EXHIBIT 99.1
WIRELESS BROADBAND PRODUCTS
TECHNOLOGY LICENSE OPTION AGREEMENT
BETWEEN
STANFORD TELECOMMUNICATIONS INC.
a Delaware Corporation having its principal place of business at
0000 Xxxxxxxx Xxxxxx, X.X. Xxx 0000, Xxxxxxxxx, Xxxxxxxxxx 00000
("Stel")
AND
NEWBRIDGE NETWORKS CORPORATION
a Canadian Corporation having its principal place of business at
000 Xxxxx Xxxx, X.X. Xxx 00000, Xxxxxx, Xxxxxxx, Xxxxxx X0X 0X0
("Newbridge")
This Agreement is made effective as of the 22nd day of June 1999 (the "Effective
Date").
BACKGROUND
A. Stel designs, manufactures and markets advanced digital communications
products and systems to establish or enhance communications via satellites,
terrestrial wireless and cable.
B. Newbridge designs, manufactures, markets and services a comprehensive
family of networking products and systems.
C. Pursuant to that certain Agreement and Plan of Merger (the "Merger
Agreement") executed concurrently herewith by Stel and Newbridge (each a "Party"
and collectively "Parties") and Saturn Acquisition Corp., a Delaware corporation
and wholly owned subsidiary of Newbridge ("Merger Sub"), as a condition and as a
inducement to Newbridge and the Merger Sub to enter the Merger Agreement, Stel
is providing an option to license Stel's wireless broadband products technology
upon the terms and subject to the conditions set forth in this Agreement.
THEREFORE THE PARTIES AGREE:
1. Definitions. The following capitalized terms shall have these meanings
ascribed to them:
1.1 "Affiliate" means any person that controls, is controlled by or is
under common control with a Party
1.2 "Agreement" means this Wireless Broadband Products Technology License
Option Agreement.
1.3 "Change of Control" means an "Acquisition Transaction", as such term
is defined in the Merger Agreement; provided, however, that the spin-off of the
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WBP business of Stel by distribution to Stel's stockholders shall not constitute
a Change of Control, unless subsequent to such spin-off and during the Option
Period an Acquisition Transaction occurs involving the new company conducting
the WBP business.
1.4 "Escrow Agreement" means an escrow agreement to be entered into by the
parties and an escrow agent (the "Escrow Agent") selected by the parties within
30 days of the Effective Date, which provides under the circumstances described
in Section 3.2 the release to Newbridge of the Stel Designs and related
information for the Stel Intellectual Property.
1.5 "Intellectual Property" means patents, copyrights, mask work rights,
trade secrets and any other intellectual or industrial properties as may be
recognized around the world, including without limitation, applications and
registrations for any of the foregoing.
1.6 "License" has the meaning set forth in Section 2.3
1.7 "Licensed Patents" means: (i) the patent and patent applications
specified in Exhibit A attached hereto; (ii) the resulting patents, reissues,
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reexaminations, and continuations, continuations-in-part and divisionals of any
of the foregoing; and (iii) corresponding foreign patent applications and
resulting patents of any of the foregoing.
1.8 "Licensed Products" are products that incorporate or are produced by
the practice of subject matter of Stel Intellectual Property or whose
manufacture, use, sale, export, or offer for sale would constitute an
infringement of Stel Intellectual Property but for the License granted under
this Agreement.
1.9 "Option" has the meaning set forth in Section 2.1
1.10 "Option Period" means the period beginning on the Effective Date and
ending on the earlier of: (i) May 24, 2001; (ii) nine months after the
termination by
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Newbridge of the Merger Agreement pursuant to Section 8.1(h) thereof; (iii)
twelve months after the termination by either Party of the Merger Agreement
pursuant to Section 8.1(b) or 8.1(c) thereof; and (iv) the date of termination
if the Merger Agreement is terminated by Stel pursuant to Section 8.1(f) or
Section 8.1(g) thereof.
1.11 "Stel Designs" means the designs for Stel's WBP specified in Exhibit
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B attached hereto, including without limitation, the schematics, net lists, mask
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works, test data, simulations and specifications therefore.
1.12 "Stel Intellectual Property" means all Intellectual Property owned or
sublicensable by Stel at any time during the Term relating to, or otherwise used
by its WBP business, including without limitation, the Licensed Patents and the
Stel Designs, and Stel's written technical information and know-how therefor.
1.13 "Term" means the period beginning on the Effective Date and ending
upon: (i) the end of the Option Period, if Newbridge does not exercise the
Option by such time; or (ii) the expiration of the last of Licensed Patents,
otherwise.
1.14 "WBP" means wireless broadband products.
2. License Option and Grant; Technology Transfer
2.1 Option Grant. Stel hereby grants to Newbridge an option (the
"Option") to acquire the license specified in Section 2.3.
2.2 Exercise of Option. The Option shall be exercisable by Newbridge upon
a Change of Control. In order to exercise the Option, Newbridge shall: (i)
provide Stel notice of its exercise of the Option; and (ii) pay Stel the option
fee specified in Section 4.1.
2.3 License. Effective upon Newbridge's exercise of the Option, Stel
hereby grants to Newbridge a perpetual, nonexclusive, nontransferable,
worldwide, irrevocable, fully paid-up and royalty-free license (the "License")
without the right to sublicense except as set forth below to make, have made,
import, use, sell and have sold Licensed Products covered by Stel Intellectual
Property. Newbridge shall have the right to sublicense the rights set forth in
this Section 2.3 to its Affiliates, third party OEMs and end-users of the
Licensed Products.
2.4 License of "Intellectual Property". All rights and licenses granted
under or pursuant to this Agreement by Stel to Newbridge with respect to the
Stel Intellectual Property are, and shall otherwise be deemed to be, for
purposes of Section 365(n) of Title 11 of the United States Code (the
"Bankruptcy Code"), licenses of rights to "intellectual property" as defined
under Section 101(56) of the Bankruptcy Code. The Parties agree that Newbridge,
as a licensee of such rights and licenses, shall retain and may fully exercise,
provided it abides by the terms of this Agreement, all of its rights and
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elections under the Bankruptcy Code. The Parties further agree that, in the
event that any proceeding shall be instituted by or against Stel seeking to
adjudicate it bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief or composition of it
or its debts under any law relating to bankruptcy, insolvency or reorganization
or relief of debtors, or seeking an entry of an order for relief or the
appointment of a receiver, trustee or other similar official for it or any
substantial part of its property, or Stel shall take any action to authorize any
of the foregoing actions (each a "Proceeding"), Newbridge shall have the right
to retain and enforce its rights under this Agreement including, but not limited
to, the right obtain the License for the Stel Intellectual Property in
accordance with the terms of this Agreement.
2.5 Technology Transfer. Upon the effectiveness of the License in
accordance with Section 2.3, (i) Stel shall provide Newbridge all reasonably
applicable information pertinent to the manufacture of Stel Designs or otherwise
to exploit the Stel Intellectual Property; and (ii) for a period of one year
after the exercise of the Option, Stel shall make available to Newbridge at
least three engineers that are thoroughly familiar with the Stel Intellectual
Property for the purposes of facilitating the technology transfer required to
fully exploit the License, including without limitation, applying the Stel
Designs to Licensed Products.
3. Escrow
3.1 Deposit. Stel shall deposit in a timely manner into escrow with the
Escrow Agent all reasonably applicable information pertinent to the manufacture
of Stel Designs or otherwise to exploit the Stel Intellectual Property (the
"Escrow Materials"), in accordance with the Escrow Agreement. Stel shall
periodically update the Escrow Materials based on any improvements to the Stel
Intellectual Property made during the Term. The Escrow Agent fees shall be
borne by Stel.
3.2 Release Events. The Escrow Materials shall be released only under the
following circumstances:
(a) To Newbridge, due to the failure of Stel or Stel's successor-in-
interest after a Change of Control to carry out the technology transfer under
Section 2.5;
(b) To Newbridge, at its option, due to Stel's bankruptcy,
liquidation or winding up of its business; or
(c) To Stel, due to the expiration of the Option Period, without the
Option being exercised in accordance with Section 2.2.
3.3 Post-Release Use. Provided the Escrow Materials have been rightfully
released by the Escrow Agent to Newbridge in accordance with Section 3.2, the
Escrow Materials shall be subject to the License.
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4. Payments
4.1 Option Fee. Upon exercising the Option, Newbridge shall pay Stel the
sum of $69 million in consideration of the License and the technology transfer
specified in Section 2.5, including without limitation, the salaries, travel,
lodging and other expenses of the Stel personnel involved.
4.2 Payment Terms. Newbridge shall pay Stel by check or wire transfer in
immediately available funds within ten business days of notice of Newbridge's
exercise of the Option.
5. Confidentiality
Newbridge and Stel agree that each of them shall treat any confidential
information disclosed hereunder in accordance with the Confidentiality Agreement
effective as of March 1, 1999 between the Parties, which Confidentiality
Agreement, except with respect to the standstill provisions thereof, shall
remain in full force and effect in accordance with its terms.
6. Ownership
6.1 Newbridge. As between Newbridge and Stel, Newbridge shall retain
ownership of all right, title and interest in and to any and all Intellectual
Property: (i) held by Newbridge as of the Effective Date; or (ii) solely
developed by Newbridge following exercise of the Option using the Stel
Intellectual Property. Any and all Intellectual Property jointly developed by
the Parties pursuant to Section 2.5 shall be jointly owned.
6.2 Stel. Subject to the License granted hereunder, Stel shall retain
ownership of all right, title and interest in and to the Stel Intellectual
Property.
7. Representations, Warranties and Indemnification
7.1 Representations and Warranties. Stel represents, warrants and
covenants that:
(a) Other than the Licensed Patents and Stel Designs scheduled on
Exhibit A and Exhibit B, respectively, there are no other Intellectual Property
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rights: (i) used in the WBP business or (ii) required to exploit the License;
(b) Stel owns and shall continue to own the Stel Intellectual
Property free and clear of any liens or encumbrances; and
(c) Stel is able and shall remain able to grant the License specified
in Section 2.3 for the Term and shall not commit any acts, or through inaction
allow any events to occur, which would impair such ability.
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7.2 Indemnification. Stel shall indemnify, hold harmless, and defend
Newbridge, its officers, employees, and agents against any claims, suits,
losses, damages, costs, fees, and expenses resulting from or arising out of
exercise of the License granted under this Agreement or any breach of any
representation or warranty hereunder. Stel shall pay all costs incurred by
Newbridge to enforce this indemnification, including reasonable attorneys' fees.
8. Term and Survival
8.1 Term. This Agreement shall be in effect for the Term.
8.2 Survival. Upon the expiration of this Agreement, the provisions of
Articles 1, 5 and 6, Section 7.2, this Section 8.2, Section 9.4, Section 9.13
and Section 9.14 shall survive and continue into perpetuity.
9. Miscellaneous
9.1 Waiver. No provision of this Agreement is deemed waived and no breach
excused unless such waiver or consent is made in writing and signed by the Party
to have waived or consented. Failure on the part of either Party to exercise or
enforce any right of such Party under this Agreement shall not be a waiver by
such Party of any right, or operate to bar the enforcement or exercise of the
right at any time thereafter.
9.2 Assignability. This Agreement is binding on and inures to the benefit
of the Parties and their respective successors and assigns. Newbridge's rights
and obligations hereunder shall survive any change in the status of Stel,
including without limitation, Change of Control, bankruptcy or receivership.
9.3 Notices. Any report, payment, notice, or other communication that
either party receives must be in writing and shall be properly given and
effective on the date of delivery if delivered in person, or the fifth day after
mailing if mailed by first-class certified mail, postage paid, to the addresses
given below (or to an address designated by written notice to the other party):
In the case of Newbridge: Newbridge Networks Corporation
000 Xxxxx Xxxx, X.X. Xxx 00000
Xxxxxx, Xxxxxxx, Xxxxxx X0X 0X0
Phone: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxx Xxxxxx
In the case of Stel: Stanford Telecommunications, Inc.
0000 Xxxxxxxx Xxxxxx, X.X. Xxx 0000
0
Xxxxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxx
9.4 Governing Law. This Agreement and performance hereunder shall be
governed by the laws of the State of California, without regard to its conflict
of laws provisions. The Parties hereby acknowledge and agree that the United
Nations Convention on Contracts for the International Sale of Goods shall not
apply to this Agreement.
9.5 Export Control. Newbridge shall observe all applicable United States
and foreign laws and regulations concerning the transfer of Licensed Products
and related technical data, including International Traffic in Arms Regulations
(ITAR) and Export Administration Regulations. The foregoing notwithstanding,
Stel shall be responsible for obtaining any export permits hereunder for the
License that may be exercised hereunder.
9.6 Force Majeure. This Agreement is not breached and no liability is
created when a Party fails to perform an obligation under this Agreement if the
failure or omission arises from a cause beyond the reasonable control of such
Party. These causes include, but are not limited to, the following: acts of
God; acts or omissions of any government or governmental agency; compliance with
requirements, rules, regulations, or order of any governmental authority or any
office, department, agency, or instrumentality thereof; fire, storm, flood,
earthquake; accident; acts of the public enemy, war, rebellion, insurrection,
riot, sabotage, invasion; quarantine, restriction; transportation embargoes; or
failures or delays in transportation.
9.7 Interpretation. The Section headings contained in this Agreement are
solely for purpose of reference and shall not in any way affect the meaning or
interpretation of this Agreement.
9.8 Amendments. Subject to applicable law, this Agreement may be amended,
modified or supplemented only by written agreement of Newbridge and Stel.
9.9 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9.10 Severability. In case any one or more of the provisions contained in
this Agreement should be finally determined to be invalid, illegal or
unenforceable in any respect against a Party hereto, it shall be adjusted if
possible to effect the intent of the parties. In any event, the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby, and such invalidity,
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illegality or unenforceability shall only apply as to such party in the specific
jurisdiction where such final determination shall have been made.
9.11 No Agency. Neither Party is an agent of the other and neither shall
have any power to contract for the other Party for any purpose.
9.12 Entire Agreement. This Agreement, including the exhibits hereto and
the documents and instruments referred to herein, and the Merger Agreement,
including the exhibits thereto and the documents and instruments referred to
therein, embody the entire agreement and understanding of the parties hereto in
respect of the subject matter contained herein.
9.13 Rules of Construction. Each party to this Agreement has been
represented by counsel during the preparation and execution of this Agreement,
and therefore waives any rule of construction that would construe ambiguities
against the party drafting the Agreement.
9.14 Jury Waiver. The Parties irrevocably waive trial by jury.
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IN WITNESS WHEREOF, the Parties have executed this Agreement, on the date
first above written.
NEWBRIDGE NETWORKS CORPORATION
By: /s/ Xxxx X. Xxxx
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Name: Xxxx X. Xxxx
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Title: President and Chief Operating Officer
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By: /s/ Xxxxx Xxxxxx
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Name: Xxxxx Xxxxxx
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Title: Vice President and General Counsel
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STANFORD TELECOMMUNICATIONS, INC.
By: /s/ Xxx X. Xxxxxx
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Name: Xxx X. Xxxxxx
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Title: President and Chief Executive Officer
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