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EXHIBIT 10.9
TRANSITIONAL SERVICES AGREEMENT
TRANSITIONAL SERVICES AGREEMENT ("Agreement") made and executed by and between
Nortel Networks Inc. ("Nortel Networks"), a Delaware corporation, with offices
at Northern Telecom Plaza, 000 Xxxxxx Xxx, Xxxxxxxxx, Xxxxxxxxx 00000, and Arris
Interactive L.L.C. ("Arris") a Delaware limited liability company, with offices
at 0000 Xxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, XX 00000, as of the 3rd day of
August, 2001 ("Effective Date").
WHEREAS, pursuant to a reorganization effective as of the Effective Date, Arris,
formerly owned by Nortel Networks L.L.C. and Antec Corporation ("Antec"), is now
owned by Antec and Arris Group, Inc.; and
WHEREAS, Nortel Networks L.L.C. (a subsidiary of Nortel Networks) is a
shareholder of Arris Group, Inc.; and
WHEREAS, in connection with this reorganization, Nortel Networks and Arris have
agreed that Nortel Networks will provide to Arris certain transitional services
as more fully described in this Agreement.
NOW THEREFORE, in consideration of the mutual terms and conditions hereinafter
set forth, the parties agree as follows:
1. Scope of Services.
1.1 Infrastructure Services. In accordance with the terms and conditions
of this Agreement, Nortel Networks will provide to Arris the following
infrastructure services ("Infrastructure Services")
a. To the extent of its legal right to do so, Nortel Networks
grants to Arris a non-exclusive, non-transferable right and
license, commencing on the Effective Date and continuing for
the period specified in Appendix A, to use the Nortel Networks
systems and software tools, ("Nortel Systems") identified in
Appendix A, as such Nortel Systems may be modified and
enhanced during such period; and
b. To the extent of its legal right to do so, Nortel Networks
grants to Arris a non-exclusive, non-transferable right and
sublicense, commencing on the Effective Date and continuing
for the period specified in Appendix A, to use the third party
software, software tools and IT infrastructure ("Third Party
Software") identified in Appendix A, as such Third Party
Software may be modified and enhanced during such period, in a
manner consistent with the requirements of the license
agreements between Nortel Networks and the suppliers of such
Third Party Software.
1.1.1 The parties shall cooperate (and have cooperated prior to the Effective
Date) to seek to obtain any required consents by the suppliers of the
Third Party Software required for Nortel Networks to grant the right
and sublicense under b. above. If any such required consents are not
provided in writing within 30 days following the Effective Date
("Un-consented Third Party Software"), then Arris shall be responsible
for obtaining the right and license to use such Un-consented Third
Party
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Software directly from the suppliers thereof and, notwithstanding any
time periods specified in Appendix A, any right to use such
Un-consented Third Party Software shall cease 30 days following the
Effective Date
1.1.2 Nortel Networks reserves the right to discontinue the use of any Nortel
System or Third Party Software and in such event Arris' right under
this Section 1.1 to use the same shall cease. If Nortel Networks
implements a substitute Nortel System or item of Third Party Software
for the discontinued Nortel System or item of Third Party Software,
Arris may elect to obtain a right to use such substitute Nortel System
or Third Party Software on the same basis, and subject to the same
conditions and limitations, as the original Nortel System or Third
Party Software, as provided above. Nortel Networks will provide the
same advance notice to Arris about the discontinuance of a Nortel
System or item of Third Party Software that it does to internal Nortel
Networks development groups.
1.1.3 In connection with the providing of the Services, Nortel Networks
grants to Arris for the duration of the applicable Services the right
to use certain Nortel Networks "Identifiers". Nortel Networks
Identifiers consist of internet protocol addresses and networks,
including without limitation, DNS domain names, e-mail addresses, world
wide web and http addresses, network names, network addresses (such as
IPv4 and IPv6) and the registrations relating thereto. Title and
ownership of such Identifiers is and shall remain in Nortel Networks.
1.1.4 Title and ownership of the Nortel Systems, and all intellectual
property rights therein, is and shall remain in Nortel Networks. Title
and ownership of the Third Party Software, and all intellectual
property rights therein, is and shall remain in the suppliers of the
Third Party Software. Arris shall not (i) reverse engineer,
disassemble, reverse translate, decompile or decode, or (ii) modify,
enhance, adapt or translate, or (iii) copy, except as required in
connection with use thereof, as described in the applicable
documentation, or one copy for backup, any Nortel Systems or Third
Party Software. In connection with the Nortel Systems and the Third
Party Software, Arris shall provide "first-line" support for its
internal users and shall designate no more than three employees to
interface between Arris' internal users and Nortel Networks in
obtaining higher level support for the Nortel Systems and the Third
Party Software.
1.2 Post-Sales Support Services. In accordance with the terms and
conditions of this Agreement, if ordered by Arris, Nortel Networks will
provide to Arris on a non-exclusive, non-transferable basis for the
period specified in Appendix B the post-sales support services
("Post-Sales Support Services") identified in Appendix B for the
benefit of the customer agreements partially assigned by Nortel
Networks to Arris on the Effective Date under that certain Assignment
and Sale Agreement between Arris and Nortel Networks of even date
herewith.
1.3 Services. The Infrastructure Services and the Post-Sales Support
Services are collectively referred to in this Agreement as "Services."
Arris shall be the exclusive user and beneficiary of the Services to be
provided under this Agreement and no third parties shall be permitted
to obtain, use or access the Services. Arris shall not use the
Infrastructure Services to obtain connectivity with and/or for third
parties (such as TCS) to work on projects in which Nortel Networks has
no interest and/or participation.
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1.4 Ordering Services. All services shall be ordered by Arris by issuance
of purchase orders to Nortel Networks. For Services with a duration of
90 days or less, Arris will issue an initial purchase order of 90 days
duration. For Services with a duration of more than 90 days, Arris will
issue an initial purchase order of 12 months duration. Such initial
purchase orders have been issued by Arris on or prior to the Effective
Date. If Arris wishes to renew the Services covered by a purchase order
for an additional period and such renewal is permitted by this
Agreement, Arris shall issue a renewal purchase order at least 30 days
prior to expiration of the preceding purchase order. Arris purchase
orders shall be of sufficient dollar amount to accommodate high use of
the Services beyond the estimates in Schedule 1.1. Arris shall be
responsible for the payment for Services actually used even if not
covered by a purchase order or within the dollar limits of a purchase
order.
1.5 Transition Team. Notwithstanding any time periods specified in
Appendix A or B, Arris shall use its best efforts to become independent
of Nortel Networks with respect to the Services as soon as commercially
practicable. The parties shall establish transition teams which shall
be responsible for transitioning Arris from the need to use the
Services specified under this Agreement as soon as it is commercially
practicable for Arris to provide such Services itself or to purchase
such Services from third parties. The transition teams shall meet no
less frequently than monthly to review the status of the actions being
taken to transition Arris from the need to purchase Services under this
Agreement and to agree upon additional or revised actions, as
appropriate, to achieve such transition.
2. Services Standards.
2.1 In connection with the provision of Services to Arris, Nortel Networks
will exercise the same measure of care, including data backups and
other contingency procedures, to protect Arris against loss of data or
computer outages as Nortel Networks uses to protect itself from such
occurrences. In no event shall Nortel Networks incur any liability to
Arris as a result of the loss of data or computer outages arising in
connection with the providing of the Services.
2.2 Services will be performed in a professionally skilled manner at a
level consistent with the level at which Nortel Networks performed the
Services for itself prior to the Effective Date.
2.3 The Infrastructure Services shall be provided for use by the same
number of Arris employees who are using such Infrastructure Services on
the day preceding the Effective Date. The Post-Sales Support Services
shall be provided at a level consistent with the level that Nortel
Networks was providing such Services on the day preceding the Effective
Date.
2.4 To the extent that the demand for Services from Arris and from others
and for Nortel Networks own internal requirements exceeds Nortel
Networks capacity to provide such Services, Nortel Networks will
prioritize the providing of Services based on Nortel Networks
reasonable judgment and no liability shall arise based on such
prioritization or based on any other decisions made by Nortel Networks
in connection with the providing of the Services.
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3. Term. The term ("Term") of this Agreement shall commence on the
Effective Date and shall continue until Arris' use of all
Infrastructure Services and Post-Sales Support Services ceases in
accordance with this Agreement unless earlier terminated in accordance
herewith.
Arris may terminate all or any portion of the Services hereunder upon
90 days prior written notice to Nortel Networks.
4. Fees and Payment Terms. The fees ("Fees") payable by Arris to Nortel
Networks for the Services shall be as specified in Appendix A
(including Schedule 1.1) and Appendix X.
Xxxxx shall pay such Fees to Nortel Networks monthly in advance within
30 days of the date of Nortel Networks invoice therefore, except that
the initial payment of such Fees shall be paid by Arris 10 days after
the Effective Date.
In addition to the Fees, Arris shall reimburse Nortel Networks for all
out of pocket expenses incurred by Nortel Networks in performing the
Services, including without limitation, the travel and living expenses,
the cost of establishing required "firewalls" between Arris' network
and Nortel Networks' network or providing Arris partitioned access to
the Nortel Systems and/or the Third Party Software, any additional
license fees or support changes payable to the suppliers of Third Party
Software in connection with Arris' use of the Third Party Software, the
cost of any additional hardware or software required to deliver the
Services and all support costs, whether incurred internally or paid to
third party, to maintain or restore the hardware and software required
to deliver the Services, the Nortel Systems and the Third Party
Software in or to good operating condition.
In addition to the Fees and expenses, Arris shall pay to Nortel
Networks the amount of any tax or other fee which Nortel Networks may
be required to pay because of its performance of this Agreement, except
for any tax assessed on Nortel Networks net income.
The Fixed Asset Price for the Owned Fixed Assets, as described in
Appendix C, plus applicable taxes shall be paid by Arris to Nortel
Networks in eight quarterly installments in advance with the first
quarterly payment being due and payable 10 days after the Effective
Date.
The Leased Equipment Purchase Price for the Leased Equipment, as
described in Appendix C, plus applicable taxes shall be paid by Arris
to Nortel Networks within 60 days following the Effective Date.
The Option 81 System Fee for the Option 81 System, as described in
Appendix C, plus applicable taxes and the Option 11C System Fee for the
Option 11C System, as described in Appendix C, plus applicable taxes
shall be paid by Arris to Nortel Networks on a quarterly basis in
advance for eight quarters with the first payment being due and payable
10 days after the Effective Date, subject to Arris' right to
discontinue use of the Option 81 System and/or the Option 11C System,
as described in Appendix C.
The fees for the rental of the services of the Netherlands Employees
(defined in Appendix C) referred to in Section 10, plus applicable
taxes, shall be paid by Arris to Nortel Networks monthly
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in advance within 30 days of the date of Nortel Networks invoice
therefor, except that the initial payment of such fees shall be paid by
Arris 10 days after the Effective Date.
The legal fees and costs referred to in Section 11 shall be paid to the
applicable law firm or reimbursed by Arris to Nortel Networks within 30
days of the date of delivery to Arris of the applicable law firm
invoice or within 30 days of the date of Nortel Networks invoice
therefor.
Any other amounts due Nortel Networks pursuant to this Agreement,
including without limitation, the Option 81 Decommissioning Charges, if
applicable, or the Option 11C Decommissioning Charges, if applicable,
plus applicable taxes shall be paid by Arris to Nortel Networks within
30 days of the date of Nortel Networks invoice therefore.
In the event that any payment to be made by Arris to Nortel Networks
pursuant to this Agreement is not made timely and in full, the overdue
amount shall bear interest, from the date due until paid in full, at a
rate per annum equal to the lesser of (i) 12% per annum or (ii) the
maximum lawful rate.
5. Confidential Information. The parties acknowledge that during the
course of this Agreement one party may disclose to the other party
Confidential Information. "Confidential Information" shall, for
purposes of this Agreement, be deemed to be all information, materials
and data which one party advises the other party in writing is of such
character, or which a party knows or reasonably should know is
customarily treated as such within the communications industry,
including, solely by way of illustration and not in limitation:
software programs, product ideas and designs; production plans; cost
and pricing information; marketing and sales analyses, plans and data;
financial data; all matters pertaining to personnel, the Nortel Systems
and any associated documentation, the Third Party Software and any
associated documentation and the Identifiers.
The receiving party shall hold secret and not disclose to any
third party any of the Confidential Information of the disclosing party
except as authorized in writing by the disclosing party. The receiving
party shall use the disclosing party's Confidential Information only in
furtherance of this Agreement.
The foregoing shall not apply to any portion of the disclosing party's
Confidential Information which: (i) becomes available to the public
from a source other than the receiving party; (ii) is obtained by the
receiving party without similar restrictions on use or disclosure from
a third person who did not receive it, directly or indirectly, from the
disclosing party; (iii) is documented as being known to the receiving
party prior to its disclosure by the disclosing party; or (iv) is
documented as being independently developed by the receiving party
without reference to the disclosing party's Confidential Information.
The receiving party shall not make or have made or permit to be
made, any copies of the Confidential Information except those copies
which are necessary for the use of the Confidential Information in
furtherance of this Agreement, and all such copies shall include the
same proprietary and confidentiality notices or legends which appear on
the disclosing party's Confidential Information as originally provided
under this Agreement.
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The receiving party shall use the same degree of care as is
used to protect its own confidential information of a similar nature,
but no less than reasonable care, to prevent the unauthorized use,
dissemination or publication of the Confidential Information of the
disclosing party. Title and ownership of the Confidential Information
of the disclosing party is and shall remain in the disclosing party.
Upon the expiration of this Agreement or the earlier request of the
disclosing party, the receiving party shall immediately return or
destroy (and certify such destruction to the disclosing party) the
Confidential Information of the disclosing party, and all copies
thereof.
6. Nortel Systems and Third Party Software Use. Arris shall limit access
to the Nortel Systems and Third Party Software to Arris employees on a
need-to-know basis and shall use the same solely for undertakings
directly applicable to the conduct of Arris' business and shall not
access or attempt to access any other systems, computers or software
not identified in Appendix X. Xxxxx shall strictly follow Nortel
Networks' security rules and procedures for restricting access to
Nortel Networks systems and computers. All user identification numbers
and passwords disclosed to Arris and any information obtained by Arris
as a result of Arris' access and use of Nortel Systems or Third Party
Software shall be deemed to constitute Confidential Information under
Section 5. Nortel Networks and Arris shall cooperate in the
investigation of any unauthorized access to any Nortel Networks systems
or computers.
7. No Warranties or Representations. The Services will be provided on an
"AS IS" and "WHERE IS" basis and Nortel Networks makes no warranty or
representation of any nature with regard to the Services, including but
not limited to, their accuracy, completeness and/or efficacy.
8. Third Party Software. Arris shall abide by all the license terms and
conditions prescribed by each supplier of Third Party Software and
Arris shall indemnify and hold Nortel Networks harmless from any claims
by and liability or damages to any such supplier arising out of Arris'
failure to abide by such terms and conditions in its use of Third Party
Software. The Third Party Software shall constitute Confidential
Information of Nortel Networks.
9. Nortel Systems. The Nortel Systems are provided to Arris under this
Agreement on a nonexclusive, non-transferable license to use basis to
the extent of the authorized usage levels only for the applicable
periods specified in Appendix A. The Nortel Systems shall constitute
Confidential Information of Nortel Networks.
10. Fixed Assets; Communications System; Services Equipment; Nortel Test
Equipment; Rental of Services of Netherlands Employees; and Rental of
Nortel Networks Facilities Space in The Netherlands and Japan. The
purchase by Arris of certain fixed assets, a communications System,
certain Services Equipment, and certain Nortel Test Equipment, the
rental by Arris of the services of certain Nortel Networks Netherlands
employees, and the rental by Arris of certain facility space in The
Netherlands and Japan, all as described in Appendix C, shall be subject
to the additional terms and conditions set forth in Appendix C.
11. Legal Fees Relating to Certain Patent Applications. Prior to the
Effective Date Nortel Networks has pending certain invention
disclosures submitted on or after October 1, 2000 which are to be
assigned to Arris as of the Effective Date pursuant to that certain
Intellectual Property Rights
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Agreement between Arris and Nortel Networks of even date herewith.
Arris agrees to pay or reimburse Nortel Networks for all legal fees and
associated costs invoiced by outside legal counsel with respect to any
patent applications resulting from such invention disclosures.
12. Independent Contractor. Nortel Networks shall perform the Services as
an independent contractor, and nothing contained in this Agreement
shall be construed to create or imply a joint venture, partnership,
principal-agent or employment relationship between the parties. Neither
party shall take any action or permit any action to be taken on its
behalf which purports to be done in the name of or on behalf of the
other party.
Neither party, nor any of its respective employees or agents, shall, in
any sense, be considered employees or agents of the other party, nor
shall either party, its respective employees or agents, be eligible or
entitled to any benefits, perquisites or privileges given or extended
to employees of the other party.
13. Non-Exclusivity of Services. Nothing herein shall be deemed to
preclude Nortel Networks from performing services identical or similar
to the Services for the benefit of itself or any other person.
14. Default. If either party shall be in default of any term or condition
of this Agreement and such default shall continue more than twenty (20)
days after written notice thereof is given to the party in default by
the other party, then the party not in default shall be entitled to
terminate this Agreement and/or pursue cumulative each and every remedy
available at law and in equity, subject to the limitations expressly
provided elsewhere in this Agreement. The failure to object to an act
of default shall not be deemed a waiver of any other act of default.
15. Nortel Networks Furnished Materials. Except as provided in Appendix C,
any materials, software or hardware furnished by Nortel Networks in
connection with this Agreement, with or without charge to Arris, shall
be deemed bailed to Arris, and title and ownership is and shall at all
times remain in Nortel Networks. All such materials, software and
hardware shall be returned to Nortel Networks at Arris' expense and
risk, in the same condition as when furnished, less reasonable wear and
tear, upon the expiration or termination of this Agreement.
16. Limitation on Liability. In no event shall Nortel Networks be liable
to Arris for any claim, damage, injury or loss of any nature arising
out of or related to any Service in excess of the Fee for such Service
for the month in which the claim arose. In no event shall Nortel
Networks be liable to Arris for any claim, damage, injury or loss of
any nature arising out of or related to the fixed assets or the
communications system or the Services Equipment sold to Arris as
described in Appendix C in excess of the price paid by Arris such fixed
assets or communications system or Services Equipment.
In no event shall Nortel Networks be liable to Arris for any claim,
damage, injury or loss of any nature arising out of or related to (a)
the rental to Arris of the services of certain Nortel Networks
Netherlands employees as described in Appendix C; or (b) the occupancy
by certain Arris employees of Nortel Networks work space as described
in Appendix C.
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Except for Arris' indemnities pursuant to Section 8 and Appendix C or
for a breach by either party of its obligations under Section 5 or for
a breach by Arris of its obligations under Section 6 or under the
Software license in Paragraph 6 of Appendix C, neither Nortel Networks
nor Arris shall be liable for any indirect, special or consequential
damages of any nature, for any reason including without limitation,
loss of revenue, loss of profits, loss of use, or loss of opportunity.
Neither party shall be responsible for any delay or failure of
performance under this Agreement due to events or circumstances beyond
a party's control which may not be overcome by due diligence.
17. General.
17.1 This Agreement may be executed in one or more counterparts, each of
which when executed shall be deemed to constitute an original but all
of which when taken together shall constitute one and the same
instrument.
17.2 This Agreement shall be governed by, and interpreted in accordance
with, the laws of the State of Georgia, without regard to the conflict
of law principles thereof.
17.3 The parties hereby irrevocably waive any and all rights to a trial by
jury in any proceeding arising out of or relating to this Agreement.
17.4 This Agreement shall be binding upon and inure to the benefit of the
parties and their respective successors and permitted assigns.
Notwithstanding the foregoing, the parties agree that they shall not
assign this Agreement or any of their rights, duties or obligations
hereunder without the prior written consent of the other party, except
that an assignment to an affiliate of a party shall require prior
notice to the other party, but not consent.
17.5 Except as otherwise provided herein, each party hereto will bear all
expenses incurred by it in connection with its performance under this
Agreement.
17.6 All notices, requests and other communications hereunder to a party
shall be in writing and shall be deemed given on the date of delivery,
if personally delivered, three business days after being mailed by
registered or certified mail (return receipt requested) or one business
day after being sent by receipted overnight courier to such party at
its address set forth below or such other address as such party may
specify by notice to the other party hereto.
If to Arris:
Arris Interactive, LLC
0000 Xxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Attention: President
If to Nortel Networks:
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Nortel Networks Inc.
0000 Xxxxxxxx Xxxxxxx
Xxxxx X
Xxxxxxxxxx, XX 00000
Attention: VP Marketing, Local Internet
With a copy to:
Legal Department
Nortel Networks Inc.
0000 Xxxxxxxx Xxxx.
Xxxxxxxxxx, XX 00000
Attention: Lead Counsel, Supply Management
17.7 This Agreement sets forth the entire agreement and understanding
between the parties with respect to the subject matter hereof, and
merges all prior discussions between them, and neither party hereto
shall be bound by any conditions, definitions, representations or
understandings with respect to such subject matter other than as
expressly provided herein.
17.8 No agreement or understanding amending, revising or otherwise changing
the terms and conditions hereof shall be binding unless in writing and
signed for each party by a duly-authorized representative.
17.9 The failure on the part of either party to exercise any right hereunder
shall not constitute a waiver of any such right.
17.10 The provisions of this Agreement shall be held in confidence by the
Parties and only disclosed as may be agreed to by the parties or as may
be required by applicable law. Neither party shall make public
statements or issue publicity or media releases with regard to this
Agreement without the prior written approval of the other party such
approval not to be unreasonably withheld.
17.11 Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability
without rendering invalid or unenforceable the remaining terms and
provisions of this Agreement or affecting the validity or
enforceability of any of the terms or provisions of this Agreement in
any other jurisdiction. If any provision of this Agreement is so broad
as to be unenforceable, the provision shall be interpreted to be only
so broad that it is enforceable.
17.12 Upon the expiration or termination of this Agreement, those terms which
by the nature and context would be expected to survive shall survive
such expiration or termination, including without limitation, Sections
1.1.4, 5, 6, 7, 8, 9, 12, 15 and 16.
[Signature Page to Follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Transitional Services
Agreement to be duly executed as of the Effective Date.
NORTEL NETWORKS INC. ARRIS INTERACTIVE L.L.C.
By: /s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxx Xxxxx
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Name: Name:
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Title: Title:
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