Preview of our top selling Cross License Agreement
Headway Technologies - Cross-license, Know-how Transfer Agreement 5-19-95
EXHIBIT 10.2
SEAGATE
CROSS LICENSE AND
KNOW-HOW TRANSFER AGREEMENT
[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
TABLE OF CONTENTS
RECITALS.................................................................1
ARTICLE 1. DEFINITIONS...................................................1
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ARTICLE 2. DESIGN CROSS LICENSE..........................................1
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2.1 Design Cross License......................................1
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2.2 Term......................................................1
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2.3 Scope.....................................................2
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ARTICLE 3. TECHNOLOGY LICENSE AND TRANSFER...............................2
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3.1 Technology License and Transfer...........................2
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3.2 Term......................................................2
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ARTICLE 4. TRANSFER SCHEDULE.............................................3
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4.1 Transfer to Seagate.......................................3
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4.2 Schedule and Form.........................................3
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ARTICLE 5. TRAINING AND TECHNICAL ASSISTANCE.............................3
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5.1 Training..................................................3
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5.2 Technical Assistance......................................4
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ARTICLE 6. CAPITAL EQUIPMENT.............................................5
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ARTICLE 7. MATERIALS.....................................................5
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ARTICLE 8. CONSIDERATION.................................................5
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8.1 Prepaid Royalty...........................................5
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8.2 Ongoing Royalties.........................................5
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8.3 Maximum Royalties.........................................5
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8.4 Royalty Recovery..........................................6
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8.5 Royalty Restrictions......................................6
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ARTICLE 9. TRANSPORTATION AND ASSOCIATED DOCUMENTS.......................6
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ARTICLE 10. PAYMENT TERMS................................................6
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10.1 Prepaid Royalty Payment Schedule..........................6
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10.2 Prepaid Royalty Payment Conditions........................7
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10.3 Ongoing Royalties.........................................7
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ARTICLE 11. TAXES........................................................8
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ARTICLE 12. EXPORT RESTRICTIONS..........................................8
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ARTICLE 13. PROPRIETARY INFORMATION NON-DISCLOSURE.......................8
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13.1 General...................................................8
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13.2 Exceptions................................................8
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ARTICLE 14. INTELLECTUAL PROPERTY INDEMNIFICATION........................9
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14.1 Headway Defense and Indemnification.......................9
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14.2 Seagate Defense and Indemnification.......................9
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14.3 Warranty.................................................. 10
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ARTICLE 15. TERMINATION.................................................. 10
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15.1 Termination of Agreement.................................. 10
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15.2 Survival of Rights and Obligations........................ 10
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15.3 Procedure................................................. 10
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ARTICLE 16. FORCE MAJEURE................................................ 10
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ARTICLE 17. GENERAL...................................................... 11
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17.1 Entire Agreement.......................................... 11
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17.2 Amendments................................................ 11
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17.3 Severability.............................................. 11
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17.4 Descriptive Headings...................................... 11
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17.5 Interpretation............................................ 11
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17.6 Third Party Beneficiary................................... 11
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17.7 Independent Contractor.................................... 11
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17.8 Media Release; Advertising................................ 11
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17.9 Assignment................................................ 12
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17.10 Expenses.................................................. 12
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17.11 Notice.................................................... 12
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17.12 Governing Law............................................. 12
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17.13 Counterparts.............................................. 13
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SEAGATE CROSS LICENSE AND KNOW-HOW TRANSFER AGREEMENT
This Seagate Cross License and Know-How Transfer Agreement is made as of May 19, 1995, by and among Seagate Technology, Inc. of Scotts Valley, California, U.S.A., a Delaware corporation, including all divisions and majority-owned affiliated entities (hereinafter jointly and severally referred to as "Seagate") and Headway Technologies, Inc., a California corporation, on behalf of itself, (hereinafter referred to as "Headway").
RECITALS
A. Both Seagate and Headway have conducted extensive research, design and
development efforts related to magneto resistive heads used to read, write
or erase information on or from computer disk drive data storage devices.
B. Both Seagate and Headway, subject to the terms hereof, are willing to cross
license certain of their respective technology rights for the purpose of
development and determining the compatibility between Seagate and Headway
of the potential manufacture and distribution of MR Heads utilizing Headway
Dual Stripe MR Technology.
C. In addition, Headway desires to license and transfer Headway Dual Stripe MR
Technology to enable Seagate to make, use and sell DSMR Heads or other
products utilizing Headway Dual Stripe MR Technology.
D. Concurrently with entering into this Agreement, Seagate and Headway will
enter into that certain Patent Cross License Agreement in the form attached
as Exhibit 1.
NOW, THEREFORE, in consideration of the recitals and of the mutual covenants and agreements set forth herein, Seagate and Headway hereby agree as follows:
ARTICLE 1. DEFINITIONS
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Unless the context clearly indicates otherwise, all capitalized terms used in this Agreement shall have the meanings given them in Exhibit 2 attached hereto and made a part hereof.
ARTICLE 2. DESIGN CROSS LICENSE
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2.1 Design Cross License. Subject to the terms hereof: (a) Headway hereby
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grants Seagate a limited non-exclusive, worldwide, fully paid-up right
and license to use its MR Head Design for the purpose of further
development, enhancement, modification and improvement in connection
with making, using or selling MR Heads without right to sublicense,
except as provided in Section 3.3; (b) Seagate hereby grants to
Headway a limited non-exclusive, worldwide, fully paid-up right and
license to use Seagate Design Technology for the purposes of
determining and establishing commonality of dimensions between
Headway's MR Head Design and Seagate's Design Technology to enable
Headway to provide wafers, head gimbal assemblies and/or sliders to
Seagate in connection with Seagate's making, using or selling DSMR
Heads and permitting Headway to make, have made, use and/or sell
products utilizing or embodying Seagate's Design Technology, provided
that Headway may not sublicense Seagate's Design Technology except to
Asahi Komag Co., Ltd. ("AKCL"), provided that AKCL and Seagate have by
then executed a patent cross license agreement, or for the purpose of
having a third party make product for Headway's use or sale.; (c)
Seagate agrees to grant to Headway a worldwide fully paid-up license
to improvements Seagate may make to Headway's MR Head Design, provided
that Seagate will identify those improvements that Headway may not
transfer to third parties, including AKCL, without Seagate's prior
written approval; and (d) Headway agrees to grant Seagate a worldwide,
fully paid-up license to improvements Headway may make to Seagate
Design Technology.
2.2 Term. Unless terminated earlier pursuant to Article 15 hereunder, the
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term of the design cross license granted by Section 2.1 shall continue
for five (5) years and may be renewed for an additional period upon
the mutual agreement of the parties. Notwithstanding the foregoing,
the cross license granted by Section 2.1 shall continue to apply to
those products or components produced and thereafter sold embodying or
utilizing the technology so licensed during the life of this Agreement
for as long as such products are in use or are being supported by
Seagate, Headway or their respective successors.
2.3 Scope. The design cross license granted by Section 2.1 shall permit:
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(a) Seagate to make, use and/or sell products utilizing or embodying
Headway's MR Head Design as integrated parts of storage devices used
internally by Seagate or Headway, sold to third parties or end users,
sold separately as component parts of third party storage devices, and
as sold as spare parts incidental to previous sales to support
reasonable needs of Seagate, Headway or their respective customers;
and (b) Headway to make, have made, use and/or sell products utilizing
or embodying Seagate's Design Technology; provided that Headway may
not sublicense Seagate's Design Technology except to AKCL , provided
that AKCL and Seagate have by then executed a patent cross license
agreement, or for the purpose of having a third party make product for
Headway's use or sale.
ARTICLE 3. TECHNOLOGY LICENSE AND TRANSFER
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3.1 Technology License and Transfer.
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(a) Pursuant and subject to the terms and conditions hereof, Headway
hereby grants to Seagate a non-exclusive world-wide, transferable
(pursuant to Section 17.9), royalty-bearing right and license
under Headway Dual Stripe MR Technology to make, use, import,
sell and otherwise dispose of products embodying or utilizing
Headway Dual Stripe MR Technology whether or not DSMR Products.
Headway further agrees:
(i) That it has the all rights necessary to transfer and
license the Headway Dual Stripe MR Technology, and that it
will transfer to Seagate all Headway Dual Stripe MR
Technology that is necessary for Seagate to make, have
made (pursuant to Section 3.3), use, import, sell and
otherwise dispose of DSMR Heads and/or DSMR Products;
(ii) That the Headway Dual Stripe MR Technology and other
information that will be supplied to Seagate by Headway
under this Agreement will be equivalent to what Headway
uses for the development, fabrication and/or manufacture
of DSMR Heads and DSMR Products; and
(iii) This license applies to all Headway Dual Stripe MR
Technology as specified in Schedule 1.
(iv) That Headway will negotiate in good faith to license
Seagate the foregoing rights with respect to future
generations of Headway MR Head technology having
capabilities beyond those presently projected for Headway
Dual Stripe MR Technology.
(b) Seagate agrees to grant to Headway a worldwide fully paid-up
license to improvements Seagate may make to Headway's MR Head
process without the right to sublicense, except to AKCL, provided
that Seagate will identify those improvements that Headway may
not transfer to AKCL, without Seagate's prior written approval;
(c) Seagate agrees to grant Headway and AKCL Seagate's proprietary
suspension designs, subject to the prior negotiation of license
fees or other consideration.
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3.2 Term. Unless terminated earlier pursuant to Article 15 hereunder, the
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term of the technology license granted by Section 3.1 shall continue
indefinitely. Notwithstanding any termination, the license granted by
Section 3.1 shall continue to apply to those products or components
produced and thereafter sold embodying or utilizing the technology so
licensed during the life of this Agreement for as long as such
products are in use or are being supported by Seagate or its
successor.
3.3 Sublicense. In the event of the loss or substantial reduction in
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Seagate's internal capacity to fabricate thin film wafers resulting
from a sudden occurrence over which Seagate did not have reasonable
control and the expectation that such loss or reduction in capacity
shall continue for such a period of time that Seagate reasonably
believes renders it necessary to arrange for an outside source of such
capacity, Headway hereby agrees to grant Seagate the worldwide right
to sublicense the Headway Dual Stripe MR Technology for the limited
purpose of supplying Seagate and Headway with their respective needs
until such time as Seagate's internal capacity can reasonably be
restored; provided that Headway will have the first right to supply
such required capacity at mutually acceptable terms.
ARTICLE 4. TRANSFER SCHEDULE
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4.1 Transfer to Seagate. Within thirty (30) days of the execution of this
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Agreement, Headway will commence the transfer of the Headway Dual
Stripe MR Technology.
4.2 Schedule and Form. Within thirty (30) days following the execution of
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this Agreement under Section 4.1, Seagate and Headway will jointly
develop and complete a schedule, Schedule 1, which will identify the
Headway Dual Stripe MR Technology by category required to be
transferred by Headway to Seagate to enable Seagate to fabricate
wafers, machine sliders and assemble head gimbal assemblies and all
other activities necessary to completely manufacture DSMR Heads and
DSMR Products. Schedule 1 will also specify the methods to be used for
the transfer of the Headway Dual Stripe MR Technology, will specify
the schedule for complete transfer and will outline the expected
schedule for Training and Technical Assistance.
(a) The transfer of Headway Dual Stripe MR Technology identified in
Schedule 1 shall be completed within sixty (60) days after
establishing the schedule of such transfer.
(b) One (1) copy of Headway Dual Stripe MR Technology identified in
Schedule 1 will be supplied to Seagate. It shall be in clear,
legible and reproducible form.
(c) In addition, Seagate may request during the first six (6) months
following the request under Section 4.1 in writing, any other
Information not specified in Schedule 1, which is agreed to be
relevant by Headway and Seagate to the Headway Dual Stripe MR
Technology and Headway shall transfer such Information no later
than thirty (30) days after such request.
(d) The Headway Dual Stripe MR Technology supplied by Headway
pursuant to this Agreement shall be in accordance with Headway's
then standards of measurement and format.
(e) All Headway Dual Stripe MR Technology that is required to be
supplied by Headway pursuant to this Agreement shall be that
which, when requested by Seagate is in the possession of and
under the control of Headway and must be transferred by Headway
even if such transfer requires the payment of fees or royalties
to third parties by Headway.
ARTICLE 5. TRAINING AND TECHNICAL ASSISTANCE
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Headway will make available Training and Technical Assistance as may be reasonably necessary to enable Seagate to manufacture DSMR Heads.
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5.1 Training. Training will be provided at Headway's designated facility
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as follows:
(a) Headway undertakes to permit Seagate's qualified employees, at
Seagate's request, necessary access to Headway's facility, at
dates and times to be mutually agreed upon, to receive
instructions, information, Training and any other type of
explanation appropriate to the manufacture of DSMR Head and DSMR
Products.
Such permission includes access to all Headway Dual Stripe MR
Technology only. Headway will provide copies of Headway Dual
Stripe MR Technology upon request of Seagate's employees.
Seagate's employees may take notes and upon prior written notice
may take photographs concerning the manufacturing process,
provided said access by Seagate's employees would not be
disruptive to Headway's manufacture or assembly of DSMR Head and
DSMR Products or to the production facility. All such photographs
and notes shall be deemed to be and treated as Information.
(b) To request Training, Seagate shall send a written request to
Headway, specifying the number of instruction man weeks requested
including the number of Seagate's employees, training area and a
schedule of not less than one (1) week before the request is
effective taking into account equipment availability and the
like. Headway shall commence providing such Training within ten
(10) days from the effective date of such request. The scope and
schedule of such Training will be as defined in Schedule 1.
(c) All data and Information supplied by Headway during Training
shall consist of Information in use by Headway for purposes of
training Headway's own employees in connection with the
fabrication and manufacture of DSMR Head and DSMR Products.
(d) Seagate employees, while receiving Training from Headway, shall
be subject to all internal rules and regulations of Headway as
may be necessary to prevent interference with the normal
operation and administration of Headway's facility. Seagate shall
assign one person with the responsibility of overseeing Seagate's
employees according to Headway's directions.
(e) Seagate shall, at its expense, be responsible for all business
travel expenses incurred by its employees while they are at
Headway's site receiving Training.
5.2 Technical Assistance. Technical Assistance shall be provided at
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Seagate's manufacturing facility as follows:
(a) Headway's employees, while rendering Technical Assistance to
Seagate, shall be subject to all internal rules and regulations
of Seagate as may be necessary to prevent interfere with the
normal operation and administration of Seagate's facilities, and
Headway's employees shall be accompanied by a Seagate
representative at all times. It is understood that such rules and
regulations will not prevent or hinder the performance by Headway
of its obligations under this Agreement.
(b) Seagate will, at no cost to Headway, provide Headway's employees
rendering Technical Assistance with office accommodations equal
or similar to those made available to Seagate's employees
performing similar activities. Such accommodation will include
adequate office space, furniture, communications, facilities,
secretarial and clerical assistance and such other items as may
be required to enable Headway's employees to perform their
services.
(c) To request Technical Assistance, Seagate shall send a written
request to Headway specifying the number of man weeks requested,
by technical area, and a schedule of not less than one (1) week
before such request is effective, taking into account equipment
availability and the like. The scope and schedule of such
Technical Assistance shall be as defined in Schedule 1. In no
event shall Technical Assistance be provided in increments of
less than one (1) man weeks. Headway shall commence rendering
such Technical Assistance within ten (10) days from the effective
date of such request. Seagate may cancel in advance any scheduled
period of Technical Assistance by providing Headway with written
notice five (5) days in advance of the commencement of such
Technical Assistance.
(d) Headway's employees rendering Technical Assistance will, in
general, observe Seagate's normal work schedule for the location
to which they are assigned, but in no case shall such employees
be required to work in excess of eight (8) hours per day, or in
excess of forty (40) hours per work week.
(e) Headway shall, at its expense, be responsible for all business
travel expenses incurred by its employees while they are at
Seagate's site and rendering Technical Assistance.
ARTICLE 6. CAPITAL EQUIPMENT
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A schedule of all necessary capital equipment to enable Seagate to produce/process DSMR wafers will be provided by Headway, which will require that Information concerning Equipment will be delivered to Seagate within fifteen (15) days of the execution of this Agreement. The initial schedule of equipment, tooling and test equipment shall be included in Exhibit 4 to this Agreement for the DSMR wafer process functions. For those items produced by or for Headway, either a copy of any necessary information required to produce the item will be provided, or authorization to use Headway's vendor will be given.
ARTICLE 7. MATERIALS
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Seagate will be provided with a list of all materials critical to the manufacture of the DSMR Heads and DSMR Products and the name and address of each supplier on Exhibit 5 hereto, and Information with respect thereto will be delivered to Seagate with the process documentation identified in Schedule 1.
ARTICLE 8. CONSIDERATION
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In consideration for the license and transfer of Headway Dual Stripe MR Technology and rendering of Technical Assistance and Training under this Agreement, Seagate will pay Headway as follows:
8.1 Prepaid Royalty. Seagate agrees to pay Headway with a prepaid royalty
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payment of up to [*] Dollars ($[*]) conditioned upon Headway's meeting
the performance criteria identified in Section 10.1. This payment
shall be considered a prepaid royalty, subject to recovery by Seagate
as a credit against future royal payments as provided in Section 8.4
below.
8.2 Ongoing Royalties. Seagate agrees to pay ongoing royalties for
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products actually sold by Seagate utilizing or embodying Headway Dual
Stripe MR Technology as follows:
(a) For each DSMR Head shipped from Seagate head manufacturing or its
sublicensees in accordance with Section 3.3 to Seagate drive
manufacturing for incorporation into a Seagate disk drive,
Seagate will pay a royalty of [*] ($[*]) per Head for the first
[*] ([*]) DSMR Heads and [*] ($[*]) per DSMR Head shipped
thereafter.
(b) For each DSMR Head actually sold by Seagate to third party
original equipment manufacturers (including the Hewlett-Packard
Company) and not incorporated into a Seagate disk drive, Seagate
will pay a royalty of [*] ($[*]) per DSMR Head sold for the first
[*]=CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
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like. The scope and schedule of such Technical Assistance shall
be as defined in Schedule 1. In no event shall Technical
Assistance be provided in increments of less than one (1) man
weeks. Headway shall commence rendering such Technical Assistance
within ten (10) days from the effective date of such request.
Seagate may cancel in advance any scheduled period of Technical
Assistance by providing Headway with written notice five (5) days
in advance of the commencement of such Technical Assistance.
(d) Headway's employees rendering Technical Assistance will, in
general, observe Seagate's normal work schedule for the location
to which they are assigned, but in no case shall such employees
be required to work in excess of eight (8) hours per day, or in
excess of forty (40) hours per work week.
(e) Headway shall, at its expense, be responsible for all business
travel expenses incurred by its employees while they are at
Seagate's site and rendering Technical Assistance.
ARTICLE 6. CAPITAL EQUIPMENT
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A schedule of all necessary capital equipment to enable Seagate to produce/process DSMR wafers will be provided by Headway, which will require that Information concerning Equipment will be delivered to Seagate within fifteen (15) days of the execution of this Agreement. The initial schedule of equipment, tooling and test equipment shall be included in Exhibit 4 to this Agreement for the DSMR wafer process functions. For those items produced by or for Headway, either a copy of any necessary information required to produce the item will be provided, or authorization to use Headway's vendor will be given.
ARTICLE 7. MATERIALS
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Seagate will be provided with a list of all materials critical to the manufacture of the DSMR Heads and DSMR Products and the name and address of each supplier on Exhibit 5 hereto, and Information with respect thereto will be delivered to Seagate with the process documentation identified in Schedule 1.
ARTICLE 8. CONSIDERATION
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In consideration for the license and transfer of Headway Dual Stripe MR Technology and rendering of Technical Assistance and Training under this Agreement, Seagate will pay Headway as follows:
8.1 Prepaid Royalty. Seagate agrees to pay Headway with a prepaid royalty
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payment of up to [*] Dollars ([*]) conditioned upon Headway's meeting
the performance criteria identified in Section 10.1. This payment
shall be considered a prepaid royalty, subject to recovery by Seagate
as a credit against future royalty payments as provided in Section 8.4
below.
8.2 Ongoing Royalties. Seagate agrees to pay ongoing royalties for
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products actually sold by Seagate utilizing or embodying Headway Dual
Stripe MR Technology as follows:
(a) For each DSMR Head shipped from Seagate head manufacturing or its
sublicensees in accordance with Section 3.3 to Seagate drive
manufacturing for incorporation into a Seagate disk drive,
Seagate will pay a royalty of [*] ([*]) per Head for the first
[*] ([*]) DSMR Heads and Fifteen Cents ([*]) per DSMR Head
shipped thereafter.
(b) For each DSMR Head actually sold by Seagate to third party
original equipment manufacturers (including the Hewlett-Packard
Company) and not incorporated into a Seagate disk drive, Seagate
will pay a royalty of [*] ([*]) per DSMR Head sold for the first
[*]=CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
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[*] ([*]) DSMR Heads and [*] ($[*]) per DSMR Head sold
thereafter.
8.3 Maximum Royalties. Notwithstanding anything else herein, Seagate will
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not be obligated to pay more than the following amounts for the sale
of DSMR Heads of the type identified which amounts will not be reduced
by royalty recovery provisions provided by Section 8.4 below:
(a) [*] Dollars ($[*]) for Generation 1 DSMR Heads having the
capacity of up to 900 megabits per square inch;
(b) [*] Dollars ($[*]) for Generation 2 DSMR Heads having the
capacity of between 900 and 1,500 megabits per square inch; and
(c) [*] Dollars ($[*]) for Generation 3 DSMR Heads having a capacity
of between 1,500 to 2,000 megabits per square inch.
The license granted by Section 3.1 shall be considered fully paid-up
upon payment of the foregoing amounts with respect to the specific
category of DSMR Heads noted.
8.4 Royalty Recovery. Seagate shall be entitled to retain as an offset
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and credit against ongoing royalties [*] percent ([*]%) of all
royalty payments owed to Headway at the time such payments are due to
the extent necessary and until the entire advance royalty payments
actually made by Seagate of up to [*] ($[*]) has been recovered by
Seagate.
8.5 Royalty Restrictions. No royalty will be payable by Seagate to
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Headway in the event and to the extent Seagate utilizes or embodies
Headway Dual Stripe MR Technology in products that do not constitute
DSMR Products or with respect to DSMR Heads sold or used by Seagate
that are produced from Headway supplied wafers, sliders or head gimbal
assemblies.
ARTICLE 9. TRANSPORTATION AND ASSOCIATED DOCUMENTS
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