Exhibit 10.69
CONFIDENTIAL TREATMENT
TECHNOLOGY LICENSE
AGREEMENT
This Technology License Agreement
(the “ Agreement ”) is entered into as of March
18, 2005 (“ Effective Date ”) by Occam Networks,
Inc., a Delaware corporation with a principal place of business at
77 Robin Hill Road, Santa Barbara, California 93117 (“
Occam ”), and Tellabs Petaluma, Inc., a Delaware
corporation with a principal place of business at 1465 North
McDowell Boulevard, Petaluma, California 94954 (“
Tellabs ”), on behalf of itself and its parent,
subsidiaries, and affiliates such that each entity will be jointly
and severally liable for the obligations of the other
entities.
Recitals
A. The parties are entering into a
strategic alliance that involves the licensing of technology,
manufacture and supply of products, and a financial investment in
Occam by Tellabs. The parties, or their affiliates, previously
entered into a Mutual Confidentiality Agreement dated July 27, 2004
and are simultaneously entering into a Manufacturing License
Agreement, a Supply Agreement, a First Restated and Amended Mutual
Confidentiality Agreement, a Series A-2 Preferred Stock Purchase
Agreement, and a Fourth Amended and Restated Investors’
Rights Agreement (collectively, the “ Ancillary
Agreements ”), as well as this Agreement, to implement
the strategic alliance.
B. This Agreement sets forth the
terms by which Occam will license Tellabs to integrate certain
Occam technology into Tellabs’ Fiber to the Curb (FTTC)
products.
The parties agree as
follows:
Agreement
1. DEFINITIONS
1.1 “ Blade Technology
” means all Technology owned by Occam and provided by Occam
to Tellabs during the term of this Agreement that explicitly
relates to Occam’s BLC 6000 one (1) gigabit ethernet
switching and transport subsystems Technology or the manufacture,
marketing, distribution, sale, or support of Occam’s BLC 6000
one (1) gigabit ethernet switching and transport subsystems
Technology, including the original Technology Deliverables and
updated Technology Deliverables provided by Occam.
1.2 “ Claim ” is
defined in Section 6.1(a).
1.3 “ FTTC Card ”
means Tellabs’ FTTC card known as of the Effective Date as
ESU1.
1.4 “ FTTC Product
” means Tellabs’ FTTC products known as of the
Effective Date as: DISC*S MX-FTTC and DISC*S FITL.
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treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission.
Omitted portions have been filed separately with the
Commission.
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CONFIDENTIAL TREATMENT
1.5 “ Manufacturing
Specifications ” means the manufacturing specifications
for the Blade Technology provided by Occam.
1.6 “ Occam Indemnified
Parties ” is defined in Section 6.3(a).
1.7 “ Occam Patent
Right ” means a patent right of any class or type issued
by any jurisdiction (a) that relates to or arises out of any Blade
Technology and (b) that is owned or controlled by Occam or its
parent, subsidiaries, or affiliates.
1.8 “ Scope of Work
” means the scope of work attached as Exhibit C
.
1.9 “ Technical
Specifications ” means the written technical and
functional specifications for the Blade Technology provided by
Occam.
1.10 “ Technology
” means, regardless of form, any invention, discovery, work
of authorship, or information, including articles of manufacture,
machines, methods, processes, product designs, computer programs,
drawings, documentation, databases, algorithms, formulas, know-how,
and techniques.
1.11 “ Technology
Deliverables ” means the Manufacturing Specifications,
Technical Specifications, and the Technology owned by Occam listed
in Exhibit A , including updated versions of these
items.
1.12 “ Tellabs Brand
” means a trademark that Tellabs or a successor-in-interest
to Tellabs owns or otherwise has sufficient rights to use in
connection with the marketing, distribution, and sale of FTTC Cards
or FTTC Products.
1.13 “ Tellabs
Developments ” means improvements to, modifications of,
and derivative works of the Blade Technology made by or for Tellabs
and Technology developed or derived by or for Tellabs as a result
of its study of the performance, design, or operation of the Blade
Technology.
1.14 “ Tellabs Indemnified
Parties ” is defined in Section 6.1(a).
1.15 “ Tellabs Patent
Right ” means a patent right of any class or type issued
by any jurisdiction (a) that relates to or arises out of any Blade
Technology or any Tellabs Developments and (b) that is owned or
controlled by Tellabs or its parent, subsidiaries, or
affiliates.
1.16 “ Third Party
Technology ” means Technology identified as Third Party
Technology in Exhibit A or in a written notice delivered by
Occam to Tellabs before the Technology is delivered to
Tellabs.
2. TECHNOLOGY
LICENSE
2.1 Blade Technology .
Subject to the terms of this Agreement, Occam hereby grants to
Tellabs a perpetual (subject to termination as set forth in Section
9.3), worldwide,
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Omitted portions have been filed separately with the
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CONFIDENTIAL TREATMENT
non-exclusive, royalty-bearing (as set forth in
Section 4), non-assignable (except as set forth in Section 10.3),
non-transferable, non-sublicenseable license under Occam’s
intellectual property rights to:
(a) integrate (in accordance with
the applicable Technical Specifications) Blade Technology only into
FTTC Cards to be sold solely as part of FTTC Products under a
Tellabs Brand;
(b) market, distribute, and sell
FTTC Cards integrated with Blade Technology as part of FTTC
Products at a price set by Tellabs;
(c) use the Blade Technology during
the term of this Agreement and after the term of this Agreement in
accordance with Section 9.3(c) to provide technical support to
customers that purchase FTTC Cards integrated with Blade
Technology;
(d) make, have made, use, sell,
offer to sell, import, and distribute any FTTC Card (i) within the
scope of or covered by one or more claims of an Occam Patent Right;
(ii) manufactured by process, method, or procedure within the scope
of or covered by one or more claims of an Occam Patent Right; or
(iii) used in a process, method, or procedure within the scope of
or covered by one or more claims of an Occam Patent Right;
and
(e) practice any method, process, or
procedure within the scope of or covered by one or more claims of
an Occam Patent Right.
2.2 Third Party Technology .
This Agreement, including the license in Section 2.1, does not
grant Tellabs any rights with respect to any Third Party
Technology, including Third Party Technology provided by Occam to
Tellabs, whether as part of the Technology Deliverables or not. If
requested by Tellabs, Occam will use reasonable efforts to assist
Tellabs to identify and license, at Tellabs’ expense,
relevant Third Party Technology.
2.3 Tellabs Developments .
Tellabs will own all right, title, and interest (including
intellectual property rights) in and to all Tellabs
Developments.
2.4 Tellabs Patent Rights .
Tellabs hereby grants to Occam a perpetual, irrevocable, worldwide,
non-exclusive, royalty-free, transferable, sublicenseable license
under all Tellabs Patent Rights to do the following during and
after the term of this Agreement:
(a) make, have made, use, sell,
offer to sell, import, and distribute any product (i) within the
scope of or covered by one or more claims of an Tellabs Patent
Right; (ii) manufactured by process, method, or procedure within
the scope of or covered by one or more claims of an Tellabs Patent
Right; or (iii) used in a process, method, or procedure within the
scope of or covered by one or more claims of an Tellabs Patent
Right; and
(b) practice any method, process, or
procedure within the scope of or covered by one or more claims of a
Tellabs Patent Right.
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treatment filed with the Securities and Exchange Commission.
Omitted portions have been filed separately with the
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2.5 Reservation of Rights .
The Blade Technology is licensed, not sold, by Occam to Tellabs,
and nothing in this Agreement will be interpreted or construed as a
sale or purchase of the Blade Technology. Tellabs will not have any
rights in or to the Blade Technology except as expressly granted in
this Agreement. Occam reserves to itself all rights to the Blade
Technology not expressly granted to Tellabs in accordance with this
Agreement. Occam will own all right, title, and interest (including
intellectual property rights) in and to the Blade
Technology.
2.6 Bankruptcy Protection .
All licenses granted under this Agreement are, and will otherwise
be deemed to be, for purposes of Section 365(n) of the Bankruptcy
Code, licenses of rights to “intellectual property” as
defined under Section 101(56) of the Bankruptcy Code. The parties
agree that each party, as a licensee of the rights under this
Agreement, will retain and may fully exercise all of its rights and
elections under the Bankruptcy Code.
3. INTEGRATION, TECHNOLOGY
TRANSFER, AND TECHNICAL SUPPORT
3.1 Integration
(a) During the one-year period
following the Effective Date, the parties will cooperate to
integrate the Blade Technology into the FTTC Card as set forth in
the Scope of Work. Each party will use reasonable and diligent
efforts to accomplish the tasks assigned in the Scope of Work.
Unless otherwise specified in the Scope of Work or this Agreement,
Tellabs will provide all personnel, materials, equipment, and other
resources required to complete the integration effort as specified
in the Scope of Work.
(b) During the one-year period
following the Effective Date, Occam will provide not less than one
full-time equivalent (FTE) software engineer and one FTE hardware
engineer to participate in the integration effort under the Scope
of Work. Tellabs will reimburse Occam for the engineers’ time
at the applicable rates set forth in Exhibit E .
(c) As reasonably requested by
Tellabs during the one-year period following the Effective Date,
Occam will train Tellabs personnel to integrate the Blade
Technology into the FTTC Card, establish a development environment,
and utilize applicable testing tools at times and locations agreed
to by the parties. Occam will charge Tellabs for the training at
the applicable rates set forth in Exhibit E . Tellabs will
also reimburse Occam’s reasonable travel and personal (e.g.,
lodging, meals) expenses incurred in the course of providing
Tellabs-requested training away from Occam’s facilities. All
Technology provided as part of the training is Blade Technology and
must be protected by Tellabs as specified in this
Agreement.
(d) Tellabs will reimburse Occam for
its performance of all integration activities at the applicable
rates set forth in Exhibit E . The maximum total
reimbursement Tellabs will pay Occam under this Section 3.1 is
[***]. If the parties mutually agree that the time and resources
required to complete integration of the Blade Technology will
exceed their initial estimates, through no fault of either party,
the parties may mutually agree in writing to increase the maximum
reimbursement under this Section 3.1. Occam’s obligations
under this Section 3.1 will terminate once the maximum
reimbursement is reached.
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treatment requested pursuant to a request for confidential
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(e) Occam will invoice Tellabs on a
monthly basis for amounts to be reimbursed under Section 3.1(d) and
payment terms will be the full invoiced amount payable within
thirty (30) days after the date of the invoice (i.e., net 30
payment terms) unless the invoice is disputed in accordance with
Section 3.1(f), in which case payment will be due as specified in
Section 3.1(f).
(f) If Tellabs in good faith
believes that the invoiced amount of payment under an invoice is
incorrect, Tellabs may dispute the invoice by providing Occam,
within thirty (30) days after the date of the invoice, with a
detailed written notice of the amount that Tellabs is disputing and
Tellabs’ reasons for disputing the invoice. If Occam receives
Tellabs’ written notice of dispute within the thirty (30)-day
period, Tellabs’ obligation to pay the disputed portion of
invoiced amount will be suspended until the dispute is resolved in
accordance with this Section 3.1(f). The undisputed portion of the
invoiced amount is still due within thirty (30) days after the date
of the invoice. The parties must use good faith and diligent
efforts to resolve the dispute within twenty (20) days of
Occam’s receipt of Tellabs’ written notice of dispute.
If the parties are unable to resolve to the dispute within the
twenty (20)-day period, the parties will submit the dispute to a
third party arbitrator for resolution within sixty (60) days of
Occam’s receipt of Tellabs’ written notice of dispute.
Each party will submit its arguments and evidence to the arbitrator
in writing and the arbitrator will render a decision, within the
specified time period, based on the written materials presented by
the parties. The arbitrator’s decision must specify the
amount to be paid by Tellabs, if any, under the invoice and which
party will bear the costs of the arbitration. The decision of the
arbitrator is final and binding on the parties. Payment of the
amount specified by the arbitrator is due within five (5) business
days after the decision of the arbitrator is issued.
3.2 Technology
Transfer
(a) Within thirty (30) days after
the Effective Date, Occam will deliver to Tellabs two (2) copies of
the Technology Deliverables.
(b) During the five-year period
following the Effective Date, Occam will meet with Tellabs
quarterly to review Occam’s development, if any, of updated
versions of any Technology Deliverables and to agree on a process
and timeline for transferring updated Technology Deliverables to
Tellabs. Occam will transfer updated Technology Deliverables in
accordance with the process and timeline agreed to by the
parties.
(c) In addition to its obligations
under Section 3.2(b), during the five-year period following the
Effective Date, Occam will deliver to Tellabs updated Technology
Deliverables at the conclusion of pilot and beta development stages
(if any) of any updated version of a Technology Deliverable and
when an updated version of a Technology Deliverable is made
generally available by Occam.
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treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission.
Omitted portions have been filed separately with the
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3.3 Technical Support .
During the term of this Agreement, the parties will have the
technical support obligations set forth in Exhibit D
.
4. ROYALTIES
4.1 Royalty Amount . For each
FTTC Card sold by Tellabs during and after the term of this
Agreement, Tellabs will pay to Occam the royalties specified in
Exhibit B , plus any applicable taxes.
4.2 Royalty Report and
Payments . For so long as Tellabs sells FTTC Cards, within ten
(10) business days after the end of each calendar quarter during
and after the term of this Agreement, Tellabs will provide to Occam
a written report stating (a) the number and type of FTTC Cards and
FTTC Products sold during the calendar quarter just ended and (b) a
calculation of the aggregate royalties owed by Tellabs to Occam for
each FTTC Card sold during such period, as well as payment of such
royalties that are due and payable.
4.3 Audit
(a) For so long as Tellabs sells
FTTC Cards and for three (3) years thereafter, Tellabs will keep
current, complete, and accurate records regarding the calculation
and payment of royalties under this Agreement. Upon not less than
five (5) business days prior written notice from Occam, and not
more frequently than once per calendar year, Tellabs will provide
such materials, to the extent necessary or useful to Occam to
verify the accurate payment of royalties under this Agreement. If
requested by Occam, a senior Tellabs executive shall certify in
writing that the materials provided to Occam are current, complete,
and accurate.
(b) If Occam’s review of the
materials provided by Tellabs reveals any underpayment of
royalties, Tellabs will promptly make an additional payment in
order to comply fully with the terms of this Agreement unless
Tellabs disputes Occam’s finding in accordance with Section
4.3(c). If the amount of such underpayment is five percent (5%) or
greater, Tellabs will promptly reimburse Occam for its reasonable
costs of conducting its review of the materials provided by
Tellabs.
(c) If Tellabs in good faith
disputes in writing Occam’s finding of an underpayment of
royalties within five (5) business days of Tellabs’ receipt
of Occam’s request for payment, then the parties will agree
on a mutually acceptable independent third party auditor to audit
Tellabs’ records. Tellabs will provide the auditor with
access to all records and personnel that the auditor requests to
verify the calculation and payment of royalties under this
Agreement. The auditor’s determination will be final and
binding on the parties. If the auditor determines that Tellabs
underpaid royalties, then Tellabs will promptly make an additional
payment to Occam to comply fully with the terms of this Agreement
and will be responsible for the cost of the auditor. If the auditor
determines that Tellabs did not underpay royalties, then Occam will
be responsible for the cost of the auditor.
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treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission.
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5. REPRESENTATIONS AND
WARRANTIES
5.1 Authority . Each party
represents and warrants to the other party that (a) this Agreement
has been duly executed and delivered and constitutes a valid and
binding agreement enforceable against such party (and, with respect
to Tellabs, against its parents, subsidiaries, and affiliates) in
accordance with its terms; (b) no authorization or approval from
any third party is required in connection with such party’s
execution, delivery, or performance of this Agreement; and (c) the
execution, delivery, and performance of this Agreement does not
violate the laws of any jurisdiction or the terms or conditions of
any other agreement to which it is a party or by which it is
otherwise bound.
5.2 Product
Warranties
(a) Occam warrants to Tellabs that
the Blade Technology will be free from defects in design that cause
the Blade Technology to not meet its Technical Specifications for
six (6) years from the Effective Date if the Blade Technology is
manufactured in full compliance with the Manufacturing
Specifications. If the Blade Technology fails to conform to the
warranty in this Section 5.2(a), Occam will: (i) provide a work
around for a design defect in shipped FTTC Cards in accordance with
the Technical Support procedures set forth in Exhibit D ;
and (ii) provide Tellabs with corrected Blade Technology that
addresses the design defect.
(b) The warranties and remedies set
forth in Section 5.2(a) will not apply to nonconformities to the
extent caused by (i) defects in material or manufacture, including
the failure to manufacture in accordance the Manufacturing
Specifications; (ii) Tellabs’ failure to use or implement any
updated Blade Technology made available to Tellabs by Occam; (iii)
any alterations or modifications of, or additions to, the Blade
Technology not made in accordance with the Technical
Specifications; (iv) use of the Blade Technology in a manner for
which it was not designed or other than as specified in the
Technical Specifications; (v) the combination, use, or
interconnection of the Blade Technology with other Technology not
supplied or not approved by Occam; (vi) abnormal usage or misuse of
the Blade Technology, including, but not limited to, accident,
fire, water damage, earthquake, lightning, other acts of nature,
and other causes external to the Blade Technology; or (vii)
Tellabs’ or a third party’s negligence. If Occam
determines that any warranty claim reported by Tellabs falls within
any of the foregoing exceptions, Tellabs will pay Occam for its
services at the applicable rates set forth in Exhibit E
.
(c) This Section 5.2 sets forth
Tellabs’ exclusive remedies, and Occam’s entire
liability in contract, tort, or otherwise for any breach of the
warranty in Section 5.2(a) for any Blade Technology integrated into
an FTTC Card.
(d) The parties may agree to modify
the product warranties provided in this Section 5.2 on a customer
by customer basis in a written agreement signed by the
parties.
5.3 Disclaimer . EXCEPT FOR
THE EXPRESS REPRESENTATIONS AND WARRANTIES STATED IN THIS SECTION
5, OCCAM MAKES NO ADDITIONAL REPRESENTATION OR WARRANTY OF ANY KIND
WHETHER EXPRESS, IMPLIED
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(EITHER IN FACT OR BY OPERATION OF LAW), OR
STATUTORY, AS TO ANY MATTER WHATSOEVER. OCCAM EXPRESSLY DISCLAIMS
ALL IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, QUALITY, ACCURACY, TITLE, AND NON-INFRINGEMENT. OCCAM DOES
NOT WARRANT AGAINST INTERFERENCE WITH THE ENJOYMENT OF THE BLADE
TECHNOLOGY OR AGAINST INFRINGEMENT. OCCAM DOES NOT WARRANT THAT
TELLABS WILL BE ABLE TO SUCCESSFULLY INTEGRATE THE BLADE TECHNOLOGY
INTO FTTC PRODUCTS. OCCAM EXERCISES NO CONTROL OVER AND EXPRESSLY
DISCLAIMS ANY LIABILITY ARISING OUT OF THE USE OF THE BLADE
TECHNOLOGY. TELLABS AND ITS CUSTOMERS WILL NOT HAVE THE RIGHT TO
MAKE, PASS THROUGH, OR PASS ON ANY REPRESENTATION OR WARRANTY ON
BEHALF OF OCCAM TO ANY THIRD PARTY.
6. INDEMNIFICATION
6.1 Infringement Indemnification
by Occam
(a) Occam will, at its option and
expense, defend Tellabs and its parent, subsidiaries, and
affiliates and their respective officers, employees, directors,
agents, and representatives (“ Tellabs Indemnified
Parties ”) from or settle any claim, proceeding, or suit
(“ Claim ”) brought by a third party against an
Tellabs Indemnified Party alleging that Tellabs’ authorized
use of the Blade Technology infringes or misappropriates any
patent, copyright, trade secret, trademark, or other intellectual
property right if: (i) the Tellabs Indemnified Party gives Occam
prompt written notice of the Claim; (ii) Occam has full
