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.

 

*** Confidential 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,

 

*** Confidential 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

 

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.

 

*** Confidential 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

 

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.

 

*** Confidential 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

 

(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.

 

*** Confidential 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

 

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.

 

*** Confidential 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

 

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

 

*** Confidential 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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(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 and
complete control over the defense and settlement of such Claim; (iii) the
Tellabs Indemnified Parties provide assistance, at Occam’s expense as specified
in Section 6.1(b), in connection with the defense and settlement of such Claim
as Occam may reasonably request; and (iv) the Tellabs Indemnified Parties comply
with any settlement or court order made in connection with such Claim (e.g.,
relating to the future use of any infringing materials). The Tellabs Indemnified
Parties will not defend or settle any such Claim without Occam’s prior written
consent. The applicable Tellabs Indemnified Party shall have the right to
participate in the defense of such Claim at its own expense and with counsel of
its own choosing, but Occam will have sole control over the defense and
settlement of the Claim.

 

(b) Occam will indemnify the Tellabs Indemnified Parties against and pay (i) all
damages, costs, and attorneys’ fees finally awarded against an Tellabs
Indemnified Party in any Claim under Section 6.1(a); (ii) all out-of-pocket
costs (including reasonable attorneys’ fees) reasonably incurred by any of them
in connection with the defense of such Claim, including assistance provided
under Section 6.1(a)(iii) (other than attorneys’ fees and costs incurred without
Occam’s consent after Occam has accepted defense of such claim); and, (iii) if
any Claim arising under Section 6.1(a) is settled, all amounts to be paid to any
third party in settlement of any such Claim (as agreed to by Occam).

 

(c) If Tellabs’ use of the Blade Technology is, or in Occam’s reasonable opinion
is likely to become, enjoined or materially diminished as a result of a Claim
under Section 6.1(a), then Occam will either: (i) procure the continuing right
of Tellabs to use the Blade

 

*** Confidential 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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Technology; (ii) replace or modify the Blade Technology in a functionally
equivalent manner while maintaining the same form, fit, and function so that it
no longer infringes; or if, despite its commercially reasonable efforts, Occam
is unable to do either (i) or (ii), Occam will (iii) terminate Tellabs’ right to
use that Blade Technology.

 

(d) Occam will have no obligation under this Section 6.1 for any alleged
infringement or misappropriation to the extent that it arises out of or is based
upon (i) use of the Blade Technology in combination with other Technology if
such alleged infringement or misappropriation would have not have arisen but for
such combination; (ii) Blade Technology that is provided to comply with designs,
requirements, or specifications required by or provided by Tellabs, if the
alleged infringement or misappropriation would not have arisen but for the
compliance with such designs, requirements, or specifications; (iii) use of the
Blade Technology outside of the scope of the license granted to Tellabs; (iv)
Tellabs’ failure to use the latest version of the Blade Technology provided by
Occam or to comply with instructions provided by Occam, if the alleged
infringement or misappropriation would not have occurred but for such failure;
or (v) any modification of the Blade Technology not made or authorized in
writing by Occam where such alleged infringement or misappropriation would not
have occurred absent such modification. Tellabs is responsible for any costs or
damages that result from these actions.

 

(e) This Section 6.1 states Occam’s sole and exclusive liability, and Tellabs’
sole and exclusive remedy, for the actual or alleged infringement or
misappropriation of any third party intellectual property right by the Blade
Technology.

 

6.2 Product Liability Indemnification by Occam

 

(a) Occam will, at its option and expense, defend the Tellabs Indemnified
Parties from or settle any Claim brought by a third party against an Tellabs
Indemnified Party that arises directly from any injury or death to persons or
loss of or damage to tangible property that is caused directly by a design
defect in the Blade Technology if: (i) the Tellabs Indemnified Party gives Occam
prompt written notice of the Claim; (ii) Occam has full and complete control
over the defense and settlement of such Claim; (iii) the Tellabs Indemnified
Parties provide assistance, at Occam’s expense as specified in Section 6.2(b),
in connection with the defense and settlement of such Claim as Occam may
reasonably request; and (iv) the Tellabs Indemnified Parties comply with any
settlement or court order made in connection with such Claim (e.g., relating to
the future use of any Blade Technology containing a design defect). The Tellabs
Indemnified Parties will not defend or settle any such Claim without Occam’s
prior written consent. The applicable Tellabs Indemnified Party shall have the
right to participate in the defense of such Claim at its own expense and with
counsel of its own choosing, but Occam will have sole control over the defense
and settlement of the Claim.

 

(b) Occam will indemnify the Tellabs Indemnified Parties against and pay (i) all
damages, costs, and attorneys’ fees finally awarded against an Tellabs
Indemnified Party in any Claim under Section 6.2(a); (ii) all out-of-pocket
costs (including reasonable attorneys’ fees) reasonably incurred by any of them
in connection with the defense of such Claim, including assistance provided
under Section 6.2(a)(iii)(other than attorneys’ fees and costs incurred without

 

*** Confidential 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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Occam’s consent after Occam has accepted defense of such claim); and, (iii) if
any Claim arising under Section 6.2(a) is settled, all amounts to be paid to any
third party in settlement of any such Claim (as agreed to by Occam).

 

(c) Occam will have no obligation under this Section 6.2 for any injury or death
to persons or loss of or damage to tangible property to the extent caused by (i)
defects in material or manufacture, including the failure to manufacture FTTC
Cards 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) an Tellabs Indemnified Party’s or a third party’s
negligence. Tellabs is responsible for any costs or damages that result from
these actions.

 

6.3 Product Liability Indemnification by Tellabs

 

(a) Tellabs will, at its option and expense, defend Occam and its parent,
subsidiaries, and affiliates and their respective officers, employees,
directors, agents, and representatives (“Occam Indemnified Parties”) from or
settle any Claim brought by a third party against an Occam Indemnified Party
that arises directly from any injury or death to persons or loss of or damage to
tangible property that is caused directly by a design (excluding design defects
attributable to the Blade Technology), manufacturing, or materials defect in a
FTTC Card or FTTC Product if: (i) the Occam Indemnified Party gives Tellabs
prompt written notice of the Claim; (ii) Tellabs has full and complete control
over the defense and settlement of such Claim; (iii) the Occam Indemnified
Parties provide assistance, at Tellabs’ expense as specified in Section 6.3(b),
in connection with the defense and settlement of such Claim as Tellabs may
reasonably request; and (iv) the Occam Indemnified Parties comply with any
settlement or court order made in connection with such Claim (e.g., relating to
the future use of any FTTC Card or FTTC Product containing a design defect). The
Occam Indemnified Parties will not defend or settle any such Claim without
Tellabs’ prior written consent. The applicable Occam Indemnified Party shall
have the right to participate in the defense of such Claim at its own expense
and with counsel of its own choosing, but Tellabs will have sole control over
the defense and settlement of the Claim.

 

(b) Tellabs will indemnify the Occam Indemnified Parties against and pay (i) all
damages, costs, and attorneys’ fees finally awarded against an Occam Indemnified
Party in any Claim under Section 6.3(a); (ii) all out-of-pocket costs (including
reasonable attorneys’ fees) reasonably incurred by any of them in connection
with the defense of such Claim, including assistance provided under Section
6.3(a)(iii) (other than attorneys’ fees and costs incurred without Tellabs’
consent after Tellabs has accepted defense of such claim); and, (iii) if any
Claim arising under Section 6.3(a) is settled, all amounts to be paid to any
third party in settlement of any such Claim (as agreed to by Tellabs).

 

*** Confidential 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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(c) Tellabs will have no obligation under this Section 6.3 for any injury or
death to persons or loss of or damage to tangible property to the extent caused
by (i) a design defect in the Blade Technology attributable to Occam; (ii) any
defects caused by Tellabs’ required compliance with designs, requirements, or
specifications required by or provided by Occam, if the defect would not have
occurred but for the compliance with such designs, requirements, or
specifications; or (iii) an Occam Indemnified Party’s or a third party’s
negligence. Occam is responsible for any costs or damages that result from these
actions.

 

7. LIMITATION OF LIABILITY

 

7.1 Disclaimer of Consequential Damages. NOTWITHSTANDING ANYTHING TO THE
CONTRARY CONTAINED IN THIS AGREEMENT, EXCEPT FOR LIABILITY ARISING OUT OF A
BREACH OF SECTION 2 OR SECTION 8, NEITHER PARTY WILL, UNDER ANY CIRCUMSTANCES,
BE LIABLE TO THE OTHER PARTY OR ITS CUSTOMERS FOR ANY CONSEQUENTIAL, INCIDENTAL,
INDIRECT, SPECIAL, PUNITIVE, OR EXEMPLARY DAMAGES ARISING OUT OF OR RELATED TO
THE TRANSACTIONS CONTEMPLATED UNDER THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO
LOST PROFITS, LOSS OF BUSINESS, AND BUSINESS INTERRUPTION, EVEN IF SUCH PARTY IS
APPRISED OF THE LIKELIHOOD OF SUCH DAMAGES OCCURRING. THIS SECTION 7.1 DOES NOT
LIMIT EITHER PARTY’S OBLIGATION TO PAY ALL DAMAGES, REGARDLESS OF TYPE, AWARDED
AGAINST THE OTHER PARTY IN ANY CLAIM, PROCEEDING, OR SUIT THAT THE PARTY IS
OBLIGATED TO INDEMNIFY AGAINST UNDER SECTION 6.

 

7.2 Cap on Liability. EXCEPT FOR LIABILITY ARISING OUT OF SECTION 2, SECTION
3.1(d), SECTION 3.1(e), SECTION 4, SECTION 6, OR SECTION 8, UNDER NO
CIRCUMSTANCES WILL EITHER PARTY’S TOTAL LIABILITY OF ALL KINDS ARISING OUT OF OR
RELATED TO THIS AGREEMENT (INCLUDING BUT NOT LIMITED TO WARRANTY CLAIMS),
REGARDLESS OF THE FORUM AND REGARDLESS OF WHETHER ANY ACTION OR CLAIM IS BASED
ON CONTRACT, TORT, OR OTHERWISE, EXCEED TWICE THE TOTAL AMOUNT PAID OR PAYABLE
BY THE OTHER PARTY UNDER THIS AGREEMENT.

 

7.3 Independent Allocations of Risk. EACH PROVISION OF THIS AGREEMENT THAT
PROVIDES FOR A LIMITATION OF LIABILITY, DISCLAIMER OF WARRANTIES, OR EXCLUSION
OF DAMAGES IS TO ALLOCATE THE RISKS OF THIS AGREEMENT BETWEEN THE PARTIES. THIS
ALLOCATION IS REFLECTED IN THE ROYALTY PRICING OFFERED BY OCCAM TO TELLABS AND
IS AN ESSENTIAL ELEMENT OF THE BASIS OF THE BARGAIN BETWEEN THE PARTIES. EACH OF
THESE PROVISIONS IS SEVERABLE AND INDEPENDENT OF ALL OTHER PROVISIONS OF THIS
AGREEMENT, AND EACH OF THESE PROVISIONS WILL APPLY EVEN IF THE WARRANTIES IN
THIS AGREEMENT HAVE FAILED OF THEIR ESSENTIAL PURPOSE.

 

*** Confidential 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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8. CONFIDENTIALITY

 

8.1 Mutual Confidentiality Agreement. The information disclosed between the
parties under this Agreement will be governed by the First Amended and Restated
Mutual Confidentiality Agreement entered into by the parties simultaneously with
this Agreement (“NDA”). The Blade Technology must be protected by Tellabs as
Occam’s Confidential Information under the NDA.

 

8.2 Return of Materials. Upon the termination or expiration of this Agreement,
or upon earlier request, each party will deliver to the other all Confidential
Information that they may have in its possession or control. Notwithstanding the
foregoing, neither party will be required to return materials that it must
retain in order to receive the benefits of this Agreement or properly perform in
accordance with this Agreement.

 

9. TERM AND TERMINATION

 

9.1 Term. This Agreement will commence upon the Effective Date and will continue
in effect until five (5) years after the Effective Date.

 

9.2 Termination. This Agreement may be terminated before the end of the term of
this Agreement upon the occurrence of any of the events set forth in this
Section 9.2.

 

(a) If either party ceases to conduct business in the ordinary course, the other
party may terminate this Agreement by providing the first party with written
notice. The termination under this Section 9.2(a) will take place immediately
when the first party receives the other party’s notice of termination.

 

(b) If either party defaults on any of its material obligations,
representations, or warranties under this Agreement, or otherwise commits a
material breach of this Agreement, then the non-defaulting party may notify in
writing the defaulting party of the material breach or default and its intention
to terminate the Agreement if the material breach or default is not cured within
thirty (30) days (ten (10) days in the case of a failure to pay amounts when
due) after the date that the notice is received by the defaulting party. If the
defaulting party does not cure the breach during such thirty (30)-day period
(ten (10)-day period for a failure to pay amounts when due), the non-defaulting
party may terminate this Agreement by providing written notice of termination to
the defaulting party. The termination under this Section 9.2(b) will take effect
thirty (30) days after the defaulting party’s receipt of such notice of
termination.

 

9.3 Survival and Termination of the License Granted to Tellabs in Section 2.1

 

(a) Subject to termination in accordance with Section 9.3(b)(ii), the license
granted to Tellabs in Section 2.1 will survive the expiration, but not
termination, of this Agreement for so long as Tellabs continues to comply with
the terms and conditions associated with the license, including the payment of
the royalty specified in Section 4.1.

 

*** Confidential 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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(b) The license granted to Tellabs in Section 2.1 will terminate immediately if
(i) this Agreement is terminated for any reason or (ii) if Tellabs fails to
comply with the terms associated with the license following expiration of this
Agreement and fails to cure its breach within thirty (30) days of receiving
written notice of its breach from Occam.

 

(c) Following termination of the license granted to Tellabs in Section 2.1,
(i)Tellabs will pay to Occam any royalties and other indebtedness that have
accrued prior to the termination; (ii) Tellabs will cease to use the Blade
Technology for any purpose, except to provide technical support to customers
with respect to FTTC Cards integrated with Blade Technology sold before
termination of Tellabs’ license; (iii) Tellabs will cease to market, distribute,
and sell FTTC Cards integrated with Blade Technology; and (iv) Tellabs will
return to Occam all copies of Blade Technology in its possession no later than
five (5) days after it no longer provides technical support to customers with
respect to FTTC Cards integrated with Blade Technology sold before termination
of Tellabs’ license.

 

9.4 Effects of Termination and Expiration. Following expiration or termination
of this Agreement, all rights and obligations under this Agreement will
terminate except that the rights and obligations under Sections 2 (except as set
forth in Section 9.3), 3.1(d), 3.1(e), 3.1(f), 4, 5.3, 7, 8, 9.3, and 10 will
survive expiration of this Agreement. All liabilities accrued prior to the
expiration or termination of this Agreement for any reason will survive the
expiration or termination of this Agreement. Upon termination or expiration of
this Agreement, Tellabs will pay to Occam any amounts that have accrued prior to
the termination

 

10. GENERAL

 

10.1 Relationship. This Agreement will not be interpreted or construed as (a)
creating or evidencing any association, joint venture, partnership, or franchise
between the parties; or (b) imposing any partnership or franchise obligation or
liability on either party. Each party must not represent to anyone that it is an
agent for the other party or is otherwise authorized to bind or commit the other
party in any way without the other party’s prior authorization.

 

10.2 Publicity. Neither party will make a public announcement or any other sort
of press release regarding the terms of this Agreement or any aspect of the
relationship under this Agreement between the parties without having obtained
the prior written consent of the other party, which consent will not be
unreasonably withheld or delayed. However, nothing in this Section 10.2 shall
preclude either party from making such disclosures that are required by
applicable law.

 

10.3 Assignability. Neither party may assign this Agreement or any of its
rights, duties, or obligations set forth in this Agreement without having
obtained the other party’s prior written consent, which consent will not be
unreasonably withheld or delayed, except that either party may assign this
Agreement without consent to a successor-in-interest, whether by sale of
substantially all of its assets, merger, reorganization, acquisition, or other
similar transaction. This Agreement will bind the other party’s permitted
successors and assigns. Any attempt by a party to transfer its rights, duties,
or obligations under this Agreement except as expressly provided in this
Agreement shall be void ab initio.

 

*** Confidential 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

 

10.4 Non-solicitation. During the term of this Agreement and for a period of one
(1) year thereafter, neither party may directly solicit the employment of the
other party’s employees without having obtained the prior written consent of the
other party.

 

10.5 Further Assurances. During and after the term of this Agreement, at the
other party’s request, each party will execute any and all documents and perform
any and all acts that the other party may reasonably require in order to perfect
the other party’s rights under this Agreement, or to apply for, obtain, and vest
in the name of the other party alone all intellectual property rights or other
similar protection for any Technology that is to be owned by the other party
under the terms of this Agreement and, when obtained or vested, to maintain,
renew, and restore the protection.

 

10.6 Notices. Any notice required or permitted to be given in accordance with
this Agreement will be effective if it is in writing and sent by certified or
registered mail, or insured courier, return receipt requested, to the
appropriate party at the address set forth at the beginning of this Agreement
and with the appropriate postage affixed. Either party may change its address
for receipt of notice by notice to the other party in accordance with this
Section 10.6. Notices are deemed given five (5) days following the date of
mailing or one (1) business day following delivery to a courier with evidence of
actual delivery by such courier on such date. In the case of Tellabs, such
notice shall be issued to the attention of the Tellabs Legal Department.

 

10.7 Force Majeure. Neither party will be liable for, or be considered to be in
breach of or default under this Agreement on account of any delay or failure to
perform, except for the obligation to make payment, as required by this
Agreement to the extent resulting from any cause or condition beyond the party’s
reasonable control, so long as the party uses commercially reasonable efforts to
avoid or remove the cause of delay or non-performance.

 

10.8 Governing Law. This Agreement will be interpreted, construed, and enforced
in all respects in accordance with the laws of the State of California, U.S.A.,
without reference to its conflict of law provisions and not including the
provisions of the 1980 U.N. Convention on Contracts for the International Sale
of Goods.

 

10.9 Arbitration. Any claim, controversy or dispute between the parties, their
agents, employees, officers, directors or affiliated agents (“Dispute”) shall be
exclusively resolved by arbitration conducted by a single arbitrator (selected
by mutual agreement of the parties) engaged in the practice of law, under the
then current Commercial Arbitration Rules of the American Arbitration
Association. The arbitrator’s award shall be final and binding, is the only
means of dispute resolution and may be entered in any court having jurisdiction
thereof. The laws of the State of California shall exclusively govern the
construction and interpretation of this Agreement without regard to the conflict
of laws principles contained therein, and any arbitration or other proceeding
shall occur exclusively in San Francisco, California. Notwithstanding the above,
it is expressly agreed that either party may seek injunctive relief in an
appropriate court of law or equity pending an award in arbitration.

 

10.10 Waiver. Any waiver by either party of any of the rights set forth in this
Agreement must be in writing and signed by the party against whom the
enforcement of such waiver

 

*** Confidential 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

 

is sought. The waiver by either party of any breach of any provision of this
Agreement shall not waive any subsequent breach of the same provision or any
other provision set forth in this Agreement. The failure of any party to insist
on strict performance of any covenant or obligation in accordance with this
Agreement will not be a waiver of such party’s right to demand strict compliance
in the future, nor will the same be construed as a novation of this Agreement.

 

10.11 Severability. If any part of this Agreement is found to be illegal,
unenforceable, or invalid, the remaining portions of this Agreement will remain
in full force and effect.

 

10.12 Interpretation. The parties have had an equal opportunity to participate
in the drafting of this Agreement and the attached exhibits, if any. No
ambiguity will be construed against any party based upon a claim that that party
drafted the ambiguous language. The headings appearing at the beginning of
several sections contained in this Agreement have been inserted for
identification and reference purposes only and must not be used to construe or
interpret this Agreement. Whenever required by context, a singular number will
include the plural, the plural number will include the singular, and the gender
of any pronoun will include all genders.

 

10.13 Counterparts. This Agreement may be executed in any number of identical
counterparts, notwithstanding that the parties have not signed the same
counterpart, with the same effect as if the parties had signed the same
document. All counterparts will be construed as and constitute the same
agreement. This Agreement may also be executed and delivered by facsimile and
such execution and delivery will have the same force and effect of an original
document with original signatures.

 

10.14 Attorneys’ Fees. If either party initiates legal proceedings to enforce
its rights under this Agreement, the prevailing party shall be entitled to
recover its reasonable attorneys’ fees and costs from the non-prevailing party.

 

10.15 Entire Agreement. This Agreement, including all exhibits, is the final and
complete expression of the agreement between these parties regarding the subject
matter of this Agreement. This Agreement supersedes, and the terms of this
Agreement govern, all previous oral and written communications regarding these
matters, all of which are merged into this Agreement, except that the Ancillary
Agreements are not superseded and will not otherwise be affected. No usage of
trade or other regular practice or method of dealing between the parties will be
used to modify, interpret, supplement, or alter the terms of this Agreement.
This Agreement may be amended only by a written agreement signed by an
authorized agent of each party.

 

*** Confidential 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

 

The parties have signed below to indicate their acceptance of the terms of this
Agreement.

 

Tellabs Petaluma, Inc.       Occam Networks, Inc.

Name:

 

 

--------------------------------------------------------------------------------

     

Name:

 

 

--------------------------------------------------------------------------------

Title:

 

 

--------------------------------------------------------------------------------

     

Title:

 

 

--------------------------------------------------------------------------------

Signature:

 

 

--------------------------------------------------------------------------------

     

Signature:

 

 

--------------------------------------------------------------------------------

Date:

 

 

--------------------------------------------------------------------------------

     

Date:

 

 

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*** Confidential 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

 

EXHIBIT A

 

TECHNOLOGY DELIVERABLES

 

[***]

 

*** Confidential 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

 

EXHIBIT B

 

ROYALTY

 

For each FTTC Card sold by Tellabs during or after the term of this Agreement,
Tellabs will pay to Occam a royalty, plus any applicable taxes, at the rate of
[***] per FTTC Card. For example, the result is [***] royalty per
fully-configured DISC*S FTTC-MX system with four (4) FTTC Cards and a royalty of
[***] per fully-configured DISC*S FITL with two (2) FTTC Cards sold by Tellabs.
Royalties for different products or for product upgrades will be determined by
the number of FTTC Cards sold as part of the product or product upgrade.

 

*** Confidential 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

 

EXHIBIT C

 

SCOPE OF WORK

 

This Scope of Work defines the general milestones that Tellabs and Occam agree
are necessary to the integration of Blade Technology into FTTC Cards. Subject to
the requirements of Section 3.1 of the Agreement, the integration will be
managed and performed by members of the R&D teams within each of the two
companies. The exact duration of time that will be necessary to complete the
integration is not yet determined.

 

The progress of the integration will be monitored by the achievement of R&D
milestones as defined below:

 

Milestones—Although there are a number of intermediate milestones that will be
identified and agreed to by the two R&D teams, this Exhibit attempts only to
capture the Technology Hand Off, Design Review, Prototype Turn-up, Integration
Testing, and Verification Test milestones.

 

Technology Hand-off – Delivery of the Blade Technology to the Tellabs R&D staff.
(Completed on September, 2004)

 

Design Review – The completion of detailed design reviews of Tellabs Technology
that will incorporate Occam Blade Technology into the FTTC Product.

 

Prototype Turn-up – R&D lab power up, debugging and testing of Tellabs
Technology that has incorporated the Occam Blade Technology into the FTTC
Product.

 

Integration Testing – R&D lab testing of the FTTC Product as a system.

 

Verification Test – The successful completion of verification testing of the
FTTC Product that deems it ready for consideration in a carrier’s lab, such as
BellSouth’s lab.

 

The activities that will be necessary to achieve the milestones identified above
will be the primary responsibility of Tellabs’ R&D staff with the assistance of
the Occam R&D staff on an “as needed” basis. The planning, coordination of work,
and the reporting of progress toward the completion of these milestones will be
the sole responsibility of the Tellabs R&D team. While these activities will be
primarily performed by the Tellabs R&D staff, this Technology License Agreement
identifies the costs for the Occam staff effort in Exhibit E.

 

*** Confidential 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

 

EXHIBIT D

 

TECHNICAL SUPPORT

 

1. Definitions

 

(a) Technical Support: Technical Support consists of: (i) assistance related to
installing, configuring, and using a FTTC Product; (ii) assistance with
identifying and verifying problems covered by the FTTC Product warranty
specified in Section 5.2 of this Agreement; and (iii) correcting problems
covered by the FTTC Product warranty specified in Section 5.2 of this Agreement.

 

(b) Tier 1 Support: Tier 1 Support consists of providing Technical Support
directly to a customer with respect to FTTC Product that is under warranty.

 

(c) Tier 2 Support: Tier 2 Support consists of consultation with Tier 1 Support
personnel regarding Technical Support issues that are beyond their scope of
expertise.

 

(d) Tier 3 Support: Tier 3 Support consists of consultation with Tier 1 and Tier
2 support personnel regarding Technical Support issues that are beyond their
scope of expertise.

 

2. Tellabs Responsibilities. Tellabs, or its designee, will be solely
responsible for providing Tier 1 and Tier 2 Support relating to the FTTC
Products that are under warranty. Tellabs must not facilitate, instruct, or
encourage its customers to contact Occam directly. Tellabs’ Technical Support
responsibilities must be performed by personnel who have completed training
programs specified by Occam. Notwithstanding this training, Tellabs is fully
responsible for the product knowledge and technical support skills of its
Technical Support personnel. Tellabs will promptly return calls for Technical
Support related to the FTTC Products, and will otherwise use commercially
reasonable efforts to assist customers to resolve any Technical Support issues.
Tellabs will perform all initial troubleshooting before escalating to Occam’s
Tier 3 Support group.

 

3. Occam Responsibilities. Occam, or its designee, will be responsible for
providing Tier 3 Support relating to Blade Technology integrated into FTTC
Products to Tellabs or its designee during Occam’s standard hours for Tier 3
Support. Occam’s Technical Support responsibilities do not include consultation
with Tellabs’ customers. Any additional Technical Support related to FTTC
Products requested by Tellabs will be provided at the applicable rate set forth
in Exhibit E.

 

*** Confidential 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

 

EXHIBIT E

 

RATE SHEET

 

The following rates are current as of the Effective Date. Occam may increase one
or more of the following rates by providing written notice of the increased rate
to Tellabs at least thirty (30) days before the increased rate takes effect.
During any year of this Agreement, Occam may not increase a rate by a percentage
that is greater than the percentage increase in the unadjusted Consumer Price
Index for All Urban Consumers, as reported by the Bureau of Labor Statistics,
U.S. Department of Labor (“CPI”). The percentage increase in the CPI will be
determined based on the difference between the reported CPI as of the most
recent anniversary of the Effective Date and the reported CPI as of the second
most recent anniversary of the Effective Date (or as of the Effective Date if
compared to the first anniversary of the Effective Date).

 

Design Engineer (Hardware, Software, Mechanical, etc.): [***].

 

Technician (Design, Cust. Support, Repair, Test, etc.), Sales Eng., Trainer,
Program Mgmt.: [***].

 

Administrative and Production: [***].

 

Materials and Direct Costs (equipment rentals, direct invoices from suppliers,
etc.): [***].

 

Travel: actual travel and personal (e.g., lodging, meals) expenses.

 

*** Confidential 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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