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Exhibit 99.1
LICENSE AGREEMENT
This License Agreement (the "
Agreement "), dated as of December 29, 2006 (the "
Effective Date "), is by and between Paradyne Networks,
Inc., a Delaware corporation (" Licensor "), and Verso
Technologies, Inc., a Minnesota corporation (" Licensee
").
BACKGROUND
WHEREAS, Licensor and Licensee
have entered into that certain Asset Purchase Agreement dated as of
December 29, 2006 (the " Purchase Agreement "); and
WHEREAS, pursuant to the Purchase
Agreement, Licensor has agreed to license to Licensee the Retained
IP (as defined below) on a non-exclusive basis and the Transferred
IP on an exclusive basis.
NOW, THEREFORE, the parties hereto
agree as follows:
ARTICLE 1.
Definitions
Any capitalized terms used herein
which are not defined below shall have the meanings given to them
in the Purchase Agreement:
" Bankruptcy Code " means
as set forth in Section 7.02 .
" Extended License Date "
means as set forth in Section 2.05 .
" Disclosing Party " means
as set forth in Section 4.01 .
" Improvements " means any
improvements, modifications or enhancements which are a derivative
of or related to the Retained IP and/or Transferred IP.
" Infringing Activities "
means as set forth in Section 3.01(b) .
" Intellectual Property
Rights " means any or all of the following and all rights in,
arising out of, or associated with: (a) all United States and
foreign patents and utility models and applications therefor,
including provisional applications and all reissues, divisions,
re-examinations, renewals, extensions, continuations and
continuations-in-part thereof; (b) all rights in inventions
(whether patentable or not), invention disclosures, improvements,
trade secrets, proprietary information, know-how, technology and
technical data; and (c) all copyrightable material, copyright
registrations and applications therefor and all other rights
corresponding thereto throughout the world including moral
rights.
" Licensed Products " means
the iMARC product line and the 7123 TI CSU/DSU product.
" Proprietary Information "
means as set forth in Section 4.01 .
" Receiving Party " means
as set forth in Section 4.01 .
Signature Page to License Agreement
S-1
" Retained IP " means any
Intellectual Property Rights owned by Licensor or licensed to
Licensor, in each case, which do not constitute Transferred IP but
which were used by Licensor in the conduct of the Business prior to
the Effective Date, but in the case of Intellectual Property Rights
licensed to Licensor, only such Intellectual Property Rights that
Licensor has the right to license to Licensee on a royalty-free
basis without restriction.
" Subsidiary " of a party
means any entity which is controlled by that party. An entity shall
be regarded as in control of another entity if it owns or controls,
directly or indirectly, more than fifty percent (50%) of the shares
of the subject entity entitled to vote in the election of directors
(or, in the case of an entity that is not a corporation, for the
election of the corresponding managing authority).
" Term " means as set forth
in Section 6.01 .
ARTICLE 2.
Technology Licenses
Section 2.01 .
License Grant to Retained IP. Subject to the terms and
conditions of this Agreement, Licensor hereby grants to Licensee a
perpetual (except as set forth below), worldwide, royalty-free,
non-transferable (except as set forth in Section 7.07
), non-exclusive license, under the Retained IP, to make, have
made, use, offer for sale, and sell Licensed Products and to
practice any methods, processes and procedures covered by the
Retained IP, in each case solely within the conduct of the Business
and solely during the Term. Notwithstanding the foregoing, the
license granted to Licensee under this Section 2.01
shall terminate on the IP Payment Date, if, and only if, Licensee
fails to provide to Licensor the IP Payment on the IP Payment Date.
Otherwise, the license granted to Licensee under this
Section 2.01 shall continue in perpetuity.
Section 2.02
License Grant to Transferred IP. Subject to the terms and
conditions of this Agreement, Licensor hereby grants to Licensee a
limited term, worldwide, royalty-free, non-transferable (except as
set forth in Section 7.07 ), exclusive (except as set
forth in Section 2.05 ) license, under the Transferred
IP, to make, have made, use, offer for sale, and sell Licensed
Products and to practice any methods, processes and procedures
covered by the Transferred IP, in each case solely within the
conduct of the Business and solely until the IP Payment Date. Upon
the IP Payment Date, the license granted under this
Section 2.02 shall terminate.
Section 2.03
Sublicenses. The license granted to Licensee in
Sections 2.01 and 2.02 shall include the right
to grant and authorize sublicenses to one or more Subsidiaries of
Licensee or third parties who may assist in the development of
Licensed Products for use in the conduct of the Business for
Licensee; provided that: (a) any such sublicenses shall
terminate contemporaneously with the termination of any licenses
granted to Licensee hereunder; and (b) Licensee provides a
copy of each such sublicense to Licensor upon the expiration or
termination of this Agreement. Licensee shall have no other right
to grant or authorize sublicenses except that the license hereunder
shall pass to the extent required to: (i) permit a reseller or
distributor who has agreed in writing to be bound by the
confidentiality restrictions set forth in this Agreement to resell
Licensed Products; and (ii) permit a consumer of the
Licensed
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Products to use indefinitely whether or not this Agreement is in
effect such Licensed Product, without the prior written consent of
Licensor.
Section 2.04 .
Retention of Rights. Licensor hereby reserves all rights in
the Retained IP and Transferred IP not expressly granted under this
Agreement.
Section 2.05
License Back. Licensee hereby grants to Licensor and Zhone
Technologies, Inc. and its Subsidiaries a perpetual (except as set
forth below), irrevocable, worldwide, royalty-free,
non-transferable (except as set forth in Section 7.07
), non-exclusive license, under the Transferred IP: (i) prior to
the Extended License Date (as hereafter defined), to make, have
made, use, offer for sale, sell and have sold Licensed Products and
to practice any methods, processes and procedures covered by the
Transferred IP solely on behalf of Licensee ( e.g. pursuant
to a reseller or manufacturing agreement between the parties); and
(ii) after the Extended License Date, to make, have made,
use, offer for sale, sell and have sold Licensed Products and any
other products manufactured, marketed, distributed and/or sold by
Licensor and/or Zhone Technologies, Inc. and/or its Subsidiaries
and to practice any methods, processes and procedures covered by
the Transferred IP. Notwithstanding the foregoing, the license
granted to Licensor under this Section 2.05(ii) shall
automatically terminate thirty (30) days after the Inventory
Payment Date if Licensee pays to Licensor the Inventory Payment
(less any amount remaining under dispute in good faith under
Section 2.5 of the Purchase Agreement) prior to the end
of such 30-day period (the end of such 30-day period is referred to
herein as the " Extended License Date "). Otherwise, the
licenses granted to Licensor under this Section 2.05
shall continue in perpetuity, including after the transfer, if at
all, of the Transferred IP to Licensee pursuant to the Purchase
Agreement.
ARTICLE 3.
Patent Prosecution And Infringement
Section 3.01 .
Prosecution and Infringement.
(a) Prosecution by
Licensee. Licensor shall have the sole right, but not the
obligation, to prepare, file, prosecute and maintain any
applications and registrations for the Retained IP and Transferred
IP. Licensee shall cooperate with and assist Licensor in all
reasonable respects in connection with such activities.
(b) Enforcement of
Intellectual Property Rights. In the event that Licensee
becomes aware of any infringement by a third party of any of the
Retained IP or Transferred IP (" Infringing Activities "),
it shall promptly notify Licensor. Licensor shall have the sole
right, but not the obligation, to institute, prosecute and control
any action or proceeding with respect to any such Infringing
Activities, using counsel of its choice, including any declaratory
judgment action arising from such infringement. Licensee shall
cooperate with Licensor in all reasonable resp
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