AGREEMENT
BY AND BETWEEN
JDS FITEL, INC.
AND
OPTICAL COATING LABORATORY, INC.
TABLE OF CONTENTS
ARTICLE I 1
1.1 Definitions 1
ARTICLE II
SCOPE OF RELATIONSHIP 3
ARTICLE III
MANUFACTURE OF WDM PRODUCTS 4
3.1 Manufacture of WDM Optical Filters by OCLI 4
3.2 Supply of WDM Products by JDS 4
3.3 Supply of WDM Optical Filters 5
3.4 Price for JDS's Services 5
3.5 Terms and Conditions 5
ARTICLE IV
DISTRIBUTION AGREEMENT 5
ARTICLE V
USE OF THIRD PARTY WDM OPTICAL FILTER SUPPLIERS 5
5.1 Price Competition 5
5.2 Competition Other Than Price 6
5.3 Price of Third Party Filters Included in Costs 6
ARTICLE VI
PROFIT SHARING 6
6.1 Quarterly Profit Sharing Adjustments 6
6.2 Profit Sharing for Non-Optical Filter WDMs 6
6.3 Failure of OCLI to Supply Filters 7
6.4 Right to Inspect and Audit Records 8
6.5 Audit Costs Necessitated by Agreement 8
ARTICLE VII
FORMATION OF JOINT VENTURE COMPANY 8
7.1 Option to Form Joint Venture Company 8
7.2 Formation of Joint Venture Company 8
(a) Form 9
(b) Location 9
(c) Capital 9
(d) Licensing of Technology 9
(e) Governance 9
(f) Profit Sharing 10
7.3 Assignment of Distribution Agreement 10
7.4 Assignment of Terms of the Agreement 10
7.5 Activities of the Company 10
7.6 Failure to Agree on Terms of the Company 10
ARTICLE VIII
EXCLUSIVITY 11
8.1 Scope of Exclusive Rights 11
8.2 Notification 12
8.3 Sale of Planar Waveguide and Fiber ▇▇▇▇▇ Gratings 12
ARTICLE IX
TERMINATION 12
9.1 Termination for Cause 12
(a) Termination by JDS 12
(b) Termination for Failure of OCLI
to Supply Filters 13
(c) Termination for Failure of JDS to
Supply Assembly Services 13
(d) Termination by Either party 14
9.2 [CONFIDENTIAL TREATMENT REQUESTED] 14
9.3 Effect of Termination 14
ARTICLE X
MANAGEMENT COMMITTEE 14
10.1 Management Committee 14
10.2 Chairman of the Management Committee 15
10.3 Delegation 15
ARTICLE XI
RESEARCH AND DEVELOPMENT 15
11.1 Funding of R&D 15
11.2 16
ARTICLE XII THIRD PARTY LICENSING 16
12.1 16
ARTICLE XIII ACQUISITIONS 17
13.1 17
13.2 17
ARTICLE XIV
CONFIDENTIAL INFORMATION 18
14.1 "Confidential Information" 18
14.2 19
14.3 19
14.4 19
ARTICLE XV
MISCELLANEOUS 20
15.1 Non-Supply of WDM Optical Filters to Third Parties 20
15.2 21
15.3 Order Backlog 21
15.4 JDS's Inventory 22
15.5 Constraints on Employee Transfers 22
15.6 Governing Law 22
15.7 Disputes 23
15.8 Attorneys' Fees 23
15.9 Notices 24
15.10 Public Announcements 25
15.11 Counterparts 25
15.12 Interpretation 26
15.13 Successors and Assigns 26
15.14 Waiver 26
15.15 Purchase By Competitor 26
15.16 Entire Agreement 27
15.17 Agency 27
15.18 Survival 27
15.19 Further Assurances and Approvals 27
15.20 Intellectual Property Indemnity Liability 28
15.21 Approval by Board of Directors 28
AGREEMENT
THIS AGREEMENT, made as of this 1st day of February, 1997, by and
between JDS FITEL Inc., a Canadian corporation, having its principal place
of business at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇
("JDS" and "Distributor") and OPTICAL COATING LABORATORY, INC., a Delaware
corporation, having its principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ ("OCLI").
W I T N E S S E T H :
WHEREAS, JDS and OCLI wish to combine their respective areas of
expertise and capabilities in a joint effort for WDM Product Business as
defined herein.
NOW, THEREFORE, in consideration of the mutual promises contained
herein, the parties hereto agree to the following:
ARTICLE II
DEFINITIONS
1.1 Definitions. For purposes of this Agreement, the following
definitions shall apply:
"Backlog" shall mean the customer orders that JDS has on hand for
which WDM Products have not been shipped at (a) January 19, 1997 with
respect to Section 15.3(a) and at (b) the effective date of this Agreement
all other provisions under this Agreement;
"Company" shall have the meaning as set out in Section 7.1;
"Company Profit" with respect to the Company shall mean the Company's
revenues, including from transactions with the Distributor or with any
party to this Agreement, from the WDM Products Business, including related
activities such as licensing of WDM Product or WDM Optical Filter
technology, pursuant to this Agreement less Company related Costs.
"Company Profit" can be either a profit or a loss.
"Confidential Information" shall have the meaning as set out in
Section 14.1;
"Cost" shall be defined as set forth in Exhibit A attached hereto.
"Fiscal Year" shall mean a 12 month period of time ended October 31.
"Fiscal Quarter" shall mean the quarters ended January 31, April 30, July
31 and October 31.
"Management Committee" shall have the meaning as set out in Section
10.1;
"Non-assignable" shall mean personal, non-transferable, indivisible
and non-assignable.
"Passive" shall mean not electrically powered or electrically
controllable or adjustable;
"Planar Waveguides" shall mean planar waveguides performing a
wavelength discrimination function;
"Profit" shall mean the sum of the Transaction Profit of each party
plus Company Profit. "Profit" can be either a profit or a loss.
"Transaction Profit" with respect to any party shall mean that party's
revenues, including from transactions with the Company or with other
parties to this Agreement from the WDM Products Business, including related
activities such as licensing of WDM Product or WDM Optical Filter
technology, pursuant to this Agreement less such party's related Costs.
"Transaction Profit" can be either a profit or a loss. For greater
certainty, Transaction Profit shall not include any revenue, Costs or
Company Profit recognized by either party as a result of either
consolidating, equity accounting or cost accounting for a party's ownership
interest share in the Company.
"WDM Optical Filters" shall mean WDM Optical Filters A and WDM Optical
Filters B;
"WDM Optical Filters A" shall mean any and all optical filters that
are intended to be used in WDM Products A;
"WDM Optical Filters B" shall mean any and all optical filters that
are intended to be used in WDM Products B;
[CONFIDENTIAL TREATMENT REQUESTED]
"WDM Product Business" shall mean the business of design, development,
manufacture, supply of WDM Optical Filters or WDM Products, sales to
Distributor and technical product marketing support to assist Distributor
in sales and marketing of WDM Products, all related to WDM Optical Filters
or WDM Products.
ARTICLE II
SCOPE OF RELATIONSHIP
2.1 The relationship created between JDS and OCLI as described in
more detail herein encompasses a joint venture activity relating to the
design and manufacture of WDM Optical Filters; the design and manufacture
of WDM Products; and the marketing and sale of WDM Products. From this
joint venture activity JDS will realize [CONFIDENTIAL TREATMENT REQUESTED]
of all Profits and OCLI will realize [CONFIDENTIAL TREATMENT REQUESTED]
of all Profits, subject to adjustment as set out herein. The activities
for the design, test and manufacture of WDM Optical Filters are to be provided
by OCLI and the design, assembly, test and manufacture and test of WDM
Products are to be provided by JDS and upon the occurrence of certain
circumstances as set out herein, these activities may be transferred to
a separate legal entity. JDS shall be the exclusive entity through which
all WDM Products from this joint venture activity are sold and JDS will
perform all marketing and sale activities for WDM Products, with technical
assistance from OCLI as set out herein.
OCLI represents that it has expertise in optical coating technology and
optical design capabilities for making optical filters and is currently
developing technology to address current and future market demands for
telecommunications applications. JDS represents that it has know-how and
expertise in fiber optic component technology including packaging and
development, design and test, and manufacturing capabilities for fiber
optic components, including WDM Products, for telecommunications
applications, and is currently developing technology to address current and
future market demands for telecommunications applications, and also has
marketing and sales expertise relating to such optical components. At
least until the establishment of the Company, it is intended that OCLI will
use its expertise and facilities for manufacturing WDM Optical Filters for
the joint venture, and JDS will use its expertise and facilities for
manufacturing WDM Products for the joint venture.
ARTICLE III
MANUFACTURE OF WDM PRODUCTS
3.1 Manufacture of WDM Optical Filters by OCLI. Subject to
Sections 7.5 and 9.1(b), and except for WDM Optical Filters supplied by JDS
from inventory existing on the effective date of this Agreement pursuant to
Section 15.4, OCLI agrees to commit all resources necessary and appropriate
to provide manufacturing services to manufacture and supply WDM Optical
Filters for use by JDS or the Company in WDM Products which are based on
Distributor's customer requirements which have been translated into
product, proof of concept product or prototype product specifications by
Distributor where the required WDM Optical Filters specifications have been
determined in consultation with OCLI with respect to WDM Optical Filters
provided by OCLI.
3.2 Supply of WDM Products by JDS. Subject to Sections
7.5 and 9.1(c), JDS agrees to commit all resources necessary and
appropriate to provide services to design, assemble, test and supply to
OCLI or the Company WDM Products which are based on Distributor's customer
requirements which have been translated into product, proof of concept
product or prototype product specifications by Distributor in consultation
with JDS with respect to WDM Products provided by JDS.
3.3 Supply of WDM Optical Filters. Prior to formation
of the Company, OCLI shall provide WDM Optical Filters at no charge to JDS
for use in the manufacture of the WDM Products.
3.4 Price for JDS's Services. Prior to formation of the Company, and
subject to Section 6.1 JDS shall charge OCLI for the design, assembly and
testing of the WDM Products at JDS's Cost to design, assemble and test the
WDM Products plus a percentage ▇▇▇▇ up fee of such Cost as agreed by the
Management Committee. JDS shall invoice OCLI for WDM Products for which
testing has been completed and are ready for shipment to Distributor or
Distributor's customers.
3.5 Terms and Conditions. Payment terms for the sale of WDM Products
and services by JDS to OCLI shall be net 45 days from the date of invoice.
All payments not received when due shall be subject to an additional charge
of 1.5% per month of the unpaid amount until the date of payment.
ARTICLE IV
DISTRIBUTION AGREEMENT
4.1 Contemporaneously with the execution of this Agreement, OCLI and
Distributor shall enter into that certain Distribution Agreement attached
hereto as Exhibit B pursuant to which OCLI shall sell WDM Products only to
Distributor as the sole and exclusive distributor of WDM Products at a
price equal to OCLI's Cost of WDM Products plus a percentage ▇▇▇▇ up fee of
such Cost as agreed by the Management Committee.
ARTICLE V
USE OF THIRD PARTY WDM OPTICAL FILTER SUPPLIERS
5.1 Price Competition. The Management Committee may decide whether JDS
or the Company may purchase WDM Optical Filters from third parties if it
determines that the Profits would be greater than if equivalent WDM
Optical Filters were supplied by OCLI.
5.2 Competition Other Than Price. In the event that OCLI
or the Company is unable to provide WDM Optical Filters, as required by
Distributor's customers, based on lack of technology, including but not
limited to capacity, yield or delivery timeframes, JDS or the Company may
purchase WDM Optical Filters from third parties.
5.3 Price of Third Party Filters Included in Costs. In the event WDM
Optical Filters are purchased from third parties pursuant to Section 5.1
or 5.2, the price paid for such filters are to be included in Costs for the
purpose of determining profit sharing under Article VI.
ARTICLE VI
PROFIT SHARING
6.1 Quarterly Profit Sharing Adjustments. Within 30 days from
the end of each Fiscal Quarter thereafter, OCLI, JDS, Distributor and
the Company when formed will exchange accounting information regarding
each party's respective Costs incurred and Profits realized from the
WDM Products Business. The sale price of WDM Products from OCLI or
the Company to Distributor under the Distribution Agreement or alternately
prior to formation of the Company the ▇▇▇▇-up fee under Section 3.4,
shall be adjusted such that the portion of Profits realized by OCLI are
equal to [CONFIDENTIAL TREATMENT REQUESTED] and the portion of Profits
realized by JDS and Distributor combined are equal to [CONFIDENTIAL TREATMENT
REQUESTED] of the Profits realized pursuant to the terms of this Agreement,
subject to adjustment under Sections 6.2 and 6.3. The profit sharing
adjustment of each party's portion of Profits shall be made retroactively
for the Fiscal Quarter just ended in the form of a credit from one party to
the other and prospectively such that the profit sharing expected for the
current Fiscal Quarter will conform to the requirements of this section.
6.2 Profit Sharing for Non-Optical Filter WDMs. In the
event the amount of sales of WDM Products by Distributor that incorporate
means of wavelength selection other than WDM Optical Filters or other
elements providing means of wavelength discrimination which all have
originated from OCLI during any Fiscal Quarter constitute more than
[CONFIDENTIAL TREATMENT REQUESTED] of the amount of all sales of WDM Products
by Distributor, then the adjustment called for by Section 6.1 shall be such
that the portion of Profits realized by OCLI are equal to [CONFIDENTIAL
TREATMENT REQUESTED] and the portion of Profits realized by JDS and
Distributor combined are equal to [CONFIDENTIAL TREATMENT REQUESTED] of
the Profits realized pursuant to the terms of this Agreement. In the case
of WDM Products containing both WDM Optical Filters and other means of
wavelength selection, sales by Distributor shall be allocated to WDM
Products sales in accordance with the relative value of the WDM Optical
Filter elements or other elements providing means of wavelength
discrimination which all have originated from OCLI to the total
value of all wavelength selection elements employed in the WDM Products, as
determined by the Management Committee. Notwithstanding the foregoing, the
said other elements providing means of wavelength discrimination
in WDM Products which all have originated from OCLI, shall only be used in
the calculation in this subsection if such elements were not available from
JDS at the time introduced by OCLI.
6.3. Failure of OCLI to Supply Filters. In the event, OCLI and the
Company fail in any Fiscal Quarter to supply JDS or the Company with:
(i) [CONFIDENTIAL TREATMENT REQUESTED] of the requirements for WDM
Optical Filters A, then the profit sharing adjustment pursuant to Section
6.1 shall be further adjusted such that the portion of Profits that are
realized during the next Fiscal Quarter by OCLI are equal to [CONFIDENTIAL
TREATMENT REQUESTED] and the portion of Profits realized by JDS and
Distributor combined are equal to [CONFIDENTIAL TREATMENT REQUESTED] of
the Profits realized pursuant to the terms of this Agreement with respect
to WDM Products A. This further profit sharing adjustment shall continue to
apply until the Fiscal Quarter in which OCLI and the Company supplies the
said [CONFIDENTIAL TREATMENT REQUESTED] of JDS's or the Company's
requirements after which the profit sharing shall return to that specified
pursuant to Section 6.1 in the next Fiscal Quarter; or
(ii) [CONFIDENTIAL TREATMENT REQUESTED] of the requirements for WDM
Optical Filters B, then the profit sharing adjustment pursuant to Section
6.1 shall be further adjusted such that the portion of Profits that are
realized during the next Fiscal Quarter by OCLI are equal to [CONFIDENTIAL
TREATMENT REQUESTED] and the portion of Profits realized by JDS and
Distributor combined are equal to [CONFIDENTIAL TREATMENT REQUESTED] of the
Profits realized pursuant to the terms of this Agreement with respect to
WDM Products B. This further profit sharing adjustment shall continue to
apply until the Fiscal Quarter in which OCLI and the Company supplies the
said [CONFIDENTIAL TREATMENT REQUESTED] of Distributor's or the Company's
requirements after which the profit sharing shall return to that specified
pursuant to Section 6.1 in the next Fiscal Quarter; or
(iii) [CONFIDENTIAL TREATMENT REQUESTED] of the requirements for WDM
Optical Filters, then the profit sharing adjustment pursuant to Section 6.1
shall be further adjusted such that the portion of Profits that are realized
during the next Fiscal Quarter by OCLI are equal to [CONFIDENTIAL
TREATMENT REQUESTED] and the portion of Profits realized by JDS and
Distributor combined are equal to [CONFIDENTIAL TREATMENT REQUESTED] of the
Profits realized pursuant to the terms of this Agreement with respect to
WDM Products. This further profit sharing adjustment shall continue to
apply until the Fiscal Quarter in which OCLI and the Company supplies the
said [CONFIDENTIAL TREATMENT REQUESTED] of JDS's or the Company's
requirements after which the profit sharing shall return to that specified
pursuant to Section 6.1 in the next Fiscal Quarter.
The following formula shall be used to determine whether OCLI or OCLI
and the Company have satisfied the requirements set out in this Section 6.3
to supply WDM Optical Filters A, WDM Optical Filters B or WDM Optical
Filters:
S = A/B
Where:
(i) "S" represents the percentage of the requirements for WDM Optical
Filters A, WDM Optical Filters B or WDM Optical Filters, as the case may
be, supplied by OCLI and the Company;
(ii) "A" represents the number of WDM Optical Filters A, WDM Optical
Filters B or WDM Optical Filters, as the case may be, supplied by OCLI and
the Company and incorporated into WDM Products shipped by the Distributor
in the relevant Fiscal Quarter; and
(iii) "B" represents the number of WDM Optical Filters A, WDM Optical
Filters B or WDM Optical Filters, as the case may be, that are required by
the Distributor in the relevant Fiscal Quarter to satisfy (a) purchase
order delivery commitments for WDM Optical Filters incorporated into WDM
Products and (b) reasonable requirements to qualify, test and market
prototype or demonstration products but excluding any delivery commitments
not satisfied due to causes other than OCLI's failure to supply WDM Optical
Filters that meet the required WDM Optical Filter specifications based on
Distributor's customer requirements.
In any event, this Section 6.3 shall cease to apply after January 31,
2002.
6.4 Right to Inspect Audit Records. Each party hereto shall have the
right, upon reasonable notice and during normal business hours, to
inspect and conduct an audit of any other party's or the Company's
accounting records for the purpose of verifying such party's Costs
and Profits.
6.5 Audit Costs Necessitated by Agreements. Except for Section
6.4, in the event a financial audit other than a party's normal annual or
quarterly audit required for its own business, is required at any time
to determine any matter or calculation hereunder, the costs of such
audit shall be included in Costs.
ARTICLE VII
FORMATION OF JOINT VENTURE COMPANY
7.1 Option to Form Joint Venture Company. Subject to Section 7.2
and only where the sales of WDM Products by Distributor exceeds
[CONFIDENTIAL TREATMENT REQUESTED] for any four consecutive Fiscal Quarters,
either party hereto may exercise an option to cause to be formed a
joint venture company (the "Company"). Such option shall be exercisable
by either party by giving sixty (60) days written notice thereof to
the other party.
7.2 Formation of Joint Venture Company. Prior to either party
exercising the option under Section 7.1, OCLI and JDS shall upon
written notice negotiate in good faith for a period of sixty (60)
days following such notice and agree upon all the terms and conditions
relating to the formation and operation of the Company, including but
not limited to the terms set forth below. Where the parties are not able
to agree on all such terms or conditions, the terms and conditions the
parties have not agreed upon shall be addressed in accordance with
Section 7.6 below.
(a) Form. The Company will be formed as a general partnership,
limited liability company or other "flow-through" entity [CONFIDENTIAL
TREATMENT REQUESTED].
(b) Location. The Company will be located in a location agreed
upon by OCLI and JDS which provides a favorable tax treatment for all
parties, location to competent labor force, access to markets and
convenience to the management of OCLI and JDS.
(c) Capital. OCLI and JDS will provide capital in the form of
equity or working capital loans on commercially reasonable terms as needed.
(d) Licensing of Technology. Subject to Sections 11 and 13.1,
OCLI and JDS shall license the Company on a royalty free, nonexclusive, Non-
assignable basis all intellectual property rights, excluding trademarks,
service marks and tradenames, owned by either party for WDM Products
Business. OCLI and JDS shall at no charge provide technical assistance to
the Company to help the Company to implement, and utilize in the Company's
WDM Product Business, such licensed intellectual property rights. JDS will
use reasonable efforts to obtain a nonexclusive license of intellectual
property rights owned by Furukawa but only if agreeable to Furukawa and
necessary to enable the Company to conduct WDM Product Business for a
commercially reasonable royalty, provided same are Non-assignable by the
Company. Intellectual property rights owned by either party's subsidiaries
in which the party has majority ownership and where the party has control
to cause said subsidiaries to grant an intellectual property rights license
relating to the WDM Products Business which is necessary to enable the
Company to conduct WDM Product Business, shall be offered to the Company on
a nonexclusive, Non-assignable basis for a commercially reasonable royalty.
(e) Governance. The governance and control of the Company will
be negotiated by the parties acting in good faith prior to the exercise of
the option under Section 7.1, by taking into consideration, in addition to
all other factors: [CONFIDENTIAL TREATMENT REQUESTED]
(f) Profit Sharing. The parties' respective percentage interest
in the earnings and profits of the Company shall be such as to reflect
the sharing of Profits provided for in Article VI of this Agreement.
7.3 Assignment of Distribution Agreement. Upon formation of the
Company, the Distribution Agreement shall be assigned by OCLI to the
Company.
7.4 Assignment of Terms of the Agreement. The Company, shall also
agree to be bound by the same obligations that JDS and OCLI have to
each other before the formation of the Company that relate to protecting
each party's interests, including but not limited to, Sections 3.1 and
3.2, Article IV Distribution; Article VI Profit Sharing; Article VIII
Exclusivity; Article IX Termination; Article XI Research and Development;
Article XIII Acquisitions; Article XIV Confidential Information and
Article XV Miscellaneous.
7.5 Activities of the Company. After the formation of the
Company, the parties shall determine what activities as set out in Article
III shall be assumed by the Company or shall continue to be provided by one
or both of the parties.
7.6 Failure to Agree on Terms of the Company. In the event the
parties do not reach agreement on all the terms and conditions relating to
the formation and operation of the Company within the 60-day notice period
or any extensions of time mutually agreed to by the parties, the parties
agree to immediately submit any such terms and conditions that the parties
have failed to agree on to arbitration pursuant to Section 15.7 except that
such arbitration shall not be binding on the parties save as expressly set
out in this Article VII. The factors set forth in Section 7.2(e)(i) and
(ii) shall not in any manner be disclosed to the arbitrators. The
arbitrators shall determine such terms and conditions taking into account:
(a) all of the factors listed in Section 7.2 but without any reference
to the factors set forth in Section 7.2(e)(i) and (ii), (b) other
provisions of this Agreement and (c) the conduct of the parties under this
Agreement. The arbitration proceeding shall be completed within 90 days
following the conclusion of good faith negotiations. After conclusion of
the arbitration of all such terms and conditions that the parties had
failed to agree on, and where OCLI is not satisfied with the arbitrators'
decision OCLI shall have the option, exercisable by notice, given within 30
days of the date of the arbitrators' decision, to (i) terminate this
Agreement on six months notice provided notice is given after January 31,
1999, (ii) agree to form the Company upon the terms decided by the
arbitrators if, and only if, JDS also, in its sole and unfettered
discretion, whether or not acting reasonably, agrees to form the Company
upon such terms or (iii) continue this Agreement without the formation of
the Company. In the event the parties continue this Agreement without the
formation of the Company, either of the parties may elect, on one
subsequent occasion only, to initiate the process to form the Company
pursuant to this Article VII any time after a date that is 24 months after
the date of the arbitrators' decision. In no event shall either party have
any rights or obligations under this Article VII upon the conclusion of the
second arbitration and this Article VII shall thereafter be null and void.
ARTICLE VIII
EXCLUSIVITY
8.1 [CONFIDENTIAL TREATMENT REQUESTED]
Notwithstanding any term to the contrary, all such activities for
making for or selling to third parties by either OCLI or JDS, in compliance
with this section, are deemed to be completely outside of the scope of this
Agreement and for greater certainty, Costs and that party's Transaction
Profits associated with such sales shall not be considered in calculation
of Profits under this Agreement.
8.2 [CONFIDENTIAL TREATMENT REQUESTED]
8.3 Sale of Planar Waveguide and Fiber ▇▇▇▇▇ Gratings. Either party
may at anytime make for or resell to third parties Fiber ▇▇▇▇▇ grating
or Planar Waveguide or other technology based WDM Products where the
party's Transaction Profit on such sales is included in calculating
Profits under this Agreement.
ARTICLE IX
TERMINATION
9.1 Termination for Cause.
a) Termination by JDS. JDS may terminate this Agreement upon 30 days
written notice, unless within such period OCLI cures the condition giving
rise to JDS's right to terminate this Agreement (whereupon all intellectual
property rights owned by each party shall be retained by such party and all
intellectual property rights jointly owned shall continue to be jointly
owned provided however that either party may thereafter exploit such joint
intellectual property rights without the consent or accounting to the other
party) in the event that OCLI fails to either provide: [CONFIDENTIAL
TREATMENT REQUESTED] or (ii) in sufficient quantities for proof of
concept or prototype WDM Product samples for product qualification, system
and performance verification to meet Distributor's customers' requirements.
b) Termination for Failure of OCLI to Supply Filters. (If OCLI and
the Company fail for any two consecutive Fiscal Quarters to supply the
Distributor or the Company with:
(i) [CONFIDENTIAL TREATMENT REQUESTED] of the requirements for WDM
Optical Filters A, then JDS may immediately terminate this Agreement
upon 30 days notice given within 30 days following the end of the said
two consecutive Fiscal Quarters; or
(ii) [CONFIDENTIAL TREATMENT REQUESTED] of the requirements for WDM
Optical Filters B, then JDS may immediately terminate the parties rights and
obligations herein with respect to WDM Products B upon 30 days notice given
within 30 days following the end of the said two consecutive Fiscal
Quarters; or
(ii) [CONFIDENTIAL TREATMENT REQUESTED] of the requirements for WDM
Optical Filters, JDS may terminate this Agreement upon 30 days notice given
within 30 days following the end of the said two consecutive Fiscal Quarters.
The said two consecutive Fiscal Quarter period described above shall not
commence until such filters become commercially available to the
Distributor or the Company.
The following formula shall be used to determine whether OCLI or OCLI and
the Company have satisfied the requirements set out in this provision to
supply WDM Optical Filters A, WDM Optical Filters B or WDM Optical Filters,
as the case may be,:
S = A/B
Where:
(i) "S" represent the percentage of the requirements for WDM Optical
Filters A, WDM Optical Filters B or WDM Optical Filters, as the case may
be, supplied by OCLI and the Company;
(ii) "A" represents the number of WDM Optical Filters A, WDM Optical
Filters B or WDM Optical Filters, as the case may be, supplied by OCLI and
the Company and incorporated into WDM Products shipped by the Distributor
in the relevant two consecutive Fiscal Quarter; and
(iii) "B" represents the number of WDM Optical Filters A, WDM Optical
Filters B or WDM Optical Filters, as the case may be, that are required by
the Distributor in the relevant two consecutive Fiscal Quarter to satisfy
(a) purchase order delivery commitments for WDM Optical Filters
incorporated into WDM Products and (b) reasonable requirements to qualify,
test and market prototype or demonstration products but excluding any
delivery commitments not satisfied due to causes other than OCLI's failure
to supply WDM Optical Filters that meet the required WDM Optical Filter
specifications based on Distributor's customer requirements [CONFIDENTIAL
TREATMENT REQUESTED].
Once the Company has demonstrated that it has the ability in any Fiscal
Quarter to supply [CONFIDENTIAL TREATMENT REQUESTED] of the requirements for
WDM Optical Filters and [CONFIDENTIAL TREATMENT REQUESTED]
of the requirements for WDM Optical Filters A, then this provision and
Section 3.1 shall cease to apply. In any event, this provision shall cease
to apply after January 31, 2000 provided that if the right to terminate
this Agreement pursuant to this subsection 9.1(b) arises prior to January
31, 2000, then this subsection continues until January 31, 2002.
(c) Termination for Failure of JDS to Supply Assembly Services. If
JDS, or JDS and the Company combined, has not supplied [CONFIDENTIAL
TREATMENT REQUESTED] of the requirements for WDM Product assembly services
for WDM Products A or [CONFIDENTIAL TREATMENT REQUESTED] of the requirements
for WDM Products B for two consecutive Fiscal Quarters, and provided that
such assembly services are or have been commercially available to third
parties, then OCLI may terminate this Agreement upon 30 days notice given
within 30 days following the end of the said two consecutive Fiscal Quarters.
If such assembly services are not or have not been commercially available,
the said two consecutive Fiscal Quarter period described above shall not
commence until such assembly services become commercially available. Once
the Company has demonstrated that it has the ability to supply 85% of the
requirements for such WDM product assembly services for a Fiscal Quarter,
then this provision and Section 3.2 shall cease to apply. In any event,
this provision shall cease to apply after January 31, 2000.
d) Termination by Either party. Beginning on [CONFIDENTIAL
TREATMENT REQUESTED], either party may at anytime terminate this Agreement
upon 30 days notice unless prior to such notice sales of WDM Products by
Distributor for any four consecutive Fiscal Quarter period exceed
[CONFIDENTIAL TREATMENT REQUESTED] ("the Sales Goal"). Either party may
also terminate this Agreement pursuant to this provision if, for such
period, Profits are not positive.
9.2 [CONFIDENTIAL TREATMENT REQUESTED]
9.3 Effect of Termination. Subject to Section 14.4, in the event that
either this Agreement or the Distributor Agreement, Exhibit C, is
terminated pursuant to any provision hereunder or for breach,, both this
Agreement and said Distributor Agreement shall terminate and all
intellectual property rights owned by each party shall be retained by such
party and all intellectual property rights jointly owned shall continue to
be jointly owned provided however that either party may thereafter exploit
such joint intellectual property rights without the consent or accounting
to the other party. In addition, in the event the Company has been formed,
the parties shall use their best efforts to effect an orderly dissolution
and wind-up of the Company by discharging all debts and obligations of the
Company with the remaining equity to be distributed to the parties in
accordance with their respective interests in Profits; provided that all
assets of the Company are dealt with as follows. All assets of the Company
shall be transferred to the parties as mutually agreed. No Company asset
shall be conveyed, sold, leased or otherwise disposed of to a third party
unless both parties agree in writing to such disposal in their respective
sole discretion. Should the Company not have sufficient monetary assets to
discharge all debts and all obligations of the Company, each of the parties
shall share in the discharge of such debts and obligations in accordance
with their respective interests in Company.
ARTICLE X
MANAGEMENT COMMITTEE
10.1 Management Committee. OCLI and JDS shall each appoint two
persons to serve as a Management Committee. The Management Committee shall
have the authority, acting reasonably, to manage the design, development,
manufacture and technical product marketing support of WDM Products
Business pursuant to this Agreement and until the formation of the Company.
Meetings of the Management Committee may be called by any member thereof
upon one business day notice to the other Management Committee members and
attendance may be by telephone, video conference or other means agreed to
by such members. Three members, or their designated representatives, must
be present for a quorum and no business shall be conducted by the
Management Committee except at such meetings where a quorum is present.
The affirmative vote of three members is required to authorize all actions
of the Management Committee. In the event the Management Committee reaches
a deadlock, including consistent failure or refusal of one or more party's
members to attend meetings, the chief executive officers then in office of
JDS and OCLI shall jointly appoint one non-affiliated business person to
serve as the fifth member of the Management Committee to break such
deadlock. If the chief executive officers of OCLI and JDS are unable to
agree on who should serve as the fifth member of the Management Committee,
each shall select one non-affiliated business person, and the two non-
affiliated business persons so selected shall select a third non-affiliated
business person who alone will then join the Management Committee as the
fifth member to break such deadlock.
10.2 Chairman of the Management Committee. A member of the Management
Committee initially selected by OCLI shall serve as chairman for a nine-
month term. Thereafter, JDS shall choose the chairman to serve for a nine-
month term, and thereafter the parties shall continue to rotate in the
selection of the chairman for succeeding nine-month terms. The duties of
the chairman shall be to organize and preside at meetings of the
Management Committee and to perform such other duties as from time to time
may be determined by the Management Committee. The parties may adjust the
term of the chairman by mutual agreement.
10.3 Delegation. The Management Committee may delegate duties to one
or more persons who need not be members of the Management Committee.
ARTICLE XI
RESEARCH AND DEVELOPMENT
11.1 Funding of R&D. The parties may propose any R&D projects that
relate to WDM Products Business to the Management Committee or the Company.
Notwithstanding the voting provisions contained in Section 10.1, if the
Company or the Management Committee, acting through members or
representatives that are unaffiliated with the offering party, elects to
conduct the R&D project, the Company, or OCLI or JDS as determined by the
Management Committee, shall fund the R&D project which funding shall
constitute Costs and the results shall be owned by the Company or equally
by OCLI and JDS. Where the Company or said members of the Management
Committee decline to undertake the R&D project, either party may conduct
the R&D project provided that the Company or said members of the Management
Committee shall have the right for a period of 60 days after declining to
conduct the R&D project to accept the R&D project in which case the total
cost of the R&D project shall be funded by the Company, or OCLI or JDS as
determined by the Management Committee, which funding shall constitute
Costs. In the event the Company or said members of the Management
Committee elect not to conduct the R&D project, or exercise the 60 day
option described above, either party is free to conduct the R&D project
with the results being owned by such party with no obligation to license or
otherwise share the results with the Company or the other party and any
products based on the R&D project shall be deemed to fall outside of the
definition of WDM Products. In the event a party elects not to present an
R&D project to the Management Committee or the Company, and the results of
the R&D project has application in the WDM Products Business, at the end of
the R&D project such party will offer the Company a nonexclusive, Non-
assignable license limited to use the results of such R&D project solely
for the WDM Product Business, based on commercially reasonable terms
including lump sum and royalty terms, which amounts shall be included in
Costs but not be included in the licensing party's revenues for the purpose
of determining such party's Transaction Profits. The Company shall have a
period of thirty (30) days from the date of such offer to accept such
license. In the event the Company does not take a license within said time
period, any products based on such R&D project shall be deemed to fall
outside of the definition of WDM Products and the party owning such results
shall have no obligation to license or otherwise share the results with the
Company or the other party.
11.2. All OCLI R&D, development and capital costs associated with or
related to OCLI complying with its obligations to develop WDM Optical
Filters as set out in Section 9.1(a), shall be paid for completely by OCLI
and not be included in Costs, and shall fall within the intellectual
property rights that OCLI must license under Section 7.2(d).
ARTICLE XII
THIRD PARTY LICENSING
12.1 Where the parties agree that a third party license of
intellectual property rights is needed to carry out the activities
hereunder, the costs of such license shall be included in Costs for the
purpose of sharing Profits under Article VI.
ARTICLE XIII
ACQUISITIONS
13.1 Where either party makes an acquisition in which it
has majority ownership and the acquiring party has control to cause the
acquisition to offer an intellectual property license relating to WDM
Products Business to the Company, immediately after the completion of the
acquisition the Company will be offered a nonexclusive, Non-assignable
license limited to use for the WDM Product Business based on commercially
reasonable terms including lump sum and royalty terms. The Company shall
have a period of thirty (30) days from the date of such offer to accept
such license. Neither party is otherwise obligated to license or otherwise
share such intellectual property with the Company or the other party.
13.2 Notwithstanding the voting provision contained in
Section 10.1, Where either OCLI or JDS makes an acquisition in which it
has majority ownership (the "Acquiring Party") and the acquisition's
existing business includes WDM Products Business, the Acquiring Party shall
offer to the joint venture, immediately after the completion of the
acquisition, acting through the members of the Management Committee or the
governing body of the Company who are unaffiliated with the Acquiring
Party, the right to have the Acquiring Party's share of Transaction Profits
of the acquisition's WDM Products Business included in the calculation of
Profit sharing between the parties pursuant to Article VI of this
Agreement. If the joint venture so elects within thirty (30) days from the
date of such offer to so participate, as consideration for the right to so
share in such Transaction Profits, the Acquiring Party shall be compensated
by the non-acquiring party (the "Other Party"), in cash or other
consideration acceptable to the Acquiring Party, an amount that shall be
equal to the portion of the acquisition costs, including expenses
(including costs associated with determining the portion of the acquired
company's business allocable to the WDM Products Business), that is
attributed to the WDM Business of the acquired company times [CONFIDENTIAL
TREATMENT REQUESTED] where OCLI is the Other Party and [CONFIDENTIAL
TREATMENT REQUESTED] where JDS is the Other Party. Alternatively, the
Acquiring Party may at its sole option agree with the Other Party to adjust
the Profit sharing pursuant to Article VI to replace a portion or all of the
said cash amount. If the joint venture does not so elect within the
specified time period, the acquired company's business shall be completely
outside the scope of this Agreement and not be included in the calculation
of Profit. For greater certainty, where the Acquiring Party is OCLI, the
Other Party is JDS and vice-versa.
ARTICLE XIV
CONFIDENTIAL INFORMATION
14.1 "Confidential Information" shall mean any business,
marketing, technical, scientific, financial or other information,
specifications, designs, plans, drawings, software, prototypes or process
techniques, of a party, which at the time of disclosure, is designated as
confidential (or like designation), is disclosed in circumstances of
confidence, or would be understood by the parties, exercising reasonable
business judgement, to be confidential, but excludes any information which:
(a) is independently developed by or for the receiving party without
reference to or use of Confidential Information;
(b) is lawfully received free of restriction from another source
having the right to so furnish such confidential information;
(c) is or becomes lawfully in the public domain other than through a
breach of this Agreement;
(d) was known by the receiving party prior to disclosure, as
evidenced by its business records;
(e) disclosing party agrees in writing is free of such restrictions;
(f) is disclosed by the disclosing party to a third party without a
duty of confidentiality on such third party; or
(g) is required or compelled by law to be disclosed, provided that
the receiving party give all reasonable prior notice to the disclosing
party to allow it to seek protective or other court orders.
14.2 Obligation to Keep in Confidence. Except as otherwise allowed
under this Agreement, Receiving party shall keep Confidential Information
of the disclosing party in confidence; disclose it only to individuals in
the receiving party with a need to know and who are under confidentiality
restrictions; and use or reproduce it only to the extent necessary for the
activities contemplated hereunder. Each party shall protect Confidential
Information of disclosing party with at least the same degree of care as
it normally exercises to protect its own Confidential Information of a
similar nature, but no less than a reasonable degree of care.
14.3 Irreparable Harm. Receiving party agrees that any violation or
threat of violation of this section will result in irreparable harm to
disclosing party for which damages would be an inadequate remedy and,
therefore, in addition to its rights and remedies otherwise available at
law, including without limitation the recovery of damages and expenses,
including attorney's fees for breach of this Agreement, disclosing party
shall be entitled to unilaterally seek equitable relief, including both
temporary and permanent injunctions, to prevent any unauthorized use or
disclosure, and to such other and further equitable relief as the court may
deem proper under the circumstances.
14.4 [CONFIDENTIAL TREATMENT REQUESTED]
ARTICLE XV
MISCELLANEOUS
15.1 Non-Supply of WDM Optical Filters to Third Parties. Except for
commitments to supply not more than a total of [CONFIDENTIAL INFORMATION]
of WDM Optical Filters to third parties which commitments to deliver do not
extend beyond June 1, 1997, OCLI represents and warrants to JDS that it is
under no obligations whatsoever to supply WDM Optical Filters to any third
party as of the date of this Agreement, and agrees not to supply any WDM
Optical Filters to any third party except as expressly provided for herein.
In addition, where OCLI provides optical filters for use in fiber optical
product applications other than WDM Products, to any third party where such
optical filters may also be used as a wavelength discrimination element,
OCLI shall obtain from such third party an enforceable representation and
warranty that such third party will not use such optical filter in WDM
Products.
15.2 [CONFIDENTIAL TREATMENT REQUESTED]
15.3 Order Backlog. Notwithstanding any term to the contrary herein,
the portion of Profits that OCLI shall realize from Profits, where Profits
on Backlog shall be JDS' revenues from the sale of WDM Products less JDS'
related Costs, whether or not Costs were incurred before or after the date
of this Agreement and such JDS Costs related to Backlog shall be included
in Costs, shall be as follows:
(a) where arising from Backlog from [CONFIDENTIAL TREATMENT REQUESTED]
for WDM Products B shall be calculated as follows.
(i) where such Backlog is shipped in the two (2) months period
from the date of this Agreement, five percent (5%) of Profits on such
Backlog shipped during said period;
(ii) where such Backlog is shipped within the period from the end
of (2) months to four (4) months from the date of this Agreement, ten
percent (10%) of Profits on such Backlog shipped during said period;
(iii) where such Backlog is shipped within the period from the
end of four (4) months to six (6) months from the date of this
Agreement, fifteen percent (15%) of Profits on such Backlog shipped
during said period;
(iv) where such Backlog is shipped within the period from the end
of six (6) months to eight (8) months from the date of this Agreement,
twenty percent (20%) of Profits on such Backlog shipped during said
period;
(v) where such Backlog is shipped within the period from the end
of eight (8) months to ten (10) months from the date of this
Agreement, twenty-five percent (25%) of Profits on such Backlog
shipped during said period;
(vi) where such Backlog is shipped within the period from the end
of ten (10) months to twelve (12) months from the date of this
Agreement, thirty percent (30%) of Profits on such Backlog shipped
during said period;
(vii) where such Backlog is shipped after twelve (12) months from
the date of this Agreement, the portion of Profits of OCLI shall be
determined pursuant to the terms of this Agreement.
(b) arising from Backlog from [CONFIDENTIAL TREATMENT REQUESTED] for
WDM Products A where such Backlog is shipped after the effective date of
this Agreement shall be included in this Agreement;
(c) arising from purchase orders received by JDS on or after January
20, 1997 from [CONFIDENTIAL TREATMENT REQUESTED] for WDM Products B which
are shipped after the effective date of this Agreement, shall be included in
this Agreement;
(d) all other Backlog shall be considered completely outside of this
Agreement; and
15.4 JDS's Inventory. JDS's current inventory of WDM Optical Filters
on hand at the effective date of this Agreement ("JDS's Inventory Filters")
shall be treated as follows:
(a) notwithstanding any term to the contrary herein, for sales of WDM
Products A that contain JDS's Inventory Filters after the effective date of
this Agreement to a maximum of the lesser of (i)[CONFIDENTIAL TREATMENT
REQUESTED], where Profits on Inventory Sales shall be JDS' revenues from
the sale of WDM Products A less JDS's related Costs, whether or not Costs
were incurred before or after the date of this Agreement and such JDS Costs
related to Inventory Orders shall be included in Costs, the portion of
Profits that OCLI shall realize from such Profits shall be as follows:
(i) where Inventory Sales are shipped in the two (2) months
period from the date of this Agreement, five percent (5%) of Profits
on Inventory Orders shipped during said period;
(ii) where Inventory Sales are shipped within the period from the
end of two (2) months to four (4) months from the date of this
Agreement, ten percent (10%) of Profits on Inventory Orders shipped
during said period;
(iii) where Inventory Sales are shipped within the period from
the end of four (4) months to six (6) months from the date of this
Agreement, fifteen percent (15%) of Profits on Inventory Orders
shipped during said period;
(iv) where Inventory Sales are shipped within the period from the
end of six (6) months to eight (8) months from the date of this
Agreement, twenty percent (20%) of Profits on Inventory Orders shipped
during said period;
(v) where Inventory Sales are shipped within the period from the
end of eight (8) months to ten (10) months from the date of this
Agreement, twenty-five percent (25%) of Profits on Inventory Orders
shipped during said period;
(vi) where Inventory Sales are shipped within the period from the
end of ten (10) months to twelve (12) months from the date of this
Agreement, thirty percent (30%) of Profits on Inventory Orders shipped
during said period;
(vii) where Inventory Sales are shipped after twelve (12) months
from the date of this Agreement, the portion of Profits of OCLI shall
be determined pursuant to the terms of this Agreement;
(b) Except with respect to WDM Products shipped prior to the
effective date of this Agreement, JDS shall receive a credit from OCLI at
the effective date of this Agreement for the current inventory of WDM
Optical Filters JDS has on hand at the effective date of this Agreement as
follows:
(i) for all such WDM Optical Filters purchased from OCLI suitable
for use under Section 15.3(b) for Backlog from [CONFIDENTIAL TREATMENT
REQUESTED] for WDM Products A, OCLI shall provide JDS with a credit
of [CONFIDENTIAL TREATMENT REQUESTED] per WDM Optical Filter A, and
JDS shall be entitled to include [CONFIDENTIAL TREATMENT REQUESTED] per
WDM Optical Filter A in Costs hereunder;
(ii) for all such WDM Optical Filters purchased from OCLI
suitable for use under Section 15.3(a) for Backlog from [CONFIDENTIAL
TREATMENT REQUESTED] for WDM Products B, OCLI shall provide JDS with
a credit of an amount equal to the purchase price JDS actually paid
less the Costs (whether or not Costs were incurred before or after the
date of this Agreement) of such WDM Optical Filters B, and JDS shall be
entitled to include such WDM Optical Filters B Costs (whether or not
Costs were incurred before or after the date of this Agreement) in
Costs hereunder; and
(iii) for all such WDM Optical Filters suitable for use under
Section 15.4(a) for Inventory Orders for WDM Products A:
(A) OCLI shall provide JDS with a credit of an amount equal to the
purchase price JDS actually paid to OCLI less the Costs (whether or
not Costs were incurred before or after the date of this Agreement) of
such WDM Optical Filters A, and JDS shall be entitled to include such
WDM Optical Filters A Costs (whether or not Costs were incurred before
or after the date of this Agreement) in Costs hereunder, and
(B) for such WDM Optical Filters made by JDS, JDS shall be
entitled to include such WDM Optical Filters A Costs (whether or not
Costs were incurred before or after the date of this Agreement) in
Costs hereunder.
15.5 Constraints on Employee. For a period of two years following
the termination of employment of an employee of either party, the other
party shall be prohibited from employing such employee without prior
written consent of the other party; provided, however, that this
restriction shall terminate two years after the termination of this
Agreement.
15.6 Governing Law. This Agreement shall be construed
in accordance with and governed by the laws of the State of Delaware
without regard to the conflict of law principles or without regard to the
United Nations Convention on the Contracts for the International Sale of
Goods.
15.7 Disputes. Except for breach of Article XIV Confidential
Information, and subject to Sections 7.6 and 10.1, except where the
parties fail to take any required actions to resolve their differences
or there is no resolution under Section 10.1, if a dispute, breach
or failure to agree shall occur between the parties concerning this
Agreement, both parties may require the other party promptly to submit
the reasons for its position, in writing to the requesting party, and
then to enter into good faith negotiations, including the involvement,
if appropriate, of senior management of each of the Parties to attempt
to resolve the disagreement. If such dispute, breach or failure to agree
cannot be settled by good faith negotiation between the parties within
30 days, the matter shall be finally settled by mandatory, binding
arbitration, in accordance with the rules and procedures
of the American Arbitration Association applicable to commercial
transactions then in force, provided that arbitration proceedings may not
be instituted until sixty (60) days after delivery of any such notice of
arbitration and where the other party has not remedied the matter within
said time period. The arbitration panel shall consist of three (3)
arbitrators one of which shall be appointed by each party and the third
selected by the two so appointed. Costs of arbitration shall be borne by
the parties in accordance with the decision of the arbitrators. Judgment
upon the award rendered may be entered in any court having competent
jurisdiction thereof, or application may be made to such court for a
judicial acceptance of the award and an order of enforcement as the case
may be. The arbitration proceedings shall be conducted at a reasonable
location selected by the parties or by the arbitrators. The factors set
forth in Section 7.2(e)(i) shall not in any manner be disclosed to the
arbitrators. Notwithstanding the foregoing, the parties may apply to any
court of competent jurisdiction to compel arbitration in accordance with
this paragraph, without breach of this arbitration provision.
15.8 Attorneys' Fees. In case suit is brought or arbitration
proceedings commenced by either party because of the
breach of any term, covenant or condition contained in this Agreement, the
prevailing party shall be entitled to recover against the other party the
full amount of its costs, including expert witness fees and reasonable
attorneys' fees. If neither party prevails entirely, such fees and
expenses shall be prorated based upon the relative success of each party to
the relief being sought.
15.9 Notices. All notices, offers, acceptances, approvals and other
communications under this Agreement shall be in writing and shall be given
to such party, addressed to it, at its address or telecopy number set
forth below or such other address or telecopy number as such party may
in the future specify for such purpose by notice to the other party.
Each such notice, information, request or communication shall be
effective upon actual receipt by the party at the address specified below:
If to OCLI:
Optical Coating Laboratory, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Attention: General Counsel
(▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.)
With a copy to (which is not required to constitute notice to
OCLI):
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
If to JDS or Distributor:
JDS FITEL, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Attention: President (▇▇▇▇▇ ▇▇▇▇▇▇, Ph.D.)
With a copy to (which is not required to constitute notice to
JDS):
JDS FITEL, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Attention: General Counsel
(▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.)
Any party may from time to time specify as its address or telecopy number
for purposes of this Agreement any other address or telecopy number upon
the given of 10 days notice thereof to the other party.
15.10 Public Announcements. The parties shall not issue a press
release or other publicly available document containing any information
regarding the other party, this Agreement, the transactions contemplated
herein or the operating or financial results of the Company without the
prior written approval of the other party. At least 72 hours prior to
the issuance of such information, the issuing party shall provide the
other party with notice of its intention to disclose such information
as well as the draft wording of the information to be released.
Where a party refuses to approve the wording of the information to be
released, the party shall provide the reasons for such refusal and both
parties agree to use their best efforts to negotiate the appropriate
wording of the information to be released. However, nothing contained
herein shall prevent a party from disclosing any information that is
required to be disclosed pursuant to Securities Law and the rules or
regulations promulgated thereunder. Where a party issues a press release
containing any information regarding the other party, this Agreement,
the transactions contemplated herein or the operating or financial
results of the Company, a copy of such release shall be provided to the
other party forthwith.
15.11 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original. A photocopy or
facsimile copy of the signatures of the parties to this Agreement shall
be considered authenticated signatures admissible into evidence where the
authenticity of the signatures are placed into question.
15.12 Interpretation. The table of contents and the headings to
the various subdivisions of this Agreement are for convenience of reference
only and shall not define or limit any of the terms or provisions hereof.
All pronouns shall be deemed to refer to the masculine, feminine, neuter,
singular or plural as the identity of the Person or Persons referred to
may require. The language in all parts of this Agreement will in all
cases be construed as a whole and in accordance with its fair meaning
and not restricted for or against either party.
15.13 Successors and Assigns. This Agreement and any rights or
licenses granted herein are personal to each party and shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, provided, however, neither party shall
assign any of its rights or privileges hereunder without the prior written
consent of the other party. Should either party attempt an assignment in
derogation of the foregoing, the other party shall have the right to
immediately terminate this Agreement by written notice to the other party.
15.14 Waiver. The failure of either party to give notice to the
other party of the breach or non-fulfillment of any term, clause,
provision or condition of this Agreement shall not constitute a waiver
thereof, nor shall the waiver of any breach or non-fulfillment of any
term, clause, provision or condition of this Agreement constitute a waiver
of any other breach or non-fulfillment of that or any other term, clause,
provision or condition of this Agreement.
15.15 Purchase By Competitor. [CONFIDENTIAL TREATMENT REQUESTED]
15.16 Entire Agreement. This Agreement sets forth the entire
agreement and understanding between the parties with respect to the subject
matter hereof and supersedes and cancels all previous negotiations,
agreements, commitments, and writings in respect to the subject matter
hereof, and neither party shall be bound by any term, clause, provision or
condition save as expressly provided in this Agreement or as duly set forth
on or subsequent to the date of execution hereof in writing, signed by duly
authorized officers of the parties.
15.17 Agency. Subject to Article VII, each party acknowledges that
it does not intend to create or imply a legal partnership with the other
parties by virtue of this Agreement and the parties agree that nothing in
this Agreement shall be construed as establishing or implying any legal
partnership between the parties hereto, and nothing in this Agreement shall
be deemed to constitute either of the parties hereto as the Agent of the
other party or authorize either party to incur any expenses on behalf of
the other party or to commit the other party in any way whatsoever,
without obtaining the other party's prior written consent. The parties
further agree that when any party hereto deals with a third party as a
result of this Agreement that such third party will be notified that every
party hereto is acting on its own behalf.
15.18 Survival. The provisions of Sections 9.3, 14 and 15.5,
15.6,15.7, 15.8, 15.9, 15.12, 15.13, 15.14, 15.18, 15.19 and 15.20,
and in Exhibit B, Article V and Article IX shall survive termination
of this Agreement. The provisions of Section 6.4 shall survive for a
period of 18 months following termination of this Agreement.
Notwithstanding any term to the contrary: (a) where at the date of
termination of this Agreement, (i) the Profit is negative or (ii)
Costs exist but there is no Profit; or (b) where after the date of
termination of this Agreement (i) if any obligations, including but
not limited to customs and duties, arise with respect to any Cost that
would have been included in Costs if the obligation was identified
during the period that the Agreement was in effect,
(ii) if any liability arose during the period that the Agreement was in
effect, including but not limited to any liability under Section 15.20 or
Exhibit B Article V, but which was not identitifed or determined until
after the date of termination of this Agreement, or (iii) bona fides bad
debts arise for which revenues have been used in the calculation of Profits;
then in all cases the parties agree to share the Costs such that OCLI shall
be responsible for paying one-third and JDS and Distributor combined shall
be responsible for paying two-thirds of all such Costs, regardless of which
party actually paid such Costs. The parties shall promptly make payment to
the other party as appropriate to ensure that each party has fulfilled its
obligation under this Section 15.18 with regard to such Costs.
15.19 Further Assurances and Approvals. The parties agree to make,
do, execute, endorse, acknowledge and deliver or cause and procure to be
made, done, executed, endorsed, acknowledged, filed, registered and
delivered any and all further acts and assurances including any conveyance,
deed, transfer, assignment, share certificate or other instrument in
writing as may be necessary to give effect to the terms and conditions
provided for and contemplated by this Agreement. The parties further
agree that where any term, warranty, representation, option or condition
provided for or contemplated by this Agreement requires prior regulatory
or shareholder approval to give effect to such term, warranty,
representation, option or condition, the parties shall not enforce such
term, warranty, representation, option or condition unless and until
such approval is obtained.
15.20 Intellectual Property Indemnity Liability. Where any threatened
or actual proceeding or claim against any party alleging that any WDM
Product or WDM Optical Filter furnished hereunder infringes
any third party intellectual property rights, including without limitation
any patents, trademarks and copyright, the parties agree to jointly (i)
defend or settle any such matter, (ii) equally share any costs, including
without limitation all legal or expert fees and disbursements which were
incurred as a result of such defense or settlement, and (iii) equally
share in the payment of all damages and costs assessed by final judgment
against any party and attributable to such matter.
15.21 Approvals. The signatures provided below shall not be
deemed effective unless and until all required or counseled government or
regulatory filings are made and all approvals or consents are obtained.
15.22 Representations and Warranties. Each party represents and
warrants that:
(a) it has full right and title to all of the Confidential Information
it discloses to the other party under this Agreement;
(b) to the best of its knowledge, there are no material liens,
encumbrances of any kind against its intellectual property which relates to
the WDM Product Business and that it is not subject to any outstanding
agreements, assignments or encumbrances that are inconsistent with the
provisions of this Agreement;
(c) to the best of its knowledge, there are no material actual or
threatened suits, actions at law, proceedings in equity, arbitrations or
other proceedings or actions against the party; and
(d) the execution, delivery and performanace of this Agreement by each
party are within each party's corporate powers.
15.23 Force Majuere. Neither party be responsible or liable for any
delay or failure to deliver goods or perform services under this Agreement
due to any unforeseen circumstances or causes beyond that party's control,
including but not limited to, acts of God, fire, flood, explosion,
earthquake, war, insurrection, embargo, acts of civil or military
authorities, delay in delivery by suppliers, accident, strike or other
labour dispute, inability to secure labour, material, facilities, energy or
transportation. In the event of a force majeure condition, the time for
delivery or other performance will be extended for a period of time equal
to the duration of such force majeure condition.
IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as of the date first above written.
OPTICAL COATING LABORATORY, INC.
By /S/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Name ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Its Chairman, President & CEO
JDS FITEL Inc.
By /S/▇▇▇▇▇ ▇▇▇▇▇▇▇
Name ▇▇▇▇▇ ▇▇▇▇▇▇
Its President & CEO