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Exhibit 10.8
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EMC MODULE SUPPLY AGREEMENT
THIS EMC MODULE SUPPLY AGREEMENT (the "Agreement") is made effective as of the -
__ day of May, 1999 (the "Effective Date") by and between Nortel Networks Inc.
("Nortel"), a Delaware corporation, having a place of business at 5555 Windward
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Parkway, Alpharetta, Georgia, 30201-3895, and Avici Systems Inc., a Delaware
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corporation, having a place of business at 101 Billerica Avenue, North
Billerica, MA 01862 (hereinafter "Avici").
W I T N E S S E T H:
WHEREAS, Avici desires to have Nortel manufacture and assemble certain Products
(as hereinafter defined) for use in Avici's Terabit Router (as described in the
Technology License Agreement (as hereinafter defined)) pursuant to one or more
Purchase Orders (as hereinafter defined) issued by Avici in accordance with this
Agreement.
WHEREAS, Nortel desires to manufacture and assemble such Products for Avici
hereunder;
NOW, THEREFORE, Avici and Nortel, in consideration of the mutual premises
contained herein and for other good an valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, agree as follows:
SECTION 1: DEFINITIONS
Capitalized terms used in this Agreement and not otherwise defined herein shall
have the meanings set forth below:
"Activity Description" shall mean Activity Description No. 98-017, EMC
Module and Shelf Design Adaptation, entered into by the parties hereto,
dated September 28, 1998, an addendum to the Assistance Agreement.
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"Affiliate" of Nortel shall mean, Nortel Networks Corporation, any entity
of which Nortel directly or indirectly owns or controls at least 50% of the
voting securities, and any entity of which Nortel Networks Corporation
directly or indirectly either owns or controls at least 50% of the voting
securities.
"Assistance Agreement" shall mean the Nortel-Avici Assistance Agreement
entered into by the parties hereto, dated as of January 28, 1998.
"Days" shall mean calendar days, unless otherwise specified, provided that
if a deadline falls on a Saturday, Sunday, or holiday, it shall be extended
until the following regular business day.
"Delivery" shall mean Nortel's delivery of Products, FOB Nortel's North
American manufacturing facility, distribution center or approved supplier.
"Delivery Date" shall mean the date of Delivery of Products.
"Escrow Materials" shall mean the design documentation for tooling
necessary to manufacture the OC-192 and XE-Core Components of the Products
described in Schedule C.001000 6, Section 3.2 and 3.3.
"Events of Release" shall mean the events listed in Section 16.2.
"Price" shall mean the amount payable for Products or Services, exclusive
of any commissions, bonds, levees, insurance, taxes, delivery charges and
other similar amounts. All Prices and other amounts in this Agreement
shall be construed to be in U.S. dollars ($U.S.).
"Products" shall mean any one of: (1) circuit pack EMC enclosure piece
part sets: (II) EMC enclosure shelf assemblies (two (2) types); (III)
backplace EMC gasket hardware kits; and (IV) assembly of the faceplate
portion of circuit pack EMC enclosure piece part
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sets, to be delivered as a kit of parts, as such products are more fully
described in the Activity Description, to be manufactured by Nortel
pursuant to this Agreement. Delivery quantities will be defined by means of
Purchase Orders issued under this Agreement.
"Purchase Order" shall mean an order to purchase a specific quantity of a
Product submitted by Avici and accepted by Nortel in accordance with this
Agreement, which refers to the type and volume and timing of Products to be
manufactured and purchased; price terms; schedule Delivery Dates (unless
submitted on open Delivery terms); and "sold to," and "ship to" addresses.
The terms of this Agreement take precedence over any preprinted terms on a
Purchase Order acknowledgement, confirmation, or invoice and any
inconsistent terms in a Purchase Order unless expressly accepted by Nortel.
"Services" shall mean the repair services described in Section 12.
"Schedule C.00100 6" shall mean Schedule C.00100 6 entered into by the
parties hereto, dated as of September 30, 1998, a schedule to the
Technology License and Agreement.
"Specifications" shall mean the description of the Products, performance
and test requirements, and in-process and final test criteria, attached
hereto as Schedule A. Upon completion of the activity described in the
Activity Description the parties shall amend the Specifications to conform
to the results of such activity, to take effect as of the next
manufacturing cycle of the Product after the date of such amendment. Any
changes to the Specifications must be in writing and signed by authorized
representatives of the parties hereto.
"Technology License and Agreement" shall mean the Technology License and
Agreement entered into by the parties hereto, dated as of January 29, 1998.
SECTION 2: SCOPE OF WORK
2.1 Scope
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Nortel and Avici acknowledge and agree that this Agreement is an "EMC Supply
Agreement" as defined in Schedule C.00100 6, Section 6, Grant B. Nortel agrees
to perform for Avici the tasks and Services described hereafter, with respect to
the Products described in this Agreement and according to the terms and
conditions set forth herein, as modified from time to time by mutual agreement,
in writing, signed by both parties, under the specific supervision of the
technical coordinator by Avici.
2.2 Manufacturing of Products
Nortel shall manufacture and shall coordinate with such of its Affiliates
or subcontractors as necessary, and Avici shall order the manufacture of,
Products by Nortel, in accordance with the terms and conditions of this
Agreement. Nortel shall deliver to Avici's specified location only that
quantity of Products specified in Avici's Purchase Orders at the Prices set
forth herein. All applicable transportation and insurance costs incurred
by Nortel in connection with the Delivery of the Products to Avici shall be
for the account of Avici.
2.3 Manufacturing Scheduling
Nortel shall coordinate the manufacturing scheduling and pre-process
material planning with regard to the Products to be manufactured with all
necessary Affiliates and subcontractors and shall manage the overall
production plan and Deliveries thereunder in accordance with the Product
forecasts provided by Avici in accordance with Section 4.3 and the Delivery
Dates set forth in the Purchase Orders in accordance with Section 4.1.
2.4 Quality Assurance
Nortel shall build and inspect the Products in accordance with the
Specifications. Inspection data will be maintained by Nortel for at least
two (2) years from the date of such inspection and will be available for
inspection by Avici during normal business hours upon reasonable notice.
2.5 Repairs
Nortel shall manage the Product repair process in accordance with Section
12 of this Agreement.
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2.6 Tooling
Avici grants to Nortel a license to use or have used, and Avici shall
deliver to Nortel, the Specific EMC Tooling (as defined in Schedule C.00100
6, Section 3.3(b)) without charge, to manufacture Products.
SECTION 3: PRICING AND PAYMENT TERMS
3.1 Pricing of Products and Services
Prices for each Product and Service to be paid by Avici for Services
performed and Product(s) delivered under this Agreement are as follows:
(i) Schedule B contains a Price schedule for Products for the initial
term of this Agreement. Ninety (90) Days prior to the close of the
first term, at Avici's option in accordance with Section 15, the
parties shall enter into good faith negotiation with the intent to
reach agreement on second term pricing in accordance with Schedule
C.00100 6, Section 6, Grant B, paragraph (d).
(ii) Subject to any non-renewal notice provided pursuant to section 15.1,
thereafter, for each subsequent term, ninety (90) Days prior to the
close of the previous term, the parties shall enter into good faith
negotiations for subsequent-term pricing.
(iii) Such price negotiation opportunities shall not apply to the
intellectual property rights buy-out prices set out in Schedule
C.00100 6.
(iv) Subsequent term pricing changes, if any, shall not be effective
until set out in writing, signed by both parties, and attached to
this Agreement as an amendment to Schedule B.
3.2 Payment
Payment terms are as follows:
(i) Net forty-five (45) Days from the date of Nortel's Invoice to
Avici;
(ii) Intentionally deleted;
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(iii) Avici shall pay Nortel in accordance with the above payment
terms the full amount due under each invoice, less amounts
for shortages and/or non-conforming Products or Services;
(iv) If Avici fails to pay any amount when due, Avici shall pay a
late payment charge equal to one percent (1%) per month
(twelve (12%) per annum) or the maximum rate permitted by
applicable law, whichever is lesser, calculated daily from
the due date, on such unpaid amounts, together with all costs
and expenses, including reasonable attorney's fees, incurred
by Nortel in collecting such overdue amounts;
(v) If Avici disputes any invoice rendered, Avici shall so notify
Nortel and the parties will use their best efforts to resolve
such dispute expeditiously. Provided that Avici so notifies
Nortel of a disputed invoice and there is a good-faith basis
for such dispute, the time for paying the portion of the
invoice in dispute shall be extended by a period of time
equal to the time between Nortel's receipt of such notice
from Avici and fifteen (15) Days after resolution of such
dispute. Avici shall pay for nondisputed items in accordance
with the terms of this Agreement.
(vi) All payments hereunder shall be made in U.S. dollars ($U.S.).
3.3 Invoicing
Nortel may invoice for Products upon Delivery of such Products or
completion of Services, as applicable, pursuant to Purchase Orders.
Invoices shall be dated no earlier than the Delivery Date for such Products
and shall identify and show separately quantities of Products, unit prices,
total amount for each item, applicable sales or use taxes, discounts where
applicable, estimated shipping charges, if applicable, and total amount
due.
3.4 Taxes
Avici shall be responsible for sales, use, or custom taxes or duties
resulting from the manufacture and sale or Delivery of Products in
accordance with the Purchase Orders. Avici shall provide tax exemption
numbers, if applicable, for such purchases.
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SECTION 4: PURCHASE ORDERS
4.1 Purchase Orders
Subject to its buy-out rights as set out in Schedule C.00100 6, Avici will
provide to Nortel Purchase Order(s) on a quarterly basis for the following
quarter, no later than forty-five (45) Days prior to the commencement of
Delivery for such quarter, unless otherwise agreed by the parties, in
accordance with the forecast to be provided by Avici to Nortel in
accordance with Section 4.3. During the initial 18-month term of the
Agreement, and notwithstanding Section 5, Avici shall purchase no less than
1,000 circuit pack EMC enclosure piece part sets.
4.1.1 In the event the Agreement is extended for a second 18-month
term, Avici shall, during such second term, notwithstanding
Section 5, purchase no less than 1,000 circuit pack EMC
enclosure piece part sets.
4.1.2 In the event of a conflict between the terms and conditions of
a Purchase Order and terms and conditions of this Agreement,
this Agreement shall govern unless otherwise mutually agreed.
4.1.3 All Purchase Orders submitted by Avici to Nortel pursuant to
this Agreement shall reference this Agreement.
4.1.4 The parties acknowledge and agree that the units of circuit
pack EMC enclosure piece part sets purchased by Avici from
Nortel pursuant to Avici Purchase Order No. 981492, dated April
1, 1999, shall be credited towards the 1,000 unit minimum
purchase amount described in the opening paragraph of this
Section 4.1, and that Nortel shall credit the aggregate
difference between the price for the circuit pack EMC enclosure
piece part sets purchased pursuant to Purchase Order No. 981492
and the Price for circuit pack EMC enclosure piece part sets
against payments owned by Avici in respect of circuit pack EMC
enclosure piece part sets purchased hereunder.
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4.2 Acceptance of Purchase Orders
Nortel shall accept all Purchase Orders conforming to the requirements of
this Agreement delivered via facsimile (and confirmed by telephone
conversation) to the address and addressee of Nortel set forth in Section
17.6. Any Purchase Order not rejected within five (5) business days of
receipt by Nortel shall be deemed accepted. Failure by Nortel to accept a
conforming Purchase Order shall be considered a material breach of this
Agreement, provided Avici is not in material breach thereof.
4.2.1 Nortel will maintain raw material inventory in stock and tooling on
hand sufficient to meet Avici orders and requirements.
4.2.2 Notwithstanding any provision in this Agreement to the contrary,
Nortel's supply of Products shall be limited to the capability, tool
life and/or quantity of the tools provided to Nortel by Avici
pursuant to Section 2.5.
4.2.3 Avici will reimburse Nortel one and one-half percent (1.5%) of the
cost of finished goods inventory per month maintained by Nortel at
Avici's request.
4.3 Product Forecasts
Avici shall provide Nortel with written 12-month forecasts by calendar
quarter of all Purchase Orders in respect of Products Avici expects to
place on Nortel, not later than three (3) months prior to the 12-month
period covered thereby. Avici shall update such forecasts every three
months and report to Nortel any significant changes in the forecasts. Such
forecasts shall not be binding purchase obligations upon Avici. Firm
purchase and sale commitments shall be made through Purchase Orders issued
by Avici and accepted by Nortel.
SECTION 5: PURCHASE ORDER RESCHEDULING/CANCELLATIONS
5.1 Rescheduling
5.1.1 Avici may, by written notice received by Nortel fifteen (15) Days,
or less, prior to the Delivery Date, at no charge, reschedule the
Delivery of ordered Products, provided that such rescheduled
Delivery Date shall not be later than ninety (90) Days from the
original Delivery Date, and provided such rescheduled Delivery
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Date shall not exceed the then current term of this Agreement. The
Delivery Date for a particular Purchase Order may only be
rescheduled once pursuant to this Section 5.1.1.
5.1.2 Subsequent rescheduling fifteen (15) Days, or less, prior to the
Delivery Date will be subject to an additional fee of ten percent
(10%) of Nortel's Product Price.
5.1.3 Purchase orders may be rescheduled greater than fifteen (15) days
but less than forty five (45) days prior to the Delivery Date at no
charge, provided the rescheduled Delivery Date shall not be later
than ninety (90) Days from the original Delivery Date.
5.1.4 Purchase Orders may be re-scheduled more than forty five (45) Days
prior to the Delivery Date at no charge, provided such rescheduled
Delivery Date shall not exceed the then current term of this
Agreement.
5.1.5 There shall be no rescheduling charge applied to expedited
deliveries.
5.2 Cancellation Charges
5.2.1 Avici may cancel all or a portion of a Purchase Order already
accepted by Nortel by providing Nortel with a written notice of
cancellation and by paying to Nortel a fee equal to:
(a) one hundred percent (100%) of Nortel's Product/material cost of the
canceled portion of the Purchase Order if the date of Nortel's
receipt of the cancellation notice is less than fifteen (15) Days
prior to the scheduled Delivery Date of the Purchase Order.
(b) ten percent (10%) of Nortel's Product/material cost of, plus all
costs in respect of work-in-progress in respect of, the canceled
portion of the Purchase Order if the date of Nortel's receipt of the
cancellation notice is between sixteen (16) and thirty (30) Days
prior to the scheduled Delivery Date of the Purchase Order.
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(c) there shall be no charge if the date of Nortel's receipt of the
cancellation notice is more than thirty (30) Days prior to the
scheduled Delivery Date of the Purchase Order.
5.2.2 In no event shall the cancellation charges set forth in this Section
5.2 exceed the Price of the Products covered by the canceled portion
of the Purchase Order.
5.2.3 Nortel will provide Avici with documentation adequate to support its
claim for cancellation charges. Components and completed work and
work-in-process that are paid for by Avici pursuant to such
cancellation charges shall be Avici's property subject to the terms
herein and shall be held or Delivered to Avici as Avici may
reasonably request. Notwithstanding the foregoing, Avici shall have
no obligation to pay cancellation charges if the cancellation is
occasioned by the failure of Nortel to perform its material
obligations under this Agreement unless Nortel's failure is the
result of Avici's failure to perform its material obligations
hereunder.
5.3 Notwithstanding any provision in this Agreement or Avici Purchase Order No.
981492, dated April 1, 1999, to the contrary, Avici covenants and agrees
that Avici may not cancel or reschedule (unless mutually agreed) all or any
part of Avici Purchase Order No. 981492, dated April 1, 1999, for any
reason.
SECTION 6: SHIPPING/DELIVERY/TITLE
6.1 FOB Terms
All Deliveries of Products covered under this Agreement shall be made FOB
Nortel's North American manufacturing facility, distribution center or
approved supplier, freight collect. Such Delivery shall constitute delivery
to Avici. As of the moment a Product is delivered to Avici, Avici accepts
all risk of loss, mishandling, breakage, and other damages relating
thereto. Avici shall use is best efforts to specify the carrier at least
five (5) business Days prior to the Delivery Date and shall be responsible
for paying such
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carrier. In the event Avici does not so specify the carrier, Nortel shall
select a carrier and Deliver the Products as described above, in a
reasonably economical manner, freight prepaid by Nortel and charged to
Avici in the applicable invoice. If Products are designated for export,
Avici is responsible for assuring compliance with applicable export laws,
and Avici will provide Nortel with instructions for the handling of such
export shipments and shall reimburse Nortel for all costs associated
therewith.
6.2 Shipping
Intentionally deleted.
6.3 Packing
All products shipped hereunder shall be packed by Nortel, at no additional
charge to Avici, in containers adequate to prevent damage during shipping,
handling and storage.
6.4 Delivery in Installments
Nortel may fill a Purchase Order in installments, but only in mutually
agreeable partial quantities and at mutually agreeable intervals. Nortel
may not ship incomplete Products at any time, unless pre-approved by Avici.
6.5 Title
Title to Products will pass to Avici upon Delivery. Avici grants to Nortel
a first priority security interest in the Products. Nortel may perfect such
interest, and Avici shall assist Nortel, as reasonably necessary, to do so.
Nortel may retain such interest until Avici has paid Nortel in full for the
Products. Prior to payment in full for such Products, Avici shall not cause
or permit the Products, or any portion thereof, to be sold, leased or
subjected to a lien or other encumbrance. Nothing contained in this Section
6.5 shall be construed so as to vary the provisions contained in the
Activity Description or Schedule C.00100 6, as applicable, related to
ownership and licensing of, or other obligations related to, the
intellectual property, and rights therein, incorporated into Products.
6.6 Late Delivery
(a) Nortel shall Deliver the Products and perform Services ordered by
Avici by the Delivery Date mutually agreed to by the parties. All
scheduled Delivery Dates of Products or performance of Services are
firm, and time shall be of the essence.
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(b) Nortel's Delivery obligations pursuant to Section 6 are subject to the
condition that the Delivery Dates specified in Purchase Orders shall
comply with minimum forty-five (45) Days lead time, unless Nortel
expressly agrees to shorter intervals.
(c) Unless otherwise instructed by Avici, Nortel shall for all Purchase
Orders placed hereunder: (i) ship complete orders, (ii) ship to the
location designated in the Purchase Order; (iii) ensure that all
subordinate documents bear Avici's Purchase Order Number; (iv) enclose
a packing memorandum; (v) mark Avici's Purchase Order number on all
packages and shipping papers; and (vi) not Deliver earlier than five
(5) Days before the Delivery Dates specified in the applicable
Purchase Order unless otherwise mutually agreed.
(d) Nortel shall immediately notify Avici of any anticipated late
Deliveries and any impending plant or facility shutdowns for any
reason, including vacation, tool repair, labor difficulties or
governmental order, which may adversely impact the scheduled Delivery
Dates. In the event that Nortel is delinquent on delivering a Product
to Avici for reasons other than those attributable to Avici or in
accordance with Section 17.11, Nortel shall deliver such Product to
Avici in the most expeditious manner possible and the payment of
premium transportation cots associated with the shipment of the
Product shall be at Nortel's expense.
(e) The rights and obligations of the parties under this Section 6.6 shall
not apply to the extent that any delay in delivering a Product is
caused by a relevant delay in performance by Avici of its obligations
under this Agreement.
SECTION 7: QUALITY
7.1 Quality Assurance
Prior to first production start, Nortel and Avici shall engage in good
faith negotiations to develop a mutually satisfactory quality plan, which
plan shall include failure root cause analysis and a corrective action plan
which meets the requirements of ISO 9001 or 9002, whichever is applicable.
This plan shall be set out in a separate document.
Nortel agrees that all Deliveries of Products shall be verified for
compliance with the Specifications for each Product(s).
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Further, the parties agree that regular quality reviews will be held no
less frequently than on a quarterly basis at such time and place as
mutually agreed to by the parties. Reasons for such meetings may include,
but shall not be limited to:
(a) Review of quality acceptance criteria;
(b) Quality performance and receiving inspection results;
(c) Corrective action results/change control; and
(d) Field problem reviews and regulatory impacts.
In addition, Nortel will:
(a) Respond in a timely manner to Avici's quality related corrective
action requests as a result of non-conformance to the quality plan;
(b) Allow inspections of Nortel Product manufacturing facilities and
periodic quality audits by Avici to determine Product conformance to
quality criteria described in the Specifications; and
(c) Manufacture Products in compliance with applicable Specifications.
7.2 Inspection and Acceptance
Avici shall notify Nortel in writing of particular deficiencies in Products
that do not conform to the Specifications that Avici has knowledge of, from
time to time. Products will be deemed accepted by Avici if a notice of
deficiency is not received by Nortel via facsimile (and confirmed by
telephone conversation) to the address and addressee of Nortel set forth in
Section 17.6 within ten (10) days after Delivery of the Products. Such
unaccepted non-conforming Products shall be returned to Nortel at Nortel's
expense for repair or replacement, at Nortel's option and expense, as soon
as commercially possible but no later than thirty (30) Days after receipt
of such non-conforming Product. Nortel's responsibility for deficiencies
discovered after the close of the 10-day inspection period, but prior to
the close of the warranty period as set out in Section 11, shall be as
provided for under the warranty provisions of this Agreement.
7.3 Manufacturing Plant Inspection
Nortel will allow Avici into its facility manufacturing Products pursuant
to this Agreement, at which any of the Products may be inspected upon
reasonable prior written notice as long as any such inspection will not
unduly interfere with Nortel's operations.
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Avici and its employees shall comply with all Nortel rules and procedures
when in or on Nortel's premises.
SECTION 8:
Intentionally deleted.
SECTION 9: QUARTERLY OPERATIONS REVIEWS
9.1 Reviews
Avici and Nortel will review quarterly the performance of each party
hereunder. Such review shall include items such as Product Delivery,
Product forecasts, Product performance, quality and cost.
SECTION 10: Intentionally deleted.
SECTION 11: WARRANTY
11.1 Nortel's Warranty
Nortel warrants that the Products manufactured hereunder, under normal use
and service, will be free from defects in material and workmanship, and
will perform substantially in accordance with the applicable
Specifications, for a period of fifteen (15) months from Delivery (the
"Warranty Period"); provided, however, that Nortel shall have no liability
for any defects as a result of design or Specification flaws. This
warranty shall not apply to items normally consumed in operation, such as
lamps and fuses. Nortel's sole obligation and Avici's exclusive remedy
under this warranty is limited to the replacement or repair, at Nortel's
option and expense, of the defective Products. Replacement Products may be
new or reconditioned to perform as new at Nortel's option. The foregoing
warranty does not apply: (i) if the defect arises from mishandling; abuse;
improper storage; improper performance of installation, other service or
maintenance other than by Nortel; misuse (including, without limitation,
any use of the Product beyond the environmental parameters set forth in the
applicable Specifications); damage by fire, explosion, power failure, power
surge or other power irregularity (beyond such parameters which are set
forth in the applicable Specifications); or (ii) if any repair or
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modification (or attempted repair or modification) of the Product is made
other than by Nortel unless that repair or modification (or attempted
repair or modification) of the Product made by any party other than Nortel
has been specifically authorized in writing by Nortel. In the event a
repair is required as a result of (i) or (ii) above, Nortel will repair the
Product and Avici will pay to Nortel expenses incurred by Nortel in
connection therewith, in accordance with Nortel's then current standard
rates therefor. Turnaround time for warranty repair or replacement shall
be no greater than thirty (30) Days. Repair or replacement Products
furnished by Nortel during the Warranty Period shall be warranted for a
period of ninety (90) Days or the remainder of the original Warranty
Period, whichever is longer. The aforementioned warranties shall inure to
Avici, its successors and assigns. Nortel warrants that the Products
delivered to Avici are free and clear of all liens and encumbrances.
Notwithstanding the foregoing, the warranty applicable to components
supplied to Nortel by a third party and forming a part of a Product shall
be the warranty provided by such third party supplier.
11.2 Y2K Warranties
Nortel warrants that any software or systems of Nortel used by Nortel in
the supply of Products shall: (i) process date and time related data
without causing processing interruptions, abnormal terminations, or changes
in performance characteristics; and (ii) shall process and manipulate all
date and time related functions correctly.
11.3 Nortel's Duties
Nortel shall maintain such inspection logs for Products Delivered as Nortel
would create in the normal course, for a period of twenty-four (24) months
after such inspection and shall make such information available to Avici on
request. In the event Avici root cause analysis of field failures of its
Terabit Router reasonably indicate that non-conformance of Products to the
Specifications and/or defects in material and workmanship are the cause of
the failures, Nortel shall provide reasonable assistance to Avici in
performing root cause analysis of such Products and make such information
available to Avici on request.
11.4 Conforming Products
For Products that are returned to Nortel by Avici for repair or replacement
pursuant to Section 11.1 and are found by Nortel to conform to the
applicable Specifications, Avici
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shall pay Nortel for all costs it has incurred in connection with the
handling and testing of the Products as well as shipping charges and
duties.
11.5 DISCLAIMER
THE FOREGOING WARRANTIES AND REMEDIES CONSTITUTE THE ONLY WARRANTIES,
GUARANTEES OR CONDITIONS WITH RESPECT TO PRODUCTS AND SERVICES AND ARE
AVICI'S EXCLUSIVE REMEDIES IN THE EVENT SUCH WARRANTIES ARE BREACHED. SUCH
WARRANTIES ARE IN LIEU OF ALL OTHER WARRANTIES, GUARANTEES OR CONDITIONS,
WRITTEN OR ORAL, STATUTORY, EXPRESS OR IMPLIED, INCLUDING WITHOUT
LIMITATION, ANY WARRANTY WITH RESPECT TO ANY OTHER SERVICES PROVIDED BY
NORTEL HEREUNDER OR OTHERWISE, AND ANY WARRANTY OF MERCHANTABILITY, FITNESS
FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT. NORTEL SHALL NOT BE
RESOPNSIBILE FOR ANY WARRANTY OFFERED BY AVICI TO ANY CUSTOMER(S) OF AVICI.
IN NO EVENT SHAL NORTEL BE LIABLE FOR ANY INCIDENTAL, INDIRECT, SPECIAL OR
CONSEQUENTIAL DAMAGES RELATING TO BREACH OF WARRANTY.
SECTION 12: REPAIRS
12.1 Nortel agrees to provide repair Services during the period described in
Section 12.4 for the Products it manufactures. Repair Services for items
supplied to Nortel by third parties will be subject to any agreement
between Nortel and such third party.
12.2 Repairs under Warranty
Nortel is responsible for the cost of repairs, including return shipment
costs from Nortel to Avici, in respect of Product repair pursuant to
Section 11.1. Avici shall be responsible for shipment costs to Nortel from
Avici for such Products.
12.3 Repairs out of Warranty
The Price to Avici for out-of-warranty repairs shall be at Nortel's
standard rate therefor at such time. Turnaround time for such repairs
shall be forty-five (45) Days. Invoices for out-of-warranty repairs shall
be paid by Avici within thirty (30) Days of the date of invoice for the
cost of such repairs.
12.4 Time Limitations
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Nortel must retain repair capabilities for each Product for a period of
five (5) years from the date such Product was last manufactured by Nortel,
provided, in the event Avici transfers the manufacture of such Product to a
third party, to the extent permitted in Schedule C.00100 6, the obligation
imposed upon Nortel in this Section shall terminate as of such date.
12.5 Out-of-Warranty Replacements
During the period described in Section 12.4, in the event that any Product
is beyond repair, it shall, at Avici's option, be returned to Avici as is
at Avici's expense. If, during the period described in Section 12.4, the
Warranty Period for such Product has expired and, in such case, should
Avici request a replacement Product, the applicable price for such
replacement will be the full cost of the Product, plus all transportation
costs, at such time.
12.6 Product Returns
Avici shall be responsible for the return of the Products to Nortel,
subject to Section 12.2, replaced under Section 12.5. In the event that
Nortel ships a replacement Product pursuant to Section 12.5 prior to
receiving the Product being returned, Nortel must receive the returned
Product within thirty (30) Days of shipping the replacement. If Nortel has
not received the returned Product within such thirty-(30) Days, Nortel
shall be entitled to invoice Avici for the returned Product.
SECTION 13: LIMITATION OF LIABILITY
13.1 Exclusion of Certain Damages
WITH THE EXCEPTION OF VIOLATIONS OF SECTION 14 BELOW, IN NO EVENT SHALL
EITHER PARTY BE LIABLE FOR INDIRECT, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL
DAMAGES, LOSS OF PROFITS, LOSS OF USE, OR DATA OR INTERRUPTION OF BUSINSES,
WHETHER SUCH ALLEGED DAMAGES ARE LABELED IN TORT, CONTRACT, OR INDEMNITY,
EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
WITH THE EXCEPTION OF VIOLATIONS OF SECTION 14 BELOW, IN NO EVENT SHAL
NORTEL BE LIABLE FOR DAMAGES FOR ANY CAUSE WHATSOEVER, INCLUDING BUT NOT
LIMITED TO BREACH OF CONTRACT (INCLUDING FUNDAMENTAL BREACH), TORT
(INCLUDING NEGLIGENCE),
<PAGE>
INDEMNITY OR OTHERWISE, IN AN AMOUNT IN EXCESS OF, IN THE AGGREGATE, THE
PAYMENTS RECEIVED BY NORTEL FROM AVICI PURSUANT TO THIS AGREEMENT TO THE
DATE OF SUCH LIABILITY, OR ONE HUNDRED THOUSAND DOLLARS (US $100,000.00),
WHICHEVER IS GREATER.
WITH THE EXCEPTION OF VIOLATIONS OF SECTION 14 BELOW, IN NO EVENT SHALL
AVICI BE LIABLE FOR DAMAGES FOR ANY CAUSE WHATSOEVER, INCLUDING BUT NOT
LIMITED TO BREACH OF CONTRACT (INCLUDING FUNDAMENTAL BREACH), TORT
(INCLUDING NEGLIGENCE), INDEMNITY OR OTHERWISE, IN AN AMOUNT IN EXCESS OF,
IN THE AGGREGATE, THE PAYMENTS OWED TO NORTEL BY AVICI PURSUANT TO THIS
AGREEMENT TO THE DATE OF SUCH LIABILITY, OR ONE HUNDRED THOUSAND DOLLARS
(US $100,000.00), WHICHEVER IS GREATER.
SECTION 14: INTELLECTUAL PROPERTY
RIGHTS AND CONFIDENTIALITY PROVISIONS
14.1 The rights and obligations of Nortel and Avici related to the Products and
Services shall be subject to Schedule C.00100 6, Section 6, Grant B and C,
as applicable.
14.2 All technical information, specifications, drawings, documentation and
"know-how" of every kind and description whatsoever disclosed in writing
and identified as confidential by either party to the other under this
Agreement (the "Information"), except insofar as it may be in the public
domain or be established to have been independently developed and so
documented by the other party or obtained by any person not in breach of
any confidentiality obligations to the disclosing party, is the exclusive
property of the disclosing party. The recipient party, except as
specifically authorized in writing by the disclosing party, or as permitted
hereunder, shall treat and protect the Information as confidential, shall
not reproduce the Information except to the extent reasonably required for
the performance of this Agreement, shall not divulge the Information in
whole or in part to any third parties (except for, in the case of Nortel,
Nortel Affiliates, subcontractors
<PAGE>
and suppliers), and shall use the Information only for purposes necessary
for the performance of this Agreement or as may be required for the use of
the Products and/or Services provided hereunder. This obligation shall
survive the termination of this Agreement for a period of three (3) years.
Each party shall disclose the Information only to those of its employees or
agents (including, in the case of Nortel, those of its Affiliates,
subcontractors and suppliers) who shall have a "need-to-know" the
Information for the purposes described herein after first making such
employees or agents aware of the confidentiality obligations set forth
above.
SECTION 15: TERM AND TERMINATION
15.1 Term
This Agreement shall become effective on the Effective Date and shall
remain in effect for a period of eighteen (18) months, at the conclusion of
which, at Avici's option, subject to agreement by the parties with regard
to second term pricing and provided Avici does not exercise buy-out options
pursuant to Schedule C.00100 6, the Agreement may be renewed for a second
18-month term. Subject to Section 15.2, the Agreement shall be self-
renewing thereafter for successive one (1) year renewal periods unless
either party notifies the other in writing of its intent to not renew the
Agreement and such notice is received at least ninety (90) Days prior to
the end of the then current term, all such period(s) being referred to
herein as "term," unless and until terminated in accordance with this
Agreement.
15.2 Termination of Agreement
(a) This Agreement may not be terminated by either party earlier than
eighteen (18) months after the Effective Date, other than for material
breach as set out in (b) below.
(b) This Agreement may be terminated at any time upon the occurrence of
any one or more of the following events of default:
(i) By either party if the other party defaults in the performance of
any material requirement or obligation under this Agreement, and
such default is not cured within (a) in the case of an issue
requiring initiation of a new production cycle to cure such
default, forty-five (45) Days after written
<PAGE>
notice of such default is sent to such party or (b) in the
case of any other issue, thirty (30) Days after written
notice of such default is sent to such party (in either (a)
or (b), the "Cure Period"). This Agreement shall not,
however, terminate if the other party has cured the breach
prior to the expiration of the Cure Period or, if such
breach cannot be cured within such Cure Period, the other
party has initiated actions to cure such breach within such
Cure Period, and thereafter cures such breach as soon as
reasonably practicable;
(ii) By either party if the other party defaults in the
performance of any material requirement or obligation under
Schedule C.00100 6, and such default is not cured within
forty-five (45) days after written notice of such default is
sent to such party;
(iii) By Nortel if Avici fails to make (in full) any payment
required by this Agreement to Nortel on the date due, and
fails to cure such default within forty-five (45) Days after
written notice of such default is sent to Avici; or
(iv) By either party if the other party ceases to do business,
makes a composition or assignment for the benefit of its
creditors, makes a general arrangement with its creditors
concerning any extension or forgiveness of any of its
secured debt, becomes bankrupt or insolvent, suffers or
seeks the appointment of a receiver to the whole or any
material part of its business, takes any action to liquidate
or wind up the whole or any material part of its business,
is found subject to any provisions of any bankruptcy code
concerning involuntary bankruptcy or similar proceeding, or
suffers a material adverse change in its financial position
such that payments hereunder may be affected or delayed by a
creditor or administrator of the business of the other
party.
(c) Either party may terminate this Agreement for convenience on a ninety
(90)-Day prior written notice to the other party. In the event Avici
so terminates for convenience, Avici shall reimburse Nortel for the
actual costs incurred in connection with the Agreement work to the
date of such termination. The amount of such actual costs shall be
comprised of the cost of Products already
<PAGE>
manufactured but not yet delivered, plus charges for a maximum of six
(6) weeks actual raw materials and work-in-process (material, labor
and overhead), plus costs of commitments to third parties, to the
extent such costs cannot be limited through termination.
(d) Termination for convenience by Avici, or termination by Nortel
pursuant to (b) above, during the first term is subject to
reimbursement by Avici of Nortel's $300,000 unrecovered sunk costs in
respect of the Activity Description less $150 per circuit pack EMC
enclosure piece part set Delivered to date. Termination for
convenience by Avici, or termination by Nortel pursuant to (b) above
during the second term is subject to reimbursement by Avici of
Nortel's $115,000 unrecovered sunk costs in respect of the Activity
Description less $150 per circuit pack EMC enclosure piece part set
Delivered to date during such second term.
(e) Termination for convenience by Nortel during the first term will
result in Nortel's forfeiture of any remaining portion of such
$300,000 sunk costs. Termination for convenience by Nortel during the
second term will result in Nortel's forfeiture of any remaining
portion of such $115,000 sunk costs.
(f) In the event of failure to reach agreement after good faith
negotiations with regard to subsequent-term pricing at the conclusion
of a given term, the Agreement terminates as of the end of the then-
current term.
(g) In addition, in the event Nortel terminates for convenience, Avici
shall have the right within ninety (90) Days of receipt of such notice
to
(i) place a Purchase Order(s) for Products which Avici shall deem
necessary for support of its own products for three (3) months.
The number of units ordered under this subsection shall not be
greater than the monthly average of units ordered during the
six (6) months prior to Avici's receipt of notice of
termination. The Delivery of such Products shall be in
accordance with Section 4.1 above, but no later than ninety
(90) Days of the date of such termination; and
(ii) at Nortel's discretion, Nortel will I) provide on-going supply
of re-used parts or make available information necessary for
Avici to permit the
<PAGE>
fabrication of the tools to fabricate the necessary part or II)
Avici shall have access to the Escrowed Materials in accordance
with Section 16.
(h) In the event the Agreement is not renewed for a second eighteen (18)
month term for any reason (other than termination of convenience by
Nortel), Avici shall pay Nortel $115,000 in respect of Nortel's
unrecovered sunk costs and (g)(ii) shall apply.
15.3 Payment Obligations
No termination or expiry of this Agreement shall release Avici from any
obligation to pay Nortel any amount that has accrued or become payable at
or prior to the date of termination or expiry.
SECTION 16: ESCROW and MANUFACTURING RIGHTS
16.1 Escrow
Nortel shall deposit the Escrow Materials for the Products with an escrow
agent to be mutually agreed upon by the parties. The Escrow Materials
shall be in machine-readable or hard copy form, as appropriate, suitable
for reproduction and use by Avici. During this term of this Agreement,
Nortel shall keep the Escrow Materials current by promptly depositing
updates that correspond to any Escrow Materials.
16.2 Events of Release
Events of Release are as follows:
(a) A material breach of this Agreement by Nortel, including, without
limitation, a consistent and material failure or refusal, or an
intentional refusal at any time when Avici is not in material breach
of this Agreement, to provide Products as required pursuant to this
Agreement for any reasons within control of Nortel, where such failure
or refusal has been the subject of a notice in writing to Nortel that
its continued failure or refusal would cause Avici to invoke its
rights under this Section 16 forty-five (45) Days after the receipt by
Nortel of such notice;
(b) An intentional refusal to accept a conforming Purchase Order from
Avici, where such refusal has been the subject of a notice in writing
to Nortel that its continued
<PAGE>
refusal would cause Avici to invoke its rights under this Section
16 forty-five (45) Days after the recipient by Nortel of such
notice of breach under Section 15.2(i)(a), or thirty (30) Days
after the receipt by Nortel of such notice of breach under Section
15.2(i)(b);
(c) Nortel makes an assignment, or enters into an arrangement with or
for the general benefit of its creditors, or files a notice of
intention to make a proposal under any applicable bankruptcy or
other similar laws, is subject to the appointment of a trustee,
custodian, receiver, or receiver manager of itself or of any
substantial part of its assets, or otherwise ceases to carry on
normal business operation.
16.3 Release
16.3.1 If Avici reasonably believes that an Event of Release has occurred, and
wishes to have the Escrow Materials released, it shall provide written
notice of the occurrence of an Event of Release to the escrow agent.
Upon receipt of such notice, the escrow agent shall release the Escrow
Materials to Avici, and provide notice of such release to Nortel. If
Nortel wishes to dispute the occurrence of an Event of Release, it shall
provide written notice of its objection to Avici within thirty (30) Days
of the date or receipt of the escrow agent's notice.
16.4 License
(a) The use of Escrow Materials shall be subject to Schedule C.00100 6,
Section 6, Grant C.
16.5 Liquidated Damages
In the event Avici obtains release of the Escrow Materials and it is
subsequently proven by Nortel that an Event of Release did not occur:
(I) Avici shall pay to Nortel an amount equal to $100,000 (and an
additional amount for Nortel's reasonable attorney's fees), which amount
represents Nortel's liquidated damages resulting from such action by
Avici; (II) Avici shall forthwith return all Escrow Materials to the
escrow agent, or destroy all such Escrow Materials and certify to Nortel
that all such Escrow Materials
<PAGE>
have been destroyed; and (III) the license granted by Nortel to Avici
pursuant to Section 16.4 shall terminate immediately.
SECTION 17: GENERAL
17.1 Severability
In the event that any provision of this Agreement is found to be
invalid, voidable or unenforceable, the parties agree that unless such
provision materially affects the entire intent and purpose of this
Agreement, such invalidity, voidability or unenforceability shall affect
neither the validity of this Agreement nor the remaining portion herein,
and that the provision in question shall be deemed to be replaced with a
valid and enforceable provision most closely reflecting the intent and
purpose of the original provision.
17.2 Survival
Notwithstanding any termination or expiry of this Agreement, the
provisions of Sections 1 (Definitions). 3 (Pricing and Payment Terms), 5
(Purchase Order Rescheduling/Cancellation), 6.5 (Title), 11 (Warranty),
12 (Repairs), 13 (Limitation of Liability), 14 (Intellectual Property
Rights and Confidentiality Provisions), 15 (Term and Termination) and
all consequent rights, obligations and liabilities shall survive the
termination or the expiry of this Agreement.
17.3 Assignment
Neither party shall assign its rights or delegates its duties under this
Agreement without the prior written consent of the other, provided that
Avici may assign all of its rights hereunder as part of a sale of
substantially all of the assets of Avici and Nortel may assign all of
its obligations hereunder as part of a sale of substantially all of the
assets of Nortel or its Affiliates used in fulfilling such obligations,
subject to the terms hereof. Notwithstanding the foregoing, Nortel shall
have the right to delegate or assign this Agreement to any Affiliate
subject to the consent of Avici, which consent shall not be unreasonably
withheld. Nortel may subcontract any of its obligations hereunder
without Avici's consent.
<PAGE>
17.4 Waiver
The failure of either party to enforce at any time or for any period of
time any of the provisions of this Agreement shall not constitute a
waiver of such provisions or the right of either party to enforce each
and every provision.
17.5 Governing Law
The rights and obligations arising under the Agreement shall be governed
by and construed in accordance with the laws of the Commonwealth of
Massachusetts and the federal laws of the United States applicable
therein, without regard to its conflicts of law rules.
17.6 Notices
(a) Any and all notices or other information required to be given by one
of the parties to the other shall be deemed sufficiently given when
forwarded by prepaid registered mail, overnight delivery service,
cable, telegrams, facsimile, telex or hand-delivery to the other
party at the following address:
AVICI
-----
Avici Systems, Inc.
101 Billerica Ave., Building 6
North Billerica, MA
01862
Attention: President and Chief Executive Officer
NORTEL
------
Northern Telecom Limited
NSPaN Marketing Operations
10 Brewer Hunt Way
Kanata, Ontario, Canada
K2K 2B5
Attn: Marketing Operations Manager
P: 613-765-5989
F: 613-763-9431
With a copy of all legal notices to:
Northern Telecom Limited
8200 Dixie Road, Suite 100
<PAGE>
Brampton, Ontario
L6T 5P6
Attention: Secretary
Copy to: Law Department
and such notices shall be deemed to have been received five (5) business
Days after mailing if forwarded by mail, and the following business Day
if forwarded by telegram, telex, overnight service, facsimile or hand-
delivery.
(b) The aforementioned address of either party may be changed at any time
by giving fifteen (15) business Days prior notice to the other party in
accordance with the foregoing.
(c) In the event of a generally prevailing labor dispute or other
situation which will delay or impede the giving of notice by any such
means, the notice shall be given by such specified mode as will be most
reliable and expeditious and least affected by such dispute or situation.
17.7 Export Compliance
The rights and obligations of the parties may be subject to United States
and Canadian laws and regulations governing the license and delivery of
technology abroad by persons subject to the jurisdiction of the United
States and Canada, including the Export Administration Act of 1979, as
amended, and the Export Administration regulations issued by the U.S.
Department of Commerce, International Trade Administration, Office of
Export Administration. Each party shall not, directly or indirectly,
export, reexport, or transmit technology, software, components, or
products, in such manner as to violate such laws and regulations in effect
from time to time to the extent that such laws are applicable to a party.
17.8 NAFTA
17.8.1 Both parties shall perform all administrative actions required to
qualify each Product sold under this Agreement for preferential treatment
under the rules of any
<PAGE>
applicable trade treaty, including, without limitation, the North American
Free Trade Agreement ("NAFTA"). If a Product qualifies under NAFTA, the
parties shall prepare and distribute a NAFTA Certificate of Origin, and
any other documents required. The parties shall respond to requests from
the other party for information regarding any NAFTA Certificates of Origin
and assist each other in resolving any eligibility issues.
17.8.2 If a NAFTA Certificate of Origin is prepared for each shipment,
each party shall: (a) retain the original NAFTA Certificates of Origin
with appropriate backup documentation, (b) attach a copy of the NAFTA
Certificate of Origin to the customs/shipping documents for the qualifying
component or Product, and (c) mark the customs/shipping documents with the
legend: "Copy of NAFTA Certificate of Origin attached." If a blanket NAFTA
Certificate of Origin is prepared, the parties shall: (a) retain the
original NAFTA Certificate of Origin with appropriate backup
documentation, (b) mark the customs/shipping documents for the qualifying
component or Product with the legend: "Copy of blanket NAFTA Certificate
of Origin on file at Nortel's customs office in Milton, Ontario, Canada."
and (c) mail copies of the NAFTA Certificate of Origin to the other party.
17.9. U.N. Convention Contracts
The parties agree that the U.N. Convention on Contracts for the
International Sale of Goods (Vienna, 1980) and the 1974 Convention on the
Limitation Period in the International Sale of Goods (the "1974
Convention") and the Protocol amending the 1974 Convention, done at Vienna
April 11, 1980, shall not apply to this Agreement nor to any dispute or
transaction arising out of this Agreement.
17.10 Publicity
Prior to the publication or use by a party hereto of any advertising, sale
promotions, press releases or other publicity matters relating to the
Products or this Agreement in which the names or logo of other party is
mentioned or can be reasonably inferred, the party shall obtain the prior
written consent of the other party. Such consent shall not be unreasonably
withheld. Terms, conditions, and general terms of this Agreement shall be
<PAGE>
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 or as may be otherwise required by applicable
law. 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
as may be otherwise required by law or stock exchange regulations.
Nothing herein shall prevent a party from disclosing the terms of this
Agreement to potential investors (other than to any of the entities
listed in Schedule C by Avici, except as necessary pursuant to a bona
fide offer by such a party to purchase all or substantially all of the
assets or shares of Avici) as reasonably required by such potential
investors to evaluate a potential investment in, or purchase of assets
of, such party, provided that such potential investor agrees in writing
to keep such information in confidence and to use such information solely
for purposes of evaluating the business and financial condition of such
party.
17.11 Force Majeure
Nortel shall not be responsible or liable to Avici for any delay or
failure to perform hereunder if such delay or failure results from fire,
explosion, labor dispute, earthquake, casualty or accident, lack or
failure of transportation facilities, epidemic, flood, drought, or by
reason of war, declared or undeclared, revolution, civil commotion, the
act of a public enemy, blockade or embargo, act of God, any inability to
obtain any requisite license, permit or authorization, or by reason of
law, proclamation, regulation, ordinance, demand, or requirement of any
government or by reason of any other cause whatsoever, whether similar or
dissimilar to those enumerated, beyond the reasonable control of Nortel.
With respect to labor disputes as described above, Nortel shall not be
obligated to accede to any demands being made by employees or other
personnel. All such causes will delay Nortel's performance hereunder for
a period equal to the delay resulting from any such causes and such
additional period as may be reasonably necessary to allow Nortel to
resume its obligations.
17.12 Entire Agreement
<PAGE>
This Agreement and Schedules thereto set forth the entire agreement and
understanding between the parties and supersede and cancel all previous
negotiations, agreements, commitments and writings in respect of the
subject matter hereof (except for the Activity Description, Schedule
C.00100 6 and Avici Purchase Order No. 981492, dated April 1, 1999) and
there are no understandings representations, conditions, warranties,
express or implied, statutory or otherwise made or assumed by the
parties, other than those expressly contained in this Agreement. Neither
party shall be bound by any term, clause, provision or conditions save as
expressly provided herein or as duly set forth on or subsequent to the
date of this Agreement in writing signed by duly authorized officers of
the parties.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
attested by the hands of their duly authorized representative on dates indicated
below.
AVICI SYSTEMS INC. NORTEL NETWORKS INC.
By: /s/ [Authorized Officer] By:/s/Naser Partovi
------------------------ ---------------------------------------
Naser Partovi
____________________________ ------------------------------------------
Name (Print or Type) Name (Print or Type)
Title: _____________________ Title: V.P. Emerging Markets & Technologies
------------------------------------
Date: ______________________ Date: ____________________________________
<PAGE>
SCHEDULE A
SPECIFICATIONS
See Avici Module and Shelf File description attached hereto.
<PAGE>
SCHEDULE A
Avici Module and Shelf File Definition
--------------------------------------
The stocklists below define the Nortel drawing numbers, with their vintage
control Stream and Issue, for the Avici TSR Module and Shelf design.
AVICI MODULE
EC Number: 102-
13021
CIL: 01
NOTE: "----"items are re-use items. Therefore use the latest available in
DDME.
<TABLE>
<CAPTION>
ASSEMBLIES/PIECEPARTS NORTEL P/N AVICI P/N STR ISS
---------------------- ---------- --------- --- ---
<S> <C> <C> <C> <C>
QTY PER MODULE ASSEMBLY A NTSU07BA 01151-00 O2 O1
1 TOP VENT PANEL P0902902 01152-00 O2 O1
1 BOTTOM VENT PANEL P0902903 01153-00 O2 O1
2 CONNECTOR TAB P0902907 01164-00 O2 O2
1 LEFT SIDE PANEL PAA P0902904 01154-00 O2 O1
LEFT SIDE PANEL P0902904-02 01276-00 O2 O1
CUSTOM PEM STANDOFF P0902904-01 01156-00 O2 O1
1 RIGHT SIDE PANEL P0902905 01155-00 O2 O1
4 ENCLOSURE GASKET P0902908 01165-00 O2 O1
2 M3 HEX STANDOFF, 26MM LONG P0902912 01157-00 O2 O1
16 PAN PHILLIPS HEAD, M3X6 P0600015 --- ---
38 CSK PHILLIPS HEAD M3X5 P0601899 --- ---
4 CSK PHILLIPS HEAD M3X12 P0600184 --- ---
1 NYLON PHILLIPS HEAD M2X6 P0600986 --- ---
1 FACEPLATE ASSEMBLY NTSU0705 01158-00 O2 O1
1 FRONT CASTING P0902913 01159-00 O2 O1
2 LATCH ASSEMBLY NTSU0710 01160-00 O2 O1
1 LATCH LEVER P0902918 01161-00 O1 O4
1 LATCH SLIDER P0902919 01162-00 O1 O3
1 EXTENSION SPRING P0832826 01167-00 --- ---
2 COMPRESSION SPRING P0904674 01168-00 --- ---
2 SHOULDER PIN P0902920 01169-00 O2 O1
2 PLUNGE R P0805045 01170-00 --- ---
2 RETAINING RING P049C820 01171-00 --- ---
1 CARRIER ASSEMBLY NTSU0715 0127-00 O2 O1
1 RIGHT FIBER CARRIER PO887619 01172-00 --- ---
1 CENTER FIBER CARRIER P0902921 01272-00 O2 O1
1 LEFT RJ-45 CARRIER P0902922 01173-00 O2 O3
3 LINKAGE OUTER P0887595 01174-00 --- ---
3 LINKAGE INNER P0887596 01175-00 --- ---
9 LINKAGE PIN THIN P0888030 01176-00 --- ---
6 LINKAGE PIN FAT P0888031 01177-00 --- ---
3 FIBER CARRIER LATCH P0887601 01178-00 --- ---
3 CARRIER LATCH PIN P0890377 01273-00 --- ---
1 EMC PLATE P0902911 01179-00 O2 O1
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
1 EMC PLATE GASKET P0902909 01180-00 O2 O1
1 FIBER CARRIER ID LABELS P0887602 01182-00 --- ---
1 FIBER PORT ID LABELS P0887605 01183-00 --- ---
1 AUX/LED LABEL P0902927 01184-00 O2 O1
2 SIX FINGER GASKET P0846518 01181-01 --- ---
8 NINE FINGER GASKET P0902910 01181-02 O2 O1
2 EIGHTEEN FINGER GASKET P0846519 01181-03 --- ---
2 CABLE TIE P0617129 01166-00 O2 O1
1 LED COVER PLATE P0904678 01280-00 O2 O1
1 FIBER KEY P0905137 01281-00 O2 O1
1 RJ45 ADAPTOR P0902923 01278-00 O1 O1
VENT PANEL EXTRUSION Note: Used for top and P0902906 01277-00 O2 O1
bottom vent panels
MODULE ASSEMBLY B Note: Uses all of the above NTSU07BB
parts in a different configuration
</TABLE>
Avici Shelf
-----------
<TABLE>
<CAPTION>
Description Nortel Part Number Avici # Stream Issue Cil
----------- ------------------ ------- ------ ----- ---
<S> <C> <C> <C> <C> <C>
Narrow Shelf Assm NTSU07AA 01186-00 03 01 1
Support plate rib P0902890 01196-00 03 01 1
Narrow right sidepanel P0920892 01188-00 03 01 1
Narrow left sidepanel P0902891 01189-00 03 01 1
Narrow lower support plate P0902887 01262-00 03 01 1
Narrow upper support plate P0902886 01187-00 03 01 1
Divider P0902895 01193-00 03 01 1
Upper latch feature P0902897 01198-00 03 01 1
Lower Latch Feature P0902896 01197-00 03 01 1
Caddy Assembly NTSU07AB 01263-00 03 01 1
Caddy bar P0902901 01199-00 02 01 1
Left caddy bracket P0902898 01194-00 02 01 1
Right caddy bracket P0902900 01195-00 02 01 1
Wide shelf assembly NTSU07CC 01185-00 03 01 1
Wide left sidepanel P0902893 01192-00 03 01 1
Wide right sidepanel P0902894 01191-00 03 01 1
Wide upper support plate P0902888 01190-00 03 01 1
Wide lower support plate P0902889 01261-00 03 01 1
Narrow profile gasket P0905953 01200-00 03 01 1
EMI backplane gasket P0905954 01201-00 01 01 1
</TABLE>
<PAGE>
SCHEDULE B
PRICES
<TABLE>
<CAPTION>
Product Price Per Product
<S> <C>
1. Circuit Pack EMC Enclosure Piece Part Set $715
2. Assembly of Face Plate Portion of Circuit Pack EMC a maximum of $90 for the
Enclosure Piece Part Set first 1,000 units***; a
maximum of $180
thereafter****
3. EMC Enclosure Shelf Assemblies(2 types)* $678
4. Backplane EMC Gasket Hardware Kit** $ 50
</TABLE>
*Must be ordered in lots of 10 units
**Must be ordered in lots of 1,000 units
***Such 1,000 units does not include the units ordered under Avici Purchase
Order No. 981492, dated April 1, 1999, for which Avici shall pay the charges set
out in such purchase order
****Avici shall be charged, via the applicable invoice, half of the costs
incurred by Nortel in such assembly up to such maximums
<PAGE>
SCHEDULE C
1. Lucent Technologies Inc.
2. DSC Communications Corporation
3. Fujitsu Limited
4. Cisco Systems, Inc.
5. Alcatel Alsthom Cie.
6. Telefonaktiebolaget LM Ericsson
7. Siemens AG
8. Ascend Communications, Inc.
9. Newbridge Networks Corporation
10. NEC Corporation
11. Subsidiaries and affiliates (including parent corporations) of the
foregoing
