EXHIBIT 10.6
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INTELLECTUAL PROPERTY LICENSE AGREEMENT
This Intellectual Property License Agreement ("IP LICENSE AGREEMENT") is agreed
to and entered into as of July 31, 2003, by and between Alcatel, a societe
anonyme with a capital of 2,529,416,996 euros, its registered office at 54, Rue
la Boetie 75008, Paris, France and registered in the Registry of Commerce and
Companies under number 542019096 ("SELLER"), and Avanex Corporation, a Delaware
corporation having a principal place of business at 40919 Encyclopedia Circle,
Fremont, CA 94538 ("PURCHASER"). Hereinafter, these corporations may be referred
to individually as a "PARTY" and collectively as "PARTIES", as the context
requires.
The Parties, along with Corning Incorporated, a New York corporation (referred
to as "CORNING"), are parties to a Purchase Agreement (as defined hereinafter)
pursuant to which, among other things, Purchaser is purchasing or otherwise
acquiring all of the issued and outstanding stock of Optronics Subsidiaries (as
defined below). In connection with such stock purchase, Seller and Purchaser
agreed in the Purchase Agreement to grant to each other certain licenses with
respect to intellectual property. The parties hereby enter into this IP License
Agreement in order to effectuate such licenses.
Therefore, in consideration of the mutual premises recited in this IP License
Agreement as well as the associated payments and other consideration recited in
the Purchase Agreement, the Parties agree as follows:
1.
DEFINITIONS
The following definitions set forth below shall apply when used hereinafter with
capital initials:
1.1 "ALCATEL ASSIGNED PATENTS" shall mean all Patents included in the
Alcatel Assigned IP.
1.2 "ALCATEL LICENSE TERMINATION EVENT" shall have the meaning set forth in
Section 4.1.
1.3 "CHANGE OF CONTROL" shall mean, with respect to a Party or any of its
Subsidiaries, any change in the ownership of the voting shares in
Purchaser or such Subsidiary, as applicable, resulting in the ownership
of more than 50% of such voting shares by a third party.
1.4 "CORPORATE TRADEMARKS" shall mean the Trademarks ALCATEL (word) and
ALCATEL (logo).
1.5 "FIELD" shall mean the Optronics Business (as that term is defined in
the Purchase Agreement).
1.6 "MULTI-USE INTELLECTUAL PROPERTY" shall mean all Alcatel Licensed IP,
as defined in the Purchase Agreement and the Patents referenced in
Section 1.7(ii) below.
1.7 "MULTI-USE PATENTS" shall mean (i) all Patents included in the
Multi-Use Intellectual Property and (ii) all Patents that are used in
or primarily relate to the Optronics Business and are owned by Alcatel
or its Subsidiaries or under which Alcatel or its Subsidiaries
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has the right to grant a sublicense to Purchaser and that are entitled
to an effective filing date in the period beginning on the signing date
of the Purchase Agreement and terminating one hundred eighty (180) days
after the Share Acquisition Closing.
1.8 "OPTRONICS SUBSIDIARIES" shall mean (i) Alcatel Optronics SA (France),
a societe anonyme with a capital of 336,980,000 euros and registered in
the Registry of Commerce and Companies under number B392305652
("Optronics France") and, indirectly through Optronics France, and (ii)
Alcatel Optronics Ltd. (U.K.), a wholly-owned Subsidiary of Optronics
France ("Optronics U.K.").
1.9 "PURCHASE AGREEMENT" shall mean that certain Share Acquisition and
Asset Purchase Agreement, among Purchaser, Corning and Seller dated as
of May 12, 2003 that establishes the underlying transaction related to
the purchase or acquisition of Optronics Subsidiaries' issued and
outstanding share capital as contemplated by the Parties.
1.10 "PURCHASER COMPETITOR" shall mean those entities listed on List #1 and
List #2 on Annex 3.2 hereto and their successors. Once in each twelve
(12) month period after the Share Purchase Closing, effective upon
notice to Seller, Purchaser shall have the right, at its option, to
replace up to two (2) entities on each then current list with up to two
(2) different entities.
1.11 "SELLER COMPETITORS" shall mean those entities listed on Annex 3.6
hereto and their successors.
1.12 "SUBSIDIARIES" shall have the meaning set forth in the Purchase
Agreement, provided that in this IP License Agreement (i) Optronics
Subsidiaries shall not be considered Subsidiaries of Seller, and (ii) a
corporation or organization shall only be considered a Subsidiary for
so long as the requisite ownership interest as set forth in the
definition of "Subsidiary" exists.
1.13 "TRADEMARK" shall mean any trademark or service mark.
1.14 "TRADE NAME" shall mean any company name, legal name as well as trade
name.
Any capitalized terms not defined herein shall have the meaning set forth in the
Purchase Agreement.
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2.
LICENSE GRANT TO SELLER UNDER ALCATEL ASSIGNED IP
2.1
Notwithstanding Article VIII, Section 8.6 of the Purchase Agreement (Alcatel
Covenant Not to Compete or Solicit), Purchaser hereby grants to Seller and its
Subsidiaries a non-exclusive, worldwide, irrevocable, royalty-free license, with
the right to sublicense (subject to the limitations set forth in Section 2.2
below), under the Alcatel Assigned IP (excluding any Trademarks or Trade Names
that are included within Alcatel Assigned IP) outside of the Field:
a) to develop, make, have made, use, lease, import, sell and otherwise
dispose of any products and to practice any process involved in the
manufacture or use thereof; and
b) to render any services;
c) to make, have made, use and have used manufacturing apparatus and to
practice and have practiced any method involved in the manufacture or
use thereof; and
d) with respect to any copyrights included in the Alcatel Assigned IP, to
use, update, enhance, copy, prepare derivative works of and distribute
copyrightable materials and derivative works thereof.
The license granted in this Section 2.1 shall remain in effect, with respect to
each item of Intellectual Property included in the Alcatel Assigned IP, until
the expiration of the term of such Intellectual Property.
Pursuant to Article VIII, Section 8.6 of the Purchase Agreement (Alcatel
Covenant Not to Compete or Solicit) Seller has the right to engage in research
and development conducted by its Research and Innovation Operation within the
Field ("R&D Activities") and it is confirmed, that Seller shall retain all
rights to Alcatel Assigned IP and the Multi Use IP exclusively licensed under
this Agreement, which are necessary to engage in the R&D Activities.
2.2
Seller shall have the following sublicense rights:
a) Seller shall have the right to grant sublicenses under the Alcatel
Assigned IP only in connection with the grant of a license by Seller to
make, have made, use, sell, offer for sale or import Seller's and its
Subsidiaries' products (but not new generations of such products or new
products) within the scope of the license granted in Section 2.1 above;
provided that such sublicense is not to a Purchaser Competitor listed
on List #1 for a field within the field of optical fiber
communications. Seller shall have no right to grant sublicenses under
the Alcatel Assigned Patents as part of a Patent license, Patent
portfolio license, Patent cross-license, or any license that grants no
other rights than those under Patents, or otherwise in any manner
except as specifically set forth above. The foregoing provisions of
this Section 2.2(a) shall not permit sublicenses in connection with
sales or
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transfers of a going business, product line or Subsidiary, which sales
or transfers are covered by Section 3.6 below.
b) In the event that Seller sells, spins off or transfers research and
development activities from Seller's Stuttgart or Marcoussi Research
and Innovation centers to a third party ("Research Transferee"),
whether such research and development activities are inside or outside
the Field, such Research Transferee shall be permitted to continue such
research and development activities transferred. Upon the request of
Seller, Purchaser agrees to negotiate in good faith with the Research
Transferee to grant a royalty-bearing license under the Alcatel
Assigned IP actually used on fair and reasonable terms for
commercialization of products based on such research activities;
provided that in the event that a Research Transferee is a Purchaser
Competitor listed on List #1 and the license is for any field within
optical fiber communications, such commercialization license shall not
be effective before the one (1) year anniversary of the Share
Acquisition Closing.
2.3
Notwithstanding the provisions of Section 2.1 the following shall apply:
a) Neither Purchaser nor any of its Subsidiaries shall be required under
this Agreement to secure any Patent rights or to maintain any Patents
in force.
b) Neither Purchaser nor any of its Subsidiaries shall have any obligation
under this Agreement to institute any action or suit against third
parties for the infringement of Alcatel Assigned IP or to defend any
action or suit brought by a third party which challenges or concerns
the validity of any Alcatel Assigned IP.
c) If Purchaser elects to allow any of the Alcatel Assigned Patents (or
any Patent or Patent application claiming priority) to become abandoned
or lapse, Purchaser shall give Seller written notice of such election
promptly, and in no event less than one (1) month prior to the first
date that action must be taken to avoid such abandonment or lapse.
Seller shall have the right to solely file or take over at its sole
expense the prosecution or maintenance of any such Patent application
or Patent, and to have whole ownership thereof (in which case Purchaser
shall promptly take all actions necessary in order to assign to Seller
all right, title and interest in such Patent(s)). In such event, Seller
shall not be liable to Purchaser in any way with respect to: (i)
Seller's handling of or the results obtained from such filing,
prosecution, issuance or maintenance; or (ii) any failure of Seller to
so file, prosecute, issue or maintain. In addition, in such event
Purchaser shall provide such assistance and shall execute such
documents as are reasonably necessary to file, continue prosecution or
maintenance of, issue or enforce such Patent applications or Patent,
without cost to Seller other than the reimbursement of Purchaser's
reasonable out-of-pocket expenses; provided, however, that Seller shall
compensate Purchaser for the value of the time of Purchaser's employees
as reasonably required in connection with any litigation initiated by
Seller. Any Alcatel Assigned Patents assigned back to Seller pursuant
to this Section 2.3(c) shall be considered Multi-Use Patents for the
purposes of
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this Agreement, including without limitation the license grants in
Article 3 below; provided, however, that such license shall be
non-exclusive and not exclusive.
2.4
Subject to Avanex's prior consent on a case-by-case basis, Seller shall have the
right to continue any projects started before the Share Acquisition Closing to
monetize the Alcatel Assigned Patents, and to either execute on behalf of
Purchaser respective license agreements, or execute on behalf of Seller
respective sublicense agreements, for the grant of licenses under Alcatel
Assigned Patents. Any compensation due to Purchaser under such agreements shall
be shared as mutually agreed upon by the parties on a case-by-case basis.
3.
LICENSE GRANT TO PURCHASER UNDER MULTI-USE INTELLECTUAL PROPERTY
3.1
Seller hereby grants to Purchaser and its Subsidiaries an exclusive (except
non-exclusive with respect to the Patents described in clause (ii) of Section
1.7), worldwide, irrevocable (except as set forth in Section 4.1 below),
royalty-free license, with the right to sublicense (subject to Section 3.4
below), under the Multi-Use Intellectual Property, within the Field:
a) to develop, make, have made, use, lease, import, sell and otherwise
dispose of products and to practice any process involved in the
manufacture or use thereof; and
b) to render services;
c) to make, have made, use and have used manufacturing apparatus and to
practice and have practiced any method involved in the manufacture or
use thereof; and
d) with respect to any Copyrights included in the Multi-Use Intellectual
Property, to use, update, enhance, copy, prepare derivative works of
and distribute copyrightable materials and derivative works thereof.
The license granted in this Section 3.1 shall remain in effect, with respect to
each item of Intellectual Property included in the Multi-Use Intellectual
Property, until the expiration of the term of such Intellectual Property, unless
earlier terminated pursuant to Section 4.1 below.
3.2
Notwithstanding the provisions of Section 3.1 and Article VIII, Section 8.6 of
the Purchase Agreement (Alcatel Covenant Not to Compete or Solicit), the
Multi-Use Intellectual Property is subject to any licenses granted by Seller
prior to the date of signing of the Purchase Agreement; and:
a) Seller shall have the right to enter into Patent cross license
agreements with third parties with respect to Multi-Use Intellectual
Property in the Field, provided that: (i) any and all licenses granted
by Seller pursuant to this Section 3.2(a) grant Patent rights only, and
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include no other Multi-Use Intellectual Property; (ii) no license
granted by Seller pursuant to this Section 3.2(a) is limited to the
Field alone, but rather covers at least one additional field outside
the Field; and (iii) Seller does not enter into such licenses with
divisions of the Purchaser Competitors listed on List #1 without the
prior written consent of Purchaser, which consent shall not
unreasonably be withheld; provided that in the event that Purchaser
exercises its right to revise List #1, then, if Seller has commenced
negotiations (as defined below) with a third party on a particular
cross license agreement at the time of notice to Seller of such
revision, any new entities added to List #1 shall not be considered to
be Purchaser Competitors under this Section 3.2(a), where Seller shall
be considered to have commenced negotiations with a third party if
Seller has received a Patent notification letter from such third party
or if Seller has sent a Patent notification letter, and a list of
relevant patents and products (known internally within Seller as a
"Patent proud list") to such third party; and
b) Subject to Avanex's prior consent on a case-by-case basis, Seller shall
have the right to continue any projects started before the Share
Acquisition Closing and to monetize the Alcatel Licensed Patents, and
to either execute on behalf of Purchaser respective license agreements,
or execute on behalf of Seller respective sublicense agreements, for
the grant of licenses in the Field under Alcatel Licensed Patents. Any
compensation due to Seller under such agreements shall be shared as
mutually agreed upon by the parties on a case-by-case basis.
3.3
Seller hereby grants to Purchaser and its Subsidiaries a non-exclusive,
worldwide, irrevocable (except as set forth in Section 4.1 below), royalty-free
license, with the right to sublicense (subject to Section 3.4 below), under the
Multi-Use Intellectual Property, outside of the Field:
a) to develop, make, have made, use, lease, sell and otherwise dispose of
any products and to practice any process involved in the manufacture or
use thereof; and
b) to render services related thereto;
c) to make, have made, use and have used manufacturing apparatus and to
practice and have practiced any method involved in the manufacture or
use thereof; and
d) with respect to any Copyrights included in the Multi-Use Intellectual
Property, to copy, prepare derivative works of and distribute
copyrightable materials and derivative works thereof.
The license granted in this Section 3.3 shall remain in effect, with respect to
each item of Intellectual Property included in the Multi-Use Intellectual
Property, until the expiration of the term of such Intellectual Property, unless
earlier terminated pursuant to Section 4.1 below.
3.4
Purchaser shall have the right to grant sublicenses under the Multi-Use
Intellectual Property only in connection with the grant of a license by
Purchaser to make, have made, use, sell, offer for
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sale or import Purchaser's or its Subsidiaries' products or products based on
Purchaser's or its Subsidiaries' products within the scope of the license
granted in Section 3.1 and 3.3 above. Purchaser shall have no right to grant
sublicenses under the Multi-Use Patents as part of a Patent license, Patent
portfolio license, Patent cross-license, or any license that grants no other
rights than those under Patents, or otherwise in any manner except as
specifically set forth above. The foregoing provisions of this Section 3.4 (a)
shall not permit sublicenses in connection with sales or transfers of a going
business, product line or Subsidiary, which are covered by Section 3.6 below.
3.5
Notwithstanding the provisions of Sections 3.1 and 3.3 the following shall
apply:
a) Neither Seller nor any of its Subsidiaries shall be required under this
Agreement to secure any Patent rights or to maintain any Patents in
force; and
b) Neither Seller nor any of its Subsidiaries shall have any obligation
under this Agreement to institute any action or suit against third
parties for the infringement of Multi-Use Intellectual Property or to
defend any action or suit brought by a third party which challenges or
concerns the validity of any Multi-Use Intellectual Property. In
countries, in which Purchaser or any of its Subsidiaries or legal
successors may have by law and in spite of this deviating subsection,
as a consequence of this Agreement, rights against infringers of any
Multi-Use Intellectual Property, Purchaser or any of its Subsidiaries
or legal successors hereby waive such right it may have by reason of
any third parties infringement or alleged infringement of any such
Multi-Use Patents.
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3.6
In the event of any (i) Change of Control (as defined above in Article 1) of a
Party or its Subsidiaries, (ii) merger of a Party or any of its Subsidiaries
with a third party, (iii) sale of all or substantially all of the business of a
Party or its Subsidiaries to a third party, or (iv) sale or transfer by a Party
of a specific going business or product line that includes at least one
commercially released product to a third party (in each case (i) through (iv),
an "ACQUISITION", and the entity having purchased the controlling interest in
the Party or its Subsidiary in clause (i), the third party having merged with a
Party or any of its Subsidiaries in clause (ii), the purchaser of the Party or
its Subsidiary in clause (iii) and the purchaser in clause (iv) shall be
referred to herein as the "ACQUIRER"); then the following terms shall apply with
respect to the licenses granted under this Agreement as they apply to the
Terminated Subsidiary (as defined below) or the surviving entity to a Party, as
applicable; provided, however, that (x) the following terms shall apply only to
Patents and all licenses with respect to all other Intellectual Property shall
be unchanged as a result of such transfer, and (y) in the event that the
conditions set forth in (i), (ii), (iii) or (iv) above apply only to certain
Subsidiaries or businesses of Purchaser ("TERMINATED SUBSIDIARIES"), then the
following terms will apply only to the applicable Terminated Subsidiary:
a) In the case of Purchaser, if the Acquirer is not a Seller Competitor,
then (i) the license set forth in Section 3.1 (and any right to
sublicense under Section 3.4) shall continue in full force and effect
with no change and (ii) the license set forth in Section 3.3 (and any
right to sublicense under Section 3.4) shall continue in full force and
effect; provided, that the license shall become royalty-bearing for
sales revenues of any products covered by such license in excess of
sales revenues determined by the sales revenues of the Purchaser or the
Terminated Subsidiary for the products covered by the license being
transferred during the twelve (12) months preceding the Acquisition
plus year-over-year growth in sales revenues of ten percent (10%) in
each succeeding twelve (12) month period, and Seller agrees to
negotiate such royalty on fair and reasonable terms with the Terminated
Subsidiary or the surviving entity to the Purchaser.
b) In the case of Purchaser, if the Acquirer is a Seller Competitor, then
(i) the license set forth in Section 3.1 (and any right to sublicense
under Section 3.4) shall continue in full force and effect except that
such license shall become non-exclusive and (ii) the license set forth
in Section 3.3 (and any right to sublicense under Section 3.4) shall
continue in full force and effect; provided, that the license shall
become royalty-bearing for sales revenues of any products covered by
such license in excess of sales revenues determined by the sales
revenues of the Purchaser or the Terminated Subsidiary for the products
covered by the license being transferred during the twelve (12) months
preceding the Acquisition plus year-over-year growth in sales revenues
of ten percent (10%) in each succeeding twelve (12) month period, and
Seller agrees to negotiate such royalty on fair and reasonable terms
with the Terminated Subsidiary or the surviving entity to the
Purchaser.
c) In the case of Seller, if the Acquirer is not a Purchaser Competitor
listed on List #1 or List #2, then the license set forth in Section 2.1
(and any right to sublicense under Section 2.2) shall continue in full
force and effect; provided, that the license shall become
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royalty-bearing for sales revenues of any products covered by such
license in excess of sales revenues determined by the sales revenues of
the Seller or the Terminated Subsidiary for the products covered by the
license being transferred during the twelve (12) months preceding the
Acquisition plus year-over-year growth in sales revenues of ten percent
(10%) in each succeeding twelve (12) month period, and Purchaser agrees
to negotiate such royalty on fair and reasonable terms with the
Terminated Subsidiary or the surviving entity to the Seller.
d) In the case of Seller, if the Acquirer is a Purchaser Competitor listed
on List #1 or List #2, then Purchaser shall have the right to terminate
the license set forth in Section 2.1 effective upon notice to the
Seller, provided that such notice is made to Seller within sixty (60)
days of such acquisition.
e) As a condition to exercise of the license, the Terminated Subsidiary or
the surviving entity to the Party shall agree in writing to comply with
the terms and conditions of this Agreement as it applies to the
acquired license rights.
f) Each Party or its relevant Subsidiary shall immediately notify the
other Party of any transaction covered by (i), (ii) or (iii) above and
shall respond to reasonable inquiries from the other Party regarding
transactions covered by (iv) above. Purchaser shall notify Seller of
any exclusive license transferred under Section 3.6(a) or (b) and any
such exclusive sublicense shall, in any event, be subject to the
limitations on exclusivity set forth in Section 3.2.
g) Each Party may exercise its rights to transfer a license with respect
to a Subsidiary or sale of a going business or product line up to five
(5) times.
4.
OUT OF BUSINESS
The parties acknowledge that (i) they have simultaneously entered into the
Alcatel Supply Agreement pursuant to which Purchaser agreed to supply to Seller
certain components to be manufactured by Purchaser in the Field, (ii) the supply
of such components is critical to the business of Seller; and (iii) the Parties
desire to protect and ensure Seller's supply of such components in certain
circumstances. Accordingly, the Parties agree as follows:
4.1
a) Purchaser and its Subsidiaries and their legal successors hereby grant
to Seller and its Subsidiaries a non-exclusive, worldwide, irrevocable
license, without the right to sublicense, under the following
Intellectual Property and subject to the following terms and
conditions:
(i) Under the Alcatel Assigned Patents, in the Field: to (A)
develop, make, have made, use, lease, import, sell and
otherwise dispose of any products (or the products in the
terminated product line (as described in Section 4.1(b)(ii)
below), as applicable) and to practice any process involved in
the manufacture or use thereof; and (B) to render any services
with respect to such products; and (C) to
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make, have made, use and have used manufacturing apparatus and
to practice and have practiced any method involved in the
manufacture or use thereof. The forgoing license shall be
royalty-free.
(ii) Under all Intellectual Property (other than Trademarks and
Trade Names) of Purchaser in and to any Supply Products (as
defined below) to: make, have made, use, lease, import, sell
and otherwise dispose of Supply Products and to practice any
process involved in the manufacture or use of Supply Products;
provided that the foregoing rights apply to Supply Products
only as integrated components in, or replacement components
for, the system products of Seller or its Subsidiaries. Seller
shall pay Purchaser a royalty on the percentage of revenue of
Seller or its Subsidiaries from the sale of Supply Products
that is allocable to the value of Intellectual Property
licensed by Purchaser hereunder other than Alcatel Assigned IP
and Alcatel Licensed IP. The license grants set forth in
Sections 4.1(a)(i) and (ii) shall be collectively referred to
as the "SUPPLY LICENSE".
For the purposes of this Section 4.1(a)(ii), "SUPPLY PRODUCTS" means components
in the Field which Seller purchased in volume from Purchaser under the Alcatel
Supply Agreement in the previous twelve (12) months and products in development
for Seller, in each case which products cannot be readily bought from another
source prior to a Alcatel License Termination Event (as defined in Section
4.1(b) below).
b) Notwithstanding the Supply License grant which is effective as of the
date hereof, Seller agrees that it and its Subsidiaries shall not
exercise its rights in and to the Supply License unless and until
Purchaser or its legal successor (i) ceases to conduct the Optronics
Business in the ordinary course, or (ii) terminates any product line
included within the Optronics Business (provided, however, that the
sale of a product line, going business or Subsidiary shall not be
considered to be a termination of a product line under this Section
4.1) and such terminated product line includes Supply Products, or
(iii) commences any case, proceeding or other action seeking to have an
order for relief entered on its behalf as debtor or to adjudicate it a
bankrupt or insolvent, or seeking reorganization arrangement,
adjustment, liquidation, dissolution or composition of it or its debts
under any law relating to bankruptcy, insolvency, reorganization or
relief of debtors or seeking appointment of a receiver, trustee,
custodian or other similar official for it or for all or any
substantial part of its property or shall file an answer or other
pleading in any case, proceeding or other action admitting the material
allegations of any petition, complaint or similar pleading filed
against it or consenting to the relief sought therein, or makes an
assignment for the benefit of creditors, or a trustee or similar
officer is appointed; or (iv) any involuntary case, proceeding or other
action against Purchaser shall be commenced seeking to have an order
for relief entered against it as debtor or to adjudicate it a bankrupt
or insolvent, or seeking reorganization, arrangement, adjustment,
liquidation, dissolution or composition of it or its debts under any
law relating to bankruptcy, insolvency, reorganization or relief of
debtors, or seeking appointment of a receiver, trustee, custodian or
other similar official for it or for all or any substantial part of its
property, and such case, proceeding or other action is not dismissed
within sixty (60) days (each, an "ALCATEL LICENSE TERMINATION EVENT");
provided, however, that it shall not be considered to be an Alcatel
License Termination Event if proceedings are
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commenced under (iii) above for reorganization arrangement, adjustment
or similar action unless Seller also commits a material breach of its
supply obligations under the Supply Agreement and does not cure such
breach within thirty (30) days. The Parties agree that a breach of this
Section 4.1(b) shall be considered to be a breach of the Supply
License.
c) In the event of an Alcatel License Termination Event, then Seller shall
have the right to terminate all licenses granted to Purchaser or any of
its Subsidiaries or its or their legal successors in this IP License
Agreement upon notice to Purchaser or such successor. Notwithstanding
the forgoing, any such termination pursuant to an Alcatel License
Termination Event under clause (ii) in subsection (b) above shall only
apply to the product lines that have been terminated, and all licenses
granted to Purchaser or any of its Subsidiaries hereunder shall
continue to be in full force and effect other than such terminated
product line; provided, further, that the foregoing right to terminate
shall not apply if proceedings are commenced under (iii) above for
reorganization arrangement, adjustment or similar action.
4.2
In the event that Seller desires to exercise its rights under Section
4.1(a)(ii), then prior to exercising such rights, Seller shall give notice to
Avanex. The Parties promptly shall negotiate in good faith a royalty rate and
percentage of revenue from Supply Products that is allocable to the value of
Intellectual Property of Avanex other than Alcatel Assigned IP and Alcatel
Licensed IP. In the event that the Parties cannot agree on such royalty terms
within sixty(60) days after the date of such notice, then either Party shall
have the right to initiate an arbitration proceeding by written demand to the
other Party. The arbitration proceeding shall be conducted in New York, New
York, under the auspices and Rules of Arbitration of the International Chamber
of Commerce by one (1) arbitrator appointed in accordance with such rules. The
Parties and the arbitrator shall adopt procedures to resolve the issue within
sixty (60) days of the date the written demand for arbitration is made. The only
issue before the arbitrator shall be the determination of such royalty terms and
the arbitrator shall only have the authority to choose between the last proposal
made by Alcatel and the last proposal made by Avanex prior to the commencement
of the arbitration proceeding. If Alcatel exercises its rights under Section
4.1(a)(ii) prior to the date a decision is rendered by the arbitrator, Alcatel
shall pay royalties to Avanex at the royalty rate proposed by Alcatel. If the
arbitrator rules in favor of Avanex, then Alcatel promptly shall pay to Avanex
the amount of the shortfall and interest thereon at the rate of one and one-half
percent per month (or, if less, the maximum amount permitted by applicable law.
Judgment on the arbitrator's award may be entered in any court having
jurisdiction.
In the event of a Alcatel License Termination Event, Seller agrees to first
procure any relevant Supply Products from Purchaser until Purchaser's inventory
is exhausted.
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5.
TRADEMARKS
5.1
The parties acknowledge that the Trademarks used by Optronics Subsidiaries on or
before Closing are the Corporate Trademarks ALCATEL (word) and ALCATEL (logo).
The Corporate Trademarks are owned by Seller and are used by Optronics
Subsidiaries pursuant to Mark and Tradename License Contracts which are listed
in Annex 5.1.
5.2
Pursuant to these Mark and Tradename License Contracts, Seller has granted
Optronics Subsidiaries a worldwide, non-exclusive, royalty-bearing (at the rate
of 0.075% of the Net Sales and Revenues as defined in such contracts), license
to use the Corporate Trademarks as Trademarks and as part of Trade Names. Said
contracts are non-transferable, without rights to sub-license and shall
terminate automatically upon cessation of Seller's direct or indirect ownership
of the majority of the voting capital stock of the licensee or of Seller's
effective control of the licensee; control meaning the direct or indirect
ownership of more than 50% of the voting rights for the election of directors or
persons performing similar function.
5.3
Seller shall grant to Optronics Subsidiaries a license to continue to use the
Corporate Trademarks during a transition period which shall be twelve (12)
months from the Share Acquisition Closing under the same conditions as described
above in Section 5.2 and as existed prior to the Share Acquisition Closing in
relation to the Optronics Business, including the royalty provisions, pursuant
to phase-out agreements in the form attached as Annex 5.3.
6.
NO TERMINATION
Subject to the provisions of this IP License Agreement, each Party acknowledges
and agrees that all licenses granted under this IP License Agreement are
irrevocable (except as set forth in Section 4.1 above), and that its sole remedy
for breach by the other Party of the licenses granted to it hereunder or of any
other provision hereof, shall be to bring a claim to recover damages and to seek
appropriate equitable relief, other than termination of the licenses granted by
it in this IP License Agreement. In the event of any termination under Section
4.1, any sublicenses previously granted by Purchaser shall survive.
7.
NO IMPLIED LICENSES
Seller and Purchaser grant no other licenses, express or implied, of any
Intellectual Property, except as explicitly stated in this IP License Agreement.
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8.
RECORDATION OF LICENSES
Each Party agrees, without demanding any further consideration, to execute (and
to cause its Affiliates to execute) all documents reasonably requested by the
other Party to effect recordation of the license relationships between the
Parties created by this Agreement, to the extent such recordation is required by
law.
9.
DISCLAIMER; LIMITATION OF LIABILITY
9.1
TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, EACH PARTY DISCLAIMS ALL
REPRESENTATIONS AND WARRANTIES, EXPRESS AND IMPLIED, CONCERNING OR RELATED TO
THIS IP LICENSE AGREEMENT AND THE INTELLECTUAL PROPERTY LICENSED HEREUNDER,
INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY,
NONINFRINGEMENT AND FITNESS FOR A PARTICULAR PURPOSE. THE PARTIES SPECIFICALLY
AGREE THAT ALL WARRANTIES, IF ANY, WITH RESPECT TO THE INTELLECTUAL PROPERTY
LICENSED UNDER THIS IP LICENSE AGREEMENT ARE SET FORTH IN THE PURCHASE AGREMENT.
9.2
IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL,
INDIRECT OR CONSEQUENTIAL DAMAGES (INCLUDING BUT NOT LIMITED TO LOSS OF PROFITS)
OR PUNITIVE DAMAGES ARISING OUT OF ANY PERFORMANCE OR NONPERFORMANCE OF THIS
AGREEMENT OR IN FURTHERANCE OF THE PROVISIONS OR OBJECTIVES OF THIS AGREEMENT,
REGARDLESS OF WHETHER SUCH DAMAGES ARE BASED ON TORT, WARRANTY, CONTRACT OR ANY
OTHER LEGAL THEORY, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
NOTWITHSTANDING THE PARTIES' AGREEMENT TO DISCLAIM THE AWARD OF SPECIAL,
INDIRECT OR CONSEQUENTIAL DAMAGES, THE FOREGOING LIMITATIONS SHALL NOT LIMIT HOW
A COURT WOULD MEASURE INFRINGEMENT DAMAGES UNDER APPLICABLE LAW IN AN ACTION FOR
INFRINGEMENT OR MISAPPROPRIATION BY ONE PARTY OF THE INTELLECTUAL PROPERTY OF
THE OTHER PARTY; PROVIDED THAT THE EXCLUSION FOR PUNITIVE DAMAGES SHALL APPLY IN
ANY EVENT.
10.
FULL PERFORMANCE; RIGHTS IN BANKRUPTCY
10.1
The Parties acknowledge that upon the effective date this IP License Agreement
will become non-executory. The Parties acknowledge that neither party will have
further performance obligations under any other agreement related to the subject
matter hereof, that must be satisfied
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in order to have performed under this IP License Agreement. Specifically, none
of the Parties' performance obligations under any other agreement entered into
between the Parties (including but not limited to the Purchase Agreement) are
relevant to the interpretation of the non-executory nature of this Agreement,
since the intent of the parties is that this IP License Agreement function as a
non-executory transfer of rights. It is not the intention of the Parties that
this Section 10.1 be deemed to amend any other term of this Agreement, including
but not limited to Sections 11.10 and 3.6.
10.2
Seller's rights under Section 4.1 of this IP License Agreement, including but
not limited to the Supply License, are perpetual, irrevocable, and
non-executory, to the maximum extent permitted by applicable law. In the event
of the commencement of a bankruptcy proceeding by or against Purchaser or its
Subsidiaries under the U.S. Bankruptcy Code, the Supply License granted to
Seller in Section 4.1 shall continue in full force and effect. In the event of
an Alcatel License Termination Event, under no circumstances shall Seller's
exercise of the rights granted to it in Section 4.1, within the scope of rights
granted, ever be construed as an infringement of Purchaser's or its
Subsidiaries' Intellectual Property rights. In the event a bankruptcy court or
other court of competent jurisdiction ever determines by final judgment that
this IP License Agreement is executory, despite every intention and effort by
the parties to negotiate and document non-executory rights for Seller, and
without implying any acceptance of the rejected concept that it is legally
impossible to create a non-executory license for Intellectual Property rights,
all rights and licenses granted under or pursuant to this Agreement are, and
shall otherwise be deemed to be, for purposes of Section 365(n) of the U.S.
Bankruptcy Code, licenses of rights to "intellectual property" as defined under
Section 101 of the U.S. Bankruptcy Code. The Alcatel Supply Agreement is, and
shall otherwise be deemed to be, an agreement "supplementary to" this IP License
Agreement. Furthermore, in such an event, the Parties agree that Seller, as a
licensee of such rights under this IP License Agreement, shall retain and may
fully exercise all of its rights and elections under the U.S. Bankruptcy Code
and other applicable law, including any right by Seller to specific performance
under the IP License Agreement, since Purchaser and its Subsidiaries acknowledge
and agree that the Intellectual Property licensed hereunder is unique and that
rejection of the license will cause Seller irreparable harm for which its legal
remedies are inadequate; provided, however, nothing herein shall be deemed to
constitute a present exercise of such rights and elections.
11.
MISCELLANEOUS
11.1
No failure by a Party to exercise, or to delay to exercise, any right, power, or
remedy under this IP License Agreement shall operate as a waiver thereof, nor
shall any single or partial exercise of such right, power, or remedy by such
Party preclude any other or further exercise thereof or of any other right.
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11.2
Nothing herein shall be deemed to create an agency, joint venture or partnership
relation between the Parties.
11.3
This IP License Agreement, the Supply Agreement, the Services Agreement and the
Purchase Agreement constitute the entire agreement and understanding of the
Parties with regard to the transfer or license of Intellectual Property rights
from Seller to Purchaser and Purchaser to Seller, and supersede all prior and
contemporaneous discussions, negotiations, understandings and agreements,
whether oral or written, between the Parties concerning such subject matter.
Each Party disclaims all representations and warranties except those expressly
set forth therein. No Party shall be bound by any definition, condition,
warranty, right, duty or covenant other than as expressly stated in the
agreements enumerated above. Each Party expressly waives any implied right or
obligation regarding the subject matter hereof. This IP License Agreement may be
amended only by a written document signed by authorized representatives of the
Parties.
11.4
This IP License Agreement shall be interpreted and construed, and the legal
relations created herein shall be determined, in accordance with the laws of the
State of New York (excluding conflict of laws which would require the
application of any other law) and the United States.
11.5
Each Party shall execute, acknowledge and deliver all such further instruments
and do all such further acts as may be reasonably necessary or desirable to
carry out the intent and purposes of this Agreement and the consummation of the
transactions contemplated hereby.
11.6
The headings contained in this IP License Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this IP
License Agreement.
11.7
Should any part or provision of this IP License Agreement or the application
thereof be declared by a court of competent jurisdiction to be illegal, void or
unenforceable, the remaining parts or provisions shall continue in full force
and effect. If a part or provision of this IP License Agreement is held illegal,
void or unenforceable, the remaining provisions of this Agreement shall be
construed as if such illegal, void or unenforceable provision were omitted, and
the Parties shall negotiate in good faith an amendment to such part or provision
in a manner consistent with the intention of the Parties with respect to this IP
License Agreement.
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11.8
No Party shall be responsible or liable to another Party for nonperformance or
delay in performance of any terms or conditions of this IP License Agreement due
to acts or occurrences beyond the reasonable control of the nonperforming or
delayed Party, including but not limited to, acts of God, acts of government,
wars, riots, strikes or other labor disputes, shortages of labor or materials,
fires and floods, provided the nonperforming or delayed Party provides to the
other Party written notice of the existence and the reason for such
nonperformance or delay.
11.9
Any and all notices or other communications required or permitted by this
Agreement or by law to be served on or given to a Party by another Party shall
be in writing and delivered or sent to:
Seller:
54, Rue la Boetie 75008
Paris, France
Attn: Intellectual Property
Department and General Counsel
Purchaser:
40919 Encyclopedia Circle
Fremont, CA 94538
Attn: Chief Executive Officer
A Party may change its address for purposes of this Agreement by written notice
to the other Party.
All notices and other communications hereunder shall be in writing and shall be
deemed duly given (i) on the date of delivery if delivered personally, (ii) on
the date of confirmation of receipt (or, the first business day following such
receipt if the date is not a business day) of transmission by telecopy or
telefacsimile or (iii) on the date of confirmation of receipt (or, the first
business day following such receipt if the date is not a business day) if
delivered by a nationally recognized courier service.
11.10
Other than as set forth herein, neither Party shall be permitted to assign this
IP License Agreement or any rights or obligations herein (by operation of law or
otherwise) without the prior written consent of the other Party, and any such
attempted assignment shall be void; provided, however, that either Party may
assign this Agreement in its entirety and all of its associated rights and
obligations without such consent in connection with the sale of all or
substantially all of the business to which this IP License Agreement relates,
provided the assigning Party remains primarily liable for all such obligations
and the assignee agrees in writing to comply with all of such obligations;
provided, however, that this Section 11.10 shall not limit the terms of Section
3.6. Without limiting the forgoing, this IP License Agreement
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shall be binding upon and inure to the benefit of the Parties and their
respective successors and permitted assigns. Any such permitted assignment shall
not negate any of the license grants contained herein.
11.11
Each Party shall comply with (i) applicable export laws and regulations of any
agency of the U.S. Government; and (ii) any other current, applicable laws,
regulations and other legal requirements in its performance under this IP
License Agreement.
11.12
Each Party acknowledges that its breach of its obligations hereunder would cause
irreparable damage to the other Parties for which such parties will not have an
adequate remedy at law. Therefore, each Party agrees that the other Parties
shall be entitled to seek equitable relief with respect to the first Party's
obligations hereunder.
11.13
This IP License Agreement may be executed by each Party in counterparts, each of
which shall be deemed an original, but all such counterparts shall constitute
only one and the same instrument.
IN WITNESS WHEREOF, the Parties have executed this Agreement in duplicate on the
signature pace hereof.
ALCATEL AVANEX CORPORATION
By: /s/ ULRICH KNECHT By: /s/ ANTHONY FLORENCE
-------------------------------- ---------------------------------
Title: Director Intellectual Property Title: Sr. Vice President, Corporate
Affairs
Date: July 31, 2003 Date: July 31, 2003
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