Toyoda Gosei Co., Ltd. (Head Office: Haruhi-cho, Nishikasugai-gun, Aichi-ken, Japan, President: Mr. Takashi Matsuura) and Nichia Corporation (Head Office: Anan-shi, Tokushima-ken, Japan, President: Mr. Eiji Ogawa) executed, on September 17, 2002, a Settlement Agreement having the following primary terms concerning technology of III- nitride semiconductors such as Blue LEDs, respecting any and all patent rights etc., of the parties hereto, and ending any and all disputes and lawsuits over the past six years between the two companies in order to prevent and resolve any disputes in the future.

As is known throughout the world, Blue LEDs have been developed based upon the pioneering technology of Professor Isamu Akasaki of the School of Engineering, Nagoya University (currently, Professor Emeritus of Nagoya University, and a Professor of Meijo University). In 1986, Toyoda Gosei started developing GaN-based Blue LEDs under the guidance of Professor Isamu Akasaki and with the assistance of Toyota Central R&D Labs., Inc. In the following year, 1987, Japan Science and Technology Corporation ("JST") entrusted the development of Blue LEDs to Toyoda Gosei, which Toyoda Gosei successfully achieved in 1991 with the accolades of JST. In October 1995, Toyoda Gosei started commercial production of high-brightness Blue LEDs and thereafter continued bringing new products to the market, one after another.

Nichia Corporation started developing Blue LEDs in 1989, and built up the technology for industrialization of GaN-based Blue LEDs in 1991. Nichia Corporation succeeded in the commercial production of high-brightness Blue LEDs in November 1993 for the first time in the world. Further, by applying its expertise as a phosphor manufacturer, and by combining YAG (Yttrium Aluminum Garnet) phosphor with Blue LEDs, Nichia Corporation developed and started commercial production of White LEDs in 1996 for the first time in the world. Thereafter, Nichia Corporation continued bringing new products to the market, one after another.

As is obvious from the above, through competitive development of the technology mainly between Nichia Corporation and Toyoda Gosei, the brightness and productivity of Blue LEDs were enhanced remarkably, resulting in a variety of new applications, including full-color display, traffic signals, mobile phone backlights, automotive illumination, and interior lighting.

In the near future, demand for products using cutting-edge Blue LED technology, such as blue-laser DVD players and recorders, and all manner of high-frequency devices required for broadband communication, will only grow. What is more, the use of Blue LED technology in lighting will significantly reduce CO2 emissions through energy conservation, thereby assisting in the prevention of global warming. As a result, the market for Blue LED technology will expand significantly.

In the days ahead, we will, as leading competitors in the market, further improve these pioneering technologies originated in Japan.

NOTE
1.	Both parties agree that either party shall not demand against the other party injunctive relief or claims for damages, etc. in respect of manufacturing or sales based on any of the patents of the former party.
2.	Both parties agree that either party shall not be liable to the other party for payment of damage compensation (including any settlement payment), or for ceasing manufacture or sale of its own products with respect to any of the patents currently owned by the other party (including the subject patents of the lawsuits).
3.	Both parties agree to withdraw any and all infringement actions or invalidation proceedings in the Japanese Patent Office ("JPO"), and any action before the Tokyo High Court for reversal of any trial decision of the JPO, pending between both parties.
4.	Both parties agree that in the event either party utilizes the other party's future patents in respect of any future product, the former party shall pay a reasonable royalty to the former party.
5.	Concerning Nichia Corporation's patents relating to white LEDs in which YAG phosphor material is used, Toyoda Gosei agrees to pay Nichia Corporation a royalty agreed upon by both parties in respect of future products using YAG for which the said patents will be utilized.

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