Joint Development, Manufacturing & Marketing Agreement

JDS Uniphase Corporation


- and -


EMCORE Corporation


JOINT DEVELOPMENT, MANUFACTURING & MARKETING AGREEMENT
FOR HIGH SPEED ARRAY TRANSCEIVERS


This Agreement is made the 16th day of June 2000.


By and Between


(1) EMCORE Corporation, a New Jersey corporation having its principal offices
at 394 Elizabeth Avenue, Somerset, New Jersey (hereinafter referred to as
"EMCORE"); and


(2) JDS Uniphase Corporation, a California corporation having its principal
offices at 210 Baypointe Parkway, San Jose, California acting through its
Transmission Group located at 305 East Drive, Melbourne, Florida
(hereinafter referred to as "JDSU")


WHEREAS


(A) EMCORE is the beneficial owner of certain intellectual property rights
and possesses valuable technical information and know-how relating to
vertical cavity surface-emitting lasers ("VCSEL"), circuit design, optics
and detectors, optical links, and fiberoptic communication systems and
possesses or has access to valuable commercial know-how relating to
marketing such systems.


(B) JDSU possesses or has access to valuable commercial know-how and
information relating to the world-wide promotion, distribution and
marketing of fiberoptic communication systems and is the beneficial owner
of certain intellectual property rights and possesses valuable technical
information and know-how relating to the optical packaging, assembly,
applications engineering and testing of fiberoptic communication systems.


(C) EMCORE and JDSU have agreed to collaborate in the design, development,
production, marketing and sale of a family of fiberoptic array
transceivers in accordance with the terms and conditions herein
contained.


Now therefor it is hereby agreed as follows


1. Interpretation


1.1 The following provisions have effect for the interpretation of this
Agreement including the Recitals and Schedules.


1.2 The following words and expressions shall, unless the context otherwise
requires, have the following meanings:


"Agreement" means this Joint Development, Manufacturing and Marketing
Agreement.


"Affiliate" means in relation to either Party, a corporation or other
business entity in which the Party, either directly or
indirectly, owns more than 50% of the outstanding voting
stock (as measured by the ability of such stock to vote in
elections for the board of directors of such controlled
entity) for so long as such greater than 50% ownership shall
continue.


"Background" means in respect of each Party the Intellectual Property
owned by or otherwise in the possession of that Party
relating to the Products at the Effective Date.


"Cancellation
Costs" means the redact for all Products which are subject to a
Guaranteed Purchase Forecast but which are cancelled by JDSU
or a customer prior to shipment and which are not recovered
by either (i) the sale of the Products affected to other
parties within a reasonable time, or (ii) the exercise by
EMCORE, in a commercially reasonable manner, of other
mitigation measures.


"Commercial
Launch
Date" means for a Product, the earlier of (i) the first date
upon which JDSU makes sales of such Product to third party
customers other than low volume sales for evaluation
purposes or (ii) the date of Steering Committee sign-off of
a Product Release Checklist for such Product.


"Company
Informa-
tion" means a Party's proprietary information or materials which
are provided to the other Party, whether oral or written,
tangible or intangible, whether furnished before or after
the execution of this Agreement, in relation to the research
and development of, and promotion, marketing, distribution
and sale of Products hereunder, including, without
limitation, the information or materials on substances,
formulations, techniques, technology, equipment, data,
reports, Know-How, sources for supply, patent position and
business plans.


"Develop-
ment Cost
Difference" means the amount, if any, by which the actual development
costs of EMCORE (as reduced by any payments (other than
interest) to EMCORE by JDSU as to such Product pursuant to
Section 5.5(b) below) for a given Product, other than an
EMCORE Developed Product, exceeds the actual development
cost of JDSU for such Product (as increased by any payments
(other than interest) to EMCORE by JDSU as to such Product
pursuant to Section 5.5(b) below). For purposes of this
calculation, a Party's actual development costs shall be
determined on a per project basis in accordance with US GAAP
(taking into account the collateral benefit of such
development to other products or activities of the Party)
and in a manner that is consistent with the manner in which
such Party determines such costs for its other development
projects for the purpose of its publicly released financial
statements.


"EMCORE Developed Product" means a Product for which EMCORE is
primarily responsible for the development and includes,
without limitation, the Initial Product.


"Estimated
Develop-
ment Cost" means for each Product a Party's estimated cost for
developing such Product, as the same may be adjusted from
time to time by the Steering Committee pursuant to Section
4.4.2. A Party's estimated development costs shall be
determined on a per project basis in accordance with US GAAP
(taking into account the collateral benefit of such
development to other products or activities of the Party)
and in a manner that is consistent with the manner in which
such Party determines such costs for its other development
projects for the purpose of its publicly released financial
statements.


"Effective
Date" means the date hereof.


"Force
Majeure
Event" means any cause affecting the performance of this Agreement
or the obligations of either Party arising from or
attributable to any acts or events or failures beyond the
reasonable control of the affected Party including, without
limitation, strikes, lock-outs, industrial action, civil
commotion, riot, invasion, war, threat of or preparation for
war, fire, explosion, storm, flood, earthquake, subsidence,
epidemic or other natural physical disaster, omissions or
delays in acting by any governmental authority or the
political interference with the normal operations of either
Party.


"Fore-
ground" means all Intellectual Property generated in the course of
performance by a Party of its development obligations under
a Statement of Work pursuant to this Agreement.


"Future
Products" means any product that the Steering Committee agrees to make
subject to this Agreement pursuant to Section 5.3 below and
shall include, without limitation, each Identified Future
Product, following a determination to make such Identified
Future Product subject to this Agreement pursuant to Section
5.3(a) hereof.


"Gross
Margin" means a Party's gross margin measured as a percentage of the
gross profit as to the revenue received with respect to
sales of Products from EMCORE to JDSU hereunder (in the case
of EMCORE) or by JDSU to third parties (in the case of
JDSU), which shall be determined in accordance with US GAAP
and in a manner that is consistent with the manner in which
such Party determines revenue, gross profit and gross margin
for the purpose of its publicly released statement of
operations.


"Gross
Revenue" means a Party's gross revenue with respect to sales of
Products to third parties in accordance with US GAAP, which
shall include, without limitation, gross revenue of EMCORE
from sales of Products to JDSU.


"High Vol-
ume Oppor-
tunity" means a purchase order, series of related purchase orders
from a single customer or a long term supply agreement with
a customer for purchases in excess of redact million.


"Identified
Future
Product(s)" means the following four array transceiver products:
redact.


"Initial
Product" means that certain 12 channel, 1.25 Gb/s/ch, 15 Gb/s net
array transceiver product.


"Initial
Program" means the development work to be performed by each Party
with respect to the Initial Product as set forth in the
Statement of Work for such Product.


"Initial
Statement
of Work" means that certain detailed statement of work attached
hereto as Exhibit A to be carried out by the Parties as the
Initial Program, which: (i) may be modified from time to
time in accordance with the terms of this Agreement; (ii)
sets forth the design, development and manufacturing
objectives of the Parties as to the Initial Product; and
(iii) includes the Specifications for the Initial Product.


"Intel-
lectual
Property" means all United States and foreign patents, copyrights
trade and service marks and design rights (whether
registered or not and all applications for any of the
foregoing), rights in computer software, internet domain
names and databases and all rights in the Know-How
whensoever and howsoever arising for the full term thereof
and all renewals and extensions thereof.


"Know-How" means information, data, know-how, trade secrets or
experience whether patentable or not including, without
limitation, all design or manufacturing techniques,
operating instructions, machinery designs, raw materials or
products specifications, drawings, blue prints, and any
other technical and commercial information relating to
research, design, development, manufacture, assembly, use or
sale.


"Minimum
Volume" means for a Product that level of sales of such Product for
a six (6) month period that is determined by the Parties
pursuant to Sections 2.5 and 4.4.4 hereof to be equal to
redact percent (redact%) of the TAM for such Product
during that six (6) month period.


"Parties" means EMCORE and JDSU collectively and Party means either of
them individually.


"Products" means the Initial Product and any Future Products that the
Parties shall agree to make subject to this Agreement
pursuant to Section 5.3 hereof and shall thereafter develop.


"Product
Release
Checklist" means a checklist created by the Steering Committee pursuant
to Section 4.4.8 following completion of successful
development of such Product pursuant to the applicable
Statement of Work and containing tasks that must be
completed to the satisfaction of the Steering Committee
prior to the first commercial sale of a Product. The tasks
shall include, but need not be limited to, the following:
(i) intellectual property review (including non-infringement
analysis), (ii) approval of sales and marketing literature
and rollout plan (iii) receipt of all necessary regulatory
approvals and (iv) additional items as set forth in Section
4.4 (warranty, manufacturability, Minimum Volumes QA/QC) and
Section 8.1 (initial pricing).


"Pro-
gram(s)" means the Initial Program for development of the Initial
Product as detailed in the Initial Statement of Work and any
further program for the development of Future Products as
agreed by the Parties pursuant to Section 4.4.1 of this
Agreement.


"Program
Manager" means the person appointed by each Party to manage the
Program on its behalf pursuant to Section 4.6.


"Specifica-
tions" means those performance and other specifications for the
operation, form and other material characteristics of a
Product as determined by the Parties in accordance with this
Agreement.


"Statement
of Work" means any detailed program of development work to be
performed under this Agreement by the Parties, as modified
from time to time in accordance with the terms of this
Agreement, and includes without limitation, the Initial
Statement of Work.


"Steering
Committee" means the steering committee established in accordance with
Section 4.


"TAM" means the total available market measured over a six (6)
month period for all array transceiver products that compete
with a Product as determined in accordance with Section 2.4
hereof by the Steering Committee pursuant to Section 4.4.3
below on the basis of the "VCSEL Transceiver Global Market
Forecast" published by ElectroniCast Corporation as updated
from time to time or as reported by such other
internationally recognized market forecasting company as the
Parties may agree.


"Terri-
tory" means the World.


"Very
Short
Reach" means distances of 400 meters or less.


"Work
Report" means the report prepared by each Party in accordance with
Section 3.3.


1.3 Reference to a Party hereto shall include such Party's Affiliates and
such Party's permitted assignees.


1.4 Reference to any statute or statutory provision or order or regulation
made thereunder include that statute, statutory provision, order or
regulation as amended, modified, re-enacted or replaced from time to time
whether before or after the date hereof.


1.5 References to persons shall include bodies corporate, unincorporated,
associations, partnerships and individuals. References to the singular
shall include the plural and vice-versa.


1.6 Headings to Sections are for information only and shall not form part of
the operative provisions of this Agreement or the Exhibits and shall be
ignored in construing the same.


1.7 References to Recitals, Sections or Exhibits are to recitals to, Sections
of or exhibits to this Agreement.


2. Scope of Agreement and Roles of the Parties


2.1 This Agreement sets down the terms on which the Parties shall collaborate
in the design, development, production, marketing and sale of the Initial
Product and any Future Products that the Parties determine to make
subject to this Agreement pursuant to Section 5.3 below. The Parties
perceive that the immediate market demand for the Initial Product and the
Identified Future Products is for low cost, high speed (>10Gb/s)
fiberoptic data links tailored for Very Short Reach distances. The
primary target application is close to moderate proximity interconnection
between equipment racks for system manufacturers. Primary target
customers include, but are not limited to, redact.


2.2 During the term of this Agreement, EMCORE will direct its resources and
capabilities to the manufacture of high-quality VCSEL arrays, the design
of gigabit speed control circuits, photodetectors, optical links, and
electronics and shall provide for manufacture and QA/QC testing of the
Initial Product and any Future Products made subject to this Agreement by
the Parties pursuant to Section 5.3 hereof. Consistent with the Initial
Statement of Work, EMCORE shall be primarily responsible for the design,
development and manufacture of the Initial Product.


2.3 During the term of this Agreement, JDSU will provide for all marketing,
worldwide sales, application support and customer service and
distribution functions for the Initial Product and any Future Products
made subject to this Agreement by the Parties pursuant to Section 5.3
hereof and will provide technical support for the design and development
of such Initial Product and Future Products (including, to the extent
requested by EMCORE, assistance with the optical packaging, active
alignment, lens arrays and testing of such Products).


2.4 During the term of this Agreement and subject to Sections 2.5, 2.6 and
2.7 below, redact neither Party shall be prohibited from designing,
developing, marketing or selling product components (including, without
limitation, components used in Products) to third parties; provided that
such Party is not paid or compensated other than for the sale of said
components and for the design and development of said components. The
Parties acknowledge that either Party may acquire third parties (each an
"Acquired Company") that have expertise, intellectual property, and/or
carry on business relating to the Products (collectively the "Business").
redact


2.5 Notwithstanding Section 2.4 above, EMCORE shall have the right to
terminate its redact obligations under said Section 2.4 as to any
Product subject to this Agreement (but not this Agreement itself) for
which JDSU fails to sell the Minimum Volume of such Product as provided
in this Section 2.5 during any six month period (the first such six (6)
month period for each Product to commence three (3) months after the
Commercial Launch Date for that Product); provided that purchases for
resale pursuant to Section 8.2 shall be counted as sales. JDSU shall be
credited for sales towards the Minimum Volume in any six (6) month period
for the sum of that number of Product units purchased by JDSU for resale,
sold by JDSU and that number of Product units ordered for shipment by
JDSU during that six (6) month period in accordance with this Agreement
that EMCORE failed to timely ship during that six (6) month period. JDSU
shall be required either to purchase for resale or sell such Minimum
Volume amounts to maintain EMCORE's redact obligations under said
Section 2.4, but shall not be deemed in breach of any of its obligations
hereunder solely for failure to purchase for resale or sell such Minimum
Volume amounts.


2.6 Notwithstanding Section 2.4 hereof, JDSU shall have the right to
terminate its non-compete obligations pursuant to Section 2.4 above as to
any Product subject to this Agreement (but not this Agreement itself) as
follows:


(a) Should EMCORE fail to ship that quantity of units of a Product
subject to the Customer Commitment in accordance with Section 6.2
hereof that constitute redact percent (redact%) of the
aggregate units of such Product subject to the Customer Commitment
(other than a failure to ship caused by JDSU's failure to supply
or delay in supplying parts used in the Product) during any six
(6) month period (such six (6) month period to commence three (3)
months after the Commercial Launch Date for that Product) during
the term of this Agreement, JDSU shall have the right to terminate
the redact provisions as to such Product on not less than sixty
(60) days notice to EMCORE, which shall have the right to cure
such delinquency during that sixty (60) day period by the shipment
of all units in arrears and the timely shipment of all additional
units of such Product subject to the Customer Commitment that have
shipment dates within that thirty (30) day period; or


(b) Should EMCORE ship units of a Product to a third party customer or
JDSU that have warranty return rates in excess of redact percent
(redact%) (other than as a result parts supplied by JDSU) during
any six (6) month period (such six (6) month period to commence
three (3) months after the Commercial Launch Date for that
Product), JDSU shall have the right to terminate the redact
provisions as to such Product on not less than sixty (60) days
notice to EMCORE, which shall have the right to cure such warranty
failure problem by: (i) creating a corrective action plan
regarding such warranty failure problem, which plan is reasonably
acceptable to JDSU, and (ii) shipping replacement Products to the
third party customer or JDSU, as applicable, during that sixty
(60) day period that have a warranty failure rate of less than
redact percent (redact %); provided, however, that EMCORE
shall not be deemed in breach of any of its obligations hereunder
solely for failure to meet its obligations under (a) or (b) above.


2.7 In the event that either EMCORE or JDSU shall exercise its rights under
Section 2.5 or 2.6 above to terminate its redact obligations under
Section 2.4 above as to a Product, the redact obligations of the other
Party shall also be terminated as to such Product. At any time that the
Parties are not subject to the redact obligations set forth in Section
2.4 above with respect to a particular Product, commissions shall be
payable to JDSU only with respect to units of that Product sold through
JDSU in accordance with this Agreement. redact, this Agreement shall
not serve to restrict either Party as to the development, manufacture or
sale of any other products that they may elect to pursue during the term
of this Agreement.


3. Collaboration and Initial Work of the Parties


3.1 The Parties shall collaborate in good faith under the Agreement and
shall, subject to the confidentiality restrictions imposed hereunder,
provide to the other Party such Company Information as the disclosing
Party determines in good faith is reasonably required for the performance
of its obligations under the Agreement.


3.2 EMCORE shall as soon as practicable after the Effective Date commence its
development work pursuant to the Initial Statement of Work. The Steering
Committee shall within sixty (60) days after the Effective Date jointly
prepare a Statement of Work for the first of the Identified Future
Products and on a thirty (30) day schedule for each additional Statement
of Work thereafter, complete preparation of Statements of Work for the
remaining three Identified Future Products within one hundred fifty (150)
days after the Effective Date. Each of the Identified Future Products
shall become subject to this Agreement upon the agreement by the Steering
Committee as to such Statements of Work and the other items set forth in
Section 5.3(a) hereof, and the failure of the Steering Committee to so
agree as to any Identified Future Product shall cause such product to not
become subject to this Agreement. As to the Initial Product and any
Identified Future Product that the Steering Committee agrees shall become
a Product for the purposes of this Agreement pursuant to said Section
5.3(a), each Party agrees to use its reasonable best efforts to complete
its work within the development schedules set forth in the Initial
Statement of Work and the Statements of Work f ...