instrument shall raise the use of a facsimile machine to deliver a signature or the
fact that any signature or agreement or instrument was transmitted or communicated through the use
of a facsimile machine as a defense to the enforceability of a contract and each such party forever
waives any such defense.
Section 31. Exhibits and Schedules. All Exhibits and Schedules annexed hereto or referred
to herein are hereby incorporated in and made a part of this IP License Agreement as if set forth
in full herein.
Section 32. Recordation. This IP License Agreement effects a license of rights in certain
Intellectual Property and may be recorded in appropriate recordal repositories to evidence such
license of rights.
Section 33. Third Parties. Unless otherwise expressly provided, no provisions of this IP
License Agreement are intended or shall be construed to confer upon or give to any Person or entity
other than the parties hereto, any rights, remedies or other benefits hereunder nor to constitute a
waiver or release of any claims or other rights against any Person or entity.
Section 34. Survival. To the extent the terms of this IP License Agreement provide for
rights, interest, duties, claims, undertakings and obligations subsequent to the termination or
expiration of this IP License Agreement, other than a termination caused by the termination of the
Stock Purchase Agreement, such terms of this IP License Agreement shall survive such termination or
expiration, including but not limited to the terms of Sections 1, 2 (to the extent the provision
allows for post-termination or post-expiration license), 3 (to the extent the provision allows for
post-termination or post-expiration license), 4 (to the extent the provision allows for
post-termination or post-expiration license), 5 (to the extent the provision and the Third Party
License Agreement allows for post-termination or post-expiration license), 6 (subject to the one
year survival period from the Closing Date), 7(c), 8 (subject to the one year survival period from
the Closing Date), 9(a), 10, 11(a), 11 (subject to the one year survival period from the Closing
Date, if applicable), 12, 16, 17, 18, 19, 20, 21, 23, 24, 25, 26, 27, 28, 29, 31 and 34.
Section 35. Hitachi Communication Technologies, Ltd. For purposes of this IP License
Agreement, the defined term “Wholly-Owned Subsidiary” shall not include Hitachi’s Wholly-Owned
Subsidiary, Hitachi Communication Technologies, Ltd.
* * * * *
29
SIGNATURE PAGE TO IP LICENSE AGREEMENT
IN WITNESS WHEREOF, the parties have caused this IP License Agreement to be executed by their
duly authorized officers as of the date first written above.
OPTO-DEVICE, LTD. |
||||
By: | /s/ Xxxxxxxxx Xxxxxxxxx | |||
Xxxxxxxxx Xxxxxxxxx | ||||
President | ||||
HITACHI, LTD. |
||||
By: | /s/ Xxxxxx Xxx | |||
Xxxxxx Xxx | ||||
President and Chief Executive Officer, Semiconductor & Integrated Circuits | ||||
FIRST AMENDMENT TO OPTO-DEVICE IP LICENSE AGREEMENT
THIS FIRST AMENDMENT TO OPTO-DEVICE IP LICENSE AGREEMENT (this “Amendment”) is entered
into as of October 27, 2006 (the “Amendment Date”), by and between Hitachi, Ltd., a
corporation existing under the laws of Japan (“Hitachi”) and Opnext Japan, Inc., a
corporation existing under the laws of Japan (“Opnext Japan”) and a Wholly Owned Subsidiary
of Opnext, Inc., a Delaware corporation (“Opnext, Inc.”). All capitalized terms used
herein but not defined herein shall have the meaning ascribed to such terms in the IP License
Agreement (as defined below).
RECITALS
WHEREAS, Hitachi and Opto-Device Limited, a corporation organized under the laws of Japan
(“Opto-Device”) have entered into that certain Intellectual Property License Agreement
dated as of October 1, 2002 (the “IP License Agreement”);
WHEREAS, Opnext Japan is the successor by merger to Opto-Device and seeks to affirm Hitachi’s
consent to the assignment of the IP License Agreement from Opto-Device to Opnext Japan; and
WHEREAS, Hitachi and Opnext Japan desire to enter into this Amendment to amend the IP License
Agreement as set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
to this Amendment hereby agree as follows:
Section 1. Consent to Assignment.
Hitachi hereby acknowledges and consents to the assignment of the IP License Agreement from
Opto-Device to Opnext Japan. References to Opto-Device throughout the IP License Agreement shall
be amended to refer to Opnext Japan. Opnext Japan hereby acknowledges and consents to the
assignment of certain of the Licensed Intellectual Property Rights and Future Hitachi IP to Renesas
Technology Corp. Notwithstanding the foregoing, Hitachi shall remain responsible for Renesas
Technology Corp.’s compliance with the IP License Agreement with respect to the Renesas Licensed IP
(as defined below).
Section 2. Amendment Date.
This Amendment shall be effective as of the Amendment Date. This Amendment and any amendments
made to the provisions of the IP License Agreement hereunder shall have no retroactive effect.
Section 3.
Amendment.
(1) Section 1(q) of the IP License Agreement is hereby amended by deleting it in its entirety
and replacing it with the following Section 1(q):
(q) “Licensed IP” means Hitachi Licensed IP and Renesas Licensed IP,
collectively.
(2) Section 1 of the IP License Agreement is hereby amended by adding the following clauses:
(gg) “Hitachi Licensed IP” means Licensed Intellectual Property Rights
other than Renesas Licensed IP.
(hh) “Licensed Intellectual Property Rights” shall have the meaning set
forth in Section 3(a) of this IP License Agreement.
(ii) “Renesas Licensed IP” means that portion of the Licensed
Intellectual Property Rights and Future Hitachi IP that was transferred as part of
the corporate spin-off of SIC by Hitachi to Renesas Technology Corp. on April 1,
2003. For the avoidance of doubt, Renesas Licensed IP does not include any
Intellectual Property that was created by Renesas Technology Corp. after April 1,
2003 or any Intellectual Property that was acquired by Renesas Technology Corp. from
any Person other than Hitachi.
(jj) “Opnext Entity” means Opnext Japan and its Wholly-Owned
Subsidiaries and Opnext, Inc. and its Wholly-Owned Subsidiaries.
(3) Section 2(a) of the IP License Agreement is hereby amended by deleting it in its entirety
and replacing it with the following Section 2(a):
(a) License. Opnext Japan shall license, and does hereby license
effective as of the Closing Date, the Assigned IP back to Hitachi and its
Wholly-Owned Subsidiaries on a fully paid-up, non-exclusive, perpetual and
irrevocable basis to use, make, have made, sell, advertise, offer to sell, lease,
import, export and supply products and services throughout the world using the
Assigned IP. For the avoidance of doubt, this IP License Agreement does not grant
Hitachi or its Wholly-Owned Subsidiaries the right to sublicense the Assigned IP and
Hitachi and its Wholly-Owned Subsidiaries shall not have the right to sublicense the
Assigned IP without the prior written consent of Opnext Japan, not to be
unreasonably withheld, unreasonably delayed or unreasonably conditioned.
(4) Section 2(b) of the IP License Agreement is hereby amended by deleting it in its entirety
and replacing it with the following Section 2(b):
(b) License Term. The license to Assigned IP shall be irrevocable and:
(i) with respect to patent rights, shall survive for so long as any applicable
patent is valid; and (ii) with respect to all other Assigned IP, shall be perpetual.
(5) Section 3(a) of the IP License Agreement is hereby amended by deleting the first sentence
of Section 3(a) and replacing it with the following sentence:
(a) Definition. “Licensed Intellectual Property Rights” shall
mean: (i) existing, issued patents and pending patent applications of Hitachi filed
prior to the tenth (10th) anniversary of the Closing Date (including all extensions,
reexaminations, reissues, continuations and renewals related thereto) covering the
products of the Business listed on Exhibit B to the Stock Purchase Agreement
and processes of the Business, throughout the world, which cannot be transferred to
Opnext Japan due to Hitachi’s reasonable requirements to use such Intellectual
Property in other Hitachi business units; and (ii) all know-how and other
Intellectual Property used in connection with the Business in whatever form that was
not capable of assignment pursuant to the provisions of the Business Transfer
Agreement due to Hitachi’s reasonable requirements to use such Intellectual Property
in other Hitachi business units (e.g., product specifications, manufacturing
processes, quality control procedures, instruction and/or operating, maintenance and
safety materials and drawings, test procedures, test data, sources of material and
supplies and the like).
(6) Section 3(b)(ii) of the IP License Agreement is hereby amended by deleting it in its
entirety and replacing it with the following Section 3(b)(ii):
(ii) Termination Conditions. Subject to Section 3(d), such license
shall not be terminated or its exploitation enjoined, until and unless: (i) Opnext
Japan has committed a material breach of its obligations under this IP License
Agreement, Hitachi has given written notice of such breach to Opnext Japan and such
breach remains uncured after sixty (60) days of receiving notice of such breach (the
“Cure Period”), or, in the case of a breach that cannot be cured within such
Cure Period, Opnext Japan has not instituted within such Cure Period steps necessary
to remedy the default and/or thereafter has not diligently pursued the same to
completion; or (ii) Opnext Japan has committed an incurable material breach. In the
event the breach is a curable breach that cannot be cured within the Cure Period but
with respect to which Opnext Japan has instituted steps necessary to remedy the
default and is thereafter diligently pursuing such cure, both parties shall
negotiate to determine whether further pursuit of such cure is reasonable. If the
parties cannot agree on a resolution in such negotiations, then this issue shall be
referred to arbitration pursuant to the arbitration procedures set forth in
Exhibit B hereto to decide whether such breach can be cured or any other
alternative remedy should be adopted. In the event the breach is an incurable
breach, (i) the parties agree that the matter shall be referred to arbitration
pursuant to the arbitration procedures set forth in Exhibit B hereto to
determine the appropriate remedy, and (ii) Opnext Japan shall provide an on-going
plan to address the prevention of such a breach occurring again reasonably
acceptable to Hitachi within sixty (60) days of written notice of the breach and
shall implement and comply with such plan within the time period set forth in such
plan. In the event that either party submits the dispute to arbitration, both
parties shall cooperate in such binding arbitration in accordance with Exhibit
B.
(7) Section 3(c)(ii) of the IP License Agreement is hereby amended by deleting it in its
entirety and replacing it with the following Section 3(c)(ii):
(ii) Minority-Owned Affiliates.
(A) Opnext Japan shall be permitted to further sublicense the Hitachi Licensed
IP to its and Opnext, Inc.’s Minority-Owned Affiliates, subject to approval by
Hitachi, not to be unreasonably withheld, unreasonably delayed or unreasonably
conditioned, and to commercially reasonable restrictions to be imposed by Hitachi
that will be agreed to by the parties in writing.
(B) Opnext Japan shall be permitted to further sublicense the Renesas Licensed
IP to its Minority-Owned Affiliates, subject to approval by Hitachi, not to be
unreasonably withheld, unreasonably delayed or unreasonably conditioned, and to
commercially reasonable restrictions to be imposed by Hitachi that will be agreed to
by the parties in writing.
(8) Section 3(c)(iii) of the IP License Agreement is hereby amended by deleting it in its
entirety and replacing it with the following Section 3(c)(iii):
(iii) Customers.
(A) Opnext Japan, its Wholly-Owned Subsidiaries, Opnext, Inc. and its
Wholly-Owned Subsidiaries shall be permitted to further sublicense the Hitachi
Licensed IP to their respective customers as necessary or appropriate in connection
with the completion of the applicable Opnext Entity’s products and services, to
complete the sale of products or services in the ordinary course of business or to
enable joint development of a product or system with the applicable Opnext Entity’s
customers to be manufactured and sold by the applicable Opnext Entity to such
customers, provided the applicable Opnext Entity proposes the terms and conditions
of such sublicense to Hitachi and agrees that such sublicense shall be subject to
Hitachi’s exercise of one (1) of the following options in Hitachi’s sole discretion,
with respect to the terms and conditions proposed by the applicable Opnext Entity:
(i) Hitachi may consent to the sublicense terms and conditions as is; (ii) Hitachi
may propose that a revised version of the sublicense, with reasonably modified terms
and conditions be utilized; (iii) Hitachi may enter
into a direct license with the applicable Opnext Entity’s customer under the
same terms and conditions as the applicable Opnext Entity’s proposed sublicense;
(iv) Hitachi may propose to enter into a direct license with the applicable Opnext
Entity’s customer under reasonably modified terms and conditions; or (v) Hitachi may
commence discussions with the applicable Opnext Entity to reach a resolution of
Hitachi’s concerns with respect to such sublicense, if Hitachi believes such
sublicense is not in the best interest of the parties. Hitachi shall have the sole
discretion to determine which of the five (5) foregoing options Hitachi will
exercise in each case. With respect to Hitachi’s exercise of one (1) of the five
(5) foregoing options, Hitachi agrees to provide consents to and/or notify the
applicable Opnext Entity of Hitachi’s proposed modifications within fifteen (15)
Business Days of receipt of the sublicense terms and conditions from the applicable
Opnext Entity. In the event that Hitachi exercises one (1) of the five (5)
foregoing options, the parties agree to negotiate in good faith and on reasonable
terms to resolve the situation within a reasonable amount of time, which shall not
exceed fifteen (15) Business Days of Hitachi’s provision of such a response to the
applicable Opnext Entity; provided, however, Hitachi shall not contact the
applicable Opnext Entity customers that are the subject of negotiations between
Hitachi and Opnext Japan, without the prior consent of the applicable Opnext Entity
prior to the resolution of such negotiations. If the parties cannot agree on a
resolution in such negotiations, then this issue shall be referred to arbitration
pursuant to the arbitration procedures set forth in Exhibit B hereto. In
the event that either party submits the dispute to arbitration, both parties shall
cooperate in such binding arbitration in accordance with Exhibit B.
In addition, Hitachi agrees that for the avoidance of doubt the rights provided
for in this Section 3(c)(iii)(A) are in no way meant to limit the rights of Opnext
Japan in Section 3(b)(i).
(B) Opnext Japan shall be permitted to further sublicense the Renesas Licensed
IP to its customers as necessary or appropriate in connection with the completion of
Opnext Japan’s products and services, to complete the sale of products or services
in the ordinary course of business or to enable joint development of a product or
system with Opnext Japan’s customers to be manufactured and sold by Opnext Japan to
such customers, provided Opnext Japan proposes the terms and conditions of such
sublicense to Hitachi and agrees that such sublicense shall be subject to Hitachi’s
exercise of one (1) of the following options in Hitachi’s sole discretion, with
respect to the terms and conditions proposed by Opnext Japan: (i) Hitachi may
consent to the sublicense terms and conditions as is; (ii) Hitachi may propose that
a revised version of the sublicense, with reasonably modified terms and conditions
be utilized; (iii) Hitachi may enter into a direct license with Opnext Japan’s
customer under the same terms and conditions as Opnext Japan’s proposed sublicense;
(iv) Hitachi may propose to enter into a direct license with Opnext Japan’s customer
under
reasonably modified terms and conditions; or (v) Hitachi may commence
discussions with Opnext Japan to reach a resolution of Hitachi’s concerns with
respect to such sublicense, if Hitachi believes such sublicense is not in the best
interest of the parties. Hitachi shall have the sole discretion to determine which
of the five (5) foregoing options Hitachi will exercise in each case. With respect
to Hitachi’s exercise of one (1) of the five (5) foregoing options, Hitachi agrees
to provide consents to and/or notify Opnext Japan of Hitachi’s proposed
modifications within fifteen (15) Business Days of receipt of the sublicense terms
and conditions from Opnext Japan. In the event that Hitachi exercises one (1) of
the five (5) foregoing options, the parties agree to negotiate in good faith and on
reasonable terms to resolve the situation within a reasonable amount of time, which
shall not exceed fifteen (15) Business Days of Hitachi’s provision of such a
response to Opnext Japan; provided, however, Hitachi shall not contact such Opnext
Japan customers that are the subject of negotiations between Hitachi and Opnext
Japan, without the prior written consent of Opnext Japan prior to the resolution of
such negotiations. If the parties cannot agree on a resolution in such negotiations,
then this issue shall be referred to arbitration pursuant to the arbitration
procedures set forth in Exhibit B hereto. In the event that either party
submits the dispute to arbitration, both parties shall cooperate in such binding
arbitration in accordance with Exhibit B.
(9) Section 3(d) of the IP License Agreement is hereby amended by deleting it in its entirety
and replacing it with the following Section 3(d):
(d) License Term. The licenses to Licensed IP and Future Hitachi IP
shall be irrevocable and: (i) with respect to patent rights, shall survive for so
long as any applicable patent is valid; and (ii) with respect to all other Licensed
IP or Future Hitachi IP, shall be perpetual. Notwithstanding the foregoing, if one
(1) of the conditions set forth in Section 3(b)(ii) is met, (x) Hitachi may
terminate the licenses to Licensed IP and Future Hitachi IP developed or filed on or
after the effective date of termination and (y) the licenses granted Opnext Japan to
Licensed IP and Future Hitachi IP developed or filed prior to the effective date of
termination shall continue pursuant to the terms and conditions set forth herein.
(10) Section 4(b)(i) of the IP License Agreement is hereby amended by deleting it in its
entirety and replacing it with the following Section 4(b)(i):
(i) Termination Conditions. Subject to Section 4(c), such license
shall not be terminated or its exploitation enjoined, until and unless: (i) Hitachi
has committed a material breach of its obligations under this IP License Agreement,
Opnext Japan has given written notice of such breach to Hitachi and such breach
remains uncured after the Cure Period, or, in the case of a breach, which cannot be
cured within such Cure Period, Hitachi has not instituted
within such Cure Period steps necessary to remedy the default and/or thereafter
has not diligently pursued the same to completion; or (ii) Hitachi has committed a
material breach which is incurable. In the event the breach is a curable breach
that cannot be cured within the Cure Period but with respect to which Hitachi has
instituted steps necessary to remedy the default and is thereafter diligently
pursuing such cure, both parties shall negotiate to determine whether further
pursuit of such cure is reasonable. If the parties cannot agree on a resolution in
such negotiations, then this issue shall be referred to arbitration pursuant to the
arbitration procedures set forth in Exhibit B hereto to decide whether such
breach can be cured or any other alternative remedy should be adopted. In the event
the breach is an incurable breach, (i) the parties agree that the matter shall be
referred to arbitration pursuant to the arbitration procedures set forth in
Exhibit B hereto to determine the appropriate remedy, and (ii) Hitachi shall
provide an on-going plan to address the prevention of such a breach occurring again
reasonably acceptable to Opnext Japan within sixty (60) days of written notice of
the breach and shall implement and comply with such plan within the time period set
forth in such plan. In the event that either party submits the dispute to
arbitration, both parties shall cooperate in such binding arbitration in accordance
with Exhibit B.
(11) Section 4(c) of the IP License Agreement is hereby amended by deleting it in its entirety
and replacing it with the following Section 4(c):
(c) License Term. The license to Opnext Japan IP shall be irrevocable
and: (i) with respect to patent rights, shall survive for so long as any applicable
patent is valid; and (ii) with respect to all other Opnext Japan IP, shall be
perpetual. Notwithstanding the foregoing, if one (1) of the conditions set forth in
Section 4(b)(i) is met, (x) Opnext Japan may terminate the license to Opnext Japan
IP developed or filed on or after the effective date of termination and (y) the
license granted Hitachi to Opnext Japan IP developed or filed prior to the effective
date of termination shall continue pursuant to the terms and conditions set forth
herein.
(12) Section 5(e) of the IP License Agreement is hereby amended by deleting it in its entirety
and replacing it with the following Section 5(e):
(e) Termination of Obligations. The obligations set forth in this
Section 5 shall terminate upon the later of: (i) the date that is one hundred and
eighty (180) days after the date when Opnext, Inc. ceases to be a Subsidiary of
Hitachi, and (ii) the first anniversary of any Initial Public Offering of Opnext,
Inc. (the “Negotiation Period”), provided that, if negotiations are ongoing with
respect to any license and within thirty (30) days of the end of the Negotiation
Period, Opnext Japan provides a written request to Hitachi for an extension of the
Negotiation Period for such time as is required to complete negotiations for such
license, but no longer than one hundred and eighty (180) days, the Negotiation
Period for such license shall automatically be extended for such requested time
period, not to exceed one hundred and eighty (180) days. Additionally, for so long
as Hitachi owns twenty percent (20%) or more of the voting securities of Opnext,
Inc., Opnext Japan may submit a written request to Hitachi once every six (6) month
period regarding whether Hitachi has entered into (or has entered into negotiations
for) a Future Third Party License Agreement with a specified third party, and
Hitachi will confirm whether or not Hitachi has entered into (or has entered into
negotiations for) a Future Third Party License Agreement with such specified third
party.
(13) Section 13 of the IP License Agreement is hereby amended by adding the following clause
at the end:
For the avoidance of doubt, the parties agree that an Initial Public Offering
(as defined in the Stockholders’ Agreement) shall not require the consent of
Hitachi.
(14) Section 15 of the IP License Agreement is hereby amended by adding the following clause
at the end:
and (vi) any licenses to Intellectual Property that exists and is subject to
any licenses granted hereunder prior to the effective date of any termination of
this IP License Agreement.
(15) A new Section 36 is hereby added to the IP License Agreement which provides as follows:
Section 36. Injunctive Relief. Each party acknowledges and agrees that
the other party’s Intellectual Property and Confidential Information are valuable
property of such other party and that a material breach of this IP License Agreement
(including unauthorized use of Intellectual Property or disclosure of Confidential
Information) will cause irreparable injury for which the injured party does not have
an adequate remedy at law and for which monetary remedies are not sufficient. Each
party shall be entitled to seek equitable relief (including the granting of
injunctive relief in that party’s favor) without the obligation of posting a bond if
the other party makes or threatens a material breach of this IP License Agreement
(including unauthorized use of Intellectual Property or disclosure of Confidential
Information). Each party agrees that equitable relief is not exclusive of other
remedies to which the other party may be entitled at law or in equity as a result of
any such material breach of this IP License Agreement (including any unauthorized
use of Intellectual Property or disclosure of Confidential Information).
(16) A new Section 37 is hereby added to the IP License Agreement which provides as follows:
Section 37. Bankruptcy. The parties agree that if a party becomes a
debtor or debtor-in-possession under Title 11 of the United States Code (the
“Bankruptcy Code”): (i) in the event of a rejection or proposed rejection
of this IP License Agreement under Section 365 of the Bankruptcy Code, any and all
rights licensed pursuant to this IP License Agreement shall be deemed to fall within
the definition of “intellectual property” under Section 101 of the Bankruptcy Code
and, in connection therewith, Section 365(n) of the Bankruptcy Code shall be
implicated by such rejection or proposed rejection; and (ii) notwithstanding Section
365(c) of the Bankruptcy Code or applicable non-bankruptcy law which prohibits,
restricts or conditions the assignment or assumption of this IP License Agreement or
any of the rights therein, but subject to the debtor-in-possession or trustee, as
applicable, otherwise complying with the requirements of Section 365 of the
Bankruptcy Code for assumption, the debtor-in-possession or trustee in bankruptcy
may assume this IP License Agreement. The parties agree that if a party files for
bankruptcy under the laws of any other jurisdiction, the terms of this section will
apply to the extent necessary to preserve the rights provided in this section.
Section 4. No Other Amendments.
Except as expressly set forth herein, all other terms and conditions of the IP License
Agreement shall remain unmodified, in full force and effect and shall apply to this Amendment.
Section 5. Governing Law.
This Amendment shall be governed by and construed in accordance with the laws of Japan without
giving effect to any choice-of-law or conflict-of-law provision or rule (whether of Japan or any
other jurisdiction) that would cause the application of the laws of any jurisdiction other than of
Japan. Regardless of the law applied, because this contract is in English, the terms and
conditions of this contract will be interpreted in accordance with the meaning of the words in
American colloquial English, notwithstanding any meaning of any word when translated into its
Japanese equivalent.
Section 6. Dispute Resolution.
In the event of any dispute under this Amendment, as a condition precedent to either party
seeking arbitration, in connection therewith, the parties will attempt to resolve such dispute by
good faith negotiations (except for actions seeking injunctive relief). Such negotiations shall
first involve the individuals designated by the parties as having general responsibility for the IP
License Agreement. If such negotiations do not result within thirty (30) days from written notice
of either party indicating that a dispute exists (a “Dispute Notice”) in a resolution of
the dispute, Opnext Japan shall nominate one (1) corporate officer of the rank of
vice president or higher and Hitachi shall nominate one (1) corporate officer of the rank of
Board Director or higher, which corporate officers shall meet in person and attempt in good faith
to negotiate a resolution to the dispute. In the event the corporate executives are unable to
resolve the dispute within forty-five (45) days of receipt by either party of a Dispute Notice, a
party may refer the matter to arbitration (except in the case of disputes arising under Section
11(c) or Section 36 of the IP License Agreement for which the parties may seek injunctive relief).
In the event that either party submits the dispute to arbitration, both parties shall cooperate in
such binding arbitration in accordance with Exhibit B to the IP License Agreement.
Section 7. Interpretation.
The headings and captions contained in this Amendment and in any Exhibit are for reference
purposes only and do not constitute a part of this Amendment. The use of the word “including”
herein shall mean “including without limitation.”
Section 8. Severability.
Whenever possible, each provision of this Amendment shall be interpreted in such manner as to
be effective and valid under applicable law, but if any provision of this Amendment held to be
invalid, illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect the validity,
legality or enforceability of any other provision of this Amendment in such jurisdiction or affect
the validity, legality or enforceability of any provision in any other jurisdiction, but this
Amendment shall be reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
Section 9. Counterparts.
This Amendment may be executed in one or more counterparts, each of which shall be an original
and all of which taken together shall constitute one and the same agreement.
* * * * *
IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their duly authorized
officers as of the Amendment Date.
OPNEXT JAPAN, INC.
|
HITACHI, LTD. | |||
/s/ Kei Oki
|
/s/ Xxxxx Xxxxxxxxx | |||
Title: President
|
Title: Vice President and Executive Officer |
SIGNATURE PAGE TO FIRST AMENDMENT TO OPTO-DEVICE IP LICENSE AGREEMENT
![(LETTERHEAD)](https://www.sec.gov/Archives/edgar/data/1157780/000095013407002703/a24073a4a2407323.gif)
January 29, 2007
Xxxxx X. Xxxxx
Chief Executive Officer
Opnext, Inc.
0 Xxxxxxxxxxx Xxx
Xxxxxxxxx, XX 00000
Chief Executive Officer
Opnext, Inc.
0 Xxxxxxxxxxx Xxx
Xxxxxxxxx, XX 00000
Re: Intellectual Property License Agreement (the “IPLA”) between Hitachi, Ltd.
(Hitachi) and Opnext, Japan, Inc. (“Opnext Japan”)
(Hitachi) and Opnext, Japan, Inc. (“Opnext Japan”)
Dear Xx. Xxxxx,
This letter is in regard to the IPLA. In connection with the IPLA, Hitachi has used
commercially reasonable effort under the IPLA, has secured and is in the process of securing
agreements in connection with certain of Hitachi’s cross license agreements with third parties, to
extend such licenses to Opnext, Inc. (“Opnext”) to the extent as stipulated therein, in the event
that Hitachi’s equity ownership in Opnext drops below 50%. The copies of the third party license
agreements and such extensions that Hitachi has provided to Opnext as highly confidential
information, are true and complete, with very limited elimination of portions unrelated to Opnext.
Hitachi hereby agrees that Opnext is a third party beneficiary of such license agreements, and that
Hitachi will cooperate with Opnext to enforce Opnext’s rights under such license agreements.
Further, Hitachi will not make any changes to the above license agreements that adversely affect
Opnext’s rights under such license agreements. Finally, unless stated in the copies of the
agreements or the extensions which Hitachi has provided to Opnext, such licenses are royalty free.
Sincerely, |
||||
/s/ Xxxxxxx Xxxxxxxx | ||||
Name: | Xxxxxxx Xxxxxxxx | |||
Title: | Manager, IP Licensing Department I Intellectual Property Group, Hitachi, Ltd. |
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EXHIBIT A
LIST OF MATERIAL PATENTS
LIST OF MATERIAL PATENTS
Attached.
A-1
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![(TABLE)](https://www.sec.gov/Archives/edgar/data/1157780/000095013407002703/a24073a4a2407378.gif)
EXHIBIT B
ARBITRATION PROCEDURES
ARBITRATION PROCEDURES
a. | Appointment of Arbitrators. The arbitration shall be heard and determined by a panel of three (3) persons. Each party shall have the right to designate one (1) member of the panel. The party requesting arbitration shall communicate its request in writing, identifying the nature of the dispute and the name of its arbitrator, to the other party (“Arbitration Request”). The other party shall then name, in writing, its arbitrator within fifteen (15) Business Days (as defined in the Stock Purchase Agreement) after receipt of the Arbitration Request. Failure or refusal of the other party to name its arbitrator within the fifteen (15) day time period shall empower the only appointed arbitrator to name the second arbitrator. Within twenty-five (25) Business Days after the Arbitration Request, the two (2) arbitrators shall mutually select a third impartial and neutral arbitrator to the panel. If the two (2) arbitrators are unable to agree upon an arbitrator within forty-five (45) Business Days after the Arbitration Request then within sixty-five (65) Business Days after the Arbitration Request, the ICC shall appoint a third arbitrator. |
b. | Governing Law and ICC. All disputes submitted to arbitration under this IP License Agreement shall be governed by the laws specified in the agreement that is the subject of the dispute. The arbitration rules of the International Chamber of Commerce (“ICC”) shall apply to any arbitration under this IP License Agreement, except to the extent the provisions of this Exhibit B vary therefrom. ICC shall administer the arbitration. Decisions of the panel shall be made by majority vote. The panel may not award punitive damages, injunctions, specific performance or temporary restraining orders. |
c. | Expedited Schedule. The arbitration shall be conducted on an expedited schedule. Unless otherwise agreed by the parties, the parties shall make their initial submissions to the panel within seventy-five (75) Business Days after the Arbitration Request. Within one hundred twenty (120) Business Days after the Arbitration Request, each party shall supply to the other party all documents that such party intends to introduce or upon which such party intends to rely in connection with such proceeding, as well as a list of any and all witnesses whose testimony such party intends to introduce in connection with such proceeding (with a brief summary of their area of testimony). Additional documents or witnesses may be introduced only if a majority of the arbitrators determine that good cause has been shown. Each party shall also have the right to submit written briefs to the arbitrators in accordance with a timetable to be established by the arbitrators. Unless agreed by the parties otherwise, the hearing shall commence within one hundred fifty (150) Business Days after the Arbitration Request and shall be completed within two hundred twenty-five (225) Business Days after the Arbitration Request. |
d. | Discovery. The parties shall be entitled to discovery of all documents and information reasonably necessary for a full understanding of any dispute raised in the arbitration relating to this IP License Agreement. The parties may use all methods of discovery available under the Japanese Code of Civil Procedure and/or the United States Federal |
B-1
Rules of Civil Procedure, including depositions, requests for admission and requests for production of documents. The time periods applied to these discovery methods shall be set by the panel so as to permit compliance with the scheduling provisions of this Exhibit B. |
e. | Communication with Arbitrators. Each party shall communicate with the arbitrators only in the presence of the other party or by writing delivered to the ICC for transmittal to the arbitrators and the other party. |
f. | Prompt Award. Unless otherwise agreed by the parties, the award shall be made promptly by the panel (in any event, no later than thirty (30) Business Days from the closing of the hearing). Unless otherwise agreed by the parties, the decision and award by the panel shall be reasoned, explain the basis of the decision and be in writing. Any failure to render the award within the foregoing time period shall not affect the validity of such award. |
g. | Binding Decisions. The decision or award rendered or made in connection with the arbitration shall be final and binding upon the parties thereto. The prevailing party may present the decision or award to any court of competent jurisdiction for confirmation, and such court shall enter forthwith an order confirming such decision or award. The arbitration award shall allocate the expenses of the arbitrator(s) and of the arbitration, between the parties in a manner corresponding to the extent to which one (1) party prevails over the other. |
h. | Location. Based upon the factors set forth below, the arbitrators shall select one or more of the following cities for the location of the arbitration proceedings: Tokyo, Japan; London, United Kingdom; or New York, U.S.A. The arbitrators shall take into account: (i) the relationship between the acts and circumstances surrounding the dispute and the arbitration location; (ii) the availability and location of witnesses; and (iii) the accessibility and location of evidence. |
i. | Confidentiality. All arbitration proceedings undertaken pursuant to this Exhibit B and any awards or decisions resulting therefrom shall be deemed to be confidential between the parties thereto. To the extent either party maintains in good faith that any documents submitted or testimony introduced in connection with such arbitration contains confidential information or trade secrets, the parties shall negotiate in good faith in an effort to reach agreement regarding terms and conditions for keeping such materials and testimony confidential. If the parties are unable to agree upon such terms, the arbitrators shall have the right to impose appropriate restrictions to maintain the confidentiality of any confidential information or trade secrets in connection with the arbitration. |
B-2
EXHIBIT C
LIST OF CLAIMS AND WARNING LETTERS
LIST OF CLAIMS AND WARNING LETTERS
None.
C-1
SCHEDULE 6(a)
None.