Exhibit 10.1
PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTIONS, MARKED "[***]," HAVE BEEN
SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
STRATEGIC ALLIANCE AGREEMENT
This Strategic Alliance Agreement ("Agreement") is entered into effective April
3, 2006 ("Effective Date") between Motorola Wireline Networks, Inc., a Delaware
corporation with offices at Xxx Xxxx Xxxxx, Xxxxxxx, XX 00000 ("Motorola"), and
Amedia Networks, Inc., a Delaware corporation with a principal place of business
at 0 Xxxxxxx Xxx, Xxxxxxxxx, XX 00000 ("Amedia"). Motorola and Amedia may be
referred to individually as a "Party" or collectively as the "Parties."
The Parties are both engaged in providing broadband access platforms to telecom
service providers, and desire to work together to develop one or more new
products for that market; and
Amedia desires to grant to Motorola the right to resell certain of its existing
products to current and future Motorola customers;
Therefore, the Parties agree as follows:
1. DEFINITIONS.
1.1. "Copyrights" means copyrights, copyright registrations, mask works
rights, and mask works registrations, and applications for any of the
foregoing and all other rights corresponding thereto under any
applicable law, treaty or convention, whether registered or
unregistered, in the United States and its territories and in all other
countries of the world.
1.2. "Gateway" means a customer-premises product to provide IP-based services
using Motorola's existing Multi-Service Access Platform and capable of
interoperating with any IP-based set-top boxes that employ IGMP to
signal changes as described in the IP Set Top Application MRD.
1.3. Intellectual Property Rights ("IPR") means any and all right in and to
the following throughout the world, whether registered or unregistered,
as applicable: (i) Patents; (ii) Proprietary Rights; (iii) Copyrights;
(iv) Trademarks; and (v) any similar corresponding or equivalent
intellectual property rights to any one of the foregoing.
1.4. "Resale Products" is defined in Section 3.1.
1.5. "Patents" means classes or types of patents and patent applications,
including utility models, provisional applications, xxxxx patents,
design patents, registered industrial designs and all other similar
protection of inventions as recognized by applicable law, in all
countries of the world and all continuations, continuations-in-part,
divisions, or reissues.
1.6. "Product" means Gateway and Resale Product collectively.
PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTIONS, MARKED "[***]," HAVE BEEN
SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
1.7. "Proprietary Rights" means all trade secret rights and all other
similar or equivalent rights of a proprietary nature in any Product.
1.8. "SOW" shall mean a mutually agreed statement of work or project plan.
1.9. "Successor Product" means any new model, extension, or derivative of a
Product.
1.10. "Term" is defined in Section 20.1.
1.11. "Trademarks" means all rights and goodwill in trademarks, service marks,
logos, trade dress, trade names, web addresses and domain names, whether
registered, unregistered, or pending in the United States and all other
countries.
2. GATEWAY DEVELOPMENT AND MANUFACTURING.
2.1. DEVELOPMENT. The Parties shall jointly develop the three types of IPTV
Gateways described in the Statement Of Work (Exhibit A) for exclusive
sale by Motorola under the Motorola brand.
2.2. NON-RECURRING ENGINEERING ("NRE") COSTS. Motorola will pay Amedia
$1,900,000 for NRE associated with the development and manufacturing of
the Gateway. The NRE, the description and estimated costs of which are
provided in Exhibit B, will be paid according to the following milestone
schedule:
2.2.1. $[***] within five business days of the Effective Date;
2.2.2. $[***] within 30 calendar days after the Effective Date;
2.2.3. $[***] within 30 days of Amedia successfully passing the AM1 IPTV
Gateway Acceptance Test, as set forth in Milestone 13 of the SOW,
and delivering an invoice to Motorola. Feedback on test results
will be provided by Motorola within 30 days of AM1 delivery;
2.2.4. $[***] within 30 days of Amedia successfully passing the entrance
criteria for the IPTV Gateway SVT Acceptance Test, as set forth in
Milestone 21 of the SOW) and delivering an invoice to Motorola.
Feedback on test results will be provided by Motorola within 30
days of delivery to Motorola's designated lab;
2.2.5. $[***] within 30 days of successful completion of IPTV Gateway SVT
Test Plan Execution, including all exit criteria, as set forth in
Milestone 28 of the SOW) and delivering an invoice to Motorola;
and
2.2.6. the remainder ($[***]) is tied to successful completion of no more
than [***] customer beta trials. Upon demonstration by Amedia, in
each of Motorola's first [***] beta trials, that the Gateway
performs according to specifications agreed in the applicable beta
test plans in existence at the completion of milestone 28 in 2.2.5
above, Amedia may issue an invoice for $1[***] for each such
trial, which shall be
2
PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTIONS, MARKED "[***]," HAVE BEEN
SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
paid by Motorola within 30 days of receipt. Each of the first
[***] beta trials must be scheduled by Motorola within the first
60 days following the completion of Milestone 28 referenced in
2.2.5 above or else they will be deemed to be successfully
completed by the Parties for the purposed of payment, and Amedia
may issue an invoice for $[***] for each such trial, which shall
be paid by Motorola within 30 days of receipt.
2.3. NRE PENALTIES.
2.3.1. MILESTONE COMPLETION DATES ("MCDS"). MCDs triggering the NRE
payment obligations in Sections 2.2.3 through 2.2.6, above,
shall be agreed upon and set forth in Exhibit A. In each
instance in which Amedia misses an MCD, for each full week of
delay in meeting such MCD, Amedia shall reduce by 2.5% the total
NRE amount payable by Motorola upon completion such milestone,
to a cumulative cap of 10% of the total NRE payable for such
milestone.
2.3.2. EXTENSION OF MCDS. In the event that Amedia fails to meet an MCD
as the direct result of either an incident of force majeure (as
defined in Section 21.6, below) or a material failure of
Motorola to perform any of its prerequisite obligations under
Exhibit A, such MCD shall be extended for a period of time equal
to the duration of the force majeure incident or the failure of
Motorola to perform its prerequisite obligations, and no
penalties shall be payable unless and until such extended MCD is
missed. In the event that the Parties in good faith agree that a
day-for-day extension of any MCD under the circumstances above
is not reasonable, the Parties shall agree in good faith upon a
new MCD.
2.4. EARLY TERMINATION. Motorola may terminate Gateway development under this
Agreement at any time prior to the completion of development of the
Gateway, in which case Amedia shall be entitled to retain NRE payments
made or due and owing prior to the date on which Motorola provides
notice of termination, as its sole and complete remedy for any costs
incurred under this Agreement.
2.5. AMEDIA FAILURE. If Amedia is unable to fulfill its obligations under
Exhibit A for any reasons (excluding Force Majeure and failure of
Motorola to deliver on its obligations in a timely manner), upon notice
from Motorola, and Amedia's failure to cure such inability within 30
days (or such longer period as agreed by the Parties), Amedia shall
grant Motorola a perpetual, exclusive, royalty-free license to the IPR
and design information for the Gateway for the sole purpose of allowing
Motorola to complete the development of, sell and support the Gateway.
2.6. EXCLUSIVE MANUFACTURING AND PRICING. Upon successful completion of all
required testing, Amedia shall manufacture the Gateway for exclusive
sale to Motorola at a cost, exclusive
3
PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTIONS, MARKED "[***]," HAVE BEEN
SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
of the WAN portion [***], of no greater than [***]. The Parties shall
agree on, and shall subsequently attach as an Addendum to this
Agreement, a methodology for determining final Gateway pricing, based on
manufacturing costs assuming Amedia's current supply chain agreements.
Further improvements in pricing may be realized by utilizing Motorola's
supply chain agreements. The addition of [***] features to the Gateway
specifications shall add no more than [***] to the price of each
Gateway; the actual price will be agreed upon by the Parties prior to
the addition of such features. All prices shall include electronic
source material for all end-user documentation.
3. RESALE.
3.1. Motorola shall have the right to resell, on a non-exclusive basis,
Amedia's existing FTTx product line (not including the Gateway, which
will be sold by Motorola on an exclusive basis), including the Amedia
iNID product (collectively the "Resale Products"), as part of Motorola's
portfolio of broadband wireline solutions. The Parties would jointly
develop channels and mutually resolve channel-conflict issues.
3.2. EXCLUSIVE. Motorola shall have the exclusive right, for a period of 24
months from the Effective Date (the "Exclusivity Period"), to resell
Amedia's PG1000 and HGV100 products, and all derivative or substantially
similar products (the "Exclusive Products"), to the following customers
and their affiliates: [***] (collectively the "Exclusive Customers").
Within 60 days of the Effective Date, Amedia shall complete all changes
necessary to its existing agreements with distributors, so that such
agreements are not in conflict with Motorola's rights under this Section
3.2. However, if Motorola sources, manufactures or resells a gateway
which has substantially the same functionality as Amedia's Products, the
exclusivity in this Section 3.2 and the non-solicitation in Section 10.1
shall immediately terminate. Notwithstanding the foregoing, Amedia may
sell the Exclusive Products, either directly or indirectly through one
or more resellers, to any other customers. Motorola covenants and agrees
to use its best efforts to market the Exclusive Products to the
Exclusive Customers. Motorola further agrees that ongoing exclusive
rights, under this Section 3.2, shall be contingent on the following:
3.2.1. Motorola shall include the Products in the Motorola Wireline
Networks sales plan on or before July 1, 2006;
3.2.2. Amedia and Motorola will have had the opportunity to participate
in at least two joint sales call with one or more Exclusive
Customers on or before October 30, 2006. Either Amedia or Motorola
may arrange such joint call(s);
3.2.3. At least one Exclusive Customer shall have accepted an Exclusive
Product for lab evaluation within one year from the Effective
Date; and
4
PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTIONS, MARKED "[***]," HAVE BEEN
SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
3.2.4. Amedia shall have earned at least $[***] in revenue from the Sale
of Exclusive Products from an Exclusive Customer, or have a
signed contract from an Exclusive Customer to purchase Exclusive
Products (which is reasonably expected to result in at least
$[***] in revenue to Amedia), within 18 months of the Effective
Date.
3.3. In the event that any of the contingencies set forth in Sections 3.2.1
through 3.2.4 are not met, the Exclusivity Period shall terminate as of
the last date for completion of such contingency. Once the contingency
set forth in Section 3.2.4 is met for an Exclusive Customer, the
Exclusivity Period for such Exclusive Customer shall be extended for an
additional 24 months.
3.4. Amedia will re-brand, at its cost, the units of Resale Products that are
ordered and to be sold by Motorola as part of the "Motorola AXS" line,
as specifically directed by Motorola and in accordance with Motorola
policies and procedures. It is understood and agreed that such
re-branding shall be limited to changes in surface markings, and any
visual displays generated by software, on the Resale Products, but shall
not require changes to the overall form, fit and function of the Resale
Products. Motorola shall reimburse Amedia for any reasonably required
costs of recertification of the Resale Products by any certifying
agency. Amedia will provide Motorola with electronic source material for
all Resale Product end-user documentation, and electronic source
material for all training, sales and marketing collateral materials.
4. ADDITIONAL PRODUCT TERMS.
4.1. PAYMENT. Payments due from Motorola for Products purchased under this
Agreement shall be made within 60 days of Motorola's receipt of a
correct invoice.
4.1.1. Amedia shall deliver invoices to Motorola for Products purchased
under this Agreement on an as shipped basis.
4.1.2. All invoices submitted by Amedia to Motorola are subject to
Motorola's right to withhold partial payment in the event of a
good faith dispute pursuant to Section 4.1.3.
4.1.3. If Motorola in good faith disputes any charges, it may withhold
from its payment of the relevant invoice a reasonable amount of
the charges associated with the dispute. If Motorola withholds
any payment pursuant to this Section 4.1.3., Motorola shall
provide to Amedia written notice of the amount and basis for the
withholding. Regardless of any disputed amount, Motorola shall
remit to Amedia the invoiced amount minus the amount withheld.
The Parties will promptly discuss such withholding. If the
dispute on the withheld amount is not resolved through friendly
consultations within seven days from the date Motorola provides
the written notice,
5
then it shall be resolved by mediation under Section 21.7.
4.2. MOST-FAVORED CUSTOMER. Prices for Products and Successor Products will
be no higher than the prices Amedia charges to any other reseller,
customer or other entity for equal or lesser quantities of such products
during the Term. If Amedia offers a lower price for any of these
products to another reseller or customer on equivalent volume, Amedia
will proportionately reduce its price for such product to Motorola.
Amedia will keep appropriate records to demonstrate compliance with this
section, which will be available for inspection by Motorola upon
reasonable notice during regular business hours.
4.3. FORECAST. Motorola will provide Amedia with a rolling 12-month forecast
of requirements for Products. The first 30 days of such forecast shall
constitute a commitment on the part of Motorola to issue firm purchase
orders for such quantities of Products during that 30-day period; the
remaining 11 months of the forecast shall be non-binding. In the event
that Motorola cancels any purchase orders for Products, Motorola's only
liability will be for raw materials Amedia has ordered to support
cancelled Motorola deliveries, provided: i) Amedia's order was
consistent with the applicable forecast in effect at the time of the
cancellation, and was reasonably necessary to support the cancelled
Motorola deliveries; and ii) Amedia uses all commercially reasonable
efforts to mitigate Motorola's liability including but not limited to
attempting to cancel or return its orders for a refund, and using the
material in question for other products or for other customers. Amedia
will use all commercially reasonable efforts to mitigate the amount of
Motorola's liability.
4.4. MOTOROLA SUPPLY CHAIN. At Motorola's request, Amedia shall source any
and all product components through Motorola's supply chain, on terms and
conditions established by Motorola, provided that the pricing and terms
and conditions of sale of such components shall be no less favorable
than those obtainable by Amedia directly.
4.5. HUBBING PROGRAMS. If agreed by both Parties, Amedia may participate in
Motorola's supplier owned inventory programs ("Hubbing Programs") under
which Amedia will retain risk of loss for and title to Products stored
in Motorola or third-party warehouses ("Hubs"). Specific terms and
conditions for the Hubbing Programs will be established under separate
Hubbing Agreements with Motorola and third party Hub operators.
4.6. SUCCESSOR PRODUCTS. Amedia shall inform Motorola of all Successor
Products to be introduced by Amedia after the Effective Date. Such
information will be provided as soon as reasonably practicable, but in
no event later than 90 days in advance of beta availability of each
Successor Product, and Motorola shall be entitled to resell such
Successor Product under the terms of Section 3, above.
4.7. DEVELOPMENT MEETINGS. Representatives of the Parties will meet at least
quarterly to discuss potential improvements and modifications to
Products, and reduction of overall cost. The Parties shall agree in
writing on: implementation of modifications and improvements; the Party
to be responsible for the development work; and the Parties' respective
ownership of IPR in such modifications and improvements.
6
PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTIONS, MARKED "[***]," HAVE BEEN
SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
4.8. OEM RELATIONSHIP. [***]
5. OWNERSHIP OF IPR. The Parties agree that at no time shall either Party
acquire or retain, or appropriate for its own use, any right, title or
interest in or to any of the other Party's IPR. Neither Party shall take
any action that might impair in any way any right, title or interest of
the other Party in or to any of that Parties' IPR. The IPR of each Party
shall remain the sole property of such Party. Any jointly developed IPR,
including all new IPR created in the Gateway, shall be jointly owned,
and each Party shall execute any and all legal documentation reasonably
required to evidence that joint ownership. Each Party shall grant the
other a perpetual, non-exclusive, royalty-free license in the jointly
developed IPR.
6. LICENSE. Amedia grants to Motorola a perpetual, non-exclusive, worldwide,
fully assignable and transferable, royalty-free license under Amedia's
IPR to:
6.1. Use, market, distribute, offer, sell and otherwise dispose of Products
manufactured by Amedia to Motorola customers at prices determined solely
by Motorola; and
6.2. Sublicense to distributors, customers and end users solely the right to
use the Products, including any software associated with the Products.
7. CHANGE, DISCONTINUANCE, SERVICE AND SUPPORT.
7.1. PRODUCT CHANGE. Amedia will not make changes to Products sold to
Motorola or changes to the processes, BOM, materials, design, tools, or
locations used to manufacture the Products without Motorola's prior
written approval, which shall not be unreasonably withheld. Amedia will
provide Motorola a minimum of six months' prior written notice of any
intent to change the design, content, form, fit, or function of any
Product. Backward compatibility to prior Product and software versions
is required unless agreed otherwise. Motorola will respond to each
Product Change Notice ("PCN"). If Motorola provides written acceptance,
Amedia may make the requested change and begin to ship modified Products
once they have been qualified. If Motorola rejects the change or does
not provide written acceptance within 90 days of receipt of the notice,
Amedia may not make the change. If Amedia does not follow Motorola's
required Product change process, and such change results in a claim by a
Motorola customer, Amedia is completely responsible for all direct
damages, losses and expenses incurred by Motorola and its customers
("Damages"). Damages for purposes of this section include without
limitation, costs of inspection, storage, shipping, reinstallation,
expediting, product recalls, stop of line, plant closures, and any
resulting injuries.
7.2. DISCONTINUED PRODUCT. If Amedia intends to stop offering any Product
for sale to Motorola ("Discontinued Product"), Amedia will give Motorola
a minimum of nine months' prior written notice ("EOL Period"). During
the EOL Period, Motorola will provide Amedia
7
with a preliminary forecast of anticipated demand for the Discontinued
Product in the EOL Period and a preliminary final lifetime buy volume
forecast, and Motorola may continue to place orders for Discontinued
Product, with delivery not to exceed 12 months from the date of the
order. At the conclusion of the EOL Period, Motorola will take receipt
of the final lifetime buy of Discontinued Product over the next calendar
quarter. At Motorola's request, Amedia will sell to Motorola or its
designated third-party manufacturer at book value all Amedia owned
materials exclusively necessary for manufacture of the Discontinued
Product, and Amedia will assist Motorola in making alternative supply
arrangements for the manufacture and supply of Discontinued Product,
including granting to Motorola and a third-party manufacturer, a
perpetual, irrevocable, worldwide, non-exclusive, royalty-free,
transferable license under Amedia's IPR to such materials and all
relevant technology, to use, reproduce, modify, display, perform,
distribute copies of and sublicense such materials and technology, and
to make or have made, sell, offer to sell, import, otherwise dispose of,
sublicense and distribute the Discontinued Product.. For purposes of
this Section 7.2, Amedia's IPR includes any rights Amedia has obtained
to the IPR of third parties, to the extent that such rights are
necessary for the sale, use or other distribution of the Products
supplied to Motorola under this Agreement. If Amedia is unable to
transfer or sublicense those rights to third party IPR, then Amedia
will, at Motorola's request, assist Motorola in obtaining the necessary
rights from the third party.
7.3. MOTOROLA CHANGES. Motorola may request changes to Products ("Requested
Changes"). Amedia will use reasonable efforts to implement the Requested
Changes and all future applicable orders will be deemed amended to
incorporate the changes. Motorola agrees to purchase any unsold
inventory or goods ordered via a valid Motorola purchase order prior to
the Requested Change to the Product being delivered by Amedia. If the
Requested Changes will increase or decrease the cost of performance or
the time required to perform, Amedia will advise Motorola in writing,
and Amedia will not implement the change until Motorola gives Amedia
written authorization to do so. If Amedia deems any Requested Changes to
be beyond its ability to undertake and support with existing resources,
Amedia will provide Motorola with an NRE quotation allowing Motorola to
compensate Amedia to prioritize or add resources to undertake the
Requested Change. Motorola, however, shall be under no obligation to
accept any NRE quotation from Amedia and Amedia shall not undertake any
NRE efforts and shall not be obligated to implement any Requested
Changes until such efforts are approved by Motorola in writing. Amedia
will provide Motorola written description of any resulting costs to the
Product related to the Requested Change, including any changes to the
design, content, components, form, fit, or function of any Product. The
parties agree to execute additional SOWs or amendments to this Agreement
as necessary to accommodate such NRE and to specify ownership of any
resulting IPR resulting from any Requested Change and/or NRE. Under no
circumstances shall Amedia invoice Motorola for any engineering effort
required to achieve functional specifications described in any agreed
upon Product specification or SOW or to repair defect in any Product
unless as otherwise contained in this Agreement or agreed upon in
writing by Motorola. In the event that Motorola cancels any such NRE or
Requested Change following commencement of performance by Amedia at any
time during which any such work remains outstanding, Motorola shall
compensate Amedia on a pro-rata basis for work performed as of the
effective date of such cancellation.
8
7.4. ONGOING SUPPORT. Amedia will make available spare parts and repair
services for a period of seven years after notice of Product
discontinuance.
8. ESCROW. Amedia shall maintain the source code for all software developed
by Amedia and use reasonable efforts to obtain any sublicensed third-party
software for which Amedia has made any modifications to the source code,
provided to Motorola under this Agreement (collectively the "Escrow
Materials") in escrow (in electronic text format compatible with vi or
EMACS text editors) with Iron Mountain, Inc. The Parties shall use their
best commercially reasonable efforts to enter into the Escrow Agreement
in Exhibit C with Iron Mountain within 90 days following the Effective
Date. Amedia shall bear the expense of such escrow arrangement.
8.1. Escrow Materials for each Gateway shall initially be delivered to the
escrow agent under the Escrow Agreement immediately upon payment of the
final NRE installment under Section 2.2.6, above. Escrow Materials for
each Resale Products shall be delivered to the escrow agent within 60
days of Amedia's receipt of the Motorola's first purchase order for such
Product. Thereafter, Amedia will make, under the terms of the Escrow
Agreement, an annual deposit of updated Escrow Materials with respect to
the Products subject to this Agreement. In addition, if a Release
Condition (as defined below) occurs, Amedia will provide Motorola with
then-current versions of the Escrow Materials for each Product.
8.2. RELEASE. The escrow agent will release the Escrow Materials to Motorola,
under the terms of the escrow agreement, if a "Release Condition," as
defined below, occurs:
8.2.1. Amedia becomes the subject of any proceeding under any bankruptcy,
receivership, insolvency or similar laws instituted by or against
Amedia, which proceedings are not dismissed as to Amedia within
45 days after being instituted;
8.2.2. The occurrence of a material breach by Amedia of its obligations
under this Agreement, which material breach is not cured by
Amedia within 30 days after Amedia's receipt of notice of such
material breach from Motorola; or
8.2.3. Any change of control of Amedia, including without limitation the
acquisition of Amedia by or merger of Amedia into any other
entity, unless within 30 days of the change of control, the
newly controlling entity provides a specific written
acknowledgement to Motorola accepting the terms and conditions of
this Agreement.
8.3. Subject to the terms of this Agreement and the Escrow Agreement, Amedia
grants Motorola a non-exclusive, royalty-free, non-assignable (except
under Section 16.3), non-transferable, non-sublicenseable license to
receive all Escrow Materials released to Motorola under Section 8.2 and
the terms of the Escrow Agreement. Once Amedia cures the Release
Condition, to the reasonable satisfaction of Motorola, this license will
expire and Motorola must promptly return or destroy the Escrow
Materials. Both Parties shall protect the Escrow Materials as
Confidential Information under Section 17. It is understood and agreed
that any Escrow Materials released to Motorola under this Section 8
9
shall be used for the ongoing support and maintenance of the Products
only, and not for development of new products.
9. SUPPORT OBLIGATIONS.
9.1. PRODUCT SUPPORT. Amedia shall supply ongoing support for the Products
during the Term of this Agreement. Such support shall include, without
limitation, ongoing software releases, updates, and bug fixes, along
with hardware and software support. All such support shall be made
available to Motorola on terms no less favorable than those offered
PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTIONS, MARKED "[***]," HAVE BEEN
SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
to any other Amedia customer.
9.2. FIELD TRIAL SUPPORT. Amedia shall provide, at its sole expense,
reasonable on-site support to Motorola and customers for field trials of
Products during the first 12 months after the Effective Date.
10. NON-SOLICITATION, NONCOMPETITION AND RIGHT OF FIRST REFUSAL.
10.1. NON-SOLICITATION. Amedia agrees that it will not, during the Term and
for a period of two years after the expiration of the Agreement,
directly or through any third party, sell, solicit or accept any orders
for any Products, or substantially similar products, from any customer
to which Motorola has sold Products during the Term. This provision
shall not apply: a. to sales of Products or substantially similar
products via a distributor who has made sales of Amedia products to such
customer in the previous 12 months; or b. after termination of this
Agreement by Amedia for cause or by Motorola for convenience.
10.2. MOTOROLA COMPETITORS. In addition to the exclusive resale terms set
forth in Section 3.2, above, Amedia shall not, during the Term,
cooperate with any company that could reasonably be considered to be a
"Competitor" of Motorola to sell any Products, or substantially similar
products. Provided, however, that Amedia may work with Competitors to
sell any Product fed exclusively via a 10/100 Cat 5 or Fiber Ethernet
interface. For purposes of this Section 10.2, Motorola's Competitors
include, [***]. This paragraph shall not apply to prohibit
interoperability testing, reference sales, or any other activity that
does not result in revenue to such Competitors.
11. TECHNICAL SUPPORT.
11.1. CUSTOMER SUPPORT. During the Term, Amedia will provide Tier 2 and Tier
3 Support (as defined below) to Motorola customers. Motorola will
provide Tier 1 support.
11.1.1. TIER 1 SUPPORT. Tier 1 Support is the initial response to customer
queries and problem reporting. This involves collecting failure
data, location, Product and warranty information. Tier 1 Support
begins the troubleshooting process to determine the
10
appropriate resolution path.
11.1.2. TIER 2 SUPPORT. Tier 2 Support is the second phase of problem
isolation, in which support personnel work directly with the
customer's technical staff to perform troubleshooting processes,
and identify, isolate, and resolve customers' reported problem,
including, but not limited to, repairing or replacing defective
Products. Tier 2 Support shall be provided as set forth in
Exhibit D.
11.1.3. TIER 3 SUPPORT. Tier 3 Support (as set forth in Exhibit D) shall
include the following:
11.1.3.1. TELEPHONE SUPPORT. Telephone assistance with respect to
Products within one hour after Motorola contacts the
Amedia call center at 000-000-0000(within USA) and
x0-000-000-0000, option 4 (outside USA). Telephone
support shall be available on a 24x7, 365 basis. The
call center shall provide Motorola with a case number
and assign a technical support engineer, who shall work
with Motorola to track the problem and identify a
reasonable workaround or other resolution.
11.1.3.2. EMAIL SUPPORT. Technical support not requiring a 24-hour
response may be requested via email at
XXXXXXXXXXX@XXXXXXXXXXXXXX.XXX; and
11.1.3.3. ON-SITE SUPPORT. If a problem cannot be resolved via
telephone, at Motorola's request, Amedia shall provide
on-site support to perform additional troubleshooting
and implementation of a resolution. If such on-site
support is of a Tier 1 or Tier 2 nature, Motorola shall
bear the costs for such support at the rates set forth
in Exhibit B. If the on-site support is determined to be
of a Tier 3 Support nature, Amedia shall bear all costs
for such services.
11.2. ADDITIONAL AMEDIA OBLIGATIONS.
11.2.1. INSTALLATION SUPPORT. If requested by Motorola, during the first
customer installation of each type of generally available
Product sold by Motorola, Amedia shall provide one person
on-site to support and train Motorola, at Amedia's expense, not
to exceed one week.
11.2.2. FAILURE REPORTS. Amedia shall provide a report on any Product
returned for repair. Such report shall state how the Product was
tested, the nature of the defect or failure, if known, what
corrective action was taken, and the final test results.
11.2.3. SOFTWARE SUPPORT. Motorola may report bugs or malfunctions in
Product software to Amedia by contacting the Amedia Call Center.
Amedia shall make reasonable efforts to track the reported
problem and identify a reasonable workaround or resolution,
including bug fixes if deemed necessary, to bring such software
into compliance with specifications as soon as reasonably
possible. Any necessary bug fixes will be provided to Motorola
for installation in the field. During the warranty period,
Amedia shall provide Motorola with any bug fixes when and if
available, as released
11
by Amedia and applicable to the Products supplied. Amedia shall
provide Motorola with hardware compatibility information
applicable to any such bug fix released.
11.2.4. EMERGENCY SUPPORT. Amedia shall support Motorola on a priority
basis in the event of a Product failure that causes an emergency
"out of service" condition at a customer. Such support may
include telephone assistance and on-site support. If the Product
involved is in warranty under Section 14, any costs of such
emergency support shall be borne by Amedia.
11.2.5. OUT-OF-WARRANTY SUPPORT. Any out-of-warranty repair requested by
Motorola shall be performed by Amedia at a cost based on its
standard time and materials rates.
11.2.6. ADDITIONAL SUPPORT. Additional support services, that may be
requested by Motorola, and agreed to by Amedia, that are for
services other than Tier 3 Support as described above, shall be
provided upon a schedule agreed to by the Parties at its
standard time and materials rates. When such additional support
services are requested, Amedia will provide Motorola with an
estimated price and also advise Motorola of ordering and service
completion procedures.
11.3. ESCALATION PROCEDURES.
11.3.1. AMEDIA. At any time, Motorola may contact the Amedia Call Center
to request escalation of a technical issue or previously
reported problem. Upon receipt of such escalation request, the
Amedia Call Center shall route the caller to an appropriate
individual or provide contact information to Motorola as
necessary.
11.3.2. MOTOROLA. At any time, Amedia may contact the Motorola CNRC at
___-___-____ to request escalation of a technical issue or
previously reported problem. Upon receipt of such escalation
request, the Motorola CNRC shall route the caller to an
appropriate individual or provide contact information to Amedia
as necessary.
12. TRAINING.
12.1. SKILLS TRAINING. Amedia will provide one Product support skills training
class ("Skills Training") sufficient to enable qualified Motorola
technical personnel to provision, configure, operate, install, test,
maintain, commission, and troubleshoot the Products, and to train other
Motorola personnel to do the same. Amedia will make Skills Training
available at a site designated by Motorola within 90 days of the
Effective Date. The on-site engineering personnel provided by Amedia
shall be knowledgeable about, and able to answer detailed questions from
comparable Motorola technical staff regarding, all aspects of the design
and functioning of the Products. Additional Skills Training sessions may
be made available by Amedia on a time-and-materials basis.
12.1.1. Skills Training will comprise any Amedia-provided visual aids or
reference materials, on-the-job training, and information
sessions, as typically found in Amedia's support skills training
programs. A Skills Training plan will be mutually developed
within 60
12
days of the Effective Date, and will be focused on developing
Motorola's capabilities to fulfill its technical support
obligations. Amedia shall provide, within 30 days of the
Effective Date, documented prerequisites, if any, for such
training.
12.1.2. The agreed upon Skills Training will be provided at Motorola's
Andover facility, or at such other locations(s) as agreed, and
shall include, but not be limited, to each of the published
Product courses Amedia makes available to its customers.
12.1.3. New course materials for Skills Training on new or modified
Products will be developed by Amedia at no charge.
12.2. COURSEWARE. Amedia will provide Motorola with currently available end
customer courseware electronic source material ("Courseware") at no
charge. Amedia shall provide initial Courseware at least 90 days after
the first customer shipment or 90 days after the Effective Date,
whichever is later. Additional Courseware will be provided on a mutually
agreed schedule. Updates to Courseware will be provided at no charge
when made available. Amedia will provide Courseware electronically in a
format that is compatible with Interleaf (Unix-based) or Microsoft Word
and PowerPoint for PC Windows application. Amedia will solicit
Motorola's input when developing Courseware.
12.2.1. Amedia will provide electronic source material for Courseware for
the following courses: (a) Overview of Product; (b) Operations of
Product; (c) Maintenance of Product; (d) Deployment Guidelines;
(e) Installation and Turn-up; and (f) Troubleshooting
12.2.2. Subject to the terms and conditions of this Agreement, Amedia
grants Motorola a limited, worldwide, fully paid-up, non-exclusive
license during the Term to adapt the Courseware to different media
without altering its substance, and to reproduce and distribute
Courseware for use by customers in connection with the use of
Products. When adapting or reproducing any part of the Courseware,
Motorola shall include all copyright and other proprietary
notices as are contained on each part of the Courseware or as
may be reasonably specified from time to time by Amedia.
13. QUALITY.
13.1. TL-9000 CERTIFICATION. Within 360 days of the Effective Date, Amedia
shall obtain TL-9000 certification, at its own expense, and Amedia shall
maintain such certification during the Term and any extensions. Amedia
shall promptly inform Motorola in writing of any loss of such
certification, and use reasonable efforts to obtain recertification.
13.2. ADDITIONAL QUALITY COMMITMENT. Amedia shares Motorola's commitment to
quality and total customer satisfaction. Product malfunctions create
customer dissatisfaction and loss of goodwill. Therefore, in addition to
its warranty and other obligations under this Agreement, Amedia agrees
to provide assistance to Motorola in preventing and solving quality
problems attributable to the Products, including, without limitation,
by:
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13.3. maintaining a quality improvement program focused on producing both
major and incremental continuous improvement in Product and process
quality;
13.4. maintaining a quality assurance function covering all aspects of its
business, including product development, support services, manufacturing
and vendor quality;
13.5. participating in periodic quality reviews and working with Motorola to
improve Amedia's quality systems based on the outcome of such reviews;
13.6. attending customer meetings to address quality issues, taking action
items and working with Motorola to resolve such issues;
13.7. documenting its hardware development and manufacturing processes;
13.8. promptly diagnosing and remedying any widespread occurrences of Product
defects;
13.9. serializing all Field Replaceable Units ("FRUs") to allow tracing of
individual units should epidemic or lot-related quality issues arise
(serial numbers shall be obtainable without removing the FRU from
operation);
13.10. allowing Motorola and representatives of its customers - upon reasonable
notice during business hours, on no greater than a semi-annual basis -
to audit Amedia facilities and records for purposes of verifying
compliance with the terms set forth in this Section 13;
13.11. auditing, or facilitating a direct Motorola audit, of its suppliers'
facilities and records to verify the existence of quality programs
similar to those required under this Section 13;
13.12. establishing quality-driven return policies including detailed and
timely root-cause-analysis reports, and clearly documented and
communicated corrective action plans.
13.13. managing manufacturing and validation processes to ensure that Product
lot variations and component substitutions do not impact
customer-perceived quality.
13.14. continually striving to mimic customer environments during development,
testing and validations processes to reduce the risk of defects;
13.15. ensuring that Products meet applicable product safety requirements;
13.16. providing Motorola with a list of any restricted or controlled materials
used in Products or processes;
13.17. providing full material composition, recycled content, and recyclability
information regarding Products.
14
13.18. providing Motorola access to Amedia's quality data for the purpose of
measuring continuous process improvement; and
13.19. providing to Motorola, upon request, details of all above programs and
processes, along with results of reviews, audits, tests and other
actions discussed above.
14. WARRANTY.
14.1. TITLE. Amedia represents and warrants that all Products sold by Amedia
under this Agreement shall be owned by, or in the case of software,
licensed to, Amedia immediately prior to the time of shipment, free and
clear of any liens or encumbrances.
14.2. WORKMANSHIP AND MATERIALS. Amedia represents and warrants that all
Products sold by Amedia under this Agreement shall be free from defects
in workmanship and materials and conform to all applicable
specifications for the following periods from the date of shipment:
hardware -five years; and software - one year.
14.3. RMA. Amedia shall provide, at its sole cost, return materials
authorization ("RMA") support to Motorola customers, through Motorola's
CNRC for all Products for the duration of the applicable warranty
periods for such Products.
14.4. DESIGN DEFECTS. Amedia warrants that each hardware or software component
of each Product will be free from defects in design that cause the
Product to not meet its specifications, for five years (one year for
software) from the date a Product manufactured by Amedia is shipped to a
customer during the Term.
14.5. OUT-OF-WARRANTY REPAIRS. All out-of-warranty repairs performed by Amedia
shall be free from defects in workmanship for a period of 180 days from
date of return of the repaired Product. Turn-around time for all out of
warranty repairs shall not exceed 15 days from date of receipt.
14.6. REMEDIES. If Product does not comply with the warranties in this
Agreement, Amedia will, at its option, repair or replace defective
Product hardware, correct software defects, re-perform services, or
refund the purchase price of the Product. Amedia will also reimburse
Motorola for costs Motorola incurs to repair or replace products that
incorporate or are impacted by the non-compliant Products (including
shipping and handling costs), and for customer charges and damages
incurred and paid by Motorola. Amedia agrees that these remedies are in
addition to any other remedies provided elsewhere in this Agreement and
remedies available under law or equity. Except for the indemnity
obligations in Section 15, these are the sole and complete remedies
available for warranty and out of warranty repairs.
14.7. EPIDEMIC FAILURE. "Epidemic Failure" shall mean a hardware or software
defect which affects more than 5% of the installed base of a Product
during the applicable warranty period, and which the Parties reasonably
determine to have a common root cause. In the event of an Epidemic
Failure, Amedia will immediately take remedial action, at its sole
15
expense, for all impacted and potentially impacted Products, including
Products in the field or in Motorola's or any customer's inventory,
under a corrective action plan approved by Motorola. Amedia, at its sole
expense, will repair or replace, at Amedia's option after consulting
Motorola, all impacted and potentially impacted Products and will
reimburse Motorola for any direct and reasonable costs Motorola incurs
in connection with the Epidemic Failure. If Amedia fails to fulfill any
of its obligations to remediate or reimburse, Motorola may cancel all
open orders without any liability. Amedia will pay: (i) the costs of
recovering, and repairing or replacing any Motorola products
incorporating or otherwise potentially impacted by non-conforming or
defective Product; (ii) any customer charges Motorola incurs; (iii) any
other direct costs incurred by Motorola or its customers. Provided,
however, that Amedia shall have no obligations under this Section 14.7
for such costs to the extent that they are attributable to the acts or
omissions of Motorola.
14.8. REPAIR AND REPLACEMENT.
14.8.1. Amedia warrants that services for repair and replacement of
Products will be performed in a good and workmanlike manner and
in accordance with industry standards, and that parts, material
and components furnished will be free from defects for a period
of 90 days from the shipment date or the remainder of the
un-expired initial warranty, whichever is longer.
14.8.2. If Amedia fails to meet the warranties in Section 14.8.1, Amedia
will re-perform the repair services and replace any defective
parts, material and components without additional cost to
Purchaser. In the event of material and repeated failure of
Amedia to meet its obligations to perform repair and replacement
services in accordance with industry standards for repaired
product quality and/or Amedia's committed repair turnaround
times, Motorola may choose to repair Products internally or use
a third-party provider to provide in-warranty services and
Amedia shall be responsible for all reasonable costs associated
with such Motorola internal or third-party repair or replacement,
including inbound and outbound transportation costs.
14.9. NETWORK INTERFACE/SYSTEM INTEGRATION. Both Parties represent and warrant
that their software development related to the network interface of the
Product and system integration shall be performed in a good and
workmanlike manner and in accordance with all industry standards.
14.10. SERVICES. Amedia warrants that all other services provided under this
Agreement shall be performed in a good and workmanlike manner and in
accordance with all industry standards. If Amedia fails to meet this
warranty, it shall re-perform those services until such breach is cured.
14.11. DISCLAIMER. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES IN THIS
SECTION 14, NEITHER PARTY MAKES ANY ADDITIONAL REPRESENTATION OR
WARRANTY OF ANY KIND WHETHER EXPRESS, IMPLIED, OR STATUTORY, AS TO ANY
MATTER. EACH PARTY EXPRESSLY DISCLAIMS
16
ALL IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, AND NON-INFRINGEMENT.
15. INDEMNIFICATION.
15.1. GENERAL. Each Party will indemnify and save the other Party (including
without limitation that Party's parents, subsidiaries, affiliates,
officers, directors, employees, agents and representatives (collectively
the "Indemnified Parties")) harmless from any loss or damage to real
property or tangible personal property or from any loss or damage
arising from bodily injury, including death (collectively a "Claim"), to
the extent such Claim is caused by the negligent acts or omissions or
intentional wrongdoing of the indemnifying Party's employees,
subcontractors or agents and arises out of the performance of this
Agreement, provided that the indemnified Party gives the indemnifying
Party prompt written notice of such Claim. Upon agreement in writing by
either Party to fully indemnify the other Party against any Claim, the
indemnified Party shall give the indemnifying Party full opportunity and
sole authority to defend and settle the Claim, and furnish, upon
request, all information and assistance reasonably necessary for the
defense of such Claim.
15.2. INTELLECTUAL PROPERTY.
15.2.1. Each Party will defend, indemnify and hold harmless the other
Party against any claim brought against them alleging that the
IPR incorporated in any Product infringes any third party's
rights existing at the time of the Effective Date of this
Agreement under registered patent, copyright or trade secret law
in the United States, and shall pay all costs, damages and
attorneys' fees incurred, provided that indemnified Party: (a)
promptly notify the indemnifying Party in writing of the claim;
and (b) allows the indemnifying Party to control, and reasonably
cooperates with the indemnifying Party in, the defense and any
related settlement negotiations.
15.2.2. However, neither Party shall have any obligation to indemnify the
other Party under Section 15.2.1, to the extent any claim of
infringement is caused by any of the following:
15.2.2.1. Either Party's use of an item that is the subject of the
infringement claim (the "Item"), in a manner that causes
infringement if such manner was not actually known to the
other Party prior to the claim of infringement;
15.2.2.2. Either Party's combination of an Item with any hardware,
software, or other product, or the modification of the
Item, in a manner that causes the infringement, if such
manner was not actually known to the other Party prior to
the claim of infringement;
15.2.2.3. Either Party's failure to apply commercially reasonable
corrections or enhancements to the Item that were made
available by the other Party and that, if applied, would
have rendered the Item non-infringing; or
17
15.2.2.4. Either Party's development of the Item in accordance with
detailed, non-discretionary technical designs or
technical specifications (as opposed to functional or
business specifications or other general requirements) or
to achieve a specific, non-discretionary business process
required by the other Party.
15.2.3. If a Product in Motorola's or a customer's possession becomes, or
Amedia believes is likely to become, the subject of such a
claim, Amedia will at its option and expense: (a) procure for
Motorola and its customers to right to continue to use the
infringing Product; (b) modify the Product so it is no longer
infringing; or (c) replace it with an equivalent non-infringing
Product that does not materially affect form, fit or
functionality, and does not require modification of software
code or other technology to accommodate such replacement
Product. In the event that Amedia modifies the Product, or
replaces it with a functionally equivalent non-infringing
Product, the modified or replacement Product shall be added to
the list of "Products" in Exhibit A, and all IPR contained in
such modified or replacement Product shall immediately be
subject to all terms and conditions of this Agreement. If none
of these alternatives is reasonably available: Motorola and/or
its customers shall return all affected Amedia-manufactured
Products to Amedia, and Amedia will refund the full purchase
price of the Products plus any costs incurred in retrieving and
returning those Products; and Amedia will reimburse Motorola for
all costs incurred by Motorola in retrieving and reimbursing
customers for Motorola-manufactured Products.
15.3. PRODUCT LIABILITY INDEMNIFICATION BY AMEDIA
15.3.1. Subject to Motorola's indemnification obligations , Amedia will,
at its option and expense, defend the Motorola Indemnified
Parties from or settle any claim brought by a third party
against a Motorola Indemnified Party that arises directly from
any injury or death to persons or loss of or damage to property
that is caused directly by a design defect in a Product provided
that Motorola: (a) promptly notifies Amedia in writing of the
claim; and (b) allows Amedia to control, and reasonably
cooperates with Amedia in, the defense and any related
settlement negotiations.; and (c) complies with any settlement
or court order made in connection with such claim (e.g.,
relating to the future use of any Product containing a design
defect). The Motorola Indemnified Parties will not defend or
settle any such claim without Amedia's prior written consent.
The Motorola Indemnified Party shall have the right to
participate in the defense of such claim at its own expense and
with counsel of its own choosing, but Amedia will have sole
control over the defense and settlement of the claim.
15.3.2. Amedia will indemnify the Motorola Indemnified Parties against
and pay: (a) all damages, costs, and attorneys' fees awarded
against a Motorola Indemnified Party in any claim under Section
15.3.1; (b) all out-of-pocket costs (including attorneys' fees)
reasonably incurred by any of them in connection with the
defense of such claim, including assistance provided under
Section 15.3.1 (other than attorneys' fees and costs incurred
without Amedia's consent after Amedia has accepted defense of
such claim); and, (c) if any claim arising under Section 15.3.1
is settled, all amounts to be paid to any third party in
settlement of any such claim (as agreed to by Amedia).
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16. LIMITATION OF LIABILITY.
16.1. DISCLAIMER OF CONSEQUENTIAL DAMAGES. EXCEPT FOR LIABILITY ARISING OUT OF
SECTION 15, NEITHER PARTY WILL, UNDER ANY CIRCUMSTANCES, BE LIABLE TO
THE OTHER PARTY FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, SPECIAL,
PUNITIVE, OR EXEMPLARY DAMAGES ARISING OUT OF OR RELATED TO THIS
AGREEMENT, INCLUDING BUT NOT LIMITED TO LOST PROFITS, LOSS OF BUSINESS,
AND BUSINESS INTERRUPTION, EVEN IF SUCH PARTY IS APPRISED OF THE
LIKELIHOOD OF SUCH DAMAGES OCCURRING.
16.2. DIRECT DAMAGES. Amedia agrees that the any and all damages incurred by
Motorola as a result of the following acts or omissions by Amedia
(except and to the extent any such damages are attributable to the acts
or omissions of Motorola) shall be considered "direct" and not
"consequential" damages for the purpose of interpreting the disclaimer
in Section 16.1, and thus recoverable by Motorola: late delivery; poor
Product quality; warranty failures; and epidemic defects.
16.3. CAP ON LIABILITY. EXCEPT FOR LIABILITY ARISING OUT OF SECTION 15, UNDER
NO CIRCUMSTANCES WILL EITHER PARTY'S TOTAL LIABILITY OF ALL KINDS
ARISING OUT OF OR RELATED TO THIS AGREEMENT, REGARDLESS OF THE FORUM AND
REGARDLESS OF WHETHER ANY ACTION OR CLAIM IS BASED ON CONTRACT, TORT, OR
OTHERWISE, EXCEED THE TOTAL AMOUNT PAID OR PAYABLE UNDER THIS AGREEMENT.
17. INSURANCE.
17.1. Amedia will maintain: (i) statutory Worker's Compensation, Employer's
Liability, Broad Form Commercial General Liability, and Business
Automobile Liability Insurance on behalf of Amedia and its
subcontractors, and Contractual Liability Insurance for liability under
this Agreement, in each instance of at least $2,000,000 combined single
limit; (ii) reasonably adequate insurance covering its assets and
operations implicated by this Agreement; and (iii) Umbrella / Excess
Liability Insurance of $5,000,000 per occurrence. In addition Amedia
will: name Motorola as an additional insured and, under the Commercial
General Liability policy, include a cross-liability endorsement; provide
a waiver of subrogation in favor of Motorola under the Workers
Compensation and Employers' Liability policies; cause its insurance to
be designated as primary and provide for thirty days' minimum prior
notice of cancellation to Motorola; at Motorola's request, furnish
evidence of insurance from a licensed insurance provider reasonably
acceptable to Motorola; and require the vendors and suppliers in its
supply chain to maintain, at a minimum, the same coverage and limits
required of Amedia.
17.2. Nothing contained within these insurance requirements will be deemed to
limit or expand the scope, application or limits of the coverage
afforded, which coverage will apply to each insured to the full extent
provided by the terms and conditions of the policies. Nothing contained
within this provision will affect or alter the application of any other
provision
19
contained with this Agreement. Deductibles or self-insured retentions
must not exceed $50,000 unless declared to and approved by Motorola
prior to the date of this Agreement. The deductible or self-insured
retention of the policies will not limit or apply to Amedia's liability
to Motorola and will be the sole responsibility of Amedia.
18. COMPLIANCE WITH LAWS.
18.1. ETHICAL CONDUCT, ANTICORRUPTION AND UNFAIR BUSINESS PRACTICES. Motorola
has historically depended on upon product quality and superiority,
combined with outstanding support capability, to sell its products.
Accordingly, Amedia agrees to perform the services hereunder with the
highest ethical standards. Motorola will not do business with any entity
or person where Motorola believes that payoffs or similar improper or
unethical practices are involved. Motorola expects its suppliers to
abide by this policy and not to have a relationship with another entity
or person, or engage in any activity, that results or may result in a
conflict of interest, or embarrassment to Motorola, or harm to
Motorola's reputation. Amedia will: (i) maintain transparency and
accuracy in corporate record keeping; (ii) act lawfully and with
integrity in handling competitive data, proprietary information and
other intellectual property; and (iii) comply with legal requirements
regarding fair competition and antitrust, and accurate and truthful
marketing. Amedia will not engage in corrupt practices, including public
or private bribery or kickbacks. Motorola also agrees to comply with
this Section 18.1. If either Party fails to comply in any respect with
all of these requirements, then the other Party may immediately and
without liability terminate this Agreement.
18.2. ANTIDISCRIMINATION AND HUMANE TREATMENT OF WORKERS.
18.2.1. Amedia will employ workers on the basis of their ability to do the
job and not on the basis of their personal characteristics or
beliefs.
18.2.2. Amedia will assure that Products (including parts) (except those
provided or sourced by/through Motorola)will not be produced,
manufactured, mined, or assembled with the use of forced,
prison, or indentured labor, including debt bondage, or with the
use of illegal child labor in violation of International Labor
Conventions for minimum age (ILO-C138) and child labor
(ILO-C182). If Amedia recruits contract workers, Amedia will pay
agency recruitment commissions, will not require workers to
remain in employment for any period of time against their will,
and will not impose any early termination penalties on workers.
If Amedia provides housing or eating facilities, Amedia will
assure the facilities are operated and maintained in a safe,
sanitary and dignified manner.
18.2.3. Amedia will operate safe, healthy and fair working environments,
including managing operations so levels of overtime do not
create inhumane working conditions. Amedia will pay workers at
least the minimum legal wage applicable in the place of
employment, or where no wage laws exist, the local industry
standard. Amedia will assure that workers are free to join, or
refrain from joining, associations of their own choosing, unless
otherwise prohibited by law. Amedia will not routinely
20
require workers to work in excess of six consecutive days without
a rest day.
18.3. ENVIRONMENTAL PROTECTION.
18.3.1. Amedia will implement a functioning environmental management
system in accordance with ISO 14001 or equivalent. Third-party
registration is recommended but not required.
18.3.2. Amedia certifies that Products and their parts (except those
provided or sourced by/through Motorola) do not contain and are
not manufactured with a process that uses any Class I
ozone-depleting substances (as identified in 40 CRF Part 82
Appendix A to Subpart A, or as subsequently identified by the
U.S. Environmental Protection Agency as Class I ozone-depleting
substances). For Products imported into the United States,
Amedia will provide Motorola with a completed and signed ODS
Certification Questionnaire, accessible at the following URL:
XXXX://XXX.XXXXXXXX.XXX/XXXXXXX/0,,0000,00.XXXX.
18.3.3. For Products used as parts for Motorola products, Amedia will
provide material disclosure or certification, as defined in
Motorola's Controlled and Reportable Materials Disclosure
Process, accessible at the following URL:
XXXX://XXX.XXXXXXXX.XXX/XXXXXXX/0,,0000-0000-0000,00.XXXX.
18.4. MATERIAL SAFETY DATA SHEETS. Amedia will electronically provide material
safety data sheets, chemical safety data sheets, or equivalent
documentation for all chemicals sold to Motorola. For all chemicals
supplied or imported into the United States, Amedia will certify that
the chemicals are listed on the Toxic Substances Control Act, 15 USCS
ss.2601, et. seq., chemical inventory, or are subject to an exemption
specified in the material safety data sheets.
18.5. IMPORTS AND CUSTOMS. The Parties must comply with all import and customs
laws, regulations and administrative determinations of the importing
country. Amedia must comply with the security criteria of any supply
chain security government program of the importing country. Amedia's
providing products to be delivered to and/or services to support
delivery to the U.S. must comply with the security criteria of the U.S.
Customs and Border Protection's Customs-Trade Partnership against
Terrorism (C-TPAT) Program
XXXX://XXX.XXXXXXX.XXX/XX/XXXX/XXXXXX/XXXXXXXXXX_XXXXXXXXXXX/XXXXX/
CRITERIA_IMPORTERS/CTPAT_IMPORTER_CRITERIA.XML.
18.6. EXPORT RESTRICTION. Neither Party will export or re-export, directly or
indirectly, any Confidential Information or the Products to any country
for which any applicable government, at the time of export or re-export,
requires an export license or other governmental approval, without first
obtaining the license or approval.
18.7. UTILIZATION OF SMALL BUSINESS CONCERNS. If applicable, Amedia will
comply with the provisions of U.S. Federal Acquisition Regulation (FAR)
52.219-8 pertaining to Utilization of Small Business Concerns, as well
as any other state and local, small and
21
other business utilization laws.
18.8. EQUAL OPPORTUNITY. If applicable, Amedia will comply with the provisions
of FAR 52.222-21, 52.222-26, 52.222-35, and 52.222-36 pertaining to
Segregated Facilities, Equal Opportunity, Equal Opportunity for
Veterans, and Affirmative Action for Workers with Disabilities. If
applicable, Amedia will maintain, at each establishment, affirmative
action programs required by the rules of the U.S. Secretary of Labor (41
CFR 60-1 and 60-2).
18.9. GOVERNMENT SUBCONTRACT. If an order is issued under a government
contract, Amedia will comply with the terms of the government contract
that appear on the Order, and with any other applicable laws,
regulations and executive orders.
18.10. AMEDIA DIVERSITY. If Amedia is located in the United States or is
supplying Products to Motorola locations based in the United States,
Amedia will track and report its Supply Chain's spend with
minority-owned, women-owned and disabled veteran-owned business
enterprises located in the United States. Amedia and Motorola will agree
on a goal for Amedia's Supply Chain spend, based upon a percentage of
Amedia's total gross revenues under this Agreement. Amedia will submit
quarterly progress reports, in a format designated by Motorola, by the
twenty-fifth day of the month following the end of each calendar
quarter. All reports will be forwarded to the Motorola Amedia Diversity
Group, 0000 X. Xxxxx Xxxx, X/X X0000, Xxxxxxxx, XX 00000, or sent via
email to XXXXXXXXXXXXXXXXX@XXXXXXXX.XXX.
19. CONFIDENTIALITY.
19.1. NDA. The information between the Parties under this Agreement will be
governed by the Mutual Nondisclosure Agreement entered into by the
Parties on Jan 9, 2006 ("NDA"). A Party may disclose the terms of this
Agreement in compliance with securities law without the other Party's
consent if the disclosing Party takes reasonable steps to obtain
confidential treatment for appropriate portions of this Agreement.
19.2. RETURN OF MATERIALS. Upon the termination or expiration of this
Agreement, or upon earlier request, each Party will deliver to the other
all Confidential Information (as defined in the NDA) that it may have
received from the other Party. However, neither Party will be required
to return materials that it must retain in order to receive the benefits
of this Agreement or properly perform under this Agreement.
20. TERM AND TERMINATION.
20.1. TERM. This Agreement will commence upon the Effective Date and will
continue in effect for a period of three years (the "Term"). The Term
will automatically extend for a succession of additional one-year
periods unless either Party gives the other written notice of
termination no less than 30 days prior to the expiration date of the
then-current Term. However, in the event that Amedia gives notice of
termination under this Section, the Parties shall continue to be bound
by the terms and conditions of this Agreement for a period of no less
than nine months from the date of Motorola's receipt of such notice, so
22
that Motorola shall have adequate time in which to find an alternate
supplier.
20.2. TERMINATION. This Agreement may be terminated before the end of the Term
upon the occurrence of any of the events set forth in this Section 20.2.
20.2.1. By Motorola, for convenience, upon 30 days' advance written
notice.
20.2.2. By either Party upon written notice effective upon receipt, if the
other Party ceases to conduct business in the ordinary course.
20.2.3. By either Party, if the other Party defaults on any of its
material obligations, representations, or warranties under this
Agreement, or otherwise commits a material breach of this
Agreement and fails to cure such breach in the manner described
below. The non-defaulting Party may notify in writing the
defaulting Party of the material breach or default and its
intention to terminate the Agreement if the material breach or
default is not cured within 30 days (ten days in the case of a
failure to pay amounts when due) after the date that the notice
is received by the defaulting Party. If the defaulting Party
does not cure the breach during such 30-day period (ten-day
period for a failure to pay amounts when due), the
non-defaulting Party may terminate this Agreement by providing
written notice of termination to the defaulting Party. The
termination under this Section 20.2.3 will take effect 30 days
after the defaulting Party's receipt of such notice of
termination.
20.3. SURVIVAL. Each Party's rights and obligations under Sections 14.8, 15,
16, 17, 19, 20.3, and 21 will survive termination and expiration of this
Agreement.
21. GENERAL.
21.1. NOTICES. Unless otherwise specified, any notice required under this
Agreement will be in writing to the addresses set forth above and is
effective upon receipt. Such notice may be sent via: e-mail, receipt
acknowledged; certified mail, return receipt requested; overnight
delivery service; or facsimile, receipt acknowledged.
21.2. RELATIONSHIP OF THE PARTIES. Nothing contained in this Agreement shall
be construed as creating a joint venture or legal partnership or as
authorizing any Party to act as an agent or representative of the other.
21.3. WAIVER. Neither Party's failure to insist on the strict performance of
any provision in this Agreement will be deemed a waiver of such
provision presently or in the future nor will it be deemed a custom or
practice contrary to such provision.
21.4. ASSIGNMENT. This Agreement shall accrue to the benefit of and be binding
upon the Parties and any successor entity into which either Party shall
have been merged or consolidated. Neither Party may assign this
Agreement without the prior written consent of the other Party, which
consent shall not be unreasonably withheld.
23
21.5. ENTIRE AGREEMENT AND AMENDMENT. This Agreement, together with the
schedules and exhibits attached, constitutes the entire understanding
between the Parties concerning its subject matter and supersedes all
prior discussions, agreements and representations, whether oral or
written and whether or not executed by Amedia and Motorola. This
Agreement may not be modified except in writing signed between the
Parties. Variance from or addition to the terms of this Agreement in any
PO or other written notification will be of no effect unless
countersigned by the other Party.
21.6. FORCE MAJEURE. Neither Party shall be liable for delays, failure in
performance or damages due to fire, flood, explosion, power failures,
civil disturbances, acts of civil or military authorities or the public
enemy, labor disputes, acts of God, unauthorized use of the Products, or
other causes beyond that Party's reasonable control.
21.7. DISPUTE RESOLUTION. Any dispute arising out of this Agreement that the
Parties are unable to resolve via good faith negotiation shall be
submitted for non-binding mediation with a single mediator, under the
Commercial Mediation Rules of the American Arbitration Association,
before either party may resort to litigation or other dispute resolution
procedures. Each party will bear its own attorney's fees and other
individual costs and will equally share the costs of the mediation,
including the mediator's fees. If the matter is not resolved by
mediation within 60 calendar days of the initial request for mediation,
either Party may then submit the matter to an appropriate court of law.
21.8. GOVERNING LAW AND VENUE. This Agreement is governed by the laws of the
State of New York, without regard to its conflicts of laws rules, and
any litigation arising out of this Agreement shall be brought in state
or federal courts in New York City. Neither Party will contest
jurisdiction in such courts. The parties agree that the United Nations
Convention on Contracts for the International Sale of Goods will not
apply to this Agreement. The prevailing Party in any litigation arising
out of or related to this Agreement will be entitled to recover its
reasonable attorneys' fees and costs against the other Party
21.9. PUBLICITY. Neither Party will make any public announcement or press
release regarding the terms of this Agreement or any aspect of the
relationship under this Agreement without having obtained the prior
written consent of the other Party, which consent will not be
unreasonably withheld or delayed. However, nothing in this Section 21.9
shall preclude either Party from making such disclosures that are
required by law.
21.10. SEVERABILITY. If any part of this Agreement is found to be illegal,
unenforceable, or invalid, the remaining portions of this Agreement will
remain in full force and effect.
21.11. INTERPRETATION. The Parties have had an equal opportunity to participate
in the drafting of this Agreement and the attached exhibits, if any. No
ambiguity will be construed against any Party based upon a claim that
that Party drafted the ambiguous language.
21.12. COUNTERPARTS. This Agreement may be executed in any number of identical
counterparts, with the same effect as if the Parties had signed the same
document. All counterparts will be construed as and constitute the same
agreement.
24
The Parties have signed below to indicate their acceptance of the terms of this
Agreement.
MOTOROLA WIRELINE NETWORKS, INC. AMEDIA NETWORKS, INC.
By: /S/ XXXXXX X. XXXXX By: /S/ XXXXX XXXXXXX
----------------------------- -----------------------------
Name: XXXXXX X. XXXXX Name: XXXXX XXXXXXX
Title: CORPORATE VICE PRESIDENT, Title: CHIEF EXECUTIVE OFFICER
WIRELINE
25
EXHIBIT A
SOW
MOTOROLA WIRELINE NETWORKS, INC. ("MOTOROLA")
[MOTOROLA LOGO]
AMEDIA NETWORKS, INC. ("AMEDIA")
[AMEDIA LOGO]
MOTOROLA IPTV GATEWAY PROJECT
STATEMENT OF WORK (SOW)
XX2006-MOT-001
i
Confidential Proprietary
VERSION HISTORY
---------------- ---------------- ------------------------------------------------------------------------------
VERSION # DATE DESCRIPTION OF MAJOR CHANGES
---------------- ---------------- ------------------------------------------------------------------------------
1.0 MARCH 15, 2006 INITIAL CREATION - MOTOROLA WITH INPUTS FROM AMEDIA
---------------- ---------------- ------------------------------------------------------------------------------
1.1 MARCH 24, 2006 UPDATED MILESTONE CHART AND INPUTS
---------------- ---------------- ------------------------------------------------------------------------------
1.2 MARCH 30, 2006 UPDATED MILESTONE CHARTS AND INPUTS
---------------- ---------------- ------------------------------------------------------------------------------
1.3 MARCH 31, 2006 LANGUAGE AND FORMAT REVISIONS
---------------- ---------------- ------------------------------------------------------------------------------
1.4
---------------- ---------------- ------------------------------------------------------------------------------
1.5
---------------- ---------------- ------------------------------------------------------------------------------
1.6
---------------- ---------------- ------------------------------------------------------------------------------
1.7
---------------- ---------------- ------------------------------------------------------------------------------
1.8
---------------- ---------------- ------------------------------------------------------------------------------
1.9
---------------- ---------------- ------------------------------------------------------------------------------
1.10
---------------- ---------------- ------------------------------------------------------------------------------
1.11
---------------- ---------------- ------------------------------------------------------------------------------
APPROVALS
This SOW has been reviewed and approved by both Motorola and Amedia. Signatures
on this SOW indicate agreement with the scope and deliverables. No agreement to
purchase or provide Professional Services outlined in this SOW is implied. A
Purchase Order is required to consider this a firm and final order.
MOTOROLA - WIRELINE NETWORKS AMEDIA NETWORKS, INC.
---------------------------------------------------------- -----------------------------------------------------
SIGNATURE SIGNATURE
---------------------------------------------------------- -----------------------------------------------------
PRINT NAME PRINT NAME
---------------------------------------------------------- -----------------------------------------------------
TITLE TITLE
---------------------------------------------------------- -----------------------------------------------------
DATE DATE
Page ii of 42
Confidential Proprietary
TABLE OF CONTENTS
Table of Contents................................................................................iii
1 SOW Purpose..................................................................................5
2 SOW Validity.................................................................................5
3 Key Contacts.................................................................................6
4 Project Management...........................................................................7
4.1 Team Structure.........................................................................7
4.2 Roles and Responsibilities.............................................................7
4.3 Other Development Resources............................................................8
4.4 Meeting Structure......................................................................8
4.5 Risk Management Planning...............................................................8
4.6 System Integration.....................................................................8
4.7 Capital Expenditures...................................................................9
5 Project Description..........................................................................9
5.1 Target Market Description..............................................................9
5.2 Current Customer Deployments..........................................................11
5.3 Target Customer Deployments...........................................................12
5.3.1 Motorola IPTV Gateway Platforms....................................................13
5.4 Amedia's Gateway Platform Architecture................................................13
5.5 Customized Components Developed for Motorola by Amedia................................14
5.5.1 Hardware Terminology...............................................................15
6 Milestones..................................................................................16
6.1 IPTV Gateway Project Plan.............................................................18
6.2 IPTV Gateway Market Requirements Document (MRD).......................................18
6.3 Product Requirements Document (PRD)...................................................18
6.4 System Requirements Document (SRD)....................................................18
6.5 IPTV Gateway Middleware/applications MRD..............................................18
6.6 Amedia Provides Manufacturing Plan....................................................18
6.7 IPTV Gateway Architecture and High Level Design Document..............................18
6.8 IPTV Gateway Interface Specification Document.........................................19
6.9 Amedia Provides Hardware Test Plan (HT/HALT)..........................................19
6.10 IPTV Gateway Artmaster1 (AM1) Acceptance Test Plan....................................19
6.11 IPTV Gateway Artmaster2 (AM2) Acceptance Test Plan....................................19
6.12 Amedia Delivery of AM1 IPTV Gateways..................................................19
6.13 AM1 IPTV Gateway Acceptance Test Complete (SAA Section 2.2.3).........................19
6.14 Amedia Provides Quality / Regulatory Compliance Test Plan............................20
6.15 IPTV Gateway System Verification Test (SVT) Plan......................................20
6.16 IPTV Gateway System Verification Test (SVT) Entry Acceptance Test Specification.......20
6.17 WAN Software Acceptance Test Plan.....................................................20
6.18 Amedia Delivery of AM2 IPTV Gateways..................................................20
6.19 Motorola Delivers Fully Functional WAN SW for IPTV Gateway Integration................20
6.20 Amedia Delivery of Fully Functional IPTV Gateways.....................................20
6.21 IPTV Gateway SVT Acceptance Test Complete (SAA Section 2.2.4).........................21
6.22 Tech Pubs - IPTV Gateway Quick Start Guide............................................21
6.23 Tech Pubs - IPTV Gateway Users Guide..................................................21
6.24 Tech Pubs - IPTV Gateway Operations and Maintenance Guide.............................21
6.25 Tech Pubs - IPTV Gateway Bulletin/Data Sheet..........................................21
6.26 Amedia Completes Hardware Testing (HT/HALT)...........................................21
6.27 Amedia Completes Quality / Regulatory Compliance Testing..............................21
6.28 Successful Completion of System Verification Testing (SVT) (SAA Section 2.2.5)........21
Page iii of 42
Confidential Proprietary
6.29 Alpha Testing Complete................................................................22
6.30 Motorola Completes Customer Beta Testing (SAA Section 2.2.6)..........................22
7 Development Environment.....................................................................22
8 Constraints, Dependencies, Assumptions......................................................23
9 Project Processes...........................................................................24
9.1 Billing...............................................................................24
9.2 Change Management.....................................................................24
9.2.1 Changes Initiated by Motorola......................................................24
9.2.2 Changes Initiated by Amedia........................................................25
9.3 Defects Management....................................................................25
9.4 Milestone Acceptance..................................................................26
9.5 Cancellation Terms....................................................................26
9.6 Travel................................................................................26
Page iv of 42
Confidential Proprietary
Portions of this exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions, marked "[***]," have been
separately filed with the Securities and Exchange Commission.
1. SOW PURPOSE
This document provides a description of the work being undertaken by
Amedia as a part of the Motorola IPTV Gateway Project, and the project
management process that will be employed for this project.
This SOW sets forth terms and conditions for joint development and
delivery by the Parties of three types of IPTV Gateway for sale
exclusively under the Motorola brand as a private label product. The
specifics of the technical work and supportive business agreement are as
set forth in the following two documents:
o Market Requirements Document IPTV Gateway 525674-001 CA79 MRD V1.0
March 17, 2006
o The Strategic Alliance Agreement effective April 3, 2006 ("SAA")
This SOW covers all work for the IPTV Gateway platforms:
It is expected that the development will be for three basic codes of IPTV
Gateway that support three different Wide Area Network types, [***]
2. SOW VALIDITY
Acceptance of this SOW does not by itself constitute an agreement to
purchase or provide the services described in this document. All
deliverable dates in this SOW are based on agreement to the SAA, including
this SOW, as well as receipt of a Purchase Order.
3. KEY CONTACTS
The key contacts for this project are outlined in Table 2 below.
[***]
The Commercial Leads for Motorola and Amedia are responsible for all
commercial matters.
The Technical Lead is responsible for formal acceptance of the set of
technical deliverables identified in Section 6.
The Program Manager is responsible for coordinating all aspects of the
project, technical and non-technical, to ensure schedule of all
cross-functional deliverables.
Based on the planned transition of the Rohnert Park facility to Andover
on August 2nd, the Motorola Software and Hardware leads may be subject
to change.
4. PROJECT MANAGEMENT
A. Team Structure
Project team will consist of Motorola hardware and software resources
located in Rohnert Park to perform initial development tasks
(architecture, requirements definition) of the WAN block of the IPTV
gateways. In addition the Motorola development team will jointly create
appropriate interface specifications with
Amedia development resources.
Project team will also consist of Amedia hardware and software
resources that will develop the combined hardware and software of the
IPTV gateways.
Project team will also consist of additional Motorola hardware and
software resources that will own the project from handoff from Rohnert
Park development team lead until completion including system
integration, system verification, alpha and beta resources.
Both Motorola and Amedia will provide a Program Manager.
Both Motorola and Amedia will provide a Commercial lead.
B. Roles and Responsibilities
Amedia is responsible for IPTV Gateway hardware development, core
feature software development and integration, and core feature
software/hardware integration. Core features are the features used to
manage and operate the gateway excluding the WAN related features. The
WAN related features are features used to operate the Wide Area Network
and interface the IPTV Gateway to the remainder of the Motorola access
system.
Amedia is responsible for overall integration of interfaces for and
within the IPTV Gateway with participation by Motorola.
Amedia is responsible for IPTV Gateway manufacturing, but this
responsibility may move to Motorola over time. Any mutually agreed
changes to these responsibilities would be as identified during the
course of the project.
Amedia is responsible for all HT/HALT testing as well as all Quality
and Regulatory Compliance testing.
Motorola is responsible for software development/integration and
hardware/software integration for features related to the Wide Area
Network blocks and IPTV Gateway interface to the existing Motorola
video/data network.
Motorola is responsible for overall System Integration Testing and
Verification with participation by Amedia.
Motorola is responsible for Alpha and Beta testing with support from
Amedia as described in the SAA.
The parties agree that they will create and track a Project Plan that
structures the development project to meet the IPTV Gateway business
objectives. The parties agree to provide the deliverables identified in
Table 3 (Section 6 of this SOW) on the mutually agreed and specified
dates.
C. Other Development Resources
Other than Amedia development resources in Eatontown, NJ and Motorola
development resources in Rohnert Park, CA and Andover MA,. no other
development resources are identified at this time. Any other
development resources would be as identified during the course of the
project.
D. Meeting Structure
Two meetings each week with support from both Motorola and Amedia
project members. Scope of one meeting is for technical / development
collaboration. Scope of second meeting is for project planning
collaboration and project tracking.
E. Risk Management Planning
Page 2 of 42
Confidential Proprietary
PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTIONS, MARKED "[***]," HAVE BEEN
SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
[***]
F. System Integration
Motorola will perform development integration of the WAN block of the
IPTV gateways.
Amedia will perform development and functional integration of the IPTV
gateway hardware and software, including WAN and Core software, with
support from Motorola.
Motorola will perform system verification of the IPTV gateway within
the Motorola access system with support from Amedia.
Third party vendors of middleware application software - (VOD, DRM,
etc.) and IP STBs will be responsible for certification of their
applications over the Motorola access infrastructure.
G. Capital Expenditures
Motorola shall be responsible to provide mutually agreed upon
BDT/USAM/BSAM and View1/View2/DC assets for Amedia to use for IPTV
Gateway functional integration purposes at Amedia location.
Motorola shall be responsible to provide mutually agreed upon
BDT/USAM/BSAM and View1/View2/DC assets for Motorola to use for WAN
software integration and system verification purposes at Motorola
locations.
5. PROJECT DESCRIPTION
A. Target Market Description
Motorola provides Video over IP deployments in North America. [***].
Motorola uses Residential Gateways (RGs) to deploy IP TV. RGs are
predominantly multi-stream capable, and usually include a DSL modem.
Decoder chips are built into the unit. The RG unit targets homes with
multiple rooms pre-wired with co-ax. The RG is physically located in
the primary entertainment center of the house and distributes TV to
other rooms.
The infrastructure requirements for delivering both data and video in
the access space have shifted from an ATM architectures to IP
architectures and this shift is continuing into voice as VoIP becomes
more wide spread. Carriers have quickly embraced IP primarily because
of the significant cost savings in IP technologies but due to more
efficient deployment of services.
Many carriers are investigating or planning Switched Digital Video
(SDV) offerings to compete with the
Page 3 of 42
Confidential Proprietary
PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTIONS, MARKED "[***]," HAVE BEEN
SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
loss of lines and expected additional losses due to the introduction of
VoIP by the cable operators. All of these new deployments are being
planned around IP centric platforms many of which are being lead by
Microsoft and its new MSTV2 or Myrio based IP video architectures.
The focus of this project is on a cost-effective solution to provide a
means for our existing customers to support IPTV applications while
maintaining as much of their existing Motorola (BDT/BSAM/USAM) access
infrastructure and Motorola CPE devices. [***]
MARKET OPPORTUNITY OVERVIEW
[***]
B. Current Customer Deployments
Motorola customers currently deliver triple-play services to their
subscribers over the Motorola access infrastructure illustrated in
Figure 1 below. Motorola Residential Gateways (RGs) are deployed in the
subscriber homes and are connected via XDSL to Motorola remote terminal
equipment (BSAM/USAM). Remote terminal equipment is connected over
fiber to a Motorola Broadband Distribution Terminal (BDT) in a central
office location. Subscriber services are delivered from the Video
Head-end and Internet via ATM network connections to the BDT. The
Motorola system network elements are managed by View1 and the video and
data services are managed by the View2/Download Carousel. The Motorola
access systems also provide interaction with service provider Billing
systems and service activation from Operation Support Systems (OSS).
Electronic Program Guide (EPG), Video-on-Demand (VOD), and Digital
Rights Management (DRM) applications are fully integrated through
interactions with View2/DC and embedded application software on the
Motorola Residential Gateways.
FIGURE 1: CURRENT MOTOROLA SDV DEPLOYMENTS
[CHART ILLUSTRATING CURRENT MOTOROLA SDV DEPLOYMENTS]
C. Target Customer Deployments
Portrayed in Figure 2 below is the primary application of the IPTV
Gateway platforms to enable feature evolution and support for IPTV
applications and services on our existing customer deployments of
Motorola access infrastructure.
IP Set tops and personal computers are connected in the home network
via LAN interfaces to the Motorola IPTV gateways for video and data
services. Motorola IPTV Gateways (RGs) are deployed in the subscriber
homes and are connected via XDSL to Motorola remote terminal equipment
(BSAM/USAM). Remote terminal equipment is connected over fiber to a
Motorola Broadband Distribution Terminal (BDT) in a central office
location. Subscriber services are delivered from the Video Head-end and
Internet via ATM network connections to the BDT. The Motorola system
network elements including the IPTV gateway are managed by View1. The
video and data service connections from the IPTV gateway across the
Motorola access network are managed by View2/Download Carousel.
However, the IPTV Middleware (client and server applications) will
provide all video services management of Electronic Program Guide
(EPG), Video-on-Demand (VOD), Digital Video Recorder (DVR), and Digital
Rights Management (DRM) applications supported on the IP Set top
devices. The IPTV middleware server shall also provide interaction with
service provider Billing systems for video and data services supported
via the IPTV
Page 4 of 42
Confidential Proprietary
PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTIONS, MARKED "[***]," HAVE BEEN
SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
gateways.
FIGURE 2: IP ENABLING MOTOROLA ACCESS NETWORK- IPTV GATEWAYS
[FIGURE ILLUSTRATING IP ENABLING MOTOROLA ACCESS NETWORK - IPTV GATEWAYS]
1. Motorola IPTV Gateway Platforms
o The Motorola IPTV Gateway platform has the following
characteristics:
[***]
D. Amedia's Gateway Platform Architecture
The Amedia IPTV Gateway platform illustrated in Figure 3 below has the
following base architecture from which the Motorola IPTV gateway
platforms can easily be developed.
[***]
E. Customized Components Developed for Motorola by Amedia
Amedia is expected to develop customized hardware and software for
three basic models of IPTV Gateway that support three different Wide
Area Network (XDSL) types. [***]
1. Hardware Terminology
Artmasters (e.g. AM1, AM2) are defined as printed wiring board versions
for a given circuit pack code, and revisions are defined as equipage
variations on the PWB for that code. So for example, AM1 "Classic" can
have n revisions (component values, equipage in the BOM, white wires,
development-only access terminals, etc.), starting from rev 1 and going
to rev n. AM2 "Classic" can have a separate number m of revisions,
starting from rev 1 and going to rev m. Models for a particular
artmaster are updated to the latest rev and designated as AM j, rev k,
as appropriate.
6. MILESTONES
[***]
7. DEVELOPMENT ENVIRONMENT
Hardware development tools and licenses are Amedia's responsibility.
Software development tools and licenses and Real Time Operating System
(RTOS) licensing fees are the responsibility of each party for use in its
own software development [***]
Page 5 of 42
Confidential Proprietary
PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTIONS, MARKED "[***]," HAVE BEEN
SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
8. CONSTRAINTS, DEPENDENCIES, ASSUMPTIONS
[***]
9. PROJECT PROCESSES
A. Billing
As each billing milestone is reached, Amedia and Motorola will use the
form found in Appendix B for signatures to indicate successful delivery
of the milestone.
This Service Agreement will be considered complete upon successful
completion of all milestones described in this SOW. Amedia will make
every reasonable effort to ensure that the milestones are completed in
accordance with the milestone dates.
B. Change Management
1. Changes Initiated by Motorola
Motorola may request changes to deliverables or schedules through the
following procedure.
o The Motorola Program Manager will notify the Amedia Program
Manager in writing of a change request, specifying a
description of the requested change, using the Change Request
form found in Appendix A, and completing the Request
Description section.
o Within 5 business days following receipt of such a change
request, Amedia shall review and complete the remainder of the
Change Request document. If Amedia cannot complete the Change
Request document within 5 business days, Motorola will be
provided with a date by which the Change Request document will
be completed.
o Within 5 business days following the date of return receipt of
the Change Request document, Motorola will notify Amedia in
writing whether or not to proceed with the Change Request. If
Motorola signs and returns a copy of the Change Request
document, Amedia will implement the change as described in the
document. If Motorola notifies Amedia not to proceed, or does
not notify Amedia within the 5 business day period, Amedia
will consider the Change Request to have been withdrawn.
o If Motorola signs and returns the Change Request document,
then this SOW will be considered to have been amended as
described in the Change Request. If changes are significant
enough a new version of this document, or other appropriate
documents, will be issued. If there is a change in scope that
results in a change in cost to Motorola, Amedia will expect a
Purchase Order for the changed amount to be submitted as soon
as reasonably possible from acceptance of the Change Request.
2. Changes Initiated by Amedia
In the event that Amedia wishes to make a Change Request, Amedia
shall notify Motorola in writing of the requested change through the
following procedure.
o The Amedia Program Manager will notify the Motorola Program
Manager using the form found in
Page 6 of 42
Confidential Proprietary
Appendix A, specifying a description of the requested change,
recommended action and impact on overall plans.
o Within 5 business days of sending the request, Motorola will
notify Amedia in writing whether or not to proceed with the
Change Request. If Motorola cannot complete the Change Request
document within 5 business days, Amedia will be provided with a
date by which the Change Request document will be completed. If
Motorola signs and returns a copy of the Change Request
document, Amedia will implement the changes as described in the
document. If Motorola does not respond within 5 business days,
Amedia will consider the Change Request declined and will not
implement as described in the Change Request document. If
Motorola notifies Amedia not to proceed Amedia will consider the
Change Request to be declined.
C. Defects Management
A proper defects management procedure will be put in place and agreed
between Motorola and Amedia to track issues starting with the Release
Candidate load. When a software deficiency is found and reported, at
least the following information will be included for each defect.
o Impact (Urgent, High, Medium, Low)
o Title
o Detailed problem description
o Test case
o Expected results
o Observed results
o Date identified
o Identifier
o Assignee
o Version of Software on which defect is found
D. Milestone Acceptance
Motorola shall accept or reject each deliverable within a reasonable
time of receipt contingent upon meeting the schedules and dates within
the mutually agreed project plan, unless an extension is required and
requested in writing. Amedia shall promptly make at its expense the
modifications required to correct the issues identified in writing by
Motorola and resubmit the deliverable for approval by Motorola. The
acceptance cycle shall repeat until Motorola accepts or otherwise
mitigates.
E. Cancellation Terms
As specified in the SAA, Amedia will invoice Motorola in accordance
with the agreed terms therein.
F. Travel
The majority of the development will be conducted at the Amedia office
in Eatontown, NJ.
Page 7 of 42
Confidential Proprietary
PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTIONS, MARKED "[***]," HAVE BEEN
SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
If required travel expenses exceed the amount listed in Appendix B to
the SAA (i.e. $[***]), Motorola will pay for additional reasonable
travel and living expenses incurred as a result of this travel.
Motorola must approve all travel arrangements prior to the booking.
Page 8 of 42
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APPENDIX A - CHANGE REQUEST
-------------------- ------------------------------------------- ------------------- ---------------------------------
REQUESTOR DATE
-------------------- ------------------------------------------- ------------------- ---------------------------------
ORGANIZATION REFERENCE #:
-------------------- ------------------------------------------- ------------------- ---------------------------------
----------------------------------------------------------------------------------------------------------------------
REQUEST DESCRIPTION
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
SOLUTION DESCRIPTION
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
IMPACT ON COST, QUALITY, CONTENT AND SCHEDULE
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
------------------------- ----------------------------------------------- --------------------------------------------
APPROVALS MOTOROLA AMEDIA
------------------------- ----------------------------------------------- --------------------------------------------
SIGNATURE
------------------------- ----------------------------------------------- --------------------------------------------
NAME
------------------------- ----------------------------------------------- --------------------------------------------
TITLE
------------------------- ----------------------------------------------- --------------------------------------------
DATE
------------------------- ----------------------------------------------- --------------------------------------------
Page 9 of 42
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APPENDIX B - MILESTONE ACCEPTANCE
---------------------------------------- -----------------------------------------------------------------------------
MILESTONE NUMBER & NAME
---------------------------------------- -----------------------------------------------------------------------------
DATE DELIVERED
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DESCRIPTION OF MILESTONE DELIVERABLES
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CUSTOMER COMMENTS
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APPROVALS MOTOROLA AMEDIA
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SIGNATURE
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NAME
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TITLE
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DATE
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Page 10 of 42
Confidential Proprietary
PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTIONS, MARKED "[***]," HAVE BEEN
SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
EXHIBIT B
ITEMIZED ESTIMATED NRE AND SUPPORT COSTS
[***]
EXHIBIT C
ESCROW AGREEMENT
EXHIBIT D
SERVICE LEVELS
P1 PRIORITY SERVICE REQUEST
Conditions that severely affect service, capacity/traffic, billing and
maintenance capabilities and require immediate correct action,
regardless of time of day or day of the week as viewed by a customer on
discussion with the supplier such as;
o a loss of service that is comparable to the total loss of effective
functional capability of an entire switching or transport system,
o a reduction in capacity or traffic handling capability such that
expected loads cannot be handled, or
o any loss of safety or emergency capability.
P2 PRIORITY SERVICE REQUEST
Conditions that seriously affect system operation, maintenance and
administration, etc., and require immediate attention as viewed by the
customer on discussion with the supplier. The urgency is less than in
critical situations because of a lesser immediate or impending effect
on system performance, customers and the customer's operation and
revenue such as;
o any loss of functional visibility and/or diagnostic capability,
o short outages equivalent to system or subsystem outages, with
accumulated duration of greater than 2 minutes in any 24 hour
period, or that continue to repeat during longer periods,
o repeated degradation of DS1 or higher rate spans or connections,
o prevention of access for routine administrative activity,
o degradation of access for maintenance or recovery operations,
o degradation of the system's ability to provide any required
critical or major trouble notification,
o any significant increase in product related customer trouble
reports,
o billing error rates that exceed specifications, or
o corruption of system or billing databases.
P3 PRIORITY SERVICE REQUEST
Priority assigned to problems that do not significantly impair the
functioning of the system and do not significantly affect service to
customers. These problems are tolerable during system use. Minor
problems are classified based on one or more of the following
conditions:
o Loss of administrative capabilities
o Loss of feature functionality
o Configuration discrepancies/questions related to error messages or
alarms that are being generated on the system.
o Other equipment or software issues that are not affecting service.
P4 PRIORITY SERVICE REQUEST
Priority assigned to a case type of Information. This is normally the
urgency assigned to problems with low impact and is based on one or
more of the following conditions:
o Basic questions
o Cosmetic problems
o Documentation errors
o RMA Cases.