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EXHIBIT 10.7
LOANED EMPLOYEE AGREEMENT
This LOANED EMPLOYEE AGREEMENT ("Agreement") by and between Nortel
Networks Inc., a corporation organized under the laws of Delaware, for itself
and on behalf of its Affiliates (collectively, "Nortel Networks") and Arris
Interactive L.L.C., a limited liability company organized under the laws of
Delaware ("Existing Venture") (collectively, "Parties") is effective as of the
Effective Date.
WHEREAS, Nortel Networks and Existing Venture are parties to that
certain Agreement and Plan of Reorganization dated as of October 18, 2000, that
provides, in general, for the contribution of Nortel Networks's interest in
Existing Venture to an Affiliate of ANTEC Corporation in exchange for cash and
common shares of such Affiliate of ANTEC Corporation ("Merger Agreement"); and
WHEREAS, in connection with such transactions, the Parties desire that
Existing Venture receive the services of those employees of Nortel Networks
listed on Schedule 1 attached hereto and incorporated by reference ("Employees")
during the Term, as defined below in Section 1.1, while such Employees remain
employed by Nortel Networks in their Current Jobs as defined in Schedule 1; and
WHEREAS, the Parties wish to set forth the terms and conditions under
which Nortel Networks shall supply the services of the Employees to Existing
Venture.
Now, therefore, based on the mutual covenants contained in this
Agreement, the Parties agree as follows:
ARTICLE 1
SERVICES TO BE PROVIDED
1.1 Subject to the continued employment of the Employees in their
Current Jobs, Nortel Networks shall supply the Services of the Employees to
Existing Venture from the Effective Date through the earlier of (i) the first
anniversary of the Effective Date and (ii) the date on which the Services
supplied by the last remaining Employee under this Agreement terminate ("Term").
In addition, if Employees are providing Services under this Agreement as of the
first anniversary of the Effective Date and the Existing Venture continues to
need such Services, Nortel Networks shall continue to supply the Services of the
Employees to the Existing Venture for an additional three (3) months, provided
Existing Venture has given Nortel Networks at least sixty (60) calendar days
prior notice of this extension. The services to be supplied by Nortel Networks
are set forth in Schedule 1 ("Services"). If any Employee ceases to be employed
by Nortel Networks in the Current Job prior to the expiration of the Term for
any reason (whether as a result of voluntary or involuntary termination of
Nortel Networks employment, commencement of a New Job, as defined in Section 1.2
of this Agreement, or otherwise) or Existing Venture terminates the Services of
any Employee as provided in Section 1.4 of this Agreement, this Agreement shall
immediately terminate with respect to such Employee.
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1.2 Nortel Networks shall inform the Employees that their job
duties shall consist of supplying Services required in their Current Job. Except
as provided in Section 1.3 of this Agreement, Nortel Networks shall not permit
any Employee to be employed in a Nortel Networks job that does not involve
providing Services ("New Job") without the consent of the Existing Venture
Representative (as described in Article 4). Employees shall be solely employed
by Nortel Networks and Nortel Networks shall be responsible for the overall
direction, control and management of the Employees including, but not limited
to, the evaluation, discipline, compensation and termination of employment of
the Employees.
1.3 Notwithstanding anything in this Agreement to the contrary,
Nortel Networks shall permit an Employee to seek, accept and commence a New Job
during the Term provided that Employee shall not, without the consent of the
Existing Venture Representative, commence such New Job earlier than the
expiration of sixty (60) calendar days following Nortel Networks's written
notice to the Existing Venture Representative of such Employee's acceptance of
New Job, it being intended that Employee shall continue to supply Services
during such sixty (60) days (or shorter) period. Nortel Networks agrees that it
shall not target a group or groups of Employees for recruitment to staff Nortel
Networks projects; provided, however, that nothing in the foregoing shall
preclude Nortel Networks from staffing its job openings with Employees
identified through its usual and customary recruitment methods that are not
targeted on a group or groups of Employees.
1.4 Existing Venture may terminate the Services of any Employee
prior to the end of the Term for any reason that is not unlawful by providing
the Nortel Networks Representative (as described in Article 4) with written
notice sixty (60) calendar days prior to such Services termination date.
Notwithstanding the foregoing, the Existing Venture Representative may
immediately following notice to the Nortel Networks Representative terminate the
Services of any Employee if such termination is due to the gross misconduct of
such Employee in the performance of his duties.
1.5 Nortel Networks shall retain the right to terminate the
employment of any Employee in accordance with Nortel Networks's policies,
procedures or practices. Nortel Networks shall have no obligation to replace any
Employee if such Employee ceases active employment as a result of a leave of
absence or ceases employment in the Current Job, as a result of voluntary or
involuntary termination of Nortel Networks employment or as provided in Sections
1.2, 1.3 or 1.4 of this Agreement.
1.6 Unless otherwise agreed by the Parties, the Employees shall
supply Services in those locations where such services were supplied by
Employees immediately prior to the Effective Date.
1.7 Services shall be provided AS-IS. NORTEL NETWORKS MAKES NO
WARRANTIES, REPRESENTATIONS OR CONDITIONS, EXPRESS OR IMPLIED, STATUTORY OR
OTHERWISE, INCLUDING, WITHOUT LIMITATION, NO WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR ANY PARTICULAR
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PURPOSE, RELATING TO THE EMPLOYEES OR SERVICES, EXCEPT AS PROVIDED IN THE MERGER
AGREEMENT.
ARTICLE 2
PAYMENT OF EMPLOYEES
Nortel Networks shall be responsible for (i) paying Employees'
compensation (including, without limitation, incentive compensation and
retention payments as set out in Schedule 2 ("Retention Payments")) and travel
and business expenses, and the provision of any benefits, statutory or
otherwise, earned, incurred or accrued by the Employees, and (ii) paying or
deducting from the compensation and/or benefits of the Employees, as the case
may be, and remitting to the appropriate governmental entities, such sums as may
be required to be paid by an employer or deducted or withheld from Employees'
compensation and/or benefits under the provisions of any law now in effect or
hereafter put into effect, including, but not limited to, social security,
unemployment or income tax.
ARTICLE 3
PAYMENT FOR SERVICES
3.1 In consideration of Services to be supplied by Nortel
Networks, Existing Venture shall reimburse Nortel Networks for all costs
associated with Nortel Networks's employment of the Employees, including, but
not limited to, compensation (including, without limitation, Retention
Payments), employment taxes, employee benefits, workers compensation, travel and
business expenses, employment litigation that arises from acts or omissions of
Existing Venture or its employees or agents; provided however, that the cost of
those items listed in Schedule 3 of this Agreement shall be deemed to be equal
to the Nortel Networks Fringe Benefit Rate for which Existing Venture must
reimburse Nortel Networks. (All costs to be reimbursed by Existing Venture under
this Agreement are hereafter referred to as "Charges.")
3.2 Nortel Networks shall be responsible for providing facilities,
offices and certain equipment all as set forth in the Transition Services
Agreement.
3.3 Nortel Networks shall invoice Existing Venture monthly for
Charges and Existing Venture shall pay the amount of each such invoice within
thirty (30) calendar days from the date of receipt of such invoice. Nothing
herein shall be deemed to prevent Nortel Networks from invoicing Existing
Venture for unbilled amounts due under this Agreement that were inadvertently
omitted from the prior invoices that were sent to Existing Venture by Nortel
Networks.
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ARTICLE 4
SOLICITATION OF EMPLOYEES
Existing Venture and Nortel Networks shall each designate one of its
employees to serve as its representative with respect to matters related to
Existing Venture's interest, if any, in employing Employees and shall notify the
other Party of the identity of that individual ("Representative"). Existing
Venture may solicit, offer employment to and employ any Employee during the
period such Employee is supplying Services provided that (i) the Existing
Venture Representative provides advance notice to the Nortel Networks
Representative of Existing Venture's intention to initiate such recruitment
activity, (ii) any offer of employment by Existing Venture to such Employee is
on terms and conditions of employment that are substantially similar, in the
aggregate, to those implemented with respect to Existing Venture employees under
Section 7.19 of the Merger Agreement, (iii) the Existing Venture Representative
discloses the terms and conditions of any employment offer to the Nortel
Networks Representative upon request and (iv) the Employee commences employment
with Existing Venture on a date that is not less than five (5) calendar days
following the Existing Venture Representative's notice of Employee's offer
acceptance to the Nortel Networks Representative, unless otherwise agreed by the
Nortel Networks Representative.
ARTICLE 5
CONFIDENTIALITY
5.1 Any Confidential Information, as defined below, received by a
Party shall be retained in confidence and shall be used, disclosed, and copied
solely by that Party for the purposes of exercising its rights or fulfilling its
obligations under this Agreement. The receiving Party shall use the same degree
of care as it uses to protect its own confidential information of a similar
nature, but not less than reasonable care, to prevent the unauthorized use,
dissemination or publication of Confidential Information. "Confidential
Information" for purposes of this Agreement shall mean any business, marketing,
technical, scientific or other information disclosed by a Party.
5.2 Confidential Information shall not include, and no Party to
this Agreement shall be bound by, obligations restricting disclosure and use set
forth in this Agreement with respect to any information which: is agreed by the
Parties not to be confidential; was known by the receiving Party to the
disclosure, as evidenced by its business records; was lawfully in the public
domain prior to its disclosure, or becomes publicly available other than through
a breach of this Agreement; was disclosed to the receiving Party by a third
party provided that the receiving Party has no reason to believe such third
party, or any other party from whom such third party receives such information,
is in breach of any confidentiality obligation to the disclosing Party in
respect of such information; or is independently developed by the receiving
Party, as evidenced by its business records.
5.3 No Party shall be liable for any disclosure of Confidential
Information when such disclosure is compelled pursuant to legal, judicial or
administrative proceeding, or otherwise
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required by law, subject to the receiving Party using reasonable efforts to
provide prior notice to the disclosing Party to allow it to seek protective or
other court orders.
5.4 This Article 5 shall survive the termination of this
Agreement.
ARTICLE 6
INTELLECTUAL PROPERTY
For purposes of this Article, any inventions, discoveries,
improvements, designs, written materials, computer programs, integrated circuit
topologies, mask works, or other intellectual property developed during the
provision of services by any Nortel Networks employee in accordance with the
terms of the employment agreements made between Nortel Networks and its
employees is referred to as "Employee Intellectual Property Rights." Existing
Venture's rights to use Employee Intellectual Property Rights shall be governed
by the Intellectual Property Rights Agreement between Nortel Networks and
Existing Venture effective as of the Effective Date ("IPA"). Specifically,
Employee Intellectual Property Rights shall be considered Licensed Intellectual
Property (as defined in the IPA) if the development was related specifically to
Licensed Intellectual Property; Transferred Intellectual Property (as defined in
the IPA) if the development was related specifically to Transferred Intellectual
Property; PacketPort Intellectual Property (as defined in the IPA) if the
development was related specifically to PacketPort Intellectual Property; and
CMTS Intellectual Property (as defined in the IPA) if the development was
related specifically to CMTS Intellectual Property, provided, however, if the
development of Employee Intellectual Property Rights would not relate to any of
such aforementioned categories of Intellectual Property, then prior to the
commencement of any such development, Nortel Networks and Existing Venture shall
agree upon Nortel Networks' and Existing Venture respective rights in and to
such Employee Intellectual Property and any other related matters. This Article
shall survive the termination of this Agreement.
ARTICLE 7
INDEMNIFICATION
Notwithstanding anything in the Merger Agreement to the contrary,
Existing Venture shall, to the fullest extent permitted by applicable law,
indemnify and hold harmless Nortel Networks and any Affiliates and their
respective officers, directors, agents and employees (collectively "Nortel
Networks Indemnitees") from and against all claims, demands, damages, losses,
liabilities, costs or expenses (including, without limitation, attorneys' fees
and expenses) (collectively "Losses") incurred or suffered by any Nortel
Networks Indemnitee as a result of Services including, without limitation, any
Losses arising as a result of acts or omissions by
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Employees, which acts or omissions are in connection with providing Services,
claims by any Employee arising out of the provision of such Services (e.g.,
claims of wrongful termination, employment discrimination or wage/hour issues)
that arise from the acts or omissions of Existing Venture or its employees or
agent; provided, however, that the foregoing obligations shall not apply to the
extent that such Losses are covered by Nortel Networks's Fringe Benefit Rate as
specified in Section 3.1 and Schedule 3, and provided, further, that the
foregoing obligations shall not apply to any Employee claim for severance
benefits provided under a Nortel Networks severance plan, program or arrangement
which arises from such Employee's termination of Nortel Networks employment as a
result of such Employee's failure to obtain employment in a New Job within
ninety (90) calendar days following the date on which such Employee ceases to
supply Services. Article 7 shall survive the termination of this Agreement.
ARTICLE 8
LIMITATION ON LIABILITY
NEITHER PARTY, NOR ITS EMPLOYEES OR AGENTS, SHALL BE LIABLE TO THE
OTHER PARTY FOR ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL LOSSES OR DAMAGES,
INCLUDING WITHOUT LIMITATION LOST PROFITS, IN CONNECTION WITH THE SERVICES, THE
EMPLOYEES, OR THIS AGREEMENT, WHETHER ARISING IN CONTRACT, NEGLIGENCE OR
OTHERWISE.
ARTICLE 9
MISCELLANEOUS
9.1 This Agreement shall be binding upon the Parties and their
respective successors and assigns; provided, however, neither Party may assign,
in whole or in part, any of the rights, obligations or benefits of this
Agreement without the prior written consent of the other Party.
9.2 This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, except for its rules with
respect to the conflict of laws.
9.3 Any notice, request, demand, waiver, consent, approval or
other communication which is required or permitted under this Agreement shall be
in writing and shall be deemed given only if delivered personally, by Federal
Express (or similar service) or sent by certified mail, postage prepaid, as
follows:
If to Nortel Networks, to:
Nortel Networks Inc.
200 Athens Way
Nashville, TN 37228
Attention: Legal Department
Fax: (615) 432-4067
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With a copy to:
Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109
Attention: Dimitri P. Racklin
Fax: (617)526-5000
Phone: (617)526-6000
If to Existing Venture, to:
Arris Interactive L.L.C.
3871 Lakefield Drive, Suite 300
Suwanee, GA 30024
Attention: President
With a copy to:
Troutman Sanders LLP
600 Peachtree Street
Atlanta, Georgia 30308
Attention: W. Brinkley Dickerson, Jr.
Fax: (404)885-3900
Phone: (404)885-3000
or to such other address as the addressee may have specified in a notice duly
given to the sender as provided herein. Such notice, request, demand, waiver,
consent, approval or other communication shall be deemed to have been given as
of the date so delivered or, if not personally delivered, one business day after
sending.
9.4 Nothing in this Agreement, express or implied, is intended to
confer upon any party, other than the Parties and their respective successors
and assigns, any rights, remedies, obligations or liabilities under or by reason
of this Agreement.
9.5 Article headings are inserted for reference purposes only.
9.6 Nothing contained in this Agreement shall be construed or
implied as creating a partnership, joint venture or similar relationship between
Nortel Networks and Existing Venture other than that of independent contractors.
Nothing in this Agreement shall be deemed to create an employment relationship
between Existing Venture and the Employees or to make Nortel Networks and
Existing Venture joint employers.
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9.7 This Agreement, along with the Transition Services Agreement
and IPR Agreement, sets forth the entire agreement and understanding of the
parties with respect to the subject matter hereof and supersedes all prior
discussions, understandings and writings relating thereto. This Agreement may
not be modified or amended, or any provision hereof waived, except by means of a
subsequent writing executed by the duly authorized representatives of the
Parties. The Parties understand that certain Employees supplying Services are
located outside the United States and it may be necessary for the Parties to
make arrangements with respect to those Employees that differ in certain aspects
from this Agreement. In such cases, the Parties agree to negotiate in good faith
with respect to such arrangements and to conform those arrangements, to the
extent possible, to the terms and conditions set out in this Agreement.
9.8 Capitalized terms, which are undefined in this Agreement,
shall have the meaning set forth in the Merger Agreement.
9.9 Nortel Networks and Existing Venture shall provide each other
with such assistance as may be reasonably required by either of them in
connection with the performance of all obligations under this Agreement.
9.10 If any provision, clause or part of this Agreement is held
invalid, the remainder of this Agreement shall not be affected thereby unless
such invalidity materially impairs the rights, benefits or obligations of the
Parties under this Agreement.
9.11 This Agreement may be executed in counterparts, each of which
shall be deemed an original, but both of which shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date set forth below.
Nortel Networks Inc.
By: /s/ Michael Dadoun
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Arris Interactive L.L.C.
By: /s/ David Potts
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