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EXHIBIT 10.11
PURCHASE & SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT ("Agreement") is entered into as of the 3rd day
of August, 2001 ("Effective Date") between Nortel Networks Inc., a Delaware
corporation with offices located at 5555 Windward Parkway, Suite B, Alpharetta,
GA 30004 ("Nortel") and Arris Interactive L.L.C., a Delaware limited liability
company with offices located at 3871 Lakefield Drive, Suite 300, Suwanee, GA
("Purchaser").
DEFINITIONS
Arris Hardware means the hardware in finished goods or module/spares form,
identified with the initial PEC code letters ARCS and NTBN in Exhibit A,
manufactured by Nortel, either itself or through the use of contract
manufacturers, which is used exclusively in Purchaser's products.
Common Equipment Hardware means the hardware in module/spares form, identified
with the initial PEC code letters/numbers NT4K, as listed in Exhibit B,
manufactured by Nortel, either itself or through the use of contract
manufacturers, which is used in Nortel's Access Node products and in Purchaser's
products and which Nortel is ceasing to manufacture, as described in Section 1.1
below.
Confidential Information means information disclosed by Purchaser or Nortel to
the other party that is designated at the time of disclosure as confidential (or
like designation), is disclosed in circumstances of confidence, or would be
understood by Purchaser and Nortel, exercising reasonable business judgment, to
be confidential.
Delivery Date means the mutually agreed date set out on a PO for delivery of the
Products ordered in the PO.
Proprietary Hardware means the hardware in module/spares form, identified with
the initial PEC code letters/numbers NT7E and A037 under the heading
Modules/Spares in Exhibit A, manufactured by Nortel, either itself or through
the use of contract manufacturers, which is used in certain Nortel products and
in Arris Hardware.
Products means the Arris Hardware, the Common Equipment Hardware and the
Proprietary Hardware.
Prices means the prices for the Products, Supply Chain Components (defined
below), Software Services (defined below), Repair Services and technical
assistance determined in accordance with this Agreement.
Purchase Order or PO means any order issued by Purchaser under this Agreement
for the purchase of Products, Supply Chain Components, Software Services or
Repair Services.
Repair Services means the Product repair services described in Section 10.
Specifications means the published specifications for the Products.
1. SCOPE
1.1 Under the terms of this Agreement Nortel will sell to
Purchaser Common Equipment Hardware and provide Repair
Services and technical assistance for the Common Equipment
Hardware. The parties acknowledge and agree that Nortel has
announced that it is discontinuing the manufacture of the
Common Equipment Hardware. Therefore, Purchaser shall place
with Nortel Purchaser's final orders for Purchaser's
requirements for Common Equipment Hardware by no later than
September 30, 2001 for delivery to Purchaser no later than May
31, 2002 ("Common Equipment Last Time Buy"). Repair Services
and technical assistance for the Common Equipment Hardware
will be offered by Nortel to Purchaser until May 31, 2007
("Common Equipment Support Period"). Notwithstanding the
preceding sentence, Nortel may elect to outsource the
providing of Repair Services and/or technical support for the
Common Equipment Hardware and require Purchaser to purchase
such Repair Services and/or technical support directly from
the outsource company on terms and conditions to be agreed to
between Purchaser and the outsource company. In the event of
such outsourcing, Nortel shall be relieved of its obligation
to provide Repair Services and/or technical support, as
applicable, for the Common Equipment Hardware for the
remaining portion of the Common Equipment Support Period.
1.2 Under the terms of this Agreement Nortel will sell to
Purchaser Arris Hardware and duplicate, load and test the
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Arris software on the Arris Hardware ("Software Services") and
provide Repair Services for the Arris Hardware until the
manufacture of the Arris Hardware and the performance of
Software Services and Repair Services for the Arris are
directly assumed by Purchaser or by contract manufacturers
with which Purchaser directly contracts for such
manufacturing, Software Services and/or Repair Services (the
"Transition"), subject to Section 1.2.1 and Section 1.3. The
parties agree that the Transition will be completed as soon as
practicable following the Effective Date but in no event later
than December 31, 2001.
1.2.1 Notwithstanding Section 1.2, Purchaser and Nortel
Networks acknowledge and agree that the Arris
Hardware listed under the headings HDT's or DMC's in
Exhibit A may incorporate Proprietary Hardware and/or
Common Equipment Hardware modules. As a result of the
Transition, Purchaser is obtaining no rights to
manufacture such Proprietary Hardware modules and/or
Common Equipment Hardware modules and Purchaser shall
continue to purchase such Proprietary Hardware
modules and Common Equipment Hardware modules from
Nortel Networks pursuant to Section 1.6 below and
Section 1.1 above, respectively, for incorporation
into the HDT and DMC Arris Hardware manufactured by
Purchaser after the Transition is completed. The
extent to which Arris may undertake the manufacture
of Proprietary Hardware and/or Common Equipment
Hardware is defined in that certain Intellectual
Property Rights Agreement between Purchaser and
Nortel Networks Limited, dated as of the Effective
Date.
1.2.2 As part of the Transition Purchaser shall discontinue
the use of Nortel logos and Nortel part numbers for
the Arris Hardware and the components, assemblies and
subassemblies of the Arris Hardware, except in
connection with the existing inventory of such Arris
Hardware including the Supply Chain Components and
except for existing references to Nortel part numbers
embedded in the system software for Purchaser's
products but not visible to customers. Also, as part
of the Transition Purchaser shall move its design
documentation for the Products from Nortel's DDMEZ
database to Purchaser's own database. Also as part of
the Transition Purchaser shall assume responsibility
for the reproduction of the Arris-products-specific
documentation listed in Exhibit A for the Arris
Hardware.
1.3 The parties acknowledge and agree that as of the Effective
Date Nortel has an inventory of Arris Hardware or Proprietary
Hardware in finished goods and/or module/spares form in the
approximate quantities listed in Exhibit A ("Finished Goods
Inventory"). If on the date the Transition is completed Arris
has not purchased the Finished Goods Inventory in its
entirety, under the terms of this Agreement Purchaser agrees
that from time to time, as Purchaser has requirements for such
Arris Hardware or Proprietary Hardware constituting the
Finished Goods Inventory, Purchaser shall purchase such
requirements from the Finished Goods Inventory remaining after
completion of the Transition until the entirety of the
Finished Goods Inventory is purchased by Purchaser or Nortel,
in its sole discretion, sells or otherwise disposes of the
remaining portion of the Finished Goods Inventory. Such
purchases of the Finished Goods Inventory shall be made by
Purchaser before any new units of the same Arris Hardware
constituting the Finished Goods Inventory are manufactured by
Purchaser or its contract manufacturers after completion of
the Transition.
1.4 The parties acknowledge and agree that as of the Effective
Date Nortel and Nortel's contract manufacturers who
manufacture Arris Hardware or modules thereof for Nortel have
quantities of components and subassemblies purchased or
assembled for use in the manufacture of Arris Hardware or
modules thereof in the quantities identified in Exhibit C
("Supply Chain Components"). To the extent that, on the date
the Transition is completed, the Supply Chain Components have
not be fully used in the manufacture of Arris Hardware
purchased hereunder prior to completion of the Transition,
Purchaser agrees from time to time as Purchaser has
requirements to manufacture Arris Hardware after completion of
the Transition to purchase the Supply Chain Components itself
or to cause its contract manufacturers to purchase the Supply
Chain Components in the quantities needed for the manufacture
of Purchaser's requirements of Arris Hardware until the
entirety of such Supply Chain Components is purchased by
Purchaser or its contract manufacturers for such purpose or
Nortel, in its sole discretion, sells or otherwise disposes of
the remaining portion of such Supply Chain Components. Such
purchases of the Supply Chain Components shall be made by
Purchaser and its contract manufacturers before any new
components of the same kind are purchased by Purchaser and its
contract manufacturers for use in manufacturing Arris Hardware
after completion of the Transition.
1.5 Until all of the Finished Goods Inventory has been purchased
by Purchaser or sold or otherwise disposed of by Nortel, as
described in Section 1.3, and until all the Supply Chain
Components have been purchased by
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Purchaser or its contract manufacturers or sold or otherwise
disposed of by Nortel, as described in Section 1.4, Purchaser
shall provide to Nortel on a monthly basis (i) a written
rolling twelve month non-binding forecast of Purchaser's
expected requirements for new Arris Hardware; (ii) copies of
all purchase orders placed by Purchaser during the prior month
on Purchaser's contract manufacturers for the purchase of new
Arris Hardware.
1.6 Under the terms of this Agreement Nortel will sell to
Purchaser Proprietary Hardware and provide Repair Services and
technical assistance for the Proprietary Hardware until
Purchaser discontinues the manufacture of those products of
Purchaser which, as of the Effective Date, incorporate the
Proprietary Hardware ("Proprietary Hardware End Date").
1.6.1 Notwithstanding Section 1.6, Nortel may elect to
outsource the manufacture of the Proprietary Hardware
and/or the providing of Repair Services and/or
technical support for the Proprietary Hardware and
require Purchaser to purchase the Proprietary
Hardware and/or such Repair Services and/or technical
support directly from the outsource company on terms
and conditions to be agreed to between Purchaser and
the outsource company. In the event of such
outsourcing, Nortel will be relieved of any further
obligation to manufacture and sell the Proprietary
Hardware to Purchaser or to provide Repair Services
and/or technical support for the Proprietary
Hardware, as applicable.
1.6.2 Notwithstanding Section 1.6, Nortel may elect to
discontinue the manufacture of the Proprietary
Hardware and in such event Nortel will offer to
Purchaser the opportunity to make a last time buy of
the Proprietary Hardware ("Proprietary Hardware Last
Time Buy") and to obtain Repair Services and
technical support for the Proprietary Hardware for a
defined support period on the same basis as Nortel
announces to its other customers for the Proprietary
Hardware ("Proprietary Hardware Support Period"). In
the event of such discontinuance of the manufacture
of the Proprietary Hardware, Nortel will be relieved
of (i) any further obligation to manufacture and sell
the Proprietary Hardware to Purchaser other than the
Proprietary Hardware Last Time Buy; and (ii) to
provide Repair Services and/or technical support for
the Proprietary Hardware beyond the Proprietary
Hardware Support Period. Nortel's right to outsource
Repair Services and/or technical support for the
Proprietary Hardware, as provided above, shall also
apply during the Proprietary Hardware Support Period.
2. TERM This Agreement shall become effective on the Effective Date and
shall continue thereafter (a) with respect to the Common Equipment
Hardware until all the obligation under Section 1.1 have been
completed; (b) with respect to the Arris Hardware until all the
obligations under Sections 1.2, 1.2.1, 1.2.2, 1.3, 1.4 and 1.5 have
been completed; and (c) with respect to the Proprietary Hardware until
all the obligations under Sections 1.6, 1.6.1 and 1.6.2 have been
completed.
3. GRANT OF RIGHTS
3.1 Nortel grants to Purchaser the non-exclusive, non-transferable
worldwide right to distribute and sell the Products
incorporated into Cornerstone products manufactured and sold
by Purchaser as of the Effective Date. Purchaser is not
permitted to purchase the Products for any other purpose or
use.
3.2 With respect to the software or firmware contained in the
Common Equipment Hardware and the Proprietary Hardware
(collectively "Firmware"), Nortel grants to Purchaser a
non-exclusive, non-transferable worldwide right and license
to: (i) use the source code version of the Firmware internally
within Purchaser to modify the Firmware and create derivative
works from the Firmware (collectively "Enhancements"); (ii) to
make copies of the Firmware and the Enhancements in
machine-readable form for use on the Common Equipment Hardware
and/or the Proprietary Hardware; and (iii) to sublicense
machine-readable copies of the Firmware and the Enhancements
to Purchaser's direct or indirect end-user customers for use
on the Common Equipment Hardware or Proprietary Hardware
pursuant to the same license terms that Purchaser uses to
license the software portions of Purchaser's products to
end-user customers ("End-User Sublicenses"). Title and
ownership of the Firmware is and shall remain in Nortel or its
suppliers. Purchaser shall not rent, lease, license or
otherwise transfer the Firmware or the Enhancements except for
the granting of End-User Sublicenses.
4. ORDERING
4.1 Purchaser will use Purchase Orders to purchase Products,
Supply Chain Components, Software Services and
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Repair Services under this Agreement. Purchase Orders for
Common Equipment Hardware shall be placed by Purchaser no
later than September 30, 2001.
4.2 This Agreement will be the sole terms and conditions governing
Purchase Orders for Products, Supply Chain Components,
Software Services and Repair Services and Nortel's
acknowledgment of them. Terms and conditions on any Purchase
Order or acknowledgement shall be invalid to the extent they
conflict with or are in addition to the terms and conditions
of this Agreement.
4.3 Nortel will accept Purchase Orders for Products, Supply Chain
Components, Software Services and Repair Services issued by
Purchaser, if the POs comply with this Agreement. Nortel will
acknowledge acceptance of POs for Products, Supply Chain
Components, Software Services or Repair Services in writing
within 2 business days of its receipt of each PO. Nortel may
reject any PO that does not comply with the requirements of
this Agreement, including without limitation, a PO that
specifies a Delivery Date that has not been agreed to by
Nortel pursuant to Section 5.1.
4.4 On the first business day of each month until the Transition
is completed, Purchaser shall provide Nortel with a revised
forecast of its requirements for Arris Hardware ("Arris
Hardware Forecast") up to the most current estimated date for
completion of the Transition. Each Arris Hardware Forecast
shall be binding on Purchaser and Purchaser shall be obligated
to purchase all Arris Hardware so forecasted.
4.5 On the first business day of each month so long as Purchaser
is purchasing Proprietary Hardware under this Agreement,
Purchaser shall provide Nortel with a revised 12 month rolling
forecast of its requirements for Proprietary Hardware
("Proprietary Hardware Forecast"). Each Proprietary Hardware
Forecast shall be non-binding on Purchaser and is for planning
purposes only.
5. DELIVERY
5.1 Delivery Date The Delivery Dates for Products ordered will be
no more than eight (8) weeks after receipt of a Purchase
Order, provided that the Delivery Dates for all orders for
Common Equipment Hardware shall be on or before May 31, 2002
and the Delivery Dates for all orders for Proprietary Hardware
shall be on or before the earliest to occur of (i) the
Proprietary Hardware End Date; (ii) the date Nortel outsources
the manufacture of the Proprietary Hardware; or (iii) the last
delivery date established by Nortel pursuant to the
Proprietary Hardware Last Time Buy. Delivery Dates for the
Products and Supply Chain Components in each PO shall be
mutually agreed to by Purchaser and Nortel prior to
Purchaser's issuance of the PO.
5.2 Delivery Delay Nortel will notify Purchaser of any
anticipated delay in meeting the Delivery Date in a PO and
will provide Purchaser with a new Delivery Date.
5.3 Rescheduling a Delivery Date Subject to the limitations set
out below in this Section 5.3, Purchaser may reschedule the
original Delivery Date for Products in a PO once to a date up
to 90 business days later. At the end of the 90 business days,
unless otherwise mutually agreed by the parties, Purchaser
will take delivery of the Products in the Purchase Order.
Delivery Dates for orders for Arris Hardware which have a
delivery date prior to completion of the Transition may not be
rescheduled beyond the date of completion of the Transition.
Delivery Dates for orders for Common Equipment Hardware may
not be rescheduled beyond May 31, 2002. Delivery Dates for
orders for Proprietary Hardware may not be rescheduled beyond
the earliest to occur of (i) the Proprietary Hardware End
Date; (ii) the date Nortel outsources the manufacture of the
Proprietary Hardware; or (iii) the last delivery date
established by Nortel pursuant to the Proprietary Hardware
Last Time Buy.
6. PRICES AND PAYMENTS
6.1 Prices The Prices of Common Equipment Hardware shall be equal
to Nortel's current cost plus a margin of 5%, as set out in
Exhibit B. For Arris Hardware ordered for delivery before
December 31, 2001, the Prices shall be equal to Nortel's
current cost plus a margin of 5%, as set out in Exhibit A.
Thereafter, the Prices of Arris Hardware shall be equal to (a)
Nortel's cost at the time of order plus a margin of 5%, if
delivery is requested within 60 days following the order date;
or (b) Nortel's cost at the time of delivery plus a margin of
5%, if delivery is requested more than 60 days following the
order date. For Proprietary Hardware ordered for delivery
before December 31, 2001, the Prices shall be equal to
Nortel's current cost plus a margin of 5%, as set out in
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Exhibit A. Thereafter, the Prices of Proprietary Hardware
shall be market prices as established by Nortel from time to
time. The Prices of Supply Chain Components shall be equal to
(a) Nortel's cost at the time of order plus a margin of 5%, if
delivery is requested within 60 days following the order date;
or (b) Nortel's cost at the time of delivery plus a margin of
5%, if delivery is requested more than 60 days following the
order date. The Prices for Software Services are set out in
Exhibit D. All Prices are in United States dollars. Prices of
Products and Supply Chain Components are FOB Nortel's shipping
location. Product Prices include packing costs. Supply Chair
Component Prices do not include packing costs and such packing
costs shall be separately charged to and paid by Purchaser.
Prices do not include applicable taxes, import duties, customs
charges and shipping charges.
6.2 Taxes, Duties and Shipping Charges Purchaser will be
responsible for all applicable taxes, import duties and
customs charges payable with respect to the Products, Supply
Chain Components, Software Services, Repair Services and
technical assistance, and for all shipping charges for
shipping Products and Supply Chain Components from Nortel's
factory or other point of shipment to Purchaser's delivery
location.
6.3 Payment Nortel will invoice Purchaser at Purchaser's address
at 3871 Lakefield Drive, Suite 300, Suwanee, GA 30024.
Purchaser will pay Nortel the amount of each Nortel invoice
within 30 days of its receipt of invoice.
6.4 Audit Rights Purchaser may, at Purchaser's expense, by means
of an outside accounting firm reasonably acceptable to Nortel,
audit the records of Nortel to confirm that the Prices charged
to Purchaser for Products and/or Supply Chain Components which
are based on Nortel's applicable cost, as provided in Section
6.1 are correctly calculated by Nortel. The accounting firm
must execute with Nortel a non-disclosure agreement in a form
acceptable to Nortel before undertaking any such audit. The
accounting firm will provide Purchaser and Nortel with a
written report of the audit results, indicating whether the
Prices of Products and/or Supply Chain Components are in
compliance with this Agreement or whether the Prices have been
overstated or understated. If any Prices have been overstated
or understated, Nortel will either invoice Purchaser for the
understated amount or credit the overstated amount against
future purchases by Purchaser.
7. TITLE AND RISK OF LOSS Title and risk of loss to the Products, any
warranty replacement Products and Supply Chain Components shall pass to
Purchaser upon shipment by Nortel to Purchaser from the manufacturing
facility or other point of shipment.
8. ACCEPTANCE OR REJECTION OF PRODUCTS
8.1 Products shall be deemed accepted by Purchaser upon delivery
(the "Product Acceptance Date") unless Purchaser gives Nortel
notice of rejection within 10 business days after delivery.
8.2 If Purchaser rejects the Products in an order, as set out in
Section 8.1, Purchaser shall give Nortel a detailed notice
describing the nonconformity, and upon receipt of an RMA
(defined below) return them at Purchaser's expense and risk.
Upon confirmation of the nonconformity Nortel will repair or
replace the nonconforming Products and deliver them at
Nortel's expense and risk back to Purchaser within 30 days of
original receipt.
8.3 Supply Chain Components shall be deemed accepted by Purchaser
upon delivery (the "Component Acceptance Date") unless
Purchaser gives Nortel notice of rejection within 10 business
days after delivery.
8.4 If Purchaser rejects the Supply Chain Components in an order,
as set out in Section 8.3, Purchaser shall give Nortel a
detailed notice describing the nonconformity, and upon receipt
of an RMA (defined below) return them at Purchaser's expense
and risk. Upon confirmation of the nonconformity Nortel will,
to the extent available from Nortel's remaining inventory of
Supply Chain Components, replace the nonconforming Supply
Chain Components and deliver them at Purchaser's expense and
risk back to Purchaser within 30 days of original receipt. To
the extent the nonconforming Supply Chain Components cannot be
replaced from Nortel's remaining inventory of Supply Chain
Components, the order will be deemed cancelled and Nortel will
have no further liability with respect to such cancelled
order.
9. WARRANTY
9.1 Nortel warrants that, for 12 months from the Product
Acceptance Date (the "Product Warranty Period"), the Products
will be free from defects in materials and workmanship and
will conform to the Specifications.
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9.2 The warranties in Section 9.1 do not cover (i) items normally
consumed in operation (e.g., lamps and fuses); (ii) defects
caused by mishandling, misuse, neglect or improper testing,
installation, use or repair by Purchaser or its customers;
(iii) alterations or modifications not in accordance with
Nortel's written instructions; (iv) defects caused by use with
another vendor's products; and (v) damage due to fire,
explosion, power irregularities or surges, acts of God,
including without limitation, earthquakes, rains, floods, or
lightning, or any other causes not attributable to Nortel.
9.3 During the Product Warranty Period, at its expense Nortel
will, as its sole liability and Purchase's sole remedy for a
breach of the warranties in Section 9.1, repair or replace any
nonconfirming Products of which Nortel is notified during the
Product Warranty Period. Repair parts or replacement Products
may be new or refurbished like new at Nortel's option. For
warranty repair or replacement, Purchaser is responsible at
Purchaser's expense and risk of damage during shipment for
returning defective Products to Nortel. Repaired or
replacement Products will be shipped by Nortel to Purchaser at
Nortel's expense and risk of damage during shipment.
Notwithstanding the foregoing, once the Transition is
completed all warranty repairs or replacements of Arris
Hardware (including Finished Goods Inventory) will be
performed by Purchaser at Purchaser's expense.
9.4 The Supply Chain Components are sold to Purchaser on an AS IS
basis without any warranty except that, to the extent that
Nortel's contract manufacturers transfer the Supply Chain
Components to Nortel with a warranty, Nortel will assign such
warranty to Purchaser to the extent of Nortel's right to do
so.
9.5 EXCEPT FOR THE EXPRESS WARRANTY IN SECTION 9.1, NORTEL
DISCLAIMS ALL WARRANTIES WITH RESPECT TO THE PRODUCTS, THE
SUPPLY CHAIN COMPONENTS AND SERVICES FURNISHED UNDER THIS
AGREEMENT, INCLUDING, WITHOUT LIMITATION, ALL IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE.
10. REPAIR SERVICES The following additional terms shall apply to warranty
repairs of Products and the repair of malfunctioning Products after
expiration of the Product Warranty Period.
10.1 Prior to returning any defective Products to Nortel's repair
location, Purchaser will notify Nortel orally of the defect,
if known at that time, and will request authorization from
Nortel for the return of such Products. Upon such request,
Nortel shall provide Purchaser with a Return Material
Authorization ("RMA") number to be prominently displayed on
the shipping container for the defective Products and advise
Purchaser of the repair location to which the Products should
be returned.
10.2 Purchaser shall then ship such Products to Nortel, freight
prepaid and properly insured. Purchaser will bear the cost of
shipment of the malfunctioning Products to Nortel's repair
location and the risk of damage during shipment. Purchaser
shall prepare proper export documentation as per Nortel's
instructions, evidencing Purchaser's ownership of the Products
and shall comply with the applicable free trade requirements.
10.3 Purchaser shall furnish the following information with
Products returned to Nortel for Repair Services:
(a) Purchaser's name and complete address;
(b) quantities and model numbers of Products being
delivered for repair;
(c) the nature of the defect or failure, if known;
(d) Purchase Order number under which repairs are to be
made, if Product is no longer under warranty;
(e) names and telephone numbers of Purchaser's employees
or other designated persons to contact in case of
questions about the Products;
(f) ship-to address of Purchaser's location to which
repaired or replacement Products should be returned;
and
(g) whether or not returned Products are under warranty.
10.4 Nortel will repair or replace malfunctioning Products returned
by Purchaser in accordance with this Section 10. Repair parts
or replacement Products may be new or refurbished like new, at
Nortel's option. The repaired or replacement Products will be
returned by Nortel to Purchaser at Nortel's expense and risk
of damage during shipment. Such Repair Services for Products
outside the Product Warranty Period will be provide by Nortel
at the Prices described in Exhibit D. Repair or replacement
will be completed by Nortel within 30 days from receipt of the
malfunctioning Products. Nortel will inform Purchaser if
particular units of Products are not repairable. On a periodic
basis Nortel will provide to Purchaser a repair report for
repaired or replaced Common
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Equipment Hardware or Proprietary Hardware which report will
identify the repair actions taken or that a replacement unit
was provided.
10.5 No Repair Services will be provided by Nortel for Arris
Hardware after completion of the Transition. No Repair
Services will be provided by Nortel for Common Equipment
Hardware after the earlier to occur of (i) the date Nortel
outsources such Repair Services; or (ii) the end of the Common
Equipment Support Period. No Repair Services will be provided
by Nortel for Proprietary Hardware after the earliest to occur
of (i) the Proprietary Hardware End Date; (ii) the date Nortel
outsources such Repair Services; or (iii) the end of the
Proprietary Hardware Support Period.
11. TECHNICAL ASSISTANCE Nortel will provide its standard technical
assistance relating to the Common Equipment Hardware during the Product
Warranty Period at no charge. After the Product Warranty Period, Nortel
will provide technical assistance relating to the Common Equipment
Hardware at the Prices set out in Exhibit D. No technical assistance
will be provided by Nortel for Common Equipment Hardware after the
earlier to occur of (i) the date Nortel outsources such technical
support; or (ii) the end of the Common Equipment Support Period. No
technical assistance will be provided by Nortel for Proprietary
Hardware after the earliest to occur of (i) the Proprietary Hardware
End Date; (ii) the date Nortel outsources such technical support; or
(iii) the end of the Proprietary Hardware Support Period. No technical
assistance will be provided by Nortel for Arris Hardware.
12. CONFIDENTIAL INFORMATION Each party will use reasonable care in
holding the other's Confidential Information in confidence and not
disclosing it to anyone except the party's employees on a need-to-know
basis.
12.1 Exceptions Information is not protected if (i) a recipient
can demonstrate through written documentation that it was
already known to recipient without similar confidentiality
obligations; (ii) it becomes known or generally available to
the public (other than by act of the recipient) after its
disclosure; (iii) it is disclosed or made available in writing
to the recipient by a third party having a bona fide right to
do so and without similar confidentiality obligations; (iv) it
is independently developed by recipient as demonstrated by its
business records; or (v) it is required to be disclosed by
subpoena or other process of law. The recipient will notify
the disclosing party promptly of a subpoena or other process
of law requiring disclosure.
12.2 Ownership, Use and Return Confidential Information of the
disclosing party is and shall remain the exclusive property of
the disclosing party. The receiving party shall use the
disclosing party's Confidential Information solely in
furtherance of this Agreement or as authorized by the
disclosing party in writing, and for no other purpose. The
receiving party shall return or destroy (and certify such
destruction in writing to the disclosing party) the
Confidential Information of the disclosing party upon the
earlier of (i) the request of the disclosing party, or (ii)
the expiration or termination of this Agreement.
13. LIMITATION OF LIABILITY Except for claims arising from (i) either
Party's breach of Section 12; (ii) bodily injury or death caused by
either party; and (iii) Purchaser's breach of Nortel's intellectual
property rights, (a) Nortel's liability under this Agreement shall not
exceed $500,000; and (b) neither party shall be liable for indirect,
incidental, special, punitive or consequential damages under this
Agreement.
14. FORCE MAJEURE Neither party will be in breach of this Agreement for
delays or failures of performance due to causes beyond its reasonable
control ("Force Majeure Event"). The party whose performance is
affected by a Force Majeure Event shall notify the other party within
10 days after the occurrence of such Force Majeure Event. If a Force
Majeure Event lasts 60 calendar days or longer, Purchaser may cancel
any Purchase Order affected by the Force Majeure Event. The
cancellation will be without obligation or liability.
15. TERMINATION AND CONTINUATION OF RIGHTS
15.1 The affected party is obliged to promptly give notice to the
other party, if the affected party:
(a) files or has filed against it a petition in
bankruptcy, or
(b) makes an assignment for the benefit of creditors; or,
(c) makes a general settlement of debts or debt
reorganization, or
(d) is dissolved or ceases doing business; or
(e) has a substantial part of its assets seized; or
(f) goes into receivership or insolvency proceedings; or
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(g) assigns this Agreement or any part thereof in
violation of Section 18.2.
15.2 The other party may by written notice to the affected party,
terminate this Agreement if any of the following occurs: (i)
the event described in Section 15.1 subpart (a) and there has
been no resolution after 20 days have passed since service of
process; or (ii) any of the events described in Section 15.1
subparts (b), (c), (d), (e), (f), or (g).
15.3 If a party breaches this Agreement, it will have 30 days from
receipt of written notice from the other party to remedy the
breach. If the breach is not remedied in that time period, the
notifying party may terminate this Agreement or any
uncompleted Purchase Order.
15.4 The termination rights in Sections 15.2 and 15.3 are in
addition to, and not in lieu of, any other rights of the
terminating party at law or equity, except as limited
elsewhere in this Agreement.
15.5 All obligations and liabilities intended to survive the
termination of this Agreement will be effective after
termination.
16. NOTICES Notices shall be given by (i) certified mail, return receipt
requested; or (ii) receipted overnight courier service. Certified mail
notice is effective on the date shown on the return receipt card and
overnight courier notice is effective on the next business day after
sending. A party will send notice to the mailing addresses described
below or such other address as a party may specify by notice hereunder.
PURCHASER: Arris Interactive L.L.C.
3871 Lakefield Drive
Suite 300
Suwanee, GA 30024
Attention: President
NORTEL: Nortel Networks Inc.
5555 Windward Parkway
Suite B
Alpharetta, GA 30004
Attention: VP Marketing, Local Internet
With a copy to:
Legal Department
Nortel Networks Inc.
2221 Lakeside Blvd.
Richardson, TX 75082
Attention: Lead Counsel, Supply Management
17. GOVERNING LAW The laws of the State of Georgia, except for its
conflict of laws rules, will govern this Agreement. Application of the
United Nations Convention on Contracts for the International Sale of
Goods is specifically excluded from this Agreement.
18. GENERAL
18.1 Severability If any provision of this Agreement is determined
to be legally unenforceable or invalid, the remaining
provisions will continue in effect. The parties will
substitute a provision that most closely approximates the
economic effect and intent of the invalid provision.
18.2 Assignment Except as provided below in this Section 18.2,
neither party will assign or transfer this Agreement, or its
rights, duties or obligations under this Agreement, without
the prior written consent of the other party. Without
Purchasers consent Nortel may subcontract its duties and
obligations hereunder, in whole or in part, without
Purchaser's consent. Also without Purchaser's consent Nortel
may assign this Agreement, in whole or in
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part, (i) to an affiliate of Nortel; or (ii) to a person or
entity to which has succeeded to all or substantially all of
Nortel's business and assets to which this Agreement relates;
or (iii) to any third party contract manufacturer or other
third party which has agreed to assume and perform Nortel's
obligations and duties under this Agreement. Nortel shall be
relieved of all of its obligations and released from any
liability under this Agreement as of the effective date of any
such assignment. Notwithstanding the preceding sentence, if
Nortel assigns this Agreement to a third party under option
(iii) above, Nortel shall ensure that Purchaser receives the
benefit of the Prices established pursuant to the first
sentence of Section 6.1 with respect to any Products ordered
by Purchaser from such third party after such assignment.
18.3 Waiver Unless waived in and agreed in writing by the parties,
no action or inaction by a party under this Agreement will
constitute a waiver of (i) a party's rights or obligations
under this Agreement; or (ii) a party's breach of this
Agreement.
18.4 Independent Contractors Under this Agreement each party is an
independent contractor. This Agreement does not create a joint
venture, partnership, principal-agent or employment
relationship between Nortel and Purchaser.
18.5 Incorporation of Exhibits All exhibits attached to this
Agreement are incorporated in this Agreement.
18.6 Entire Agreement This Agreement is the entire agreement
between Purchaser and Nortel with respect to the subject
matter hereof. This Agreement supersedes all prior written or
oral agreements on the subject matter. This Agreement may not
be modified or amended except in writing executed by the duly
authorized representatives of both parties
18.7 Nortel Audit Rights From time to time upon 15 days notice to
Purchaser, Nortel may audit Purchaser's applicable records
during normal business hours to confirm that Purchaser is
complying with its obligations under Sections 1.3, 1.4 and
1.5.
18.8 Press Releases Neither party shall issue any press releases
or use the name of the other party in any advertisements
except with the prior written consent of the other party.
[Signature Page to Follow]
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IN WITNESS WHEREOF, the parties have caused this Purchase and Sale Agreement to
be executed by their duly authorized representatives as of the Effective Date.
NORTEL NETWORKS INC. ARRIS INTERACTIVE L.L.C.
By: Michael Dadoun By: /s/ David Potts
---------------------------------- ------------------------------------
(Signature) (Signature)
Name: Name:
-------------------------------- ----------------------------------
(Print) (Print)
Title: Title:
------------------------------- ---------------------------------
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