CONFIDENTIAL
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OEM
PURCHASE AND SALE
AGREEMENT
BY AND BETWEEN
NORTEL NETWORKS INC.
&
SONOMA SYSTEMS
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CONFIDENTIAL
TABLE OF CONTENTS
PAGE
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1. DEFINITIONS....................................................................................1
2. SCOPE..........................................................................................2
3. EXHIBITS.......................................................................................3
4. NORTEL NETWORK'S PRODUCT QUALIFICATION AND
ACCEPTANCE PROGRAM.............................................................................3
5. PRODUCT AND PROCESS CHANGES....................................................................4
6. QUALITY CONTROL AND RELIABILITY REQUIREMENTS,
SUPPLY MANAGEMENT AND NORTEL NETWORK'S
AUDITING RIGHTS................................................................................6
7. INTENTIONALLY DELETED..........................................................................7
8. ORDERING.......................................................................................7
9. DELIVERY.......................................................................................8
10. PRICES AND PAYMENTS............................................................................9
11. TITLE AND RISK OF LOSS.........................................................................10
12. INSPECTION.....................................................................................10
13. WARRANTY.......................................................................................10
14. REPAIR PROCEDURES..............................................................................12
15. REPAIR SERVICES................................................................................13
16. CONTINUING AVAILABILITY OF TECHNICAL ASSISTANCE,
REPAIR SERVICES, MAINTENANCE, REPLACEMENT
AND REPAIR PARTS...............................................................................15
17. TECHNICAL ASSISTANCE AND MARKETING SUPPORT.....................................................15
18. DOCUMENTATION..................................................................................16
19. CONFIDENTIAL INFORMATION.......................................................................16
20. INTELLECTUAL PROPERTY RIGHT INFRINGEMENT.......................................................17
21. HAZARDOUS MATERIALS............................................................................18
22. INDEMNITY......................................................................................18
23. COMPLIANCE WITH LAWS...........................................................................19
24. CONSEQUENTIAL DAMAGES..........................................................................19
25. INSURANCE......................................................................................19
26. FORCE MAJEURE..................................................................................19
27. TERM...........................................................................................20
28. TERMINATION AND CONTINUING RIGHTS..............................................................20
29. NOTICES........................................................................................21
30. MANUFACTURING ESCROW AND CONTINGENT LICENSE....................................................21
31. GOVERNING LAW..................................................................................21
32. GENERAL........................................................................................21
CONFIDENTIAL
EXHIBITS
Exhibit A - Product Lists, Part I and Part II, Prices, Discounts, Availability Dates and FCA Delivery Locations
Exhibit B - Specifications and Acceptance Program
Exhibit C - Demand-Pull Program
Exhibit D - Repair Services Rates, FCA Repair Locations and Technical Assistance Rates
Exhibit E - Procedures for Orders utilizing EDI and TDI
Exhibit F - Monthly Reports
Exhibit G - Change Notification
Exhibit H - Technical Assistance
Exhibit I - RUS Debarment Certificate
Exhibit J - INTENTIONALLY DELETED
Exhibit K - Marketing Support
Exhibit L - Trade Agreement - Procedures
Exhibit M - Notices
Exhibit N - Escrow Terms and Conditions and Escrow Agreement
CONFIDENTIAL
OEM PURCHASE AND SALE AGREEMENT
This OEM Purchase and Sale Agreement ("Agreement") entered into by and between
NORTEL NETWORKS INC., a Delaware corporation with offices located at ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇, (hereinafter referred to as "NORTEL
NETWORKS") and SONOMA SYSTEMS, a California corporation with offices located at
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇ (hereinafter referred
to as "SUPPLIER").
WITNESSETH that the Parties hereto hereby agree as follows:
1. DEFINITIONS
1.1 As used herein:
a) "ARO" means after receipt of a Purchase Order or Release.
b) "BLANKET PURCHASE ORDER" means a Purchase Order which does not set
forth a Delivery Date.
c) "BUSINESS DAY" means any day other than a Saturday, Sunday, a
non-working day or statutory holiday observed in the jurisdiction where
a right is to be exercised or an obligation to be executed hereunder.
d) INTENTIONALLY DELETED.
e) "DELIVERY DATE" means the date specified in a Purchase Order or a
Release when the Products are to be delivered to the FCA Delivery
Location except in the event Nortel Networks elects to take delivery of
such Products at Supplier's loading dock, in which case the Delivery
Date shall be the date Nortel Networks takes delivery of such Products
at Supplier's loading dock.
f) "DEMAND-PULL PROGRAM" means Nortel Networks' ordering process which may
be established by Nortel Networks pursuant to Section 8 (Ordering) and
Exhibit C.
g) "DOCUMENTATION" means the documentation as described in Section 18.
h) "EDI" means the electronic data interchange procedures established in
Exhibit E.
i) "EFFECTIVE DATE" means February 9, 2000.
j) "EXHIBIT" means any Exhibit listed in Section 3 hereof.
k) "FCA DELIVERY LOCATIONS" means FCA delivery locations listed in Exhibit
A Part III or as specified in the applicable Order or Release.
l) "FCA REPAIR LOCATIONS" means Supplier's FCA repair locations listed in
Exhibit D, Part II.
m) "FREE CARRIER" and "FCA" have the meaning set forth in the
International Chamber of Commerce document, "INCOTERMS 1990".
n) "HARDWARE" means the hardware components of the Products and any set of
programs in machine-executable code whether residing in fixed coded
instructions resident in read-only memory or equivalent devices forming
part of hardware and sometimes known as firmware or whether residing in
any other form of memory device such as `flash memory'.
o) "PARTY" means Nortel Networks or Supplier and "PARTIES" means Nortel
Networks and Supplier.
p) "PRICES" means the prices applicable to the Products and Repair
Services determined in accordance with Section 10 (Prices and Payments)
hereof, Exhibit A, Part I and Part II and Exhibit D.
q) "PROCESS" means a set of inter-related resources and activities which
transform inputs into outputs; resources may include personnel,
finance, facilities, equipment, techniques and methods.
r) "PRODUCT" means any one of the products comprising Hardware and
Software components, listed in the Product List attached hereto as
Exhibit A, Part I, as such Exhibit A, Part I may be modified, from time
to time, in accordance herewith or by agreement of the Parties and
"PRODUCTS" means some or all Products.
CONFIDENTIAL
Whenever the term "PRODUCT" is used in this Agreement with respect to
any Supplier product, such term designates any such product listed in
Exhibit A, Part II not yet accepted by Nortel Networks in accordance
with Section 4 (Nortel Networks' Product Qualification and Acceptance
Process) and "PRODUCTS" means some or all products.
s) "PURCHASE ORDER" means any purchase order issued (by any means of
transmission) or output of an electronic "paperless" process, initiated
by Nortel Networks, in respect of the Products or products and accepted
pursuant to Section 8 (Ordering).
t) "RELEASE" means a verbal release confirmed in writing within two (2)
Business Days, the document issued (by any means of transmission) or
output of an electronic "paperless" process, initiated by Nortel
Networks, pursuant to a Blanket Purchase Order by which the Delivery
Date for such Blanket Purchase Order or portion(s) thereof is
requested.
u) "REPAIR DATE" means the date on which the repair of a Product is
completed as stamped on the Products in accordance with Section 14.4.
v) "REPAIR SERVICES" means in the case of Hardware, the upgrade, the
repair or replacement of defective Hardware and in the case of
Software, the update, the correction or replacement of defective
Software as set forth in Section 15 (Repair Services) to be performed
during and after the applicable Product Warranty Period.
w) "SOFTWARE" means any set of programs in machine readable object code,
residing in memories or diskettes or other media for application in or
with the Products, which provides basic logic, operating instructions,
user-related application instructions and network management
information as well as associated Software documentation.
x) "SPECIFICATIONS" means the technical specifications and the other
requirements listed, described or referred to in Exhibit B, Part I,
including acceptance test specifications, which are required to be met
by the Products and the Documentation.
y) "SUBSIDIARY" means a corporation in which Nortel Networks effectively
owns or controls, and continues to own or control, directly or
indirectly, more than fifty percent (50%) of the voting stock or
shares.
z) "TERM" has the meaning ascribed to such term in Section 27 (Term) of
this Agreement.
aa) "$" OR "DOLLARS" means lawful money of the United States of America
except as otherwise expressly set forth herein.
1.2 Any reference in this Agreement to another agreement shall mean such
other agreement as executed by the Parties thereto and all amendments
thereto, unless otherwise explicitly stated.
2. SCOPE
2.1 From time to time Nortel Networks may request Supplier to sell the
Products to Nortel Networks and Supplier agrees to sell such Products
to Nortel Networks. The sale of Products by Supplier and the purchase
of Products by Nortel Networks shall be in accordance with the terms of
this Agreement and Exhibits thereto. The terms and conditions of this
Agreement shall also apply in their entirety to products purchased by
Nortel Networks from Supplier during the ninety (90) day period prior
to the Effective Date.
2.2 Nortel Networks shall have the right to request Supplier to customize
any Product, product or Documentation and Supplier, upon Nortel
Networks' request undertakes to so customize any such Product, product
or Documentation. Customization requirements, if any, shall be
incorporated in the Specifications and the sale and purchase of any
customized Product, product or Documentation shall be in accordance
with the terms and conditions of this Agreement and Exhibits thereto.
At the time any customized Product, product or Documentation is
incorporated in this Agreement, Exhibit A, Part II and Exhibit B shall
be amended to add thereto the prices and the availability date and the
acceptance program applicable to such customized Product, product or
Documentation. This Section is also applicable to Documentation
included with the Products and products. If Supplier receives an order
for product documentation from a customer of Nortel Networks, to the
extent Supplier has customized any documentation so ordered for Nortel
Networks, Supplier shall furnish such customer with the customized
documentation and not Supplier's documentation.
If requested by Nortel Networks, the Products will incorporate Nortel
Networks' branding requirements, in accordance with the Specifications
to include, as mutually agreed and without limitation, Nortel Networks'
name, trademark and logotype, Nortel Networks' color, Nortel Networks'
part number as per Specifications, Nortel Networks' bar-codes and/or
CLEI codes, Nortel Networks' technical handbook (standard ▇▇▇▇ color
binder) with each Product, packing material with Nortel Networks'
logotype and Nortel Networks' box bar coding, applicable to each
shipment. In respect of Supplier's obligations under this Section 2.2,
Nortel Networks shall pay Supplier a one-time fee of [*] dollars
($[*]). Supplier may invoice this amount to Nortel Networks no earlier
than March 15, 2000.
* CERTAIN CONFIDENTIAL INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
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2.3 Supplier hereby grants to Nortel Networks' the non-exclusive worldwide
right to distribute and sell Products, directly or indirectly,
including the right to sublicense for use the Software for the life of
the Products. Any sublicensing of Software by Nortel Networks' in
accordance with the foregoing will be pursuant to terms and conditions
consistent with terms and conditions which govern the licensing of
Nortel Networks' software used for the operation of Nortel Networks'
products comparable to the Products. Supplier hereby grants to Nortel
Networks the non-exclusive worldwide royalty-free right to use the
during the life of the Products, Software in connection with its
support, including without limitation network management undertaken by
Nortel Networks, and evaluation of the Products. With respect to
Products used by Nortel Networks internally during the Term, Supplier
shall provide Nortel Networks the same support is as given to the
Products during the Warranty Period. Supplier shall provide for Nortel
Networks use in accordance with the terms of this Section 2.3, all
patches, modifications and upgrades to the Software as such become
available during the Term.
2.4 Nortel Networks and Supplier may from time to time, by mutual
agreement, modify the Product Lists contained in Exhibit A, to add
thereto other products offered for sale by Supplier, and/or to
incorporate therein enhancements or new features introduced in Products
by Supplier. Supplier shall advise Nortel Networks during scheduled
Product marketing reviews and offer and make available to Nortel
Networks for incorporation in this Agreement, any new product or
Product enhancement or new feature that Supplier makes generally
available. Such notification shall be made by Supplier to Nortel
Networks within seven (7) calendar days of the Supplier's internal
design authorization allowing any such new product, enhancement or
feature. If Nortel Networks accepts Supplier's offer, the actual
incorporation in this Agreement of any such new product or any Product
enhancement or new feature will take place only after it complies with
Nortel Networks' acceptance requirements under Section 4 (Nortel
Networks' Product Qualification and Acceptance Process). At the time
any new product or Product enhancement or new feature is incorporated
in this Agreement, Exhibit A, Part II and Exhibit B shall be amended to
add thereto the prices and the availability date and the acceptance
program applicable to such new product or Product enhancement or new
feature.
2.5 Nothing in this Agreement shall be interpreted or construed to limit
either Party's right to perform or to continue to perform its own
independent research, development, manufacturing or marketing of any
type of products or systems even if such research, development,
manufacturing or marketing pertains to technology or products similar
to the Products or products.
2.6 Supplier accepts and acknowledges that Nortel Networks may request it
to sell Products to Nortel Networks Companies and in such event this Agreement
shall be deemed to extend to and for the benefit of Nortel Networks Companies.
Such Nortel Networks Companies shall be entitled to exercise on their own
behalf Nortel Networks' rights in respect of the purchase of Products pursuant
to this Agreement including, without limitation, the right to place Purchase
Orders together with the rights which accrue in respect of the Products or in
respect of the ordering or delivery of such Products. For the purposes of
giving effect to the above, where a Nortel Networks Company purchases Products
pursuant to this Agreement, where the context so admits, references to Nortel
Networks shall be deemed to be to the relevant Nortel Networks Company which is
ordering and/or purchasing Products in accordance with the terms of this
Agreement. Each Blanket Purchase Order, Release and Purchase Order shall create
rights and obligations solely between Supplier and the Nortel Networks Company
which issues the Blanket Purchase Order, the Release and the Purchase Order.
For the purpose of this Agreement, "Nortel Networks Company" shall mean
individually or collectively: (i) a Manufacturing Licensee (i.e. a third party
which enters into an agreement with a Nortel Networks Company to (1)
manufacture in modified or unmodified form, a Nortel Networks product
incorporating the Product, and (2) lease, sell, sublicense or otherwise
distribute (directly or indirectly through distributors such Nortel Networks
product under Nortel Networks' or the Manufacturing Licensee's own brand name;
and/or (ii) a joint venture, which is a cooperative enterprise formed between a
Nortel Networks Company and one or more other autonomous entities to address
more effectively certain mutual business interests and opportunities; and (iii)
a corporation or other legal entity other than a Subsidiary in which a Nortel
Networks Company, directly or indirectly owns or controls, and continues to own
or control, twenty percent (20%) or more of the voting stock or shares, or
other control mechanism; and/or (iv) a Subsidiary. Without prejudice to the
foregoing provisions, Supplier shall not sell Products to Nortel Networks
Companies without having first obtained the written consent of Nortel Networks'
Brand Management. The date of Nortel Networks' Management's consent shall be
deemed to be the date of the Purchase Order for the purposes of Section 8
(Ordering).
3. EXHIBITS
3.1 The following Exhibits, attached hereto, are an integral part of this
Agreement and are incorporated herein by reference:
Exhibit A - Product Lists, Part I and Part II, Prices, Discounts, Availability Dates and FCA Delivery Locations
Exhibit B - Specifications and Acceptance Program
Exhibit C - Demand-Pull Program
Exhibit D - Repair Services Rates, FCA Repair Locations and Technical Assistance Rates
Exhibit E - Procedures for Orders utilizing EDI and TDI
Exhibit F - Monthly Reports
Exhibit G - Change Notification
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Exhibit H - Technical Assistance
Exhibit I - RUS Debarment Certificate
Exhibit J - INTENTIONALLY DELETED
Exhibit K - Marketing Support
Exhibit L - North America Free Trade Agreements - Procedures
Exhibit M - Notices
Exhibit N - Escrow Terms and Conditions and Escrow Agreement.
3.2 Any amendment to any Exhibit shall be in the form of a revised Exhibit
duly dated and signed by authorized representatives of the Parties.
4. NORTEL NETWORKS' PRODUCT QUALIFICATION AND ACCEPTANCE PROGRAM
4.1 Supplier undertakes to supply Products which comply with the
Specifications. Except as otherwise set forth herein, prior to being
purchased by Nortel Networks, the products listed in Exhibit A, Part II
will undergo a program of evaluation, qualification and acceptance by
Nortel Networks ("ACCEPTANCE PROGRAM") to verify their compliance with
the Specifications. Products listed in Exhibit A, Part I have been
accepted by Nortel Networks in accordance with this Section 4. The
Acceptance Program will be conducted in accordance with Exhibit B, Part
II.
4.2 It is acknowledged by Supplier that circumstances may arise where
Nortel Networks will desire to purchase one or more products as are
listed in Exhibit A, Part II, prior to acceptance thereof in accordance
with this Section 4. Such circumstances will be examined in good faith
by the Parties on a case-by-case basis. In the event Supplier accepts
to sell any one of the products, Nortel Networks will issue Purchase
Order(s) covering same and the provisions of Section 4.6 shall be
applicable to such Purchase Order(s). If products are ordered pursuant
to this Section 4.2, such products shall be treated as Products for all
purposes of this Agreement. Supplier shall not unreasonably refuse to
accept Nortel Networks' Purchase Orders covering products.
Specifications applicable to products ordered pursuant to this Section
4.2 shall be the specifications set forth in Exhibit B, part I of this
Agreement.
4.3 Acceptance by Nortel Networks of the products will take place upon
successful completion by Nortel Networks of its Acceptance Program
provided that the products comply with the Specifications. Nortel
Networks will notify Supplier in writing of its acceptance of the
products within three (3) Business Days from successful completion of
its Acceptance Program.
4.4 In the event that in the course of the carrying out of the Acceptance
Program, Nortel Networks determines that the products fail to comply
with the Specifications, Nortel Networks will promptly notify Supplier
in writing of such failure, with reasonable detail, and upon receipt of
such notice, Supplier will, at its expense, take prompt and effective
action to correct the notified deficiencies by the applicable
Acceptance Date, as such term is hereafter defined. Product acceptance
dates shall be agreed upon by the Parties on a case-by-case basis, any
such date to be, in any event, no later than twelve (12) weeks after
the product availability date specified in Exhibit A, Part II for each
product (herein referred to as "ACCEPTANCE DATE"), or extensions
thereof, if any, granted in writing by Nortel Networks. In such case,
acceptance of the products will take place upon verification by Nortel
Networks that the notified deficiencies have been corrected, and
accepted products shall become Products hereunder and be deemed to be
included in Exhibit A, Part I.
4.5 In the event that acceptance of the products does not take place on or
before the Acceptance Date or extensions thereof, if any, granted in
writing by Nortel Networks, or in the event Nortel Networks, acting
reasonably, does not expect that acceptance will take place on the
Acceptance Date or extensions thereof, if any, granted in writing by
Nortel Networks , Nortel Networks may, in addition to any other
remedies hereunder, at law or in equity, recover all costs and charges
it has incurred as a result of the products not being accepted by the
Acceptance Date, including, without limitation as to the nature of such
costs and expenses, laboratory testing cancellation charges. In
addition Nortel Networks may, upon notice to Supplier to that effect,
request that a design review be held between Supplier's and Nortel
Networks' engineers in order to determine how far away the products
actually are from acceptance.
4.6 In the event Supplier has accepted Nortel Networks' Purchase Order(s)
for products pursuant to Section 4.2 hereof, Nortel Networks may, in
addition to its rights under Section 4.5 hereof, request that Supplier
provide, and in such event, Supplier will provide as a temporary
solution, functionally equivalent equipment acceptable to Nortel
Networks' customer(s). Once the products have passed acceptance,
Supplier shall, at its own cost, replace the functionally equivalent
equipment with the Products, and shall invoice Nortel Networks for the
price of Products only, once the Products have been delivered to Nortel
Networks' customer(s). Nortel Networks shall not be responsible for the
cost of the equipment sent as an alternate and temporary solution.
4.7 Supplier represents and warrants that it has identified and will use
its best efforts to continue to identify to Nortel Networks any sole
source/critical components incorporated into the Products.
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4.8 Acceptance of the Products by Nortel Networks under this Section 4
shall not relieve Supplier from its obligations to manufacture,
deliver, repair and support the Products in accordance with this
Agreement.
5. PRODUCT AND PROCESS CHANGES
5.1 Supplier shall notify Nortel Networks in writing of all proposed
modifications and changes that affect form, fit, function, performance
or Price (herein "CHANGE(S)") to the Products and/or Processes. Such
notification shall be made by Supplier to Nortel Networks within seven
(7) calendar days of the Supplier's internal design authorization
allowing any such Change except in the cases contemplated in Section
5.6, in which case Supplier shall promptly so notify Nortel Networks
and initiate immediate action to correct the situation. The Changes
which require that a notice be forwarded to Nortel Networks shall
include, without limitation, any proposed Change to the Products in
accordance with the classifications described in GR-209-CORE (herein
"GR-209"). All Changes proposed outside the spectrum of GR-209 shall be
classified as "O". Supplier shall comply with GR-209 except to the
extent expressly set forth in this Section 5. The interpretation of
GR-209 resides with Nortel Networks. Supplier's Change notifications
(herein "CHANGE NOTIFICATIONS") shall be in the form and content of
Exhibit G. The Parties will work together to address any known
deviations from GR-209.
5.2 Supplier's written Change Notifications shall be numbered in a single
sequential numbering scheme and shall include the information specified
in GR-209 including the following: a detailed list of the Products
and/or Processes affected and associated Changes that must be
implemented in conjunction with or prior to the notified Change, the
compatibility of the Change with the Products and/or Processes
currently deployed, a detailed description of the reason for the
Change, the effect on the Products and/or Processes once the Change is
implemented and the procedure of implementation. In addition, a
detailed description of the Change, the consequences if the Change is
not implemented and the planned implementation date of the Change shall
be included in the Change Notification. Supplier will propose a
disposition plan for Nortel Networks' and its customers' stockrooms.
Nortel Networks will notify Supplier of the type and quantity of
Products it requires for the implementation of the Change and location
where such Products should be delivered.
5.3 Nortel Networks reserves the right to request reasonable test data
associated with any Product Changes. Furthermore, in the event Nortel
Networks determines it is necessary to verify the Change prior to
acceptance, Supplier shall supply, on loan and without charge,
sufficient production level quality Products for such verification, or
offer some other alternative arrangement, satisfactory to Nortel
Networks, for such verification.
5.4 If Nortel Networks disagrees with any classification issued by
Supplier, Supplier shall present evidence in writing, within a period
of five (5) calendar days from Nortel Networks' request therefor, that
such a classification is justified. If Nortel Networks still disagrees
with the justification, Supplier shall negotiate in good faith with
Nortel Networks until a final resolution is mutually agreed upon by the
Parties within thirty (30) calendar days from the date of Supplier's
Change Notification. In the event that thirty (30) calendar days after
the date of Supplier's Change Notification, the Parties still disagree
on the Change classification, Nortel Networks' reasonable determination
shall prevail and be final.
5.5 Supplier shall not implement a Change such as those contemplated above
without the prior written consent of Nortel Networks, which consent may
not be unreasonably withheld. Should Nortel Networks fail to respond
within a period of forty (40) calendar days from the date it has
received a notice forwarded by Supplier under this Section 5, then
Supplier shall have the right to implement such Change.
5.6 In addition to Supplier's warranty obligations contained in Section 13
(Warranty) and without diminishing Supplier's obligations under this
Section 5 and Sections 6 (Quality Control and Reliability Requirements,
Supply Management and Nortel Networks' Auditing Rights) and 15 (Repair
Services), in the event that, during the Product Warranty Period or the
Term, whichever is longer, an intrinsic design or manufacturing defect
of the Product(s), including a failure of the Software to operate in
the environment in which it is installed, without troubles, due to
defects which result from the failure of the Software to conform to the
Specifications, causes an inoperative, hazardous or unsatisfactory
condition of a nature as to require the introduction in the Product(s)
of a Class A or AC Change, as described in GR-209, Supplier shall, as
expeditiously as possible, at its expense, generate a Class A or AC
Change, as applicable, to eliminate the defect, and supply such Change,
at no charge, for installation by Nortel Networks at reasonable costs,
at Supplier's expense, in all defective units of the Product(s), both
installed and stocked, in accordance with a retrofit program negotiated
by Nortel Networks with its customers. A retrofit program is a program
that allows Nortel Networks to install the Change in all of Nortel
Networks' stockrooms and customer locations within a period not to
exceed one hundred and eighty (180) calendar days from the date such
inoperative, hazardous or unsatisfactory condition first occurs. In the
course of negotiations of the retrofit program with its customers,
Nortel Networks shall consult closely with Supplier with a view to
endeavor to achieve the twofold objective of customers' satisfaction
and minimization of retrofit costs to Supplier.
Supplier shall provide, at its expense, seed stock units to support a
retrofit project completion within said one hundred and eighty (180)
days in quantities determined in accordance with the following
formulae: The one hundred and eighty (180) day period begins when all
the details of the retrofit program are determined by Nortel Networks.
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Seed Stock Units = Material Cycle Time (Weeks) x Repair and Return Rate
Repair and Return Rate = Number of units to be retrofitted
--------------------------------------------
Change Completion Date - Implementation Date
5.7 Nortel Networks shall provide to Supplier Nortel Networks' Product
Engineering Code, the release number of the Product and the CLEI code
of the Product, if required, for each Product Change under this Section
5. At Nortel Networks' request, this information shall be placed on the
Products by Supplier in accordance with the Specifications.
5.8 From acceptance of the Products by Nortel Networks in accordance with
Section 4 (Nortel Networks' Product Qualification and Acceptance
Process), Supplier shall provide Nortel Networks with a field baseline
report which will include: part number, Current Revision Level, New
Revision Level, Reason for Change, Parts affected by Change, Old and
New Revision of PCB, if applicable. This report will be updated
whenever a Change is generated by Supplier which affects form, fit,
function, performance or Price of the Products. Supplier will use its
best efforts to produce these updates within seven (7) Business Days of
each Change date.
5.9 Throughout the Term, Supplier shall requalify the Products once every
twelve (12) month period in accordance with Bellcore Standard
TR-NWT-000418, Issue 2 (Draft 3) September 1992. The parties will work
together to address any known deviations from such standard.
5.10 Change notices relating to Product Changes should be sent to Nortel
Networks' System Engineering department and Change notices relating to
Process Changes should be sent to Nortel Networks' Quality Department.
Supplier's designated point of contact shall be responsible for the
obligations described in this Section 5.
6. QUALITY CONTROL AND RELIABILITY REQUIREMENTS, SUPPLY MANAGEMENT AND
NORTEL NETWORKS' AUDITING RIGHTS
6.1 ISO 9001 CERTIFICATION
6.1.1 Supplier represents and warrants that on the Effective Date, its
Product and component manufacturers and suppliers have received ISO
9002 certification. Supplier undertakes to ensure that such parties
maintain ISO 9002 certification in effect throughout the Term including
in respect of such parties quality control systems and Supplier's
failure to ensure that such parties maintain ISO 9002 certification
shall constitute a material breach by Supplier of its obligations
hereunder.
6.1.2 In the event any of Supplier's Product and component manufacturers and
suppliers receive any notice of non-conformance to ISO from the ISO
registrars, Supplier shall immediately advise Nortel Networks and
forthwith provide Nortel Networks with (i) the list and details of the
non-conformance and (ii) the detailed plan submitted to the ISO
registrars by such party including timelines and goals to achieve
compliance with ISO 9002.
6.1.3 By March 15, 2000, Supplier shall submit to Nortel Networks sufficient
documentation for Nortel Networks to review Supplier's internal quality
control systems, and the parties shall work together to effect such
changes thereto as Nortel Networks may reasonably request.
6.2 QUALITY CONTROL AND RELIABILITY REQUIREMENTS
6.2.1 All Products delivered by Supplier shall comply with the Specifications
including those quality and reliability target metrics set out therein,
such metrics to include, without limitation, Mean Time Between Failure
("MTBF"), Return Rate ("RR") and Supplier Product Quality Level
("SPQL"). In the event Nortel Networks proposes any changes or
additions to such quality and reliability target metrics, Supplier
shall not unreasonably refuse to agree or delay compliance with such
changes.
6.2.2 Products furnished hereunder by Supplier shall be tested and inspected
by Supplier prior to shipment in accordance with testing and inspection
procedures as approved by Nortel Networks. Supplier agrees to perform
all quality control functions to ensure compliance of the Products with
the Specifications and conformance with good commercial practice.
Supplier warrants that all Products furnished hereunder shall meet all
criteria set forth in the Specifications. Detailed inspection records
are to be maintained by Supplier and made available to Nortel Networks
upon request.
6.2.3 Supplier shall provide Nortel Networks with a monthly report covering
the items shown in Exhibit F and any other items reasonably required by
Nortel Networks in a format acceptable to Nortel Networks .
6.2.4 Supplier shall, within seven (7) calendar days of becoming aware of any
such event, report to Nortel Networks by Technical Bulletin any
potential, suspected or actual (i) defect in design and/or
manufacturing of the Products, (ii) malfunction of the Products or of
products similar to the Products, (iii) failure of the Products to
conform to the Specifications or (iv) uses of the
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Products in combination with other product(s) or services which cause
or have the potential of causing disruption in the services provided
by end-users using the Products.
6.3 SUPPLY MANAGEMENT
6.3.1 Nortel Networks may, from time to time, identify in a notice to
Supplier those components and materials used in the manufacture of
Products which are subject to this Section 6.3. From the date of Nortel
Networks' notice to Supplier, all components and materials so
identified by Nortel Networks, and the vendors of such components and
materials, shall be approved by Nortel Networks and Supplier shall only
use such approved components and materials procured from such approved
vendors in its manufacture of the Products hereunder. Upon signature of
this Agreement Supplier shall provide Nortel Networks with a list of
its sole source and critical lead time suppliers so that Nortel
Networks may approve such suppliers under this Section 6.3.1. In the
event a supplier is found to be unacceptable to Nortel Networks,
Supplier and Nortel Networks shall work together to find a substitute
vendor as soon as possible, without unnecessarily disrupting supply of
the Products. In addition, in order to decrease the cost of components
to Supplier, from time to time Nortel Networks may elect to to procure
for Supplier the right to purchase Product components directly from
Nortel Networks suppliers and at the prices and on the terms offered to
Nortel. Supplier shall pass all cost savings realized pursuant to this
Section 6.3.1 to Nortel Networks in the form of decreased Product
Prices.
6.3.2 In the event Nortel Networks determines that components, materials
and/or vendors are no longer approved for use in the manufacture of
Products and so advises Supplier, Supplier shall approve all substitute
vendors and perform the qualification of all substitute components and
materials to ensure that Products incorporating such components and
materials comply with the Specifications. The selection of any
substitute approved vendors by Supplier is subject to Nortel Networks'
audit to assess the acceptability and establish the credibility of such
vendors. Supplier and Nortel Networks shall work together to find a
substitute vendor as soon as possible, without unnecessarily disrupting
the supply of Products.
6.3.3 Supplier's supply management Processes and records are subject to audit
by Nortel Networks, to assess their efficiency and ensure corrective
and preventive actions are taken internally by Supplier or externally
with the approved vendors. Nortel Networks' audit of suppliers approved
by Supplier, other than those recognized by Nortel Networks' Integrated
Electronic Data Base ("IEDB") and Nortel Networks' Divisional Component
Database ("DCD"), and of the Processes and records for non-conforming
components and materials, may be held within thirty (30) calendar days
of evidence of receiving non-conforming Products from Supplier.
6.4 NORTEL NETWORKS' INSPECTION RIGHTS
6.4.1 Nortel Networks may inspect or test, at all reasonable times and at
Supplier's locations, any Products covered by this Agreement. Supplier
shall provide at no additional cost such facilities, labor, data,
specifications, manuals and information as are reasonably required to
allow Nortel Networks to perform a full range of quality assurance
functions without unduly interfering with Supplier's normal day-to-day
operations. Inspection of Products may be performed in whole or in part
prior to final assembly and/or completion of manufacturing or repair
Processes.
6.4.2 In addition to, and without restricting, Nortel Networks' auditing and
inspection rights described in this Section 6, Nortel Networks shall
have the right to visit Supplier's manufacturing location(s) for the
purpose of inspecting any of the Processes, upon fifteen (15) Business
Days' written notice. Nortel Networks shall request inspection no more
frequently than required by good commercial practices.
6.4.3 Nortel Networks shall keep Supplier informed as to any problems
encountered with the Products and Processes and to communicate promptly
to Supplier any and all modifications or improvements to the Products
and Processes suggested by any customer, employee or agent, as Nortel
Networks considers appropriate.
6.4.4 Any exercise of, or failure by Nortel Networks to inspect Products,
Processes and Supplier's manufacturing locations as set forth in this
Section 6 and Section 12 (Acceptance or Rejection) shall not
constitute, or be construed as acceptance of the Products and Processes
by Nortel Networks or as relieving Supplier from its obligation to
furnish all Products in strict compliance with this Agreement,
including the Specifications, and the applicable Blanket Purchase
Order, Release or Purchase Order.
7. INTENTIONALLY DELETED.
8. ORDERING
8.1 Products will be purchased, if the parties mutually agree to institute
the Demand-Pull Program, through Blanket Purchase Orders and Releases
under the Demand-Pull Program or, absent mutual agreement to enter into
such Demand-Pull Program, Nortel Networks may purchase Products through
Purchase Orders with a schedule of delivery, which may be issued by
Nortel Networks, from time to time, in accordance with this Agreement.
The Parties acknowledge that such Blanket Purchase Orders, Releases and
Purchase Orders shall be transmitted by EDI as described in Exhibit E.
Nortel Networks shall, on the first business day of each
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month (and as may be updated from time to time by Nortel Networks)
during the Term, provide Supplier with a twelve (12) month rolling
forecast ("Forecast") of its Product requirements, if any.
8.2 Notwithstanding that a Blanket Purchase Order, a Release or a Purchase
Order issued in respect of Products does not refer to this Agreement,
any such Blanket Purchase Order, Release or Purchase Order issued by
Nortel Networks during the Term shall be deemed to have been issued
pursuant to this Agreement and shall be deemed to incorporate and be
governed solely by the terms and conditions set forth in this Agreement
unless the Parties expressly agree in writing to the contrary. Any
printed terms and conditions contained in any Blanket Purchase Order,
Release or Purchase Order or in any Supplier's acknowledgment, invoice
or other documentation shall be deemed deleted and of no force or
effect. Any additional typed and/or written terms and conditions
contained in any Purchase Order or Release and any Supplier's
acknowledgment, invoice or other documentation shall be for
administrative purposes only, i.e. to identify the types and quantities
of Products to be supplied, line item Prices and total Price, delivery
schedule, and other similar ordering data, all in accordance with the
provisions of this Agreement.
8.3 Nortel Networks shall not be obligated to purchase any quantities of
Products hereunder, except and only to the extent required in order to
satisfy its obligations to purchase Products pursuant to the
Demand-Pull Program, if any, as expressly set forth in Exhibit C.
Supplier acknowledges that no minimum line item value or minimum order
values shall apply to Blanket Purchase Orders, Releases or Purchase
Orders issued hereunder.
8.4 Supplier undertakes to accept any Blanket Purchase Orders and Releases
or Purchase Orders issued hereunder by Nortel Networks and Nortel
Networks Companies, provided that such Blanket Purchase Orders and
Releases or Purchase Orders are consistent with this Agreement.
Supplier shall acknowledge receipt of each Blanket Purchase Order,
Release or Purchase Order within two (2) Business Days ARO.
8.5 Any change to the original Purchase Order or Release initiated by
Nortel Networks after Supplier's acknowledgment and any resulting
adjustments to prices, schedule and/or other requirements of the
Purchase Order or Release shall be negotiated and mutually agreed upon
and subsequently detailed in a written change to the Purchase Order or
Release ("CHANGE ORDER"), referencing the original Purchase Order or
Release and executed by authorized representatives of Nortel Networks
and Supplier. In the event that the Change Order affects work already
performed, the adjustment of the Purchase Order or Release price shall
include reasonable charges incurred by Supplier related to such work.
No such changes shall be performed until a Change Order has been
executed by Supplier and Nortel Networks as described above.
8.6 The Blanket Purchase Orders, Releases, or Purchase Orders shall:
a) reference the number of Nortel Networks' Blanket Purchase
Order, Release or Purchase Order issued for the Products;
b) include a signature of an authorized employee of Nortel
Networks (to be provided by Nortel Networks );
c) have the correct Product and options description (including
item numbers and part numbers if shown for that item in the
Product list);
d) have the correct Price in accordance with Exhibit A of this
Agreement or any amendments hereto;
e) specify the exact quantity of Products to be delivered;
f) provide tax status for each "ship-to" location including the
exemption certificate number if tax exempt;
g) have firm delivery schedules and a firm Delivery Date (where
applicable) for each shipment;
h) specify the FCA Delivery Location, "ship to" and the Nortel
Networks location where the invoice shall be rendered for
payment;
i) specify the method of shipment including the names of carrier
and broker, if applicable; and
j) specify special shipping and transportation instructions, if
any.
9. DELIVERY
9.1 Products shall be delivered as follows:
a) Products ordered pursuant to the Demand-Pull Program shall be
delivered by Supplier FCA Delivery Location set forth in the
Release within a delivery lead time not to exceed twenty-four
(24) hours from Nortel Networks' Release(s).
b) Subject to Section 9.1.1 below, Products not ordered pursuant to
the Demand-Pull Program shall be delivered by Supplier FCA
Delivery Location set forth in the Purchase Order, within a
delivery lead time not to exceed [*] ([*]) weeks ARO.
No partial shipment shall be made without Nortel Networks' prior
written consent.
9.1.1 For Products not ordered pursuant to the Demand-Pull Program, in the
event Nortel Networks orders Products in excess of one hundred and
fifty percent (150%) of the amount forecasted in the calendar month
prior to the calendar month in which the Purchase Order is received,
then the delivery lead time shall not exceed [*] ([*]) weeks ARO for
the excess portion of the Purchase Order.
* CERTAIN CONFIDENTIAL INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
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9.2 Supplier shall package the Products in accordance with Nortel Networks'
standard packing and external marking practices in compliance with the
standards listed in Schedule B, Part III and the Specifications
together with any modification reasonably requested by Nortel Networks
with respect to size and external markings.
9.3 Supplier shall ▇▇▇▇ each Product listed in Exhibit A with the
Supplier's model number and where practical, the description of the
Product and the revision level. Each Product shall be marked, as
outlined in Specifications, set forth in Exhibit B, Part III. When
requested by Nortel Networks, Product shall include Nortel Networks'
logotype.
9.4 In the event that Supplier fails to deliver Products by the Delivery
Date or extension thereof granted in writing by Nortel Networks, if
any, Nortel Networks may, in addition to any other right available to
it hereunder, including under Section 9.5 (Liquidated Damages), cancel,
without charge or liability, the affected Purchase Order and/or Release
or applicable portion thereof. Supplier shall promptly advise Nortel
Networks of any anticipated delay in meeting the Delivery Date
specified in any Purchase Order or Release and shall cooperate with
Nortel Networks in the implementation by Supplier of any appropriate
action or workaround plans with a view to enable Nortel Networks to
satisfy its customer requirements. Without limiting the generality of
the foregoing or otherwise affecting Nortel Networks' rights, in the
event a Nortel Networks customer cancels one or more orders for
Products as a result of Supplier's delay in the delivery of Products of
more than five (5) calendar days, Nortel Networks shall have the right
to cancel, without charge or liability, the Purchase Order and/or
Release issued to Supplier in respect of Nortel Networks' customer
cancelled order(s).
9.5 In the event Supplier fails to meet a Delivery Date by a period of more
than [*] ([*]) calendar days through no fault of Nortel Networks and
such failure is not attributable to force majeure as described in
Section 26 (Force Majeure), Supplier shall pay to Nortel Networks, as
fixed and liquidated damages, and not as a penalty, an amount equal to
[*] percent ([*]%) per calendar day, up to [*] percent ([*]%), of
the total Price of the affected Purchase Order or Release. At Nortel
Networks' option, Supplier shall either credit the liquidated damages
against the Price of the applicable Purchase Order or Release (if not
cancelled) or promptly make payment to Nortel Networks.
9.6 Nortel Networks may at any time for its convenience and without cause,
reschedule the Delivery Date of ordered Products no more than once,
provided such rescheduled Delivery Date shall not exceed ninety (90)
Business Days from the date the Products were originally scheduled to
be delivered.
9.7 Nortel Networks may at any time for its convenience and without cause,
cancel, in whole or in part, any Purchase Order placed hereunder for
Products. In the event of such cancellation, Supplier will undertake
all commercially reasonable efforts to minimize the economic effects of
such cancellation, including without limitations, utilizing the
cancelled portion of the Purchase Order to fulfill existing commitments
to Nortel Networks or other purchasers of Supplier products. Solely to
the extent Supplier is otherwise unable to ameliorate the effects of
such cancellation as set forth above, Supplier may invoice Nortel
Networks for an amount equal to [*] percent ([*]%) of the cancelled
portion of the Purchase Order. This Section 9.7 is solely applicable to
Products not purchased pursuant to the Demand-Pull Program;
cancellation of Purchase Orders pursuant to the Demand-Pull Program
shall be in accordance with the terms of Exhibit C.
10. PRICES AND PAYMENTS
10.1 Except as specifically provided herein, all charges incurred by
Supplier in performing its obligations hereunder shall be paid by
Supplier and shall not be subject to reimbursement by Nortel Networks.
10.2 Prices applicable to Blanket Purchase Orders, Releases and Purchase
Orders for Products and Repair Services issued hereunder shall be,
subject to the provisions of this Section 10, the Prices as set forth
in Exhibit A. Prices shall be firm throughout the Term except for cost
reductions and volume discounts. Nortel Networks shall promptly
reimburse Supplier, upon invoice, or shall pay directly, if so
requested by Supplier, all taxes and charges imposed by any federal,
state, or local governmental or taxing authority, relating to the
purchase, ownership, possession, use, operation or relocation of
Products purchased, excluding, however, all taxes computed upon the net
income of Supplier.
10.3 Product Prices are: (a) FCA Supplier's shipping location within the
continental United States; (b) stated and payable in US currency; (c)
include packing, import duties and customs charges; (d) exclude all
applicable federal, state and local taxes.
10.4 Supplier represents and warrants that, except for Supplier's existing
direct customers as of the Effective Date, the Prices charged to Nortel
Networks for Products and Repair Services supplied hereunder are and
will continue to be at least [*] percent ([*]%) lower than the prices
that Supplier charges directly to Nortel Networks existing or
internally identified customers for the Products or Supplier's dealers
or value-added resellers, at a particular time, for the same Products
and Repair Services or for products or services interchangeable with,
or similar to, the Products and Repair Services. For comparison
purposes, Supplier shall aggregate purchases of Products by all Nortel
Networks Companies.
* CERTAIN CONFIDENTIAL INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
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10.5 Supplier further represents and warrants that the Prices charged to
Nortel Networks for Products and Repair Services supplied hereunder are
and will continue to be as low as those charged by Supplier, at a
particular time, to any other party with whom Supplier has entered into
an OEM or distribution agreement (or similar contractual arrangement),
for the same Products and Repair Services or for products or services
interchangeable with, or equivalent to, the Products and Repair
Services, in the same year and in similar quantities. For comparison
purposes, Supplier shall aggregate purchases of Products by all Nortel
Networks Companies.
10.6 To the extent that Supplier's records may be relevant in determining
whether Supplier is complying with the requirements of this Agreement,
Nortel Networks shall have the right, through independent Certified
Professional Accountants acceptable to both Parties, to examine and
audit, at most on a quarterly basis, during normal business hours, such
records as may, under recognized accounting practices, contain
information bearing upon the prices applicable to the providing of
repair services similar to, or interchangeable with, the Repair
Services to any other party or the sale of the same Products or
products similar to, or interchangeable with, the Products to any other
party, such records to be kept clear and accurate and in a form and
content sufficient and adequate to permit audit as aforesaid. Nortel
Networks shall retain such inspection and audit rights for so long as
it will be procuring Products and Repair Services from Supplier.
10.7 Supplier shall promptly notify and extend to Nortel Networks any
reductions made by Supplier in its published list prices and any
increases in discounts for Products. Such price reductions and
increased discounts shall apply to Blanket Purchase Orders, Releases
and Purchase Orders received by Supplier on or after the effective date
of the price reduction. Any price decreases will be immediately applied
to any Blanket Purchase Orders, Releases or Purchase Orders received
and acknowledged but not delivered by Supplier.
10.8 In an effort to provide Nortel Networks the opportunity to
competitively and profitably offer Products in high volume
applications, Supplier shall offer to Nortel Networks, as agreed upon
by the Parties, additional discounts on Products set forth in Exhibit A
for Nortel Networks' use in high volume, competitive price proposals.
10.9 Payment shall be due to Supplier from Nortel Networks forty five (45)
calendar days following the receipt by Nortel Networks of an invoice
for the Products, which invoice shall be delivered to Nortel Networks
no earlier than the Delivery Date of the Products.
10.10 Invoices for Products delivered hereunder and for any other amounts
which may be payable hereunder shall be forwarded directly to the
following address (unless Nortel Networks designates, in writing,
another address):
NORTEL NETWORKS
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇ ▇▇▇
Attention: Accounts Payable Dept.
▇-▇▇▇-▇▇▇-▇▇▇▇
11. TITLE AND RISK OF LOSS
11.1 Title to the Products (excluding Software) and risk of loss of and
damage to the Products will pass to Nortel Networks upon delivery FCA
Delivery Location specified by Nortel Networks in accordance with
Section 9 (Delivery) provided that under Section 13.6 (Warranty), 14.2
and 14.7 (Repair Procedures), risk of loss of or damage to the
replacement Products will pass to Nortel Networks upon the delivery
thereof at a Nortel Networks designated destination.
12. INSPECTION
12.1 Nortel Networks reserves the right to accept or reject Products ordered
hereunder after the delivery of such Products to Nortel Networks'
facility or, as the case may be, to a Nortel Networks customer's site.
Products shall be deemed accepted by Nortel Networks unless Nortel
Networks notifies Supplier that such Products are rejected and provides
the reasons for such rejection within thirty (30) Business Days after
Nortel Networks' receipt thereof at its facilities or, when the
Products are received at a Nortel Networks customer's site, as the case
may be.
12.2 If any Products are found not to be in substantial conformance with
this Agreement, including the Specifications, applicable Purchase Order
or Release, and/or fail to meet any of the acceptance criteria
specified in the applicable Specifications, and/or in the event an
excessive failure rate (as defined in the Specifications) is observed
by Nortel Networks with respect to Products contained in a
lot/shipment, Nortel Networks shall have the right, notwithstanding the
warranty provisions contained in this Agreement, to reject the same and
cancel the affected Purchase Order or Release, or, at its option,
require that such Products be
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replaced or repaired within ten (10) Business Days at Supplier's risk
and expense (including shipping charges). Any notice of rejection
issued by Nortel Networks under this Section 12.2 will include a
reasonable description of the deficiencies.
12.3 Payment or acceptance by Nortel Networks shall not be deemed to
constitute a waiver of the rights which Nortel Networks may have
resulting from Supplier's delivery of faulty or defective Products.
13. WARRANTY
13.1 Supplier warrants that:
a) Product shall, at the Delivery Date, be new and free and clear
of all security interest or other lien and other encumbrance;
b) for a period of [*] ([*]) months from the Delivery Date, in
the event the Products are delivered to a Nortel Networks
customer facility, and otherwise for a period of [*] ([*])
months from the Delivery Date, such period being hereinafter
referred to as the "PRODUCT WARRANTY PERIOD"), the Hardware
and the Software shall be free from defects in materials and
workmanship and shall conform to and operate in accordance
with the Specifications;
c) the Software will operate in the environment in which it is
installed, without troubles, due to defects which result from
the failure of the Software to conform to the Specifications;
d) with the exception of any notice which may be provided by
Supplier pursuant to Section 21 (Hazardous Materials), the
Hardware furnished by Supplier, as described in this
Agreement, is safe for normal use, is non-toxic, presents no
abnormal hazards to persons or their environment, and may be
disposed of as normal refuse without special precautions;
e) all Products provided pursuant to this Agreement, when used in
accordance with the Specifications and Documentation, as well
as all and any software, systems or tools of Supplier used by
it in the supply of Product and/or Services or performance of
this Agreement in any way, shall (1) process date and time
related data without causing any processing interruptions,
abnormal terminations, or changes in performance
characteristics, and (2) shall process and manipulate all date
and time related functions correctly. Without limiting the
generality of the foregoing, all Products and in all and any
software, systems or tools of Supplier used by it in the
supply of Product and/or Services or performance provided
pursuant to this Agreement shall:
i) correctly handle date and time related data before,
during and after January 1, 2000, including but not
limited to accepting date and time input, providing
date and time output, and performing ongoing
operations on dates and times and portions of dates
and times including, but not limited to, calculating,
comparing and sequencing of dates and times (in both
forward and backward operations spanning century
boundaries);
ii) correctly handle leap year calculations (including but
not limited to identification of leap years, interval
calculations, (in both forward and backward operations
spanning century boundaries), day-in-year
calculations, day-of-the-week calculations, and
week-of-the-year calculations);
iii) correctly handle all two digit date and time related
input in a manner that resolves ambiguity as to
century in a disclosed, defined and predetermined
manner; and
iv) correctly store and provide output of all date and
time data in a manner that is unambiguous as to
century;
Supplier shall immediately notify Nortel Networks of any and
all date or time-related bugs, errors or deficiencies in the
Products and in all and any software, systems or tools of
Supplier used by it in the supply of Product and/or Services
or performance of this Agreement in any way. For the purpose
of problem resolution, any such date or time-related bugs,
errors or deficiencies shall be deemed (as established by the
appropriate license or support agreement) to be bugs, errors
or deficiencies of the highest priority level, and shall be
resolved according to the procedures provided for such
priority level;
any provisions of this Agreement that tend to limit or
eliminate the liability of Supplier shall have no application
with respect to the year 2000 compliance warranty set out
above;
f) it has developed, is the owner of and/or possesses all
necessary rights, including, without limitation, rights in
respect of third party software, to use and to market the
Products, including the Product Software required for the
operation of the Products, as contemplated hereunder;
g) no license or other agreement is or will be violated by the
terms and conditions of this Agreement;
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h) it is either the owner or is otherwise in possession of
sufficient licensed rights pertaining to any portion of the
Products (including the Product Hardware and Product Software)
in order to allow it to satisfy all of its obligations
hereunder.
i) without limiting the generality of the foregoing provisions,
Supplier represents and warrants that it has the authority to
enter into this Agreement and has obtained all rights and
waivers necessary to sell Products to Nortel Networks and to
grant the rights granted hereunder. Supplier represents and
warrants that the Products and the exercise of the rights
granted in this Agreement do not infringe any third-party
patent, copyright, trademark, trade secret or other
intellectual property right.
The warranty provisions contained in this Section 13.1 shall apply
during and after the Product Warranty Period, except as expressly set
forth in 13.1 b) and c) above.
13.2 This warranty does not apply to items normally consumed in operation,
such as lamps and fuses and to any defect which has been caused by
Nortel Networks and arises from mishandling, misuse, neglect or
improper testing or repair.
13.3 Supplier shall, at its expense, during the Product Warranty Period,
provide Repair Services in accordance with Section 15 (Repair Services)
in respect of Hardware and Software which have failed to conform to
above warranties.
13.4 All Hardware or Software supplied under Section 15 (Repair Services)
pursuant to Supplier's warranty obligations under this Section 13,
shall be functionally equal or better than the vintage of the replaced
units and must be backward compatible and meet the minimum field
baseline.
13.5 Hardware repairs or replacements and Software corrections effected
during the Product Warranty Period shall be warranted, as above
provided, for the remainder of the Product Warranty Period or for
[*] ([*]) days from the Repair Date, whichever is longer. Hardware
repairs or replacements and Software corrections or replacements
effected after expiry of the Product Warranty Period shall be
warranted, as above provided, for a period of [*] ([*]) days from the
Repair Date stenciled or otherwise identified in accordance with
Section 14.4 (Repair Procedures). All transportation and other expenses
arising from shipping the non-conforming Products to, and the repaired
or replacement Products from, Supplier shall be paid in accordance with
Section 14.2 or 14.7, as appropriate.
13.6 Above warranty shall survive inspection, acceptance and payment. In the
event Supplier does not so perform under the warranty provisions for
repair or replacement in accordance with this Section, then upon Nortel
Networks' request, and in addition to any other right available to
Nortel Networks hereunder, Supplier shall: (a) refund to Nortel
Networks the Price of such Products; and (b) be entitled to the return
of such Products. All transportation and other expenses arising from
shipping the non-conforming Products to, and the repaired or
replacement Products from, the Delivery Location shall be paid by
Supplier.
13.7 In addition to Nortel Networks' rights as described in Section 13.3
above, in the event Supplier is in breach of its obligations regarding
repair or support of Hardware or Software hereunder, Nortel Networks
reserves the right to repair or replace any defective Hardware or to
correct any defective Software on its own or to arrange for such
repair, replacement or correction by other entities. In that event
Supplier shall reimburse Nortel Networks for all reasonable costs and
expenses incurred by Nortel Networks in exercising either right under
this Section during the applicable Product Warranty Period.
13.8 Any material failure by Supplier to execute its warranty obligations as
contained in this Section 13 and Section 15 (Repair Services) shall
constitute a material breach of Supplier's obligations hereunder.
13.9 EXCEPT FOR THE EXPRESS WARRANTIES STATED IN THIS AGREEMENT, SUPPLIER
DISCLAIMS ALL WARRANTIES ON PRODUCTS FURNISHED UNDER THIS AGREEMENT,
INCLUDING, WITHOUT LIMITATION, ALL IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
14. REPAIR PROCEDURES
14.1 This Section 14 shall be applicable to the providing of Repair Services
described in Section 15 by Supplier during and after the Product
Warranty Period.
14.2 a) Prior to returning any defective Products to the FCA Repair
Location, Nortel Networks will notify Supplier orally of the
defect, if known at that time, and will request authorization
from Supplier for the return of such Products. Upon such
request, Supplier shall provide Nortel Networks with a Return
Material Authorization ("RMA") number to be prominently
displayed on the shipping container for the defective Products
and advise Nortel Networks of the FCA Repair Location to which
the Products should be returned.
b) In all cases covered in Section 15 (Repair Services), Nortel
Networks shall then ship such Products to Supplier, freight
prepaid and properly insured. Nortel Networks shall prepare
proper export documentation as per Supplier's instructions,
* CERTAIN CONFIDENTIAL INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
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evidencing Nortel Networks' ownership of the Products and
shall comply with the requirements set forth in Exhibit L
(NAFTA).
14.3 Nortel Networks shall furnish the following information with Products
returned to Supplier for Repair Services:
i) Nortel Networks' or the Nortel Networks Company's name and
complete address;
ii) quantities and model numbers of Products being delivered for
repair;
iii) the nature of the defect or failure, if known;
iv) Purchase Order number under which repairs are to be made, if
Product is no longer under warranty;
v) name(s) and telephone number(s) of Nortel Networks'
employee(s) or other designated persons to contact in case of
questions about the Products;
vi) ship-to address or Nortel Networks' location to which repaired
or replacement Products should be returned;
vii) whether or not returned Products are under warranty.
14.4 Supplier shall date stamp each repaired and returned Product with the
Repair Date and type of repair "pre fix" as per Bellcore GR-209
specifications and Specifications described in Exhibit B. Hardware
repaired by Supplier shall be stamped in accordance with requirements
outlined in Bellcore TR-NWT-000078. Without limiting the generality of
the foregoing, the stamping shall include the Repair Date stenciled or
otherwise identified in a permanent manner at a readily visible
location on the Hardware, unless otherwise directed by Nortel Networks.
14.5 Supplier shall promptly provide a written notice to Nortel Networks
with the name(s) and telephone number(s) of the individual(s) to be
contacted concerning any questions that may arise with respect to the
Repair Services, and if required, specify any special packing of
Products which might be necessary to provide adequate in-transit
protection from transportation damage.
14.6 Once Products have been repaired or replaced by Supplier, Supplier
shall reissue to Nortel Networks an invoice for such repaired or
replacement Products and the charges applicable to the providing of
Repair Services, if any, as set forth in Exhibit D. Supplier's invoice
shall contain the following:
i) Nortel Networks' Purchase Order number for these Repair
Services;
ii) a detailed description of the Repair Services provided by
Supplier and the need therefor;
iii) quantities and model numbers of Products repaired and
associated repair charges;
iv) applicable sales or excise taxes;
v) total amount payable;
vi) address to which payment should be made.
14.7 The repaired or replacement Products shall be delivered by Supplier to
the destination specified by Nortel Networks, freight prepaid and
properly insured. Supplier shall prepare proper export documentation as
per Nortel Networks' instructions, evidencing Nortel Networks'
ownership of the Products and shall comply with the requirements set
forth in Exhibit L (NAFTA).
14.8 Supplier shall promptly notify Nortel Networks of returned Products
which are found by Supplier to be beyond repair. Products shall only be
considered beyond repair after agreement of the Parties to that effect.
All Products which are found to be beyond repair shall be returned to
Nortel Networks if Nortel Networks so requests.
14.9 Nothing in this Agreement shall be construed as giving Supplier an
exclusive privilege to repair any Products covered under this
Agreement, provided however, that during the Term, if Supplier is not
in material breach of this Agreement, Nortel Networks shall afford
Supplier the first opportunity to provide the technical support
services to be provided by Supplier hereunder.
15. REPAIR SERVICES
15.1 Repair Services shall be available to Nortel Networks in accordance
with the provisions contained in this Section 15 and in Section 14
(Repair Procedures).
15.2 This Section 15 shall be applicable to the providing of Repair Services
by Supplier during and after the Product Warranty Period.
15.3 To order Repair Services after expiry of the applicable Product
Warranty Period, Nortel Networks shall issue a Purchase Order and such
Purchase Order shall contain the description of the requested Repair
Services.
15.4 Repair Services shall be provided by Supplier at no charge to Nortel
Networks during the Product Warranty Period. After expiry of the
Product Warranty Period, Repair Services shall be at prices set forth
in Exhibit D (Repair Services and Technical Assistance Rates) unless
otherwise set forth in this Section 15 or unless covered by Section 5
(Product and Process Changes).
15.5 LIKE-FOR-LIKE REPAIR SERVICES
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15.5.1 Supplier shall hold at its expense a quantity of spares at the module
level ("SPARE BUFFER"), such quantity to be determined and agreed to by
the Parties on the basis of the volume of Products delivered hereunder
and the applicable Mean Time Between Failure ("MTBF") rates. In any
event, the Spare Buffer to be held by Supplier shall be sufficient to
enable immediate replacement of Products by Nortel Networks to its
customers in all cases of failure which do not fall in the category of
a retrofit. Supplier's obligations under this Section 15.5.1 do not
cover spares which may be required by Nortel Networks for Product
retrofits or upgrades.
15.5.2 Nortel Networks will at its option provide customers with one of the
following replacement services:
i) replacement of Products from the Spare Buffer after the
receipt of defective Products; or
ii) in exceptional cases, replacement of the Products from the
Spare Buffer on a "Phone-in" advance replacement basis within
[*] ([*]) business [*]. The defective Products are generally
returned to Nortel Networks by end-user customers within sixty
(60) calendar days. Supplier may invoice Nortel Networks at
the Prices set forth in Exhibit A for Products not returned to
Supplier within such period
Supplier will maintain sufficient Products in the Spare Buffer to
accommodate both replacement services.
Supplier will immediately replenish the Spare Buffer with Product
replacements that are functionally equal or better than the vintage of
the replaced Products, are backward compatible and meet the minimum
field baseline, or with new Products, at Supplier's option.
In cases of "catastrophic" failure, Supplier shall divert manufacturing
output for replacement of faulty modules. Supplier must use its best
efforts not to affect the delivery schedule of new Products but should
delays in delivery occur, they shall not constitute a breach of this
Agreement.
15.5.3 Products returned to Supplier for Repair Services shall be shipped by
Nortel Networks freight and insurance prepaid
15.5.4 Supplier shall track any defective Product by its unique serial number
throughout the repair process and provide a failure analysis report as
set forth in Exhibit F.
15.6 SAME-FOR-SAME REPAIR SERVICES
The following procedures will apply:
a) Products returned to Supplier for Repair Services shall be
shipped by Nortel Networks freight and insurance prepaid.
b) Supplier shall track any defective Product by its unique
serial number throughout the repair process.
c) Supplier shall return, after having repaired and updated the
Products to the minimum field baseline, the exact same
Products having the same serial number. If the serial number
has to change for any reason, Supplier shall, on the `repair
tag' originally provided by Nortel Networks, document the
following information: old serial number, new serial number
and reason(s) for change.
d) Supplier shall return any repaired Products with the `repair
tag' that was originally provided by Nortel Networks with the
defective Products. Supplier shall provide all post-repair
information as required on the `repair tag'.
e) Supplier shall complete the Same-for-Same process within [*]
([*]) calendar days of having received the defective Product.
15.7 FAST CYCLE FAILURE ANALYSIS
15.7.1 Supplier shall perform a Fast Cycle Failure Analysis ("FCFA") at no
cost to Nortel Networks on Products which have caused any service
interruption in the field or as may otherwise be reasonably requested
by Nortel Networks. Nortel Networks will request a separate RMA number
for each Product returned for a FCFA. A FCFA shall be performed by
Supplier in accordance with the following additional requirements:
a) FCFA shall include a detailed root cause analysis, using
engineering tools such as Environment Stress Screening ("ESS")
and any other tools which may be required to determine the
cause of the failure.
b) Supplier shall track any defective Product by its unique
serial number throughout the repair process.
c) Supplier shall return, after having repaired and updated the
Products to the minimum field baseline, the exact same
Products having the same serial number. If the serial number
has to change for any reason, Supplier shall, on the `repair
tag' originally provided by Nortel Networks, document the
following information: old serial number, new serial number
and reason(s) for change. This information will also be
documented in the FCFA report. The Products shall not be
"upgraded" to other than the actual unit release vintage until
root cause analysis is completed and the Products successfully
pass the complete test cycle. The Products shall not be
repaired without completion of the FCFA activity.
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CONFIDENTIAL
d) Supplier shall return the repaired Products with a written
report documenting all findings as a result of the FCFA.
e) Supplier shall complete the FCFA process within [*] ([*])
calendar days of having received the defective Products.
Nortel Networks shall provide all available technical
information to allow Supplier to understand the circumstances
and environmental conditions that led to the failure of the
Products.
f) Supplier shall inform Nortel Networks of the return Product
shipping information as soon as it is available. The shipping
information will include, date shipped, carrier, waybill
number and any other information that will help Nortel
Networks expedite the return of the Products.
g) In the event that the results of the FCFA indicate
deficiencies with the Product Hardware or Software, then
Supplier will modify the Products to eliminate such
deficiencies. Such modifications will be implemented in
accordance with Section 5 (Product and Process Changes).
15.8 Products found defective within the first [*] ([*]) calendar days
from their initial utilization at customer site, (referred to as `Dead
On Arrival' ("DOA") or Early Life Failure ("ELF") shall be returned to
Supplier along with the RMA documentation. Returned DOA/ELF Products
shall, at no charge to Nortel Networks, be tested through full
functional tests and ESS in order to provide a root cause analysis,
then repaired, re-furbished, upgraded to the latest version or release,
stamped with the Repair Date and returned to Nortel Networks as new
Products. Should the DOA/ELF occurrence represent more than
[*] ([*]) of the Products RR as defined in the Specifications, then
Supplier shall, in addition to performing root cause analysis,
implement a corrective plan of action within [*] ([*]) calendar days
of this occurrence being reported. Supplier will update Nortel Networks
in writing with the findings of the root cause analysis as well as with
the corrective plan of action.
15.9 In case of a No Fault Found ("NFF") in respect of Products returned or
if Nortel Networks requests re-testing of Products reasonably known to
Nortel Networks as being in good condition, Supplier shall invoice
Nortel Networks at the Prices specified in Exhibit D for their full
functional tests and ESS and such Products shall be returned to Nortel
Networks after the tests are completed, freight collect using Nortel
Networks' designated carrier. Test turnaround time shall not exceed
[*] ([*]) calendar days from the date the Product is received at
Supplier facilities and a Purchase Order number has been received from
Nortel Networks.
15.10 Should the Product failures classified by Supplier as NFF represent
more than [*] percent ([*]%) of the Products RR as defined in the
Specifications, then Supplier shall, in addition to performing a root
cause analysis, implement a corrective plan of action within [*]
([*]) calendar days of this occurrence being reported. Supplier will
update Nortel Networks in writing with the findings of the root cause
analysis as well as with the corrective plan of action.
15.11 In the event the Product RRs are higher than the rates set forth in the
Specifications, Supplier shall reimburse Nortel Networks for extra
costs it has incurred.
15.12 EMERGENCY REPLACEMENT PRODUCTS
In emergency situations threatening continuity of service or Nortel
Networks end-user's in-service date, Supplier shall, at Nortel
Networks' option, deliver to Nortel Networks or its end-users emergency
replacement Products within [*] ([*]) hours of Nortel Networks'
request, which may be conveyed to Supplier by telephone or facsimile.
All Products supplied under this Section shall be functionally equal or
better than the vintage of the replaced units and must be backward
compatible and meet the minimum field baseline. Emergency replacement
Products shall be delivered via next day service and, for Products not
under warranty, invoiced at rates then current for Products. Nortel
Networks agrees to pay such invoices within [*] ([*]) calendar
days, with no penalty for delays in payment. In addition to above
[*] ([*]) hour emergency replacement service, Supplier shall
make available to Nortel Networks at a price premium specified in
Exhibit D, a 24 hours a day /7 days a week emergency replacement
service for cases where Nortel Networks cannot deliver from its
emergency stock. Under this service, Supplier will ship new units to
the destination designated by Nortel Networks, freight collect using
Nortel Networks' designated carrier or alternate method agreed between
the Parties, within the same day, for requests made by 1:00 p.m. PST
and the next business day for requests made after 1:00 p.m. PST, of
Nortel Networks' verbal request, such verbal request to be confirmed by
Nortel Networks in writing and transmitted by facsimile or other means
of communications, prior to shipment of the units by Supplier. In the
case of shipment outside of the United States, Supplier shall prepare
proper export documentation as per Nortel Networks' instructions,
evidencing Nortel Networks' ownership of the Product; customs clearance
and duty fees (as applicable) shall be the responsibility of Nortel
Networks. This emergency service shall be available to Nortel Networks
through the following Supplier's emergency telephone number:
▇-▇▇▇-▇▇▇-▇▇▇▇.
16. CONTINUING AVAILABILITY OF TECHNICAL ASSISTANCE, REPAIR SERVICES,
MAINTENANCE, REPLACEMENT AND REPAIR PARTS
16.1 Supplier shall not discontinue the production or sale of any Product
without having first obtained Nortel Networks' consent in writing, such
consent not to be unreasonably withheld. In no event shall the Products
be discontinued until after the expiry of a period of [*] ([*])
months, or such other period as may be agreed upon by the Parties, from
Nortel Networks' written consent
* CERTAIN CONFIDENTIAL INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
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CONFIDENTIAL
and Supplier shall accept all Releases and Purchase Orders submitted
by Nortel Networks within such period for any such affected Products,
regardless of quantity.
16.2 During, and for a period of [*] ([*]) years after the expiry or
termination of this Agreement, Supplier agrees to provide Repair
Services on all Products ordered hereunder and to offer for sale to
Nortel Networks, functionally equivalent maintenance, replacement and
repair parts as may be necessary for the continued maintenance of the
Products, including discontinued Products.
16.3 Supplier, upon supply discontinuance notices from its suppliers, of any
sole source/critical components incorporated into the Products, shall
notify Nortel Networks immediately upon receipt of such notice.
Supplier shall endeavor to have its suppliers provide notices [*] ([*])
[*] in advance of discontinuance. Supplier and Nortel Networks shall
determine the quantity of such components to be ordered as last time
buy to cover for Nortel Networks' spare parts requirements. Supplier
and Nortel Networks will determine the quantity of such components to
be ordered as last time buy to cover for spare maintenance, replacement
and repair parts requirements as described in Section 15 (Repair
Services). Furthermore, should the unavailability of a component
require Supplier to develop a replacement product, Supplier will
jointly decide with Nortel Networks on last time buys for such
component to ensure continuity of supply until the replacement product
is approved by Nortel Networks and ready to be manufactured. The
provisions contained in this Section 16.3 shall be applicable for a
period of [*] ([*]) years after the expiry or termination of this
Agreement.
16.4 During, and for a period of [*] ([*]) years after the expiry or
termination of this Agreement, Supplier agrees to provide technical
assistance in accordance with Section 17 (Technical Assistance and
Marketing Support) and Exhibit D hereof.
17. TECHNICAL ASSISTANCE AND MARKETING SUPPORT
17.1 Technical assistance consists of those services described in this
Section and in Exhibit H.
17.2 Product training shall be provided by Supplier to Nortel Networks as
set forth in Exhibit H.
17.3 In addition, Supplier shall provide Nortel Networks with Product
training documentation and related information material as set forth in
Exhibit H, Part III.
17.4 All technical assistance rendered during the Product Warranty Period
shall be provided to Nortel Networks at no charge or as specified in
Exhibits D OR H. For technical service not specified as free of charge,
Supplier's current rates applicable to technical assistance are those
set forth in Exhibit D. Any technical assistance which Supplier shall
provide to Nortel Networks or its customers shall be pursuant to a
written request from Nortel Networks' designated personnel, or such
other individual that Nortel Networks may from time to time designate.
The availability or performance of technical assistance under this
Section 17, shall not be construed as altering or affecting Supplier's
other obligations under this Agreement, including under Sections 6
(Quality Control and Reliability Requirements, Supply Management and
Nortel Networks' Audit Rights), 13 (Warranty) and 5 (Product and
Process Changes).
17.5 Supplier shall provide technical assistance as set forth in Exhibit H
in order to facilitate the providing by Nortel Networks of technical
assistance to its customers.
17.6 `First line' technical assistance shall be provided to Nortel Networks
customers as described in Exhibit H.
17.7 Supplier's failure to provide technical assistance pursuant to good
commercial practices as required under this Section 17 shall constitute
a material breach of Supplier's obligations hereunder.
17.8 In order to assist Nortel Networks in its Product related marketing
activities, Supplier shall provide Nortel Networks with marketing
support in accordance with Exhibit K.
18. DOCUMENTATION
18.1 The Product Documentation shall be developed by Supplier in accordance
with the Specifications, and be made suitable for Nortel Networks'
customers by including Nortel Networks -specific items such as
warranty, logos, Product names and drawings. A hard copy and an
electronic version of the documentation marked "Draft" shall be
provided to Nortel Networks for review. After two (2) weeks, Nortel
Networks shall return the draft documentation with comments. These
comments shall be integrated by Supplier into the Documentation. An
ordering section shall be provided by Nortel Networks to Supplier in
both the hard and electronic form for inclusion by Supplier into the
Documentation. The Documentation shall be ready for release to
customers by the end of the corresponding Acceptance Program. Updated
versions of the ordering section shall be provided by Nortel Networks
as the product line(s) develop(s) and new configurations pass the
Acceptance Program.
18.2 Supplier shall provide, at no charge to Nortel Networks, for each
Product delivered one (1) set of the following Product Documentation in
accordance with the Specifications: all Product descriptions, planning
guides, operations manuals, installation
* CERTAIN CONFIDENTIAL INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
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CONFIDENTIAL
manuals, and maintenance manuals normally provided by Supplier to
customers to facilitate their installation, use, and maintenance of
the Products.
18.3 Supplier shall supply to Nortel Networks, at no additional charge, hard
and electronic copies of Supplier's Product Documentation (i.e.,
manuals, application notes and sales collateral) and any technical
assistance reasonably required by Nortel Networks to adapt such
Documentation to Nortel Networks' standard format. Supplier shall also
continue to provide to Nortel Networks, at no additional charge, during
the Term of this Agreement any updates to Supplier's Product
Documentation, as soon as they are available.
18.4 Supplier hereby grants to Nortel Networks, at no cost, the right to
use, copy, modify and translate promotional material, the Product
Documentation furnished hereunder and other material made generally
available by Supplier to its end-users and to use such material to
further Nortel Networks' Product marketing efforts.
18.5 Any modifications to the Product Documentation shall be notified to
Nortel Networks by Supplier as described in Section 5 (Product and
Process Changes).
19. CONFIDENTIAL INFORMATION
19.1 It is expected that the Parties will disclose to each other certain
business, marketing, technical, scientific or other information of any
Party, including, without limitation, Specifications and Software
which, at the time of disclosure, is designated as confidential (or
like designation), is disclosed in circumstances of confidence, or
would be understood by the Parties, exercising reasonable business
judgment, to be confidential information ("CONFIDENTIAL INFORMATION")
and each Party recognizes the value and importance of the protection of
the other's Confidential Information. All Confidential Information
owned or controlled by one Party and disclosed to the other Party shall
remain solely the property and a trade secret of the disclosing Party,
and its confidentiality shall be maintained and protected by the other
Party with the same degree of care used to protect its own proprietary
and confidential information of a similar nature, but no less than
reasonable care, to prevent the unauthorized use, dissemination or
publication of the Confidential Information. Except to the extent
required or expressly permitted by this Agreement, both Parties agree
not to duplicate or use in any manner the other's Confidential
Information or to disclose it to any of their employees not having a
need to know for the purposes of this Agreement or to any third party.
The receiving Party's employees having a need to know the Confidential
Information for the purpose of this Agreement may receive disclosure of
the Confidential Information provided such employees are bound by
confidentiality obligations no less stringent than those set forth in
this Section 19. The confidentiality provisions contained herein shall
survive the expiration or termination of this Agreement for a period of
ten (10) years. It is acknowledged by the Parties that a Party intended
to be the recipient of the Confidential Information will, prior to the
disclosure by the other Party, be afforded an opportunity to accept or
to decline receiving such Confidential Information and the
confidentiality undertakings set forth herein shall not apply in
respect of information disclosed after a Party has elected not to
receive such information.
19.2 Confidential Information shall not include information which:
a) now is, or hereafter becomes, available to the public through
no act or omission of the receiving Party; or
b) is documented as being known by the receiving Party prior to
its disclosure by the other Party; or
c) is independently developed by the receiving Party by persons
who have not had access to the Confidential Information and
without recourse to any Confidential Information received
under this Agreement and is so documented; or
d) is lawfully obtained by the receiving Party from a third party
or parties without breach of confidentiality obligations or is
disclosed hereafter to the receiving Party by a third party
who did not acquire the information directly or indirectly
from the disclosing Party; or
e) is disclosed in response to a valid order of a court or other
governmental body or any political subdivision thereof, but
only to the extent and for the purpose of such order and only
if the receiving Party, to the extent possible, first notifies
the disclosing Party, of such order and permits and reasonably
assists it in seeking an appropriate protective order.
19.3 Nothing in this Agreement shall be interpreted or construed to limit
either Party's right to perform or to continue to perform its own
independent research, development, manufacturing or marketing of any
type of Products or systems even if such research, development,
manufacturing or marketing pertains to technology or products similar
to the Products.
19.4 Prior to the publication or use by a Party hereto of any advertising,
sales promotions, press releases or other publicity matters relating to
the Products or this Agreement in which the name or logo of the other
Party is mentioned or language from which the connection of said name
can be reasonably inferred or implied, each Party shall obtain, except
as expressly provided below, the prior written consent of the other
Party. Terms, conditions and general information of this Agreement
shall be held in confidence by both Parties and only disclosed as may
be agreed to by both Parties or as may be required to meet securities
disclosure or export permit requirements. Neither Party shall make
public statements or issue publicity or media releases with regard to
this Agreement or the relationship between the Parties without the
prior written approval of the other Party, except that, upon prior
written notice to the other, and otherwise in accordance with this
Agreement, either Party may disclose only such information about this
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CONFIDENTIAL
Agreement as is necessary for public securities disclosure or export
permit requirements without the prior written consent of the other.
Prior to filing this Agreement, or any portion thereof, with any state
or federal governmental entity or any political subdivision thereof,
the filing Party shall (i) notify the other Party and (ii) with the
reasonable cooperation of the other Party, seek the maximum extent of
confidential treatment allowable by applicable law with respect to this
Agreement.
19.5 Notwithstanding any provision contained herein, Nortel Networks shall
retain all right, title and interest in and to that part of the
Specifications and Documentation (including Nortel Networks'
Confidential Information) solely created by Nortel Networks, if any,
the Nortel Networks' corporate name, trademarks, logos, color and part
number (as referred to or described in the Specifications) and all
trademarks, copyrights, trade secrets and other proprietary rights
related thereto.
19.6 The Parties acknowledge and agree that a breach of this Agreement may
result in irreparable and continuing harm to the disclosing Party for
which there may be no adequate remedy at law. In the event of a breach
or a threatened or intended breach of this Agreement by the receiving
Party, the receiving Party hereby consents to the granting of, and the
disclosing Party shall be entitled to seek, preliminary injunctions
unilaterally without notice, and final injunctions with notice,
enjoining and restraining such breach, or threatened or intended
breach, and to such other rights and remedies as are available at law
or in equity to the disclosing Party except as expressly set forth
herein.
20. INTELLECTUAL PROPERTY RIGHT INFRINGEMENT
20.1 Supplier shall defend and indemnify Nortel Networks and Nortel Networks
Companies (including their directors, officers, employees and agents)
against any and all claims brought against Nortel Networks (including,
without limitation, claims by third parties, distributors, Nortel
Networks Companies, end users and contractors against Nortel Networks),
and shall hold Nortel Networks and Nortel Networks Companies harmless
from all corresponding damages, liabilities, settlements, costs and
expenses (including attorney's fees) arising out of any claim that the
use, copying, licensing, sublicensing, sale and/or distribution of any
Product delivered hereunder or the exercise of any of the rights
granted in this Agreement infringes any third-party patent, copyright,
trademark, trade secret or other intellectual property right ("herein
"INFRINGEMENT CLAIM"). Nortel Networks shall give Supplier prompt
notice of, and authority to defend or settle, any such Infringement
Claim and shall give, at Supplier's expense, reasonable information and
assistance. Supplier will notify Nortel Networks if Supplier is subject
to any enquiry, allegation, claim or lawsuit in respect of patent,
copyright, trade secret or other intellectual property right
infringement regarding any Product delivered hereunder or any part
thereof.
20.2 When notified of an action or motion that seeks to restrict the use,
copying, licensing, sublicensing, sale and/or distribution of any
Product delivered hereunder or the exercise of any of the rights
granted hereunder, Supplier may, (and in the case of a judgment, order
or injunction that restricts the use, copying, licensing, sublicensing,
sale and/or distribution of any Product delivered hereunder or the
exercise of any of the rights granted hereunder, shall), at its option
and expense, (a) obtain the right for Nortel Networks , Nortel Networks
Companies, distributors, end users and contractors to use, copy,
license, sublicense sell and/or distribute any Product delivered
hereunder or exercise any of the rights granted hereunder, (b)
substitute other functionally equivalent product that does not
infringe, or (c) modify such Product so that it no longer infringes.
20.3 The indemnity obligations under the foregoing provisions shall survive
the termination or expiration of this Agreement.
20.4 The foregoing indemnification obligations shall not be applicable in
the event the Infringement Claim arises solely from:
(a) compliance of the Product with Nortel Networks' designs; or
(b) modification by Nortel Networks of the Product; or
(c) use of the Product by Nortel Networks in combination with
other products not provided by Supplier provided the
infringement arises from such combination and such combination
was not authorized by or known to Supplier.
In the cases specified above in this Section 20.4, Nortel Networks
shall defend and indemnify Supplier (including their directors,
officers, employees and agents) against any and all claims brought
against Supplier and shall hold Supplier harmless from all
corresponding damages, liabilities, settlements, costs and expenses
(including attorney's fees) arising out of any such claim. Supplier
shall give Nortel Networks prompt notice of, and authority to defend or
settle, any such claim and shall give, at Nortel Networks expense,
reasonable information and assistance.
20.5 Nothing contained in this Agreement shall be deemed to grant, either
directly or indirectly or by implication, any license under any patents
or patent applications of Supplier, except that Nortel Networks shall
have the normal non-exclusive, royalty-free license to use that which
is implied, or otherwise arises by operation of law, in the use,
copying, licensing, sublicensing, sale and/or distribution of the
Products.
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21. HAZARDOUS MATERIALS
21.1 Supplier shall identify and list in a notice forwarded to Nortel
Networks all of the hazardous or toxic materials which may be contained
in the Products prior to shipping the Products. For the purposes of
this Section 21.1, the hazardous and/or toxic materials shall be those
identified or described by characteristics in the regulations
promulgated under all applicable laws, rules and regulations of any
applicable governmental entity including, without limitation, the
following: the Toxic Substances Control Act, Resource Conservation and
Recovery Act of 1976, Hazardous Materials Transportation Act,
Occupational Safety and Health Act of 1970, Comprehensive Environmental
Response, Compensation and Liability Act of 1980, Consumer Product
Safety Act, Radiation Control for Health and Safety Act of 1968, Clean
Air Act, and Clean Water Act.
21.2 Supplier shall periodically, but no less than annually, review the
pertinent regulations and the materials contained in the Products and
update the lists of hazardous and/or toxic materials accordingly. Upon
request by Nortel Networks, Supplier shall also identify such other
hazardous and/or toxic substances as Nortel Networks may specify.
21.3 Supplier hereby warrants to Nortel Networks that, with the exception of
the notice referred to above, the Products furnished by Supplier, as
described in this Agreement, are safe for normal use, are non-toxic,
present no abnormal hazards to persons or their environment, and may be
disposed of as normal refuse without special precautions.
21.4 Supplier shall indemnify Nortel Networks for any expenses (including
the cost of substitute materials, less accumulated depreciation) that
Nortel Networks may incur by reason of the recall or prohibition
against continued use or disposal of the Products furnished by
Supplier, whether such recall or prohibition is directed by Supplier,
or occurs under compulsion of law. Nortel Networks shall cooperate with
Supplier to facilitate and minimize the expense of any recall or
prohibition against use of the Products directed by Supplier or under
compulsion of law.
21.5 Supplier shall indemnify, defend and hold harmless Nortel Networks from
any claims, demands, suits, judgments, liabilities, costs and expenses
(including, without limitation, reasonable attorneys' fees) which
Nortel Networks may incur under any of the laws, rules and regulations
referred to in Section 21.1 or any amendment to said statutes by reason
of Nortel Networks' acquisition, use, sale or disposal of the Products
furnished by Supplier.
22. INDEMNITY
22.1 GENERAL
22.1.1 Notwithstanding Section 24.1 of this Agreement, each Party shall
indemnify and save harmless as "INDEMNITEES" the other and its
employees, officers and directors from and against any and all fines,
penalties, losses, costs, damages, injuries, claims, expenses or
liabilities as a result of injury to, or death of, any person, or
damage to, or loss or destruction of, any property, arising out of, or
resulting from, or in connection with, this Agreement or the
performance of this Agreement and caused by the negligence or willful
misconduct of the indemnifying Party or a contractor or an agent of the
indemnifying Party or an employee of any one of them (hereinafter
individually and collectively "LIABILITIES").
22.1.2 Upon request of an Indemnitee, the other Party shall, at no cost or
expense to such Indemnitee, defend or settle any suit or other legal
proceeding asserting a claim for Liabilities, and the other Party shall
pay any reasonable costs and attorneys' fees that may be incurred by
such Indemnitee in connection with any such claim, proceeding or suit.
22.1.3 The Indemnitee shall as soon as practicable notify the other Party of
the assertion of any such claim of which the Indemnitee is aware and
the other Party shall (a) keep the Indemnitee subject to any such claim
fully informed as to the progress of such defense, and (b) afford such
Indemnitee, each at its own expense, an opportunity to participate
fully with the other Party in the defense or settlement of any such
claim, but the other Party shall have sole control of any such
settlement or defense.
22.2 PRODUCT LIABILITY
22.2.1 In addition to, and without limiting the generality of, the provisions
contained in Section 22.1, Supplier shall indemnify and save harmless,
except in the excepted cases set forth in Section 20.4 above, Nortel
Networks and its customers from and against any and all losses, costs,
damages and liabilities (including, without limitation, reasonable
attorneys' fees) and amounts agreed upon in settlement or awarded in
connection with any claim, suit or proceeding which arises from any
injury or death to persons or loss of or damage to property and which
is caused by a Product.
22.2.2 Upon request of Nortel Networks, Supplier shall, at no cost or expense
to Nortel Networks, defend or settle any suit or other legal proceeding
asserting a claim, suit or proceeding described in Section 22.2.1, and
Supplier shall pay any reasonable costs and attorneys' fees that may be
incurred by Nortel Networks and its customers in connection with any
such claim, proceeding or suit.
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CONFIDENTIAL
22.2.3 Nortel Networks shall as soon as practicable notify Supplier of the
assertion of any such claim, proceeding or suit of which Nortel
Networks is aware and Supplier shall (a) keep Nortel Networks fully
informed as to the progress of such defense, and (b) afford Nortel
Networks, each at its own expense, an opportunity to participate fully
with Supplier in the defense or settlement of any such claim,
proceeding or suit, but Supplier shall have sole control of any such
settlement or defense.
23. COMPLIANCE WITH LAWS
23.1 At no additional charge to Nortel Networks, Supplier represents and
warrants that it complies with and shall continue to comply with and
has obtained and will continue to maintain in effect all licenses and
permits required by, and Products shall be in conformance with, all
applicable laws and governmental orders and regulations in effect in
Canada and the United States at the time of the Delivery Date
applicable thereto.
24. CONSEQUENTIAL DAMAGES
24.1 Except in the event of a breach of Section 19 hereof, neither Party
shall be liable pursuant to this Agreement for any incidental
consequential, multiple or other indirect damages or for any damages
for loss of profits or revenues even if such Party has been advised of
the possibility of such damages, except that (a) Supplier shall pay,
without limitation, all litigation costs, reasonable attorneys' fees,
settlement payments and any damages awarded resulting from any suit,
claim or proceeding as set forth in Section 20 (Intellectual Property
Right Infringement) and (b) Supplier shall hold Nortel Networks and
Nortel Networks Companies harmless from any damages Nortel Networks and
the Nortel Networks Companies have incurred as a result of Supplier's
breach of the warranty set forth in Section 13.1 i).
25. INSURANCE
25.1 Supplier shall procure and maintain in full force and effect during the
period that this Agreement is in effect and for a period of [*] ([*])
years thereafter, with an insurance company a Comprehensive General
Liability insurance policy with third party liability coverage
protecting Nortel Networks and Nortel Networks Companies against any
loss, liability or expense due to bodily injury, death or property
damage arising out of this Agreement or Products delivered hereunder,
to the extent such loss, liability or expense is not due to the
negligence of Nortel Networks and any Nortel Networks Company. Such
policy shall have a combined single limit of a minimum of [*]
Dollars ($[*]), shall provide coverage worldwide and shall not
be restricted to occurrences in the country of insurer of Supplier.
Nortel Networks and Nortel Networks Companies shall be additional
insureds under such insurance policy.
25.2 Nortel Networks may upon sixty (60) calendar days written notice
increase the foregoing minimum amount in order to comply with Nortel
Networks' obligations to any customer of any Products provided any such
increase shall not exceed an amount equal to one hundred percent (100%)
of the applicable minimum amounts and shall be subject to the
availability of such insurance.
25.3 Such policy shall be endorsed to be primary insurance and shall provide
that it will not be cancelled or altered without at least thirty (30)
calendar days prior written notice to Nortel Networks. Not later than
ten (10) calendar days following the execution of this Agreement,
Supplier shall furnish Nortel Networks with a certificate of such
insurance and evidence that the premiums therefor have been paid.
Maintenance of such insurance and the performance by Supplier of its
obligations under this Section 25 shall not relieve Supplier of
liability under the indemnity provisions set forth in this Agreement.
26. FORCE MAJEURE
26.1 If the performance of any obligation under this Agreement or a Release
or Purchase Order is interfered with by reason of any circumstances
beyond the reasonable control of the Party affected, including, without
limitation, fire, explosion, power failure, acts of God, war,
revolution, civil commotion, delays of the other Party in the
performance of any of its obligations hereunder, acts of the public
enemy, or any law, order, regulation, ordinance or requirement of any
government or legal body, and labor difficulties, including without
limitation, strikes, slowdowns, picketing or boycotts; then the Party
affected shall be excused from such performance for a period equal to
the delay resulting from any such causes and such additional period as
may be reasonably necessary to allow the Party to resume its
obligations, (and the other Party shall likewise be excused from
performance of its obligations to the extent such Party's obligations
relate to the performance which was interfered with). The Party so
affected shall make reasonable efforts to remove such causes of
nonperformance; provided, however, in the event any such cause of
nonperformance extends for more than [*] ([*]) calendar days, Nortel
Networks shall have the right, without obligation or liability, to
cancel any Release or Purchase Order affected by such cause.
26.2 Either Party shall notify the other Party in writing within ten (10)
calendar days after becoming aware of the occurrence of any force
majeure event which may cause any delay or failure on the part of such
Party to perform its obligations hereunder.
27. TERM
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SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
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27.1 This Agreement shall become effective on the Effective Date and shall
remain in effect for a period of thirty six (36) months and will be
automatically renewed for successive twelve (12) month period(s) unless
one Party gives to the other Party a ninety (90) calendar day notice to
the effect that this Agreement will not be renewed, all such period(s)
being referred to herein as "TERM", unless and until terminated in
accordance with this Agreement.
28. TERMINATION AND CONTINUING RIGHTS
28.1 The Agreement may be terminated upon notice by one Party, at its sole
discretion, in the event the other Party is affected by any one of the
following events:
a) the institution by one Party of insolvency, receivership or
bankruptcy proceedings or any other material proceedings for
the settlement of its debts, including, without limitation, a
reorganization, a compromise, an arrangement or assignment for
the benefit of its creditors; the institution of such
proceedings against a Party which such Party has failed to
resolve in its favor within twenty (20) calendar days after
appropriate services of process; a Party making a general
assignment for the benefit of creditors; or a Party's
dissolution or ceasing to do business in the normal course; or
b) has a substantial part of its assets seized; or
c) assigns the Agreement or any part thereof in violation of
Section 32.4 (Assignment);
the affected Party is obliged to immediately give notice to the other
of the occurrence of any such event.
28.2 The Agreement and/or any Purchase Order or Release may be terminated,
in whole or in part, by Nortel Networks, upon written notice to
Supplier, in the event another party acquires a controlling interest in
Supplier (controlling not necessarily requiring greater than 50%) or a
majority equity participation in Supplier, without a prior written
guarantee from such party to Nortel Networks that such party will
continue to abide by the terms of this Agreement.
28.3 The Agreement and/or any Purchase Order or Release may be terminated,
in whole or in part by either Party, upon a [*] ([*]) calendar day
written notice, in the event the other Party fails to execute any one
of its material obligations hereunder and fails to remedy the default
within said period of [*] ([*]) calendar days.
28.4 Above termination rights shall be in addition to other termination
rights contained herein, including under Section 9 (Delivery), and
shall be without prejudice to the rights or claims one Party may have
against the other with respect to the performance, nonperformance, or
breach of such Party's obligations hereunder, and shall not operate so
as to extinguish any rights or obligations which arose prior to the
date of termination, and each Party shall have the right to pursue each
and every available remedy at law and in equity, including, without
limitation, withholding payments of any amount owed by Nortel Networks
to Supplier pending resolution of any claims made by Nortel Networks in
good faith against Supplier.
28.5 In the event this Agreement is terminated by Supplier for default by
Nortel Networks or for any other reason hereunder, Nortel Networks and
its customers shall thereafter retain such rights, as may be necessary
in order to allow Nortel Networks and its customers to provide Product
support and maintenance to their end-user customers, provided however
the Products, in respect of which support and maintenance services will
be provided, have been paid for by Nortel Networks.
28.6 This Agreement may be terminated upon agreement of the Parties to that
effect.
28.7 Notwithstanding any termination or expiry of this Agreement, any
provisions of this Agreement which by their nature are intended to
survive, including but not limited to the provisions of Sections 1
(Definitions), 5 (Product and Process Changes), 7 (Proprietary
Components), 10 (Prices and Payments), 13 (Warranty), 16 (Continuing
Availability of Technical Assistance, Repair Services, Maintenance,
Replacement and Repair Parts), 19 (Confidential Information), 20
(Intellectual Property Right Infringement), 22 (Indemnity), 24
(Consequential Damages), 25 (Insurance) 28 (Termination and Continuing
Rights), 30 (Manufacturing Escrow and Contingent License) and all
consequent rights, obligations and liabilities, shall survive the
termination or expiry of this Agreement.
29. NOTICES
29.1 Any and all notices or other information to be given by one of the
Parties to the other hereunder shall be sent by registered or certified
mail, postage prepaid, return receipt requested or by confirmed fax or
hand delivery to the other Party at the addresses set forth in Exhibit
M.
* CERTAIN CONFIDENTIAL INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
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CONFIDENTIAL
29.2 Notices given pursuant to Section 29.1 shall be deemed to have been
received five (5) Business Days after mailing if given by mail, and one
business day after sending if given by telecopy and upon delivery if
given by hand.
29.3 Either Party may change its address at any time by giving fifteen (15)
Business Days prior written notice to the other Party as provided
above.
30. MANUFACTURING ESCROW AND CONTINGENT LICENSE
30.1 To ensure uninterrupted availability of the Product Hardware and
Product Software and their ongoing maintenance and support, including
Repair Services, by March 15, 2000, Nortel Networks and Supplier shall
enter into an escrow agreement ("ESCROW AGREEMENT") with a mutually
agreeable escrow agent ("ESCROW AGENT").
30.2 The Escrow Agreement shall be in a form and content reasonably
acceptable to the Parties hereto and shall contain, as a minimum and
without limitation, the terms and conditions set forth in Exhibit N and
shall, when executed by all the Parties, be annexed hereto as part of
Exhibit N.
31. GOVERNING LAW
31.1 The validity, construction, interpretation and performance of this
Agreement and the rights and obligations of the Parties and any
purchase made hereunder shall be governed by the courts and laws of
Texas except for its rules with respect to the conflict of laws. The
application of the U.N. Convention on Contracts for the International
Sale of Goods is specifically excluded from this Agreement.
32. GENERAL
32.1 SEVERABILITY
If any of the provisions of this Agreement shall be adjudged invalid or
unenforceable, such invalidity or unenforceability shall not invalidate
or render this Agreement unenforceable, but rather this Agreement shall
be construed as if not containing the particular invalid or
unenforceable provision or provisions, and the rights and obligations
of the Parties shall be construed and enforced accordingly, provided
that, in the event either Nortel Networks or Supplier would not have
entered into this Agreement without such provision, that Party shall
have the right to terminate this Agreement upon written notice to the
other Party.
32.2 TRADE AGREEMENT - PROCEDURES
Supplier shall assist Nortel Networks in performing all administrative
actions required to qualify Products for preferential treatment under
the rules of any applicable trade pursuant to the procedures set out in
Exhibit L.
32.3 DEBARMENT CERTIFICATE
At no additional charge to Nortel Networks, Supplier shall comply with
any applicable import requirements and with any third party
requirements specifically set forth herein or any document referenced
herein. In addition, Supplier shall promptly, upon written request of
Nortel Networks, provide a properly executed certificate in the form
attached as Exhibit I (as such form may be modified from time to time
by the United States Rural Utilities Service) and in accordance with
the requirements specified therein with respect to any Products
furnished by Supplier and which Nortel Networks provides to a customer
which requires Nortel Networks to provide a similar certificate.
Products and services furnished by Supplier shall be in conformance
with all applicable laws and governmental orders and regulations in
effect at the time of shipment thereof or the performance of such
services, including, without limitation, the following United States
laws and regulations: Veterans Readjustment Assistance Act of 1972,
Rehabilitation Act of 1973, and the clauses set forth in Federal
Acquisition Regulation (subject to "Supplier," "Subcontractor" and
"Contract" used in such clauses meaning Nortel Networks , Supplier and
Agreement, respectively) 52.219-8, 52.219-9, 52.219-13, 52.220-4,
52.2221, 52.222-4, 52.222-20, 52.222-26, [subparagraphs b(l)-b(ll)],
52.222-35 and 52.222-36.
32.4 ASSIGNMENT
Neither Party shall assign or otherwise transfer all or any part of
this Agreement or any rights or payments to be made hereunder, or any
interest herein, without the prior written consent of the other Party,
not to be unreasonably withheld, except that Nortel Networks may assign
or subcontract any of its rights or obligations hereunder to any Nortel
Networks Subsidiary with the reasonable commercial capacity to fulfill
the terms of this Agreement. Any assignee of this Agreement shall be
bound to all of the terms and conditions hereof.
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CONFIDENTIAL
32.5 WAIVER
Except as specifically provided for in a waiver signed by duly
authorized representatives of Nortel Networks and Supplier, failure by
either Party at any time to require performance by the other Party or
to claim a breach of or to enforce any provision of this Agreement
shall not be construed as affecting any subsequent breach or the right
to require performance with respect thereto or to claim a breach with
respect thereto and shall not constitute a waiver of such provisions or
the right of such Party to enforce each and every provision.
32.6 INDEPENDENT CONTRACTORS
Nortel Networks and Supplier are independent contractors in all
relationships and actions under and contemplated by this Agreement.
This Agreement shall not be construed to create or to authorize the
creation of any employment, partnership or agency relation, or to
authorize Nortel Networks or Supplier to enter into or make any
commitment, agreement, representation or warranty binding on the other,
or to allow one Party to accept service of any legal process addressed
to, or intended for, the other Party. Nothing contained in this
Agreement shall limit, in any manner, Nortel Networks' right to enter
into other agreements with other parties.
32.7 SECTION HEADINGS
Section headings are inserted herein for convenience only and shall not
affect the meaning or interpretation of this Agreement or any provision
hereof.
32.8 ENTIRE AGREEMENT
This Agreement, including Exhibits A through N attached hereto,
comprises all the terms, conditions and agreements of the Parties
hereto with respect to the subject matter herein, and save as expressly
provided herein, may not be altered or amended except in writing signed
by authorized representatives of each Party hereto. This Agreement
cancels and supersedes all prior agreements and communications on the
said subject matter. This Agreement may not be varied except through a
document agreed to and signed by both Parties.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the day
and year last written below.
SONOMA SYSTEMS NORTEL NETWORKS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------- ---------------------------------
(Signature) (Signature)
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------- ------------------------------
(Print) (Print)
Title: Vice President Title: Vice President, [ILLEGIBLE] Networks
------------------------ -----------------------------
Date: Feb 10, 2000 Date: February 10, 2000
------------------------- ------------------------------
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EXHIBIT A
PRODUCT LISTS, PART I AND PART II, PRICES, DISCOUNTS,
AVAILABILITY DATES AND FCA DELIVERY LOCATIONS
PART I: PRODUCT LIST: ACCEPTED PRODUCTS, PRICES AND DISCOUNTS
PART II: PRODUCT LIST: NON-ACCEPTED PRODUCTS, PRICES, DISCOUNTS AND
AVAILABILITY DATES
The prices set forth herein shall apply to all Purchase Orders or
Releases and are effective as of February 4, 2000, and shall apply
regardless of whether or not the product is accepted pursuant to Section
4 of the Agreement. Prices are based upon aggregate shipments of products
to Nortel Networks Companies per calendar year. Purchase Orders and
Releases shall be priced at the designated Nortel price, which represents
[*] percent ([*]%) off the given List Price. Volume discounts shall
apply in accordance with the table below. If shipments of products exceed
[*] ([*]) units in any calendar year, Supplier shall issue
Nortel Networks a credit equal to the incremental discount from list
price multiplied by the incremental number of shipped products qualifying
for such additional discount. Subject to verification by Nortel Networks,
Supplier shall indicate the product credit to Nortel Networks, if any,
within thirty (30) days after the end of the calendar year. Nortel
Networks may utilize the product credit by indicating the amount of such
credit to be used on a Purchase Order or Release. Any product credits
remaining at the end of the Term shall be refunded in US dollars in the
form of a wire transfer within ninety (90) days after the expiration of
the Term.
----------------------------- --------------------------
Quantity Discount from List (%)
----------------------------- --------------------------
0 - [*] units [*]%
----------------------------- --------------------------
[*] - [*] units [*]%
----------------------------- --------------------------
Greater than [*] units [*]%
----------------------------- --------------------------
PRODUCT CODES, PRICING AND AVAILABILITY:
PRODUCT ID DESCRIPTION LIST NORTEL
PRICE PRICE AVAIL.
-----------------------------------------------------------------------------------------------------------------------------------
SONOMA ACCESS BASE UNITS
8000 SA PII SONOMA ACCESS Pentium II Base Unit, with switchable 110/240 VAC power $4695 $[*] 2/4/00
supply for Multi-media applications
8000 DA PII SONOMA ACCESS Pentium II Base Unit, with dual switchable 110/240 VAC $5645 $[*] 2/4/00
power supply for Multi-media applications
8000 DD PII SONOMA ACCESS Pentium II Base Unit, with dual -48VDC power supplies $5995 $[*] 2/4/00
for Multi-media applications
-----------------------------------------------------------------------------------------------------------------------------------
SONOMA ACCESS SOFTWARE
8000 SW-TLX-4 SONOMA ACCESS TLX-TM- software, V4, high-performance real-time operating $2000 $[*] 2/4/00
system, SNMP agent, Web DCS, and SLIP management software. V4
supports IMA, IP forwarding, CES, FR (Serial Card) and 8000 TRN 2.
-----------------------------------------------------------------------------------------------------------------------------------
SONOMA SYSTEMS NETWORK MANAGEMENT SOFTWARE
HP Openview Basic Package Free utility that can be downloaded from the Sonoma Systems extranet Free N/A N/A
site from Support/All Files/MIBs. Filename: OVBASIC.TAR.Z
SONOMAVIEW SonomaVIEW Element Management Package $1995 $[*] 2/4/00
Sonoma VIEW Demo The SonomaVIEW Demo application is available from Sonoma extranet website. Free N/A 2/4/00
Application This is a full feature application which expires after
thirty (30) days of
* CERTAIN CONFIDENTIAL INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
CONFIDENTIAL
installation.
SV UG SV User Guide includes both SA/SI navigation/configuration-HARDCOPY $100 $[*] 2/4/00
-----------------------------------------------------------------------------------------------------------------------------------
SONOMA ACCESS WAN CARDS
(INCLUDES DRIVER SOFTWARE LICENSE AND CERTIFICATION)
ATM DS1-4 4 port T1 ATM UNI card (RJ-45) (1 slot) $4000 $[*] 2/4/00
****REQUIRES V4 SOFTWARE*****
ATM E1-4 4 port E1 ATM UNI card (RJ-45) (1 slot) $4000 $[*] 2/4/00
****REQUIRES V4 SOFTWARE*****
ATM IMA DS1 4 port T1 ATM Inverse Multiplexing card (RJ-45) (2 slots) $6500 $[*] 2/4/00
**** ATM UPLINK SUPPORTS DATA AND VOICE APPLICATIONS****
****T1 UNI OR IMA CAPABILITY SUPPORTED WITH V4 SOFTWARE*****
ATM IMA E1 4 port E1 ATM Inverse Multiplexing card (RJ-45) (2 slots) $6500 $[*] 2/4/00
**** ATM UPLINK SUPPORTS DATA AND VOICE APPLICATIONS****
****E1 UNI OR IMA CAPABILITY SUPPORTED WITH V4 SOFTWARE*****
ATM IMA DS1-8 8 port T1 ATM Inverse Multiplexing card (RJ-45) (2 slots) $9500 $[*] 2/4/00
**** ATM UPLINK SUPPORTS DATA AND VOICE APPLICATIONS****
****T1 UNI OR IMA CAPABILITY SUPPORTED WITH V4 SOFTWARE*****
ATM IMA E1-8 8 port E1 ATM Inverse Multiplexing card (RJ-45) (2 slots) $9500 $[*] 2/4/00
**** ATM UPLINK SUPPORTS DATA AND VOICE APPLICATIONS****
****E1 UNI OR IMA CAPABILITY SUPPORTED WITH V4 SOFTWARE*****
-----------------------------------------------------------------------------------------------------------------------------------
LIST NORTEL
PRODUCT ID DESCRIPTION PRICE PRICE AVAIL.
ENH DS3 ATM DS3 GCRA compliant ATM Card, with two BNC connectors, compliant with $3000 $[*] 2/4/00
DSX-3 specifications.
*****ATM UPLINK SUPPORT FOR DATA ONLY APPLICATIONS)****
ENH E3 ATM E3 GCRA compliant ATM Card, with two BNC connectors $3000 $[*] 2/4/00
*****ATM UPLINK SUPPORT FOR DATA ONLY APPLICATIONS)****
ENH OC3 ATM MM OC-3c/STM-1 GCRA compliant ATM Multimode Card, with fiber optic SC $4000 $[*] 2/4/00
connector (0-2Km)
*****ATM UPLINK SUPPORT FOR DATA ONLY APPLICATIONS)****
ENH OC3 ATM SM-IR OC-3c/STM-1 GCRA compliant ATM Single Mode Card, with fiber optic ST $6000 $[*] 2/4/00
connector (0-19Km)
*****ATM UPLINK SUPPORT FOR DATA ONLY APPLICATIONS)****
ENH OC3 ATM ▇▇-▇▇ OC-3c/STM-1 GCRA ATM Long-Reach Single Mode Card, with fiber optic ST $8000 $[*] 2/4/00
connector (12-30Km)
*****ATM UPLINK SUPPORT FOR DATA ONLY APPLICATIONS)****
-----------------------------------------------------------------------------------------------------------------------------------
SONOMA ACCESS LAN CARDS
(INCLUDES DRIVER SOFTWARE LICENSE AND CERTIFICATION)
8000 FAST ENET-1 Fast Ethernet Card (10/100Mbps autosensing) with RJ-45 connector (UTP). $750 $[*] 2/4/00
8000 FAST ENET-4 Four-Port Fast Ethernet Card (10/100Mbps autosensing), with RJ-45 $3000 $[*] 2/4/00
connectors
8000 TRN-2 High Performance Token Ring Card (4/16Mbps autosensing), with DB-9 and $1200 $[*] 2/4/00
RJ-45 connectors.
8000 FDDI-SAS FDDI Single-Attach (SAS) Interface Card, with multimode fiber optic SC $5000 $[*] 2/4/00
connector
8000 FDDI-DAS FDDI Dual-Attach (DAS) Interface Card, with two multimode fiber optic $8000 $[*] 2/4/00
SC connectors
-----------------------------------------------------------------------------------------------------------------------------------
SONOMA ACCESS MULTISERVICE CARDS
(INCLUDES ATM UPLINK, DRIVER SOFTWARE LICENSE AND CERTIFICATION)
CES T1 IMA Card set with four T1/E1 Circuit Emulation ports (RJ-45) and four T1 $11000 $[*] 2/4/00
ATM IMA uplink ports (RJ45). REQUIRES 3 SLOTS.
REQUIRES V4.X OR GREATER. -USING V4.X OR GREATER
SOFTWARE THE ATM UPLINKS ARE SOFTWARE CONFIGURABLE
FOR EITHER IMA OR UNI
**** ATM UPLINK SUPPORTS DATA AND VOICE APPLICATIONS****
* CERTAIN CONFIDENTIAL INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
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CES E1 IMA Card set with four T1/E1 Circuit Emulation ports (RJ-45) and four E1 $11000 $[*] 2/4/00
ATM IMA uplink ports (RJ-45). Requires 3 slots.
REQUIRES V4.X OR GREATER. -USING V4.X OR GREATER
SOFTWARE THE ATM UPLINKS ARE SOFTWARE CONFIGURABLE
FOR EITHER IMA OR UNI
**** ATM UPLINK SUPPORTS DATA AND VOICE APPLICATIONS****
CES T1 IMA-8 Card set with four T1/E1 Circuit Emulation ports (RJ-45) and eight T1 $14500 $[*] 2/4/00
ATM IMA uplink ports (RJ45). REQUIRES 3 SLOTS.
REQUIRES V4.X OR GREATER. -USING V4.X OR GREATER
SOFTWARE THE ATM UPLINKS ARE SOFTWARE CONFIGURABLE
FOR EITHER IMA OR UNI
**** ATM UPLINK SUPPORTS DATA AND VOICE APPLICATIONS****
CES E1 IMA-8 Card set with four T1/E1 Circuit Emulation ports (RJ-45) and eight E1 $14500 $[*] 2/4/00
ATM IMA uplink ports (RJ-45). Requires 3 slots.
REQUIRES V4.X OR GREATER. -USING V4.X OR GREATER
SOFTWARE THE ATM UPLINKS ARE SOFTWARE CONFIGURABLE
FOR EITHER IMA OR UNI
**** ATM UPLINK SUPPORTS DATA AND VOICE APPLICATIONS****
-----------------------------------------------------------------------------------------------------------------------------------
PRODUCT ID DESCRIPTION PRICE CAT AVAIL.
CES DS3 Card set with four T1/E1 Circuit Emulation ports (RJ-45) and one DS3 $7500 $[*] 2/4/00
ATM uplink with BNC connectors. REQUIRES 2 SLOTS. REQUIRES V4.X OR
GREATER.
**** ATM UPLINK SUPPORTS DATA AND VOICE APPLICATIONS****
CES E3 Card set with four T1/E1 Circuit Emulation ports (RJ-45) and one E3 $7500 $[*] 2/4/00
ATM uplink with two BNC connectors. REQUIRES 2 SLOTS. REQUIRES V4.X
OR GREATER.
**** ATM UPLINK SUPPORTS DATA AND VOICE APPLICATIONS****
CES MM OC3 Card set with four T1/E1 Circuit Emulation ports (RJ-45) and one $8500 $[*] 2/4/00
OC-3c/STM-1 ATM uplink with fiber optic SC connector (0-2Km).
REQUIRES 2 SLOTS. REQUIRES V4.X OR GREATER.
**** ATM UPLINK SUPPORTS DATA AND VOICE APPLICATIONS****
CES SM IR OC3 Card set with four T1/E1 Circuit Emulation ports (RJ-45) and one $10500 $[*] 2/4/00
OC-3c/STM-1 ATM uplink with fiber optic ST connector (0-19Km).
REQUIRES 2 SLOTS. REQUIRES V4.X OR GREATER.
**** ATM UPLINK SUPPORTS DATA AND VOICE APPLICATIONS****
CES SM LR OC3 Card set with four T1/E1 Circuit Emulation ports (RJ-45) and one $12500 $[*] 2/4/00
OC-3c/STM-1 ATM uplink with fiber optic ST connector (12-30Km).
REQUIRES 2 SLOTS. REQUIRES V4.X OR GREATER.
**** ATM UPLINK SUPPORTS DATA AND VOICE APPLICATIONS****
-----------------------------------------------------------------------------------------------------------------------------------
SONOMA ACCESS FRAME RELAY CARDS
(INCLUDES DRIVER SOFTWARE LICENSE AND CERTIFICATION)
FR UIO 2 port Universal Serial (RS232, V.35, X.21, RS442/449) for Frame Relay $4500 $[*] 2/4/00
-----------------------------------------------------------------------------------------------------------------------------------
FRAME RELAY CABLES
(ALSO USED ON SONOMA INTEGRATOR MODELS THAT INCLUDE FRAME RELAY)
RS-232-DCE RS232/EIA530, DCE CBL, 6 FT, DB-25 FEMALE-Provides a DCE interface $225 $[*] 2/4/00
which provides both TXC/RXC to the connecting DTE device.
RS-232-DTE RS232/EIA530, DTE CBL, 6 FT, DB-25 MALE-Provides a DTE interface $225 $[*] 2/4/00
which accepts both TXC/RXC from the connecting DCE device.
V.35-DCE FRAME RELAY V.35, DCE CBL, 6 FT, 34 PIN FEMALE-Provides a DCE $250 $[*] 2/4/00
interface which provides both TXC/RXC to the connecting DTE device.
V.35-DTE FRAME RELAY ▇.▇▇, ▇▇▇ ▇▇▇, ▇ FT, 34 PIN MALE-Provides a DTE interface $250 $[*] 2/4/00
which accepts both TXC/RXC from the connecting DCE device.
X.21-DCE FRAME RELAY X.21 DCE CBL, 6 FT, DB-15 FEMALE-Provides a DCE interface $150 $[*] 2/4/00
which provides both TXC/RXC to the connecting DTE device.
X.21-DTE FRAME RELAY X.21 DTE CBL, 6 FT, DB-15 MALE-Provides a DTE interface $150 $[*] 2/4/00
which accepts both TXC/RXC from the connecting DCE device.
RS442/449-DCE FRAME RELAY RS442/449 DCE CBL, 6 FT, DB-37 FEMALE-Provides a DCE $225 $[*] 2/4/00
interface which provides both TXC/RXC to the connecting DTE device.
RS442/449-DTE FRAME RELAY DTE CBL, RS442/449, 6 FT, DB-37 MALE-Provides a DTE $225 $[*] 2/4/00
interface which accepts both TXC/RXC from the connecting DCE device.
* CERTAIN CONFIDENTIAL INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Page 3
CONFIDENTIAL
LIST NORTEL
PRODUCT ID DESCRIPTION PRICE PRICE AVAIL.
-----------------------------------------------------------------------------------------------------------------------------------
SONOMA ACCESS SYSTEM OPTIONS:
CABLE MGMT Cable Management option for PII Chassis. Consists of front bezel $200 $[*] 2/4/00
attachment with cable clamps
-----------------------------------------------------------------------------------------------------------------------------------
SONOMA ACCESS USER DOCUMENTATION:
8000 SUG V4 Sonoma Access V4 User Guide $100 $[*] 2/4/00
QS-WEBDCS V3 Sonoma ACCESS V3 / V4 Quick Start Guide for WebDCS Users $15 $[*] 2/4/00
QS-CRAFT V3 Sonoma ACCESS V3/V4 Quick Start Guide for Craft Interface Users $15 $[*] 2/4/00
8000 SUG-DISK V4 Sonoma ACCESS V4 User Guide and HTML Help Files on 3.5-inch diskettes $50 $[*] 2/4/00
-----------------------------------------------------------------------------------------------------------------------------------
SONOMA ACCESS ACCESSORIES:
PII RM-19 19" Rackmount kit for Phase II chassis $250 $[*] 2/4/00
PII RM-23 23" Rackmount kit for Phase II chassis $250 $[*] 2/4/00
PII SAC TRAY PII Single A/C power supply and fan tray assembly (switch selectable $795 $[*] 2/4/00
for 110 or 240 VAC)
PII DAC TRAY PII Dual A/C power supply and fan tray assembly (switch selectable for $1595 $[*] 2/4/00
110 or 240 VAC)
PII DDC TRAY PII Dual D/C power supply and fan tray assembly (-48 VDC) $2495 $[*] 2/4/00
PRODUCT CODES, PRICING AND AVAILABILITY:
PRODUCT ID DESCRIPTION LIST PRICE NORTEL
PRICE AVAIL.
-----------------------------------------------------------------------------------------------------------------------------------
SONOMA INTEGRATOR BASE UNITS
SI 1110 SONOMA INTEGRATOR Multiservice Branch Access Device, with $9000 $[*] 2/4/00
autosensing 110/240 VAC power supply. Includes (4) T1/E1 ports
and (1) 10/100 M Ethernet port
*****PRICE INCLUDES SOFTWARE PACKAGE*****
SI 1120 SONOMA INTEGRATOR Multiservice Branch Access Device, with $9500 $[*] 2/4/00
auto-sensing 110/240 VAC power supply. Includes (4) T1/E1 ports
and (2) 10/100 M Ethernet port
*****PRICE INCLUDES SOFTWARE PACKAGE*****
SI 1121 Sonoma INTEGRATOR Multiservice Branch Access Device, with $8500 $[*] 3/31/00
autosensing 110/240 VAC power supply. Includes (2) T1/E1 ports
and (2) 10/100 M Ethernet ports.
*****PRICE INCLUDES SOFTWARE PACKAGE*****
SI 1119 Sonoma INTEGRATOR Multiservice Branch Access Device, with $9500 $[*] 3/31/00
autosensing 110/240 VAC power supply. Includes (4)
T1/E1 ports, (1) 10/100 M Ethernet port, and 2
Frame Relay Universal Serial ports. (Frame Relay
* CERTAIN CONFIDENTIAL INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Page 4
CONFIDENTIAL
cable purchased separately.)
**FRAME RELAY CABLE PURCHASED SEPARATELY, SEE SONOMA ACCESS FRAME
RELAY CABLES FOR SELECTION**
*****PRICE INCLUDES SOFTWARE PACKAGE*****
SI 1312 Sonoma INTEGRATOR Multiservice Branch Access Device, with $9250 $[*] 3/31/00
autosensing 110/240/VAC power supply. Includes (1) DS3 ATM uplink
port and (1) 10/100 M Ethernet port
*****PRICE INCLUDES SOFTWARE PACKAGE*****
SI 1313 Sonoma INTEGRATOR Multiservice Branch Access Device, with $9250 $[*] 3/31/00
autosensing 110/240 VAC power supply. Includes (1) E3 ATM uplink
port and (1) 10/100 M Ethernet port
*****PRICE INCLUDES SOFTWARE PACKAGE*****
SI 1320 Sonoma INTEGRATOR Multiservice Branch Access Device, with $10,000 $[*] 3/31/00
autosensing 110/240 VAC power supply. Includes (2) T1/E1 ports,
(2) 10/100 M Ethernet ports and (1) DS3 ATM uplink
*****PRICE INCLUDES SOFTWARE PACKAGE*****
SI 1321 Sonoma INTEGRATOR Multiservice Branch Access Device, with $10,000 $[*] 3/31/00
autosensing 110/240 VAC power supply. Includes (2) T1/E1 ports,
(2) 10/100 M Ethernet ports and (1) E3 ATM uplink
*****PRICE INCLUDES SOFTWARE PACKAGE*****
-----------------------------------------------------------------------------------------------------------------------------------
SONOMA INTEGRATOR SOFTWARE
SI SW V1 SONOMA INTEGRATOR software, V1.0. Supports Features & Functions $1500 $[*] 2/4/00
of models SI 1110 and SI 1120. Support for T1/E1
UNI or IMA, CES, SNMP agent, Installation Wizard,
and SLIP management software, diskettes with user
documentation
****INCLUDED AT NO CHARGE WITH PURCHASE OF ANY INTEGRATOR MODEL.
USE THIS PRODUCT ID IF ORDERING SOFTWARE SEPARATELY FOR FIELD
UPGRADES*****
SI SW V2 Sonoma INTEGRATOR software V2.0. Supports all features and $1500 $[*] 2/4/00
functions included in INTEGRATOR V1.0 (SI SW V1) and supports all
Sonoma INTEGRATOR models.
****INCLUDED AT NO CHARGE WITH PURCHASE OF ANY INTEGRATOR MODEL.
USE THIS PRODUCT ID IF ORDERING SOFTWARE SEPARATELY FOR FIELD
UPGRADES*****
-----------------------------------------------------------------------------------------------------------------------------------
SONOMA INTEGRATOR USER DOCUMENTATION
SI QS CRAFT SI Quick Start Guide for Craft Interface-HARDCOPY $15 $[*] 2/4/00
SI QS SI Install Wizard Quick Start Guide-HARDCOPY $15 $[*] 2/4/00
SUG CRAFT Includes both SA/SI Craft UI for SI/V1.0 and SA/V4 -HARDCOPY $100 $[*] ▇/▇/▇▇
▇▇ ▇▇-▇ H/W Install guide for SI 1120-HARDCOPY $50 $[*] ▇/▇/▇▇
▇▇ ▇▇-▇ H/W Install guide for SI 1110-HARDCOPY $50 $[*] 2/4/00
PART III: FCA DELIVERY LOCATIONS
NASHVILLE, TN
* CERTAIN CONFIDENTIAL INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
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EXHIBIT B
SPECIFICATIONS AND ACCEPTANCE PROGRAM
PART I: SPECIFICATIONS
1. Document Identification:
=================================================== ================================================
Document identification Description and specific provisions
=================================================== ================================================
Requirement Specifications Document Code: NT______ [to be inserted upon
(RS), in effect from time to time. completion of NT document]
FUNCTIONAL: Date: Latest version signed and dated by
-Release Functional Specification for Sonoma the Parties.
Access Version 4.
-Release Functional Specification for Sonoma
Integrator Version 1.
-Functional Specification Sonoma View - HP
OpenView - Advanced Package.
USER GUIDES:
- Sonoma Access & Sonoma Integrator Craft
User Interface.
- Sonoma Access Hardware Installation Guide.
- Sonoma Integrator Hardware Installation
Guide
- SonomaView User Guide
RELEASE NOTES:
-Product Release Notes Sonoma Access Version 4.1.
-Product Release Notes Sonoma Integrator Version
1.0.
Product Release Notes SonomaView Version 1.0.
--------------------------------------------------- ------------------------------------------------
2. Certification
Supplier shall use due diligence to pursue the certifications for all
countries as listed below, and as may be requested by Nortel pending
future business as soon as new or modified designs have passed Supplier's
production release milestone, and this without prejudice to Nortel
Networks' Acceptance Program outlined in Exhibit B, Part II. Supplier and
Nortel Networks shall arrange for joint submission to the regulatory
bodies and Nortel Networks shall repay to Supplier the additional costs
incurred through the joint submissions. All Changes to existing designs
that could invalidate any one of the certifications shall be discussed
between Supplier and Nortel Networks as part of the Change Notification
procedure even if they do not require a production release.
The list of required certifications is as follows:
CEMark
ETSI
UK Type Approval
UL / CSA / EN safety
FCC parts 15 and 101
CONFIDENTIAL
Should other certifications be required, they shall be discussed between
Supplier and Nortel Networks. Supplier shall use its best efforts in
supporting Nortel Networks' regulatory activities.
SUPPORT GROUPS: Supplier's ________ group
Nortel Networks OEM Integrity group in _____________
Nortel Networks Product Integrity group in __________
PART II: PRODUCT ACCEPTANCE PROGRAM
1. In order to verify that the products or modified Products meet the
applicable Specifications as referenced in Part I above and any other
reasonable criteria as determined by Nortel Networks, Nortel Networks
will undertake an Acceptance Program covering verification and product
integrity testing. Nortel Networks may, at it's option, perform one or
more of the following for acceptance:
i) review Supplier's test reports;
ii) access 3rd party test data from Supplier;
iii) obtain products for testing at Nortel's
facility;
iv) obtain products for testing at Supplier's
facility.
2. Supplier shall loan to Nortel Networks, at no charge to Nortel Networks,
the products necessary to perform the Acceptance Program and shall
provide support to the Nortel Networks group during the testing. Such
support includes diligence in replacing failed products, availability of
technically knowledgeable individuals to discuss testing results and
teaming of at least one Supplier individual with the Nortel Networks
testing group for all tests to occur on Supplier's premises. Nortel
Networks shall endeavor to limit as much as possible the products needed
for the acceptance in terms of number of product(s) and duration of the
loan by taking into consideration design commonalties with already
accepted Products.
3. As a minimum, each new design shall be tested by Nortel Networks at its'
discretion.
4. Primeships:
Nortel Networks ________ group in __________________ is prime for the
verification testing; Supplier's Engineering department in Marlborough,
MA is prime for supporting Nortel Networks' Acceptance Program.
PART III: PRODUCT MARKING
1. Serial number: bar-coded serial number on rear of unit.
2. Manufacturing date stamp: Supplier stamps date on rear of unit.
3. Supplier's model number rear or bottom of unit on ejector tab/latch of
faceplate.
4. Bellcore CLEI code, bar-coded (Code 128) and alpha numeric
(TR-STS-000383) to be placed on the ________ of the Products.
5. Supplier's PEC code will also be placed on _________.
6. Repair Date stamp: Bellcore TR-NWT-000078 (issue 3, December 1991),
section 12.2. The location code for Supplier ("LL") is ___. This will be
rubber stamped by Supplier ______ in ______ ink.
7. Product marking and packaging requirements pursuant to this Agreement:
a) Nortel Networks Corporate Standard CS152.50 on product integrity;
b) Bellcore GR-CORE-1421 and TR-NWT-000063;
c) Nortel Networks Corporate Standard 157.0 and Bellcore TR-NWT-870
on ESD protection;
d) Nortel Networks Quality System Procedure EXCESDO1.STL.
Supplier shall package the Products for shipment in accordance with
Bellcore's ▇▇-▇▇▇▇-▇▇▇▇, ▇▇-▇▇▇-▇▇▇▇▇▇ and TR-NWT-870 standard packing
practices, with any modifications specified by Nortel Networks and agreed
to by Supplier, related to the size and external markings (including
branding) of the boxes. Supplier shall be responsible for any damage to
Products including damage caused by packing noncompliant with Bellcore
requirements.
Page 2
CONFIDENTIAL
8. Cables: [ENTER WHAT WILL BE MARKED ON CABLES, IF APPLICABLE.]
9. [ENTER ANY OTHER REQUIRED MARKING.]
Page 3
CONFIDENTIAL
EXHIBIT C
DEMAND-PULL PROGRAM
1. SCOPE
1.1 This Exhibit C sets forth the terms and conditions applicable to the
ordering of Products pursuant to the Demand-Pull Program.
2. NORTEL NETWORKS' RESPONSIBILITIES
2.1 Nortel Networks shall, on the first business day of each month (and as
may be updated from time to time by Nortel Networks) during the Term,
provide Supplier with a twelve (12) month rolling forecast ("Forecast")
of its Product requirements, if any. Concurrently with its presentation
of the first Forecast to Supplier, Nortel Networks shall issue a
Blanket Purchase Order for the quantity of Products shown for six
months of such Forecast which Blanket Purchase Order shall be updated
as required. Releases for Products covered by a Blanket Purchase Order
issued under this Section will be issued in accordance with Nortel
Networks' designated purchasing department representative's weekly
demands.
2.2 Attachment A sets forth the applicable Product stocking requirements
stated on a Target Finished Goods ("TARGET FG") and Target Work-In
Process (modules, dies components and parts) ("TARGET WIP") basis,
(collectively referred to as "TARGET PRODUCTS TOTAL STOCK"). The Target
Products Total Stock will be jointly established by the Parties in
writing based on the run rate and agreed upon number of weeks, as
referred to in Section 3.2 hereof, taking into consideration the
Supplier's Products manufacturing lead time as well as the unique
component purchasing lead time, all as stated in Attachments A and B
hereof. The Target Products Total Stock shall be jointly monitored and
may be revised by agreement of the Parties in writing as fluctuations
in the run rate so require and Attachment A updated accordingly. The
Forecasts shall be used by the Supplier for planning purposes only, and
Nortel Networks shall not be obligated to purchase any Products covered
by Forecasts and Blanket Purchase Orders issued by Nortel Networks
except as expressly set forth in the immediately following paragraph.
2.3 Nortel Networks' obligation to purchase Products under this Agreement
or otherwise shall be limited to the purchase of the Target Products
Total Stock as shown in Attachment A as revised from time to time in
accordance with Section 2.2 hereof as well as for associated quantities
of unique components inside of the lead times specified in Attachment
B.
2.4 If the Target Finished Goods is inactive for more than ninety (90)
days, the Parties shall negotiate towards reaching a mutually
acceptable agreement in respect of the disposition of the Target
Products Total Stock or portion thereof.
2.5 It is acknowledged by the Parties that although Products have been
included in Attachment A, any such Products may, from time to time at
Nortel Networks' option, be purchased by Nortel Networks otherwise than
pursuant to the Demand-Pull Program and in such event, Nortel Networks
will issue Purchase Orders for its requirements for such Products.
3. THE SUPPLIER'S RESPONSIBILITIES
3.1 Supplier shall manufacture the Target Products Total Stock in
accordance with the run rate as set forth in Attachment A which may be
revised as provided hereunder but shall only deliver Products per
latest written instruction from Nortel Networks.
3.2 Supplier shall maintain Target FG and Target WIP quantities
representing a maximum of four (4) and eight (8) weeks, respectively,
of the run rate set forth in Attachment A which may be revised as
provided hereunder.
3.3 Supplier's manufacturing operations and processes shall be established
and maintained throughout the Term so as to ensure that Supplier's
manufacturing capacity may be increased from the then applicable Target
Product Total Stock, by [*] percent ([*]%) within one (1) month, and
by [*] percent ([*]%) within two (2) months from Nortel Networks'
written notice to Supplier that the applicable Target Product Total
Stock is increased.
3.4 Products ordered pursuant to the Demand-Pull Program shall be delivered
FCA Delivery Location, within twenty-four (24) hours from Nortel
Networks' Release(s) communicated to Supplier via facsimile.
3.5 Supplier shall provide to Nortel Networks' designated Purchasing
Department representative a weekly report of Supplier's Actual Products
Total Stock status.
CONFIDENTIAL
4. CANCELLATION OF THE DEMAND-PULL PROGRAM
4.1 Nortel Networks may terminate the Demand-Pull Program in whole or in
part by means of a written notice to that effect, forwarded to Supplier
at least thirty (30) days in advance. Should the Demand-Pull Program be
terminated, the applicable Blanket Purchase Order will be closed after
disposition of the Target Product Total Stock in accordance with this
Section 4. Should the Demand-Pull Program be terminated the applicable
delivery lead time to the Product affected by the termination will be
agreed upon by the Parties but shall in no event exceed two (2) weeks
ARO.
4.2 Nortel Networks' obligation to purchase under this Agreement shall be
that stated in Section 2.3 hereof.
4.3 Nortel Networks' obligation to purchase under this Agreement shall be
reduced by the amount of Products that can be purchased by Purchase
Orders or that may be purchased by other customers of Supplier. In
addition, Supplier shall use all reasonable endeavors to minimize any
such costs by, inter alia, returning components to suppliers or
reducing cancellation costs to suppliers, and such savings will be
passed on to Nortel Networks.
Page 2
CONFIDENTIAL
ATTACHMENT A
WEEK: ________
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RUN TARGET TARGET ACTUAL ACTUAL LEAD
CPC NO. DESCRIPTION RATE FG STK WIP FG STK WIP TIME
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NORTEL NETWORKS ______________________________
APPROVAL:
DATE:_____________
ADTRON APPROVAL: ______________________________
DATE:___________________
Page 3
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ATTACHMENT B
Page 4
CONFIDENTIAL
EXHIBIT D
REPAIR SERVICES RATES, FCA REPAIR LOCATIONS AND TECHNICAL ASSISTANCE RATES
I. TECHNICAL ASSISTANCE RATES
1. TRAINING
a) SEE BELOW.
2. TECHNICAL ASSISTANCE RATES FOR ▇▇▇▇▇ ▇ ▇▇▇ ▇▇▇▇▇ ▇ SUPPORT AS SET
FORTH IN EXHIBIT H WHEN PURCHASED TOGETHER:
a) [*] Dollars ($[*]) per quarter, paid quarterly in advance
plus:
b) For aggregate unit shipments greater than [*] units, [*]%
of Price; or
c) For aggregate unit shipments greater than [*] units, [*]%
of Price; or
d) For aggregate unit shipments greater than [*] units,
[*]% of Price.
3. TECHNICAL ASSISTANCE RATES FOR LEVEL 1 SUPPORT WHEN ONLY LEVEL 1
IS PURCHASED:
a) [*] Dollars ($[*]) per quarter, paid quarterly in advance
plus:
b) For aggregate unit shipments greater than [*] units, [*]%
of Price.
4. TECHNICAL ASSISTANCE RATES FOR LEVEL 2 SUPPORT WHEN ONLY LEVEL 2
IS PURCHASED:
a) [*] Dollars ($[*]) per quarter, paid quarterly in advance
plus:
b) For aggregate unit shipments greater than [*] units,
[*]% of Price; or
c) For aggregate unit shipments greater than [*] units, [*]%
of Price; or
d) For aggregate unit shipments greater than [*] units,
[*]% of Price.
5. POST TERM TECHNICAL ASSISTANCE (COMPRISED OF ▇▇▇▇▇ ▇ ▇▇▇ ▇▇▇▇▇ ▇
▇▇▇▇▇▇▇) ▇▇▇▇:
a) [*] PERCENT OF PRICE OF INSTALLED BASE.
II. FCA REPAIR LOCATIONS
a) Marina del Rey, CA 90292
III. REPAIR SERVICES RATES
1. EMERGENCY REPLACEMENT SERVICE: IN ACCORDANCE WITH SECTION 15.12.
2. VERIFICATION OR CERTIFICATION TEST
Nortel Networks may return a Product for operational verification
tests for a charge to be mutually agreed between the parties.
3. OUT OF WARRANTY REPAIRS
[*] percent ([*]%) of list price; repaired units to be returned
within ten (10) calendar days of receipt.
4. OTHER SERVICES
* CERTAIN CONFIDENTIAL INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Page 5
CONFIDENTIAL
Product Code Description
PRICES
TRAIN-6 Training for up to 6 students. Consists of a three-day session, which takes place $[*] per day, plus
at a location agreed to by Sonoma Systems and the Customer. All equipment travel and out-of-pocket
and space to be provided by the Customer. expenses
TRAIN-12 Training for 7-12 students. Consists of a three-day session, which takes place at $[*] per day, plus
a location agreed to by Sonoma Systems and the Customer. All equipment and travel and out-of-pocket
space to be provided by the Customer. ( Requires Two Instructors). expenses
INSTALL Installation provided by Sonoma Systems. The minimum rate is one day, billed $[*] per day, plus travel
in 1/4 day increments. There is an additional travel time fee of $[*] per hour. and out-of-pocket
expenses
CONSULT Sonoma Systems technical consulting service. The hourly support price for $[*] per hour; Variable
consulting is $[*]/hr. For onsite services, Travel & Expense charges may apply. travel & expenses may
Customer P.O. should include a "not to exceed" value. apply
* CERTAIN CONFIDENTIAL INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
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CONFIDENTIAL
EXHIBIT E
PROCEDURES FOR ORDERS UTILIZING EDI AND TDI
(Rev NAESGA_970321)
PART I
ELECTRONIC DATA INTERCHANGE ("EDI") TRANSMISSION
This Part I of Exhibit E contemplates EDI transmissions of information and
Purchase Orders, Blanket Purchase Orders, Transaction Set 850 Releases or
EDIFACT 2.0 P.O. Releases (collectively, in this Exhibit E, "Orders"),
acknowledgments and invoices. The EDI transactions shall be governed by the
Agreement, as modified by this Part I of Exhibit E. This Part I of Exhibit E
shall not apply to Orders delivered solely in hard copy document form.
EDI transactions shall be made through a third-party computer network with
which the Nortel Networks Companies and Supplier have a services agreement
("Network"). EDI transactions shall be made in accordance with the version of
either 1) the American National Standards Institute ("ANSI") Business Data
Interchange Standards ANSI X12, or 2) Electronic Data Interchange for
Administration, Commerce and Transportation Issue No. 2.0 ("EDIFACT"), which
each Nortel Networks Company then utilizes, inclusive of transaction sets or
comparable EDIFACT electronic messages, data dictionary, data elements and
transmission control. Each party shall be responsible for its respective costs
incurred in sending and receiving EDI transmissions.
Supplier shall access at least once on each business day the Network to
determine whether it has received any Orders (ANSI X12, Transaction Set 850 or
EDIFACT 2.0 ORDERS). A functional Acknowledgment of Receipt of Transmission
(ANSI X12, Transaction Set 997) or an EDIFACT functional Acknowledgment Receipt
of P.O. Message shall be transmitted immediately upon receipt of an EDI Order.
A full Transaction Acknowledgment (ANSI X12, Transaction Set 855 or EDIFACT 2.0
ORDSP) shall be transmitted by Supplier within two (2) Business Days after
transmittal of the functional Acknowledgment of Receipt of Transmission. Each
Order shall contain and each full Transaction Acknowledgment shall confirm the
price, quantity, Product description by part number, FCA Delivery Location,
location to which the invoice shall be rendered for payment, method of
shipment, Delivery Date.
To reschedule, cancel or otherwise change an Order, a Nortel Networks Company
shall transmit a Purchase Order Change (ANSI X12, Transaction Set 860 or
EDIFACT 2.0 ORDCHG) and Supplier shall transmit a Purchase Order Change
Acknowledgment (ANSI X12, Transaction Set 865 or EDIFACT 2.0 ORDSP) to the
appropriate Nortel Networks Company within two (2) Business Days after receipt
by Supplier of the Purchase Order Change.
Any forecast information shall be sent using ANSI X12, Transaction Set 830 with
a quantity status code of "D" shown in the applicable time period field or
EDIFACT 2.0 DELFOR with a delivery plan status indicator of 4. A Transaction
Set 830 Release (ANSI X12, Transaction Set 830 with a quantity status code of
"C" shown in the applicable time period field on such Transaction Set) or
EDIFACT 2.0 DELFOR with a delivery plan status indicator of 1 shall be
transmitted by a Nortel Networks Company to confirm a Delivery Date for
specific quantities of Products covered by a Blanket Purchase Order, where that
Nortel Networks Company requires Supplier to send an Advanced Shipment Notice
(ANSI X12, Transaction Set 856 or EDIFACT 2.0 DESADV) prior to shipment. Upon
receipt of such Transaction Set 830 Release or EDIFACT 2.0 DELFOR, Supplier
shall transmit to the Nortel Networks Company such Advanced Shipment Notice not
less than the number of days agreed upon between the FCA Delivery Location and
Supplier prior to shipment of the quantity of Products covered by such
Transaction Set 830 Release or EDIFACT 2.0 DELFOR.
Each Nortel Networks Company ordering under this Agreement shall access the
Network at least once on each Business Day to determine whether it has received
any "Invoices" (ANSI X12, Transaction Set 810 or EDIFACT 2.0 INVOIC). A
functional Acknowledgment of Receipt of Transmission (ANSI X12, Transaction Set
997 or comparable EDIFACT 2.0 electronic message) shall be transmitted
immediately upon receipt of an Invoice.
A Nortel Networks Company shall not have any liability to Supplier for Orders
or Invoices erroneously transmitted to or received by Supplier due to the
malfunction of or a defect in the Network or other causes beyond a Nortel
Networks Company's reasonable control. If Supplier receives a distorted EDI
transmission, Supplier shall immediately contact the Network to reject the
distorted transmission and request that such transmission be resent. If
Supplier receives an Order by EDI transmission stating a quantity and/or price
significantly higher or lower than the typical quantity and/or Price shown on
Orders issued by that Nortel Networks Company ordering location, Supplier shall
immediately contact such ordering location to confirm the accuracy of the
electronically transmitted Order.
CONFIDENTIAL
Each Party shall adopt as its signature an electronic identification consisting
of symbol(s) or code(s) which shall be affixed to or contained in each document
transmitted by such Party ("Signatures"). Each Party agrees that its Signature
shall be sufficient to verify that such Party originated and authorized such
document. Each Party shall use reasonable efforts to not disclose the Signature
of the other Party to any unauthorized third party.
Any document properly transmitted pursuant to this Part I of Exhibit E shall be
deemed to be a "writing" or "in writing", and any such document when
containing, or to which there is affixed, a Signature ("Signed Documents")
shall be deemed for all purposes (a) to have been duly authorized and executed
and (b) to constitute an "original" when printed from electronic files or
records established and maintained in the normal course of business. The
Parties agree not to contest the validity or enforceability of Signed Documents
under the provisions of any applicable law relating to whether certain
agreements are to be in writing or signed by the Party to be bound thereby.
Signed Documents, if introduced as evidence on paper in any judicial,
arbitration, mediation or administrative proceedings, shall be admissible as
between the Parties to the same extent and under the same conditions as other
business records originated and maintained in documentary form.
PART II
TECHNICAL DATA INTERCHANGE ("TDI") TRANSMISSION
This Part II of Exhibit E contemplates the electronic transmission of various
types of data files, including but not limited to engineering and material
specifications, drawings, computer-aided designs ("CADs"), models, plot and
flat files ("Technical Data Interchange" or "TDI"). The TDI transmissions
between each Nortel Networks Company and Supplier shall be governed by the
Agreement and this Part II of Exhibit E.
TDI transmissions shall be made through a third-party computer network with
which each of the Nortel Networks Companies and Supplier have a services
agreement ("Network"). Each Party shall be responsible for its respective costs
incurred in sending and receiving TDI transmissions.
Supplier shall access the Network at least once on each Business Day to
determine whether it has received any TDI transmissions.
Supplier acknowledges and agrees that a Nortel Networks Company shall not have
any liability for TDI transmissions erroneously transmitted to or received by
Supplier due to a malfunction of or a defect in the Network or other causes
beyond a Nortel Networks Company's reasonable control. If Supplier receives a
distorted TDI transmission, Supplier shall immediately contact the Network to
reject the distorted transmission and request that such transmission be resent.
Supplier shall comply with such security precautions and rules as may be
initiated by the Network to protect TDI transmissions from unauthorized access.
Supplier shall treat each TDI transmission as confidential information under
the applicable provisions of the Agreement.
Each Party shall adopt as its signature an electronic identification consisting
of symbol(s) or code(s) which shall be affixed to or contained in each document
transmitted by such Party ("Signature"). Each Party agrees that its Signature
shall be sufficient to verify that such Party originated such document. Each
Party shall use reasonable efforts to not disclose the Signature of the other
Party to any unauthorized third party.
Page 2
CONFIDENTIAL
EXHIBIT F
MONTHLY REPORTS
1. Supplier will, upon Nortel's request, provide monthly reports in the
following areas:
a) Repair and Return;
b) Baseline Report;
c) General Business.
2. Supplier shall provide a Unit Failure Analysis report on all field
returned Products and a Component Failure Analysis report on a monthly
basis to Nortel Networks' Repair Manager, to Nortel Networks' Quality
Manager and to Nortel Networks' Product Brand Manager. This report which
will be issued no later than three (3) Business Days after the start of
every month shall contain the following information:
a) The number of Products delivered to Nortel Networks (on a per PEC
level) in previous month.
b) The number of Products returned to Supplier (on a per PEC level)
in previous month.
c) The number of Products delivered to Nortel Networks (on a per PEC
level) year to date.
d) The number of Products returned to Supplier (on a per PEC level)
year to date.
e) The number of Products delivered to Nortel Networks (on a per PEC
level) to date.
f) The number of Products returned to Supplier (on a per PEC level)
to date.
g) Number of replacement devices of current month per PEC code.
h) Number of replacement devices cumulative per PEC code.
i) Post Repair Information on a per unit basis returned to Supplier
for repair under the "like-for-like" program for the previous
month to include the following information:
- Symptoms of replacement devices per unit;
- Cumulative In-service time (in months) per PEC code;
- Annualized replacement rate per PEC code.
j) Trend chart in time of replacement rate value (RpR)
k) Actual MTBF measurement. Actual annualized MTBF will be calculated
from the cumulative replacement rate recorded monthly. Based on
results, additional requirements can be determined upon agreement
of both Parties.
l) On Time service level for 1) Repair and Return 2) Retrofit 3) FCFA
4) RMA.
For all occurrences of Product failure in the field, analysis results,
corrective actions and implementation plan have to be included in the
monthly report.
3. From the date the Products will have successfully passed the Acceptance
Program in accordance with Section 4 of the Agreement, Supplier shall
provide to Nortel Networks' Repair Manager, to Nortel Networks' Quality
Manager and to Nortel Networks' Product Brand Manager a monthly "Minimum
Field Baseline" report indicating the minimum applicable release level
(number) for the in-service operation of the Products and a "New Product
Shipped Baseline". The reports shall provide the details of specific
Product releases for each applicable Software load. The reports shall
contain aforementioned information for all current and previous releases
of the Products, and clearly indicate for both Hardware and Software:
a) backward and forward compatibility;
b) upgradability from any release to any other release;
c) the current Product releases.
4. From the date the Products will have successfully passed the Acceptance
Program in accordance with Section 4 of the Agreement, Supplier shall
provide to Nortel Networks' Product Brand Manager a monthly "General
Business" report which includes the following information:
a) Number of Products (on a per PEC level) delivered to Nortel
Networks in the previous month.
b) Total business in dollars on a per PEC level delivered to Nortel
Networks in the previous month.
c) Number of Products (on a per PEC level) delivered year to date to
Nortel Networks.
d) Total business in dollars on a per PEC level delivered year to
date to Nortel Networks.
e) Number of Products (on a per PEC level) delivered to date to
Nortel Networks.
f) Total business in dollars on a per PEC level delivered to date to
Nortel Networks.
g) Total number of shipments that were missed or delivered short by
Supplier in the previous month.
h) Price in effect on a per PEC level in the previous and current
months.
i) Prices paid for Nortel Networks proprietary components in the last
month.
j) Total number of PRS and CSR raised in the previous month against
the Products and a summary of each problem.
k) Total number of calls received from the Nortel Networks Customer
Service center in the previous month.
5. In addition to the above, Nortel Networks may, from time to time, request
that Supplier provides detailed Unit Failure Analysis and Component
Failure Analysis reports.
CONFIDENTIAL
EXHIBIT G
CHANGE NOTIFICATION
(Example)
Page 1 of 2
--------------------------------------------------------------------------------
1. SUPPLIER INFORMATION: |2. PRODUCT CHANGE NOTICE:
| 1997xxxx
| ISSUE: 01
------------------------------------------------|-------------------------------
3. ISSUE DATE: |4. PRODUCT IDENTIFICATION:
| MAJOR SYSTEM:
| SUB SYSTEM :
| HWARE: ? FWARE: ? SWARE: ? PLUGIN: ?
---------------------|----------------------------------------------------------
5. NEW PROD RLSE |7. NEW CLEI CODE |6. OLD PROD RLSE |8. OLD CLEI CODE
NTxxxxxx tbd | tbd | NTxxxxxx xx | xxxxxxxxx
---------------------|-----------------|--------------------|-------------------
9. ASSOCIATED PRODUCTS OR CHANGES AFFECTED:
--------------------------------------------------------------------------------
10. DRAWING NUMBER: |11. CHANGE CLASSIFICATION:
ADxxxxxx | A/AC/B.......
----------------------------------------------|---------------------------------
12. CLASSIFICATION SUBSTANTIATION:
--------------------------------------------------------------------------------
13. REASON FOR CHANGE:
--------------------------------------------------------------------------------
14. DESCRIPTION OF CHANGE:
VERIFICATION PROCEDURES:
BACKOUT PROCEDURES:
--------------------------------------------------------------------------------
15. EFFECT OF CHANGE:
Enhanced features and easier installability.
SAFETY HAZARD: ? FIRE HAZARD : ? SRVC AFFCTG: ? TRANS AFFCTG: ?
MNTNCE AFFCTG: ? RELIA AFFCTG: ? POWR AFFCTG: ? TRAF AFFCTG: ?
--------------------------------------------------------------------------------
16. MATERIAL AFFECTED:
--------------------------------------------------------------------------------
17. DOCUMENTATION AFFECTED:
--------------------------------------------------------------------------------
CONFIDENTIAL
Page 2 of 2
--------------------------------------------------------------------------------
18. IMPLEMENTATION DATE: |19. CHANGE COMPLETION DATE:
MM/DD/YY | N/A
--------------------------------------------------------------------------------
20. MODIFICATION LOCATION:
N/A
TRIALED: N (Field Lab Na)
--------------------------------------------------------------------------------
21. INSTALLATION HOURS AND MATERIAL COST:
HOURS: N/A
COST : N/A
--------------------------------------------------------------------------------
22. LOCATION AND QUANTITY OF EQUIPMENT:
N/A
--------------------------------------------------------------------------------
23. ATTACHMENTS:
None
--------------------------------------------------------------------------------
24. COMMENTS:
Page 2
CONFIDENTIAL
EXHIBIT H
TECHNICAL ASSISTANCE
I. TECHNICAL ASSISTANCE BY SUPPLIER/NORTEL NETWORKS
1. It shall be Nortel Networks' responsibility and cost if Nortel Networks
elects to provide `first line' (Level 1) technical assistance and support
to its customers. However, Nortel Networks may purchase Level 1 Support
for its customers from Supplier at the prices set forth in Exhibit D.
Level 1 Support shall consist of the following:
LEVEL 1 SUPPORT:
a) Telephone Service Desk
b) On site support
c) Corrective action and logging
d) Product alarm knowledge
e) Escalate and report problems
f) Communication junction to allow Supplier access to customers' sites
g) Log and track problems on Nortel Networks CSR database
h) Isolate subsystem faults
i) Product temporary system solutions
j) Software upgrade loads distribution to customers
k) Local spares holding
l) Manage return of defective units to Supplier
m) Telephone Technical Support in accordance with Section III,
Paragraph 5(a) of this Exhibit.
I. LEVEL 2 SUPPORT
If requested by Nortel Networks, Supplier shall provide, to Nortel
Networks and to Nortel Networks' customers, twenty-four (24) hours a
day, seven (7) days a week, "Second line" (Level 2) technical
assistance which will include the services listed below. Nortel
Networks may purchase Level 2 Support from Supplier at the price set
forth in Exhibit D.
LEVEL 2 SUPPORT:
a) Provide assistance at the request of Nortel Networks
b) Provide Supplier technical support contacts (24 hours a day in
accordance with Section III, Paragraph 5(b) of this Exhibit
c) Log and track problems using Nortel Networks' PRS system
d) Perform in-house simulation and testing
e) Provide remote modem access to Nortel Networks' Technical Service
center
f) Deliver Software upgrades and Software builds to Nortel Networks'
distribution center
g) Perform escalation and reporting to Nortel Networks
h) Provide Emergency Site Support (at customer/Nortel Networks site)
III. OTHER TECHNICAL ASSISTANCE BY SUPPLIER
1. Supplier shall at no cost to Nortel Networks, provide Product training
information and Documentation During the Term of the Agreement,
Supplier shall provide to Nortel Networks, at no charge to Nortel
Networks, provided that such training is held at Nortel Networks'
facility, four (4) three (3) day training programs for no more than six
(6) Nortel Networks technicians per session and training documentation
on Products such that Nortel Networks' personnel shall be enabled to
train other Nortel Networks personnel and customers. Supplier warrants
and shall justify to Nortel Networks that personnel assigned to do the
training is qualified to do so. Trainees travel, accommodation, and per
diem expenses will be covered by Nortel Networks.
CONFIDENTIAL
2. As Nortel Networks accepts additional Products under this Agreement,
Supplier shall provide to Nortel Networks' personnel, at no charge to
Nortel Networks, and at times and places designated by Supplier, training
and training documentation on such additional Products such that Nortel
Networks' personnel shall be able to train other Nortel Networks
personnel and customers.
3. Any additional training which Nortel Networks may require from Supplier
for its own benefit or for the benefit of its customers shall be
requested by Nortel Networks, and carried out by Supplier, at times and
places and in accordance with prices as agreed upon between Nortel
Networks and Supplier at the time such training is requested by Nortel
Networks.
4. Supplier shall provide to the designated personnel of Nortel Networks the
technical assistance set out in this Exhibit H in respect of each Product
manufactured and supplied by Supplier
a) at prices set forth in Exhibit D for the Term;
b) after the Term, the technical assistance shall be subject to the
provisions of Section 16 [CONTINUING AVAILABILITY OF REPAIR
SERVICES] of this Agreement and shall be at the prices set forth
in Exhibit D.
5. Telephone access to qualified Supplier's technical personnel shall be
supplied in accordance with the following structure:
a) NON-URGENT TECHNICAL SUPPORT (AT NO CHARGE DURING THE TERM): Pager
service will be available Monday to Friday between the hours of
8:00 a.m. and 8:00 p.m. EST (The waiting period for qualified
technical assistance shall not exceed thirty (30) minutes). At all
other times, voice-mail service shall be available at the same
number. The telephone number to reach Supplier's non-urgent
technical support personnel at all times will be provided by
Supplier.
b) URGENT TECHNICAL SUPPORT (SUPPLIED AS PART OF LEVEL 2 SUPPORT):
Pager service will be available twenty-four (24) hours a day,
seven (7) days a week. The telephone number to reach Supplier's
emergency support personnel at all times will be provided by
Supplier. The waiting period for qualified technical assistance
shall not exceed twenty (20) minutes. Supplier's technical
assistance personnel shall be equipped with mobile or cellular
phones at all times.
Supplier shall advise Nortel Networks of any telephone number change for
this service at least thirty (30) calendar days prior to the change.
6. During the Term, Supplier shall provide to Nortel Networks at no charge
the following technical assistance ("Level 3 Support) which shall consist
of the following services:
LEVEL 3 SUPPORT:
a) Isolate subsystem and design faults (in-house)
b) Perform Root Cause Analysis
c) Provide Spare Buffer
d) Maintain Emergency Spares holding (at Supplier's premises)
e) Update Engineering Changes (ECs) on PAS
f) Provide design authority support interfaces
g) Analyze and resolve design problems (Hardware and Software)
h) Prepare patches and modifications
i) Incorporate patches into new builds, test perform sanity checks
and deliver the builds and Hardware to Nortel Networks'
distribution center
j) Provide Product temporary solutions
k) In-house simulation
l) Database problem solution
m) Third party product support
n)
7. Notwithstanding any provision set forth in this Exhibit H and/or the
Agreement, Supplier will provide on-site support and assistance at no
cost to Nortel Networks in the following cases:
a) Where Nortel Networks is unable to resolve a problem through
normal maintenance activities and technical support is provided
remotely by Supplier.
b) Where Nortel Networks is able to resolve a problem but cannot
determine the root cause of the problem.
c) Where a problem with the Product leads a customer to specifically
request technical presence.
CONFIDENTIAL
d) Where a problem with the Product exists in the field and
Supplier's presence is requested by Nortel Networks Senior
Management.
However, Nortel Networks will reimburse Supplier for its actual and
reasonable expenses according to the technical assistance rates as set
forth in Exhibit D in cases where the problem which initiated the
requirement for the on-site support is attributed to reasons that are not
related to a fault or deficiency in the Products.
8. Any other technical support which Supplier shall provide to Nortel
Networks or its customers shall be pursuant to a written request from
Nortel Networks' designated personnel, or such other individual
designated, from time to time, by Nortel Networks. Such support shall be
at prices set forth in Exhibit D and on terms and conditions agreed upon
by the Parties.
9. Technical assistance support will be provided remotely to Nortel Networks
and/or to the customer in conjunction with Nortel Networks, but not by
Supplier alone (unless authorized in writing to do so by Nortel
Networks).
10. Supplier will provide Nortel Networks with a template of required
information to be supplied by Nortel Networks when referring a problem
for resolution.
11. Supplier will document all known problems and deficiency (service reports
[SR] referred by Nortel Networks and discovered by development) with the
Products in Nortel Networks' PRS database.
12. Supplier will provide Pager Response Time and Mobilization based on the
Problem Classification as prescribed in the following table.
==================================================================================================
PROBLEM CLASSIFICATION* PAGER RESPONSE TIME MOBILIZATION
--------------------------------------------------------------------------------------------------
E1 & E2 20 minutes First available flight
--------------------------------------------------------------------------------------------------
E3 & E4 N/A Next working day
--------------------------------------------------------------------------------------------------
Non service affecting N/A Scheduled
==================================================================================================
*Problem Classifications are as defined below:
The turnaround times for response and closure of SRs are summarized
below.
--------------------------------------------------------------------------------------------------
SR PRIORITY SR RESPONSE SR CLOSURE
--------------------------------------------------------------------------------------------------
E1/E2 WORK UNTIL CLOSED WORK UNTIL CLOSED
--------------------------------------------------------------------------------------------------
E3/E4 30 CALENDAR DAYS 45 CALENDAR DAYS
--------------------------------------------------------------------------------------------------
MJ 14 CALENDAR DAYS 30 CALENDAR DAYS
--------------------------------------------------------------------------------------------------
MN 42 CALENDAR DAYS 180 CALENDAR DAYS
--------------------------------------------------------------------------------------------------
The progress of the SR resolution is continually updated in the CSDS
database. Information concerning the SR is exchanged between the
Technical Services representative and the customer until an acceptable
solution is achieved.
13. Supplier will provide support consistent with the Problem Classification
Definitions as defined below. Target resolution date is from the date the
PRS is referred to Supplier.
14. Problem Classification:
E1 EMERGENCY OUTAGE/SYSTEM FAIL
- Resolution Objective = Immediate and continuous
(on a 24-hour-a-day basis)
- Escalation = Technical Support Manager
(1 hour)
Technical Support Director
(24 hours)
- Updates to Nortel Networks = Daily (or as agreed with customer)
- Written report at point of closure to ▇▇
▇▇ POTENTIAL TRAFFIC DEGRADATION OR OUTAGE
- Resolution Objective = Immediate and continuous
- Escalation = Technical Support Manager
CONFIDENTIAL
(1 hour)
Technical Support Director
(24 hours)
- Updates to Nortel Networks = Daily (or as agreed with customer)
- Written report at point of closure to ▇▇
▇▇ ▇▇ FOLLOW-UP (OPENED INTERNALLY)
- Target Resolution = 14 calendar days
- Updates to Nortel Networks = weekly
▇▇ ▇▇ FOLLOW-UP (OPENED INTERNALLY)
- Target Resolution = 14 calendar days
- Updates to Nortel Networks = weekly
MJ MAJOR-SERIOUS SERVICE AFFECTING INCIDENT OR OPERATIONAL IMPACT
- Immediate Objective = Fix/workaround within 4 hours
- Escalation = Technical Support Manager
(4 hours)
Technical Support Director
(24 hours)
- Target Resolution = 30 calendar days
- Updates to Nortel Networks = weekly
MN MINOR NON-SERVICE AFFECTING QUERY OR SERVICE REQUEST
- Procedural Deficiencies
- Documentation Flaws
- Operational Product Improvement
13. The following will be the PRIORITY LEVEL DEFINITIONS.
E1 EMERGENCY OUTAGE/SYSTEM FAIL
- System or Major System Inoperative
- Major Loss of Service
- (Escalation into Nortel Networks and customer management)
E2 POTENTIAL TRAFFIC DEGRADATION OR OUTAGE
- Potential/Partial Loss of Service
- Management System Down/Unavailable
- Loss of Redundancy/Redundant System
▇▇ ▇▇ FOLLOW-UP (NOT RAISED BY CUSTOMER)
- An E3 is opened after closure of an E1
- Root Cause Analysis (RCA) performed
▇▇ ▇▇ FOLLOW-UP (NOT RAISED BY CUSTOMER)
- An E4 is opened after closure of an E2
- Root Cause Analysis (RCA) performed
MJ MAJOR-SERIOUS SERVICE AFFECTING INCIDENT OR OPERATIONAL IMPACT
- Traffic errors
- Hardware or Software lockups/unusable
- Any fault that prevents traffic from being put into service
MN MINOR OPERATIONAL IMPACT
- Procedural Deficiencies
- Documentation Flaws
- Operational Product Improvement.
CONFIDENTIAL
EXHIBIT I
RUS
DEBARMENT CERTIFICATE
S A M P L E
--------------------------------------------------------------------------------
CERTIFICATION REGARDING DEBARMENT, SUSPENSION, INELIGIBILITY AND VOLUNTARY
EXCLUSION - LOWER TIER COVERED TRANSACTIONS
--------------------------------------------------------------------------------
This certification is required by the regulations implementing Executive Order
12549, Debarment and Suspension, 7 CFR Part 3017, Section 3017.510,
Participants' responsibilities. The regulations were published as Part IV of
the January 30, 1989, FEDERAL REGISTER (pages 4722-4733).
(BEFORE COMPLETING CERTIFICATION, READ INSTRUCTIONS ON REVERSE)
(1) The prospective lower tier participant certifies, by submission of this
proposal, that neither it nor its principals is presently debarred,
suspended, proposed for debarment, declared ineligible, or voluntarily
excluded from participation in this transaction by any Federal
department or agency.
(2) Where the prospective lower tier participant is unable to certify to
any of the statements in this certification, such prospective
participant shall attach an explanation to this proposal.
________________________________________________________________________________
Organization Name PR/Award Number or Project Name
________________________________________________________________________________
Name and Title of Authorized Representative
________________________________________________________________________________
Signature Date
________________________________________________________________________________
CONFIDENTIAL
INSTRUCTIONS FOR CERTIFICATION
1. By signing and submitting this form, the prospective lower tier
participant is providing the certification set out on the reverse side
in accordance with these instructions.
2. The certification in this clause is a material representation of fact
upon which reliance was placed when this transaction was entered into.
If it is later determined that the prospective lower tier participant
knowingly rendered an erroneous certification, in addition to other
remedies available to the Federal Government, the department or agency
with which this transaction originated may pursue available remedies,
including suspension and/or debarment.
3. The prospective lower tier participant shall provide immediate written
notice to the person to which this proposal is submitted if at any time
the prospective lower tier participant learns that its certification
was erroneous when submitted or has become erroneous by reason of
changed circumstances.
4. The terms "covered transaction", "debarred", "suspended", "ineligible",
"lower tier covered transaction", "participant", "person", "primary
covered transaction", "principal", "proposal", and "voluntarily
excluded", as used in this clause, have the meanings set out in the
Definitions and Coverage sections of rules implementing Executive Order
12549. You may contact the person to which this proposal is submitted
for assistance in obtaining a copy of those regulations.
5. The prospective lower tier participant agrees by submitting this form
that, should the proposed covered transaction be entered into, it shall
not knowingly enter into any lower tier covered transaction with a
person who is debarred, suspended, declared ineligible, or voluntarily
excluded from participation in this covered transaction, unless
authorized by the department or agency with which this transaction
originated.
6. The prospective lower tier participant further agrees by submitting
this form that it will include this clause titled "Certification
Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion
- Lower Tier Covered Transactions", without modification, in all lower
tier covered transactions and in all solicitations for lower tier
covered transactions.
7. A participant in a covered transaction may rely upon a certification of
a prospective participant in a lower tier covered transaction that it
is not debarred, suspended, ineligible, or voluntarily excluded from
the covered transaction, unless it knows that the certification is
erroneous. A participant may decide the method and frequency by which
it determines the eligibility of its principals. Each participant may,
but is not required to, check the Non-procurement List.
8. Nothing contained in the foregoing shall be construed to require
establishment of a system of records in order to render in good faith
the certification required by this clause. The knowledge and
information of a participant is not required to exceed that which is
normally possessed by a prudent person in the ordinary course of
business dealings.
9. Except for transactions authorized under paragraph 5 of these
instructions, if a participant in a covered transaction knowingly
enters into a lower tier covered transaction with a person who is
suspended, debarred, ineligible, or voluntarily excluded from
participation in this transaction, in addition to other remedies
available to the Federal Government, the department or agency with
which this transaction originated may pursue available remedies,
including suspension and/or debarment.
CONFIDENTIAL
EXHIBIT J
INTENTIONALLY DELETED
CONFIDENTIAL
EXHIBIT K
MARKETING SUPPORT
Nortel Networks may, at its option, request Supplier to provide the following
marketing support at no cost:
1. Supplier will assist Nortel Networks in providing point-by-point
responses to RFQs (Request for Quotations) and RFIs (Request for
Information) with respect to the Products.
2. Supplier will review and provide feedback on promotional material.
3. Supplier will make available non-operational demo units which have the
same "Look" as the final Products.
4. For a period of six (6) months after the Effective Date, Supplier will,
upon request of Nortel Networks, make joint sales presentations to
potential and existing customers of Nortel Networks.
5. Subject to the confidentiality provisions of the Agreement, Nortel
Networks and Supplier will mutually agree to a jointly-prepared press
release to be delivered over the business wire by Nortel Networks; Such
press release will describe the nature and scope of the Nortel Networks
- Supplier relationship.
6. With Nortel Networks prior written approval and subject to the
confidentiality provisions of the Agreement, Supplier may include a
summary of Nortel Networks information on its website to include Nortel
Networks logo, descriptions of the Nortel Networks-Supplier
relationship, complementary products and customers.
7. Supplier may be invited to participate in Nortel Networks events to
include tradeshows, industry forums, sponsored customer events,
training events and partner pavilions. SONOMA may invite NORTEL to
participate in SONOMA events to include tradeshows, industry forums,
sponsored customer events, training events and partner pavilions.
8. NORTEL NETWORKS agrees to display SONOMA/rebranded product at industry
tradeshows where they have a booth presence and such display is
appropriate.
9. Nortel Networks, with input and assistance from SONOMA, will create
customer collateral and sales tools on any rebranded/resell products,
to include, but not be limited to, datasheets, brochures,
presentations, application notes, white papers and customer profiles.
CONFIDENTIAL
EXHIBIT L
TRADE AGREEMENT - PROCEDURES
1.1 Supplier shall perform all administrative actions required to qualify
Products and maintain qualification for preferential treatment under
the rules of any applicable trade treaty between Canada, USA and
Mexico, and any other applicable trade agreements including, without
limitation, the North American Free Trade Agreement ("NAFTA"). If a
Product qualifies under any one of these agreements, Supplier shall
prepare and distribute an Exporter's Certificate of Origin according to
Sections 1.2 and 1.3 below, whichever applies, and any other documents
required. Supplier shall respond to the relevant trade agreement's
Exporter's Certificate of Origin questionnaires and assist each Nortel
Networks Company in resolving any Product eligibility issues. Supplier
alone shall bear responsibility for all penalties and costs resulting
from the relevant trade agreement's Exporter's Certificate of Origin
subsequently being determined to be invalid.
1.2 If a relevant trade agreement's Exporter's Certificate of Origin is
prepared for each shipment, Supplier shall (a) retain the original
relevant trade agreement's Exporter's Certificate of Origin in
Supplier's files with appropriate backup documentation, (b) attach a
copy of the Exporter's Certificate of Origin to the customs/shipping
documents for the qualifying Product, and (c) ▇▇▇▇ these
customs/shipping documents with the legend: "Copy of the relevant trade
agreement's Exporter's Certificate of Origin attached."
1.3 If a blanket relevant trade agreement's Exporter's Certificate of
Origin is prepared, Supplier shall: (a) retain the original relevant
trade agreement's Exporter's Certificate of Origin in Supplier's files
with appropriate backup documentation, (b) ▇▇▇▇ the customs/shipping
documents for the qualifying Product with the legend: "Copy of blanket
relevant trade agreement's Exporter's Certificate of Origin on file at
Nortel Networks customs offices in ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ (▇▇▇▇▇▇) and in
Tonawanda, NY (USA)," and (c) mail copies of the blanket relevant trade
agreement's Exporter's Certificate of Origin to the following offices:
Canada: USA:
Nortel Networks Corporation Nortel Networks Inc.
Dept. 1560 ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ USA
CONFIDENTIAL
EXHIBIT M
NOTICES
SUPPLIER : Sonoma Systems
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Contracts Manager/Chief Financial
Officer
Facsimile No: ▇▇▇ ▇▇▇ ▇▇▇▇
NORTEL NETWORKS: Nortel Networks Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: Vice-President and Deputy General
Counsel
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
and: Nortel Networks Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
Attention: Senior Manager, OEM Product Management
Facsimile No: (▇▇▇) ▇▇▇ ▇▇▇▇
CONFIDENTIAL
EXHIBIT N
ESCROW TERMS AND CONDITIONS AND
ESCROW AGREEMENT
1. ESCROW TERMS AND CONDITIONS
1.1 To ensure uninterrupted availability of the Hardware and Software and
their ongoing maintenance and support, by March 15, 2000, Nortel
Networks and Supplier shall enter into an escrow agreement ("ESCROW
AGREEMENT") with a mutually agreeable escrow agent ("ESCROW AGENT").
The Escrow Agreement shall be in a form and content reasonably
acceptable to the Parties hereto and shall contain, as a minimum and
without limitation, the terms and conditions set forth in this Article
1 and shall, when executed by all the Parties, be annexed hereto.
1.2 The Escrow Agreement shall provide, inter alia, for the deposit into
escrow with the Escrow Agent, within twenty (20) calendar days of its
execution, for storage at such Escrow Agent's premises, of all the
Hardware Technical Information (as such term is defined in Article
1.12) and all Software Source Code (as such term is defined in Article
1.13) as are available and as are used by Supplier (or its
subcontractors) for the manufacturing of Hardware and the creation of
the Software and as are reasonably acceptable in form and content to
Nortel Networks (the "ESCROW MATERIALS").
1.3 Supplier shall update the Escrow Materials as each new release of
Hardware Technical Information and Software Source Code are created.
Costs for updating and management of the Escrow Materials shall be for
the account of Supplier. Supplier will use due care in ensuring the
completeness and accuracy of the Escrow Materials provided. The Escrow
Agent fee shall be paid by Nortel Networks.
Immediately following the Release Date (as such term is defined in
Article 1.6), at the request of Nortel Networks, Supplier shall either
verify to Nortel Networks that the Escrow Materials is the most recent
version of the Hardware Technical Information and Software Source Code
then being used in Supplier's and its subcontractors' factories in
their day-to-day operations, or promptly furnish to Nortel Networks
such most recent version of the Hardware Technical Information and
Software Source Code.
1.4 Escrow Materials shall remain under seal and unopened unless and until
Nortel Networks is entitled to exercise its rights under the Escrow
Agreement. Supplier shall be entitled to examine the Escrow Materials
at the Escrow Agent's location at any time during normal business
hours.
1.5 Supplier will provide to Nortel Networks, prior to the deposit of the
relevant Escrow Materials pursuant to Article 1.2 above, such technical
assistance, at an agreed upon location, as it reasonably requires to
allow competent technical employee(s) of Nortel Networks to understand
the Escrow Materials and to establish the sufficiency of its content.
All documentation and other material created in the course of such
technical assistance shall form part of Escrow Materials. Nortel
Networks, at its option and expense, may request that the completeness
and accuracy of any Escrow Materials be verified by the Escrow Agent or
another party reasonably acceptable to the Parties. Such verification
may be requested once per Escrow Materials deposit to the Escrow Agent.
Supplier may in its discretion and at its expense designate a
representative to be present at the verification.
1.6 The Escrow Agreement shall provide that the Escrow Agent will release
the Escrow Materials to Nortel Networks on a release date ("RELEASE
DATE") which is five (5) calendar days after the date of Nortel
Networks' written request for the release of the required Escrow
Materials accompanied by a declaration from a senior representative of
Nortel Networks stating the particulars of the reasons for its request
and confirm that copy of such request and declaration have been
delivered to Supplier.
1.7 Subject to the provisions contained in Article 1.8, Supplier hereby
grants to Nortel Networks a [*] worldwide license ("LICENSE") for a
three (3) year period commencing as of the Release Date covering:
(a) the non-exclusive right to use, and to sublicense the use to
one or more subcontractors of, the Patent Rights as described
in Article 1.11; and/or
(b) the non-exclusive right to use and modify Escrow Materials to
manufacture or have manufactured the Products; and/or
(c) the non-exclusive right to use, and to sublicense the use to
one or more subcontractors of, the Escrow Materials to
maintain, support and repair the Hardware and to diagnose and
correct errors in, and to generally support and maintain, the
Software; and
* CERTAIN CONFIDENTIAL INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
CONFIDENTIAL
(d) the right to, directly or indirectly, sell and support the
Products including those modified hereunder.
1.8 A License shall solely be obtained by Nortel Networks hereunder,
(a) subject to the terms and conditions contained in this Article
1, and
(b) upon the occurrence of any one of the Release Conditions
described in Article 1.9 as identified in Nortel Networks'
request pursuant to Article 1.6, and
(c) effective only from the Release Date, giving effect to the
release from escrow of the Escrow Materials, and
(d) solely for the purpose of supplying and supporting Products
to: (i) existing Nortel Networks customers as of the Release
Date and (ii) customers to whom Nortel Networks has offered to
sell the Products in response to an RFP or RFQ prior to the
Release Date.
The aforesaid rights shall include the right to communicate relevant
portion of the Escrow Materials to subcontractors for the purpose of
the exercise of the rights granted to Nortel Networks herein provided,
however, that the recipients of the Escrow Materials be advised by
Nortel Networks at the time, or before such communication, that
proprietary information is being communicated and that such information
is to be kept confidential and not used except as permitted hereunder
and such recipients shall enter into a non-disclosure agreement with
Nortel Networks .
The Parties recognize that Nortel Networks, in the exercise of its
rights hereunder, may make improvements, developments, inventions,
changes or innovations related to Escrow Materials (hereinafter called
"IMPROVEMENTS"). Nortel Networks shall have sole ownership of all
rights in and to the information and intellectual property rights
comprising Improvements.
The Parties acknowledge that Supplier shall have sole ownership of all
rights in and to the information and intellectual property comprising
Escrow Materials.
1.9 The following shall be the release conditions ("RELEASE CONDITIONS") in
order for Nortel Networks to have access to the Escrow Materials and to
exercise the License granted hereunder:
(a) the institution by Supplier of insolvency, receivership or
bankruptcy proceedings or any other material proceedings for
the settlement of its debts, including, without limitation, a
reorganization, a compromise, an arrangement or assignment for
the benefit of its creditors; or the institution of such
proceedings against Supplier, in the event any of the
foregoing has not been settled, terminated or dismissed, as
the case may be, in Supplier's favor within twenty (20)
calendar days after the commencement of any of the foregoing;
or
(b) Supplier's dissolution or ceasing to do business in the normal
course and such event has not been cured, or a plan for the
cure thereof has not been implemented, to the reasonable
satisfaction of Nortel Networks within sixty (60) days of
notice thereof from Nortel Networks; or
(c) if a new owner of Supplier refuses to honor the terms of this
Agreement as it relates to the manufacture, delivery or
support of the Products for Nortel Networks and such event has
not been cured, or a plan for the cure thereof has not been
implemented, to the reasonable satisfaction of Nortel Networks
within sixty (60) days of notice thereof from Nortel Networks;
or
(d) a Change made to the Products in breach of Supplier's
obligations as set forth in Section 5 of the Agreement
(Product and Process Change) and such event has not been
cured, or a plan for the cure thereof has not been
implemented, to the reasonable satisfaction of Nortel Networks
within sixty (60) days of notice thereof from Nortel Networks;
or
(e) Supplier's material failure to comply with the provisions of
Section 6.1.1 of the Agreement (ISO 9001 Certification); or
(f) Supplier's continuing material breach of the terms and
conditions of this Agreement related to Product: (i) delivery,
including without limitation delivery of Product in
conformance with the Specifications, (ii) repair or (iii)
technical assistance and such material breach has not been
cured, or a plan for the cure thereof has not been
implemented, to the reasonable satisfaction of Nortel Networks
within sixty (60) days of notice thereof from Nortel Networks.
1.10 During the period of six (6) months immediately following the Release
Date, Supplier shall make available to Nortel Networks, reasonable
technical assistance to facilitate the exercise of the rights granted
under the License.
CONFIDENTIAL
Supplier shall be paid, in return for such services and visits,
standard fees based on reasonable rates which Supplier establishes from
time to time for such services and visits for the location from which
the assistance is being provided, plus reasonable travel and living
expenses incurred by Supplier personnel for such visits. Such fees
shall be paid to Supplier by Nortel Networks within thirty (30)
calendar days of invoicing therefor.
1.11 The License granted under Articles 1.7 and 1.8 hereof shall include the
worldwide non-exclusive license under the patents and patent rights
(herein collectively called "PATENT RIGHTS") of Supplier related to the
Products, existing as of the Release Date or issued or granted or
acquired during the term of this License; all patent licenses herein
granted shall commence on the Release Date or when letters patent are
issued or granted if subsequent hereto, and provided this License is
not terminated pursuant to this Agreement, shall continue for the
shortest of the entire term of the respective Patent Rights under which
they are granted or are in force, or for that part of such terms for
which Supplier has the right to grant such licenses, or the duration of
the License.
1.12 For the purpose of this Article 1, "HARDWARE TECHNICAL INFORMATION"
means that technical information necessary for the manufacture of
Hardware, including without limitation, all design, technical,
manufacturing information (including manufacturing processes, drawings
and specifications including circuit schematics) of assemblies,
sub-assemblies and parts, sole source and other components and ASICs
(including the part number, name and location of the supplier)
associated test requirements and lists of associated manufacturing
tools and test equipment as well as repair and maintenance
specifications and test procedures, as are used by Supplier for the
manufacturing of Products.
1.13 For the purpose of this Article 1, "SOFTWARE SOURCE CODE" means the
Software items comprised in the Products in source code form including
all subsequent updates and enhancements thereto as follows: (a) one
copy of the source code of said Software items in machine readable and
printed forms, (b) a list of all commercially available development
tools, editors and compilers necessary to make use of source code of
said Software items (including name and location of supplier) and
copies of any of the foregoing items which are proprietary to Supplier,
and (c) the documentation describing the source code of said Software
items which is required to assemble, test, support, customize and
evolve the Products.
1.14 The Parties acknowledge that the Escrow Materials are 'intellectual
property' within the purview of Section 101 (56) of the United States
Bankruptcy Code 11 U.S.C. 101-1330 and that the Escrow Agreement is an
agreement supplementary to this Agreement under Section 365 (n) of such
Code and that both the Escrow Agreement and the Agreement shall be
governed by Section 365 (n) of such Code in the event Supplier applies
for bankruptcy relief.
1.15 The License shall terminate in the event that Nortel Networks breaches
any material term of the License and such breach is not cured, or a
plan implemented for the cure of such breach, to the reasonable
satisfaction of Supplier, within sixty (60) days of receipt of notice
thereof by Nortel Networks.
1.16 The Escrow Agreement shall terminate at the end of the Term.
ESCROW AGREEMENT
A copy of the Escrow Agreement shall be inserted here once it is executed by all
Parties, as stipulated in Section 30 of the Agreement.