1
EXHIBIT 10.4
NETWORK IMPLEMENTATION AGREEMENT
THIS NETWORK IMPLEMENTATION AGREEMENT (this "Agreement"), effective as of April
23, 1998 (the "Effective Date"), is entered into by and between Ericsson Inc., a
Delaware corporation ("Ericsson"), and Splitrock Services, Inc., a Texas
corporation ("Splitrock").
WHEREAS, Splitrock desires to obtain from Ericsson, and Ericsson is willing to
provide to Splitrock, the products and services relating to Splitrock's national
network deployment of 99 ISP Points of Presence, in accordance with and subject
to the terms and conditions of this Agreement.
NOW, THEREFORE, Ericsson and Splitrock hereby agree as follows:
1. Agreement. During the term of this Agreement, Splitrock will purchase
from Ericsson, and Ericsson will provide to Splitrock, the products and
services as set forth in the statement of work attached hereto as Exhibit
A (the "Statement of Work") and such additional products and services as
Splitrock may reasonably request and as the parties may mutually agree
in writing from time to time, all in accordance with and subject to the
terms and conditions of this Agreement.
2. Term. The term of this Agreement will commence on the Effective Date and
will continue unless earlier terminated in accordance with the provisions
hereof.
3. Prices and Fees. With respect to the products and services to be provided
by Ericsson to Splitrock as set forth in the Statement of Work, Splitrock
will pay to Ericsson the prices and fees set forth in the Statement of
Work.
4. Out-of-pocket Expense. Except as otherwise expressly provided herein,
Splitrock will pay or reimburse Ericsson for any reasonable out-of-pocket
expenses reasonably incurred by Ericsson, with Splitrock's prior written
approval, in connection with the performance of this Agreement.
5. Taxes. Splitrock will be responsible for, and will pay or reimburse
Ericsson for, any sales, use excise or other taxes, however designated or
levied (excluding any taxes paid by Ericsson based on its profits), based
upon this Agreement, any amounts payable to Ericsson hereunder, or any
services, systems, materials or goods provided to Splitrock hereunder or
their use.
6. Invoicing and Payment. From time to time as contemplated hereby, Ericsson
will submit to Splitrock an invoice for the amounts then due and payable
to Ericsson hereunder. Each such invoice will be due and payable to
Ericsson within thirty days from the date of the invoice. Any sum due to
Ericsson hereunder that is not
2
paid when due will bear interest thereafter until paid at a rate equal to
the lesser of 1.5% per month or the maximum rate allowed by applicable
law.
7. Delivery. Unless otherwise mutually agreed in writing by the parties, the
products provided by Ericsson to Splitrock hereunder will be shipped by
Ericsson to the applicable designated sites. Risk of loss of such
products will pass to Splitrock upon Ericsson's placement of the shelter
in which such products are housed on the ground at the designated site.
Title to such products will pass to Splitrock when such products have
been paid for in full by Splitrock to Ericsson.
8. Warranty. Ericsson warrants and agrees that it will perform the services
hereunder in a good and workmanlike manner. The foregoing warranty is for
a warranty period of six (6) months following the date of acceptance. In
addition, Ericsson warrants that:
(a) Ericsson has all right, title and ownership interests and/or
licenses necessary to perform its obligations under this
Agreement, and the products sold by Ericsson hereunder will be
free and clear of any and all liens, encumbrances or security
interests of any third party.
(b) Ericsson will assign any and all warranties with respect to each
product sold by Ericsson to Splitrock hereunder if and to the
extent allowed by the supplier of such product.
EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, THERE ARE NO, AND ERICSSON
HEREBY DISCLAIMS ALL, OTHER WARRANTIES, WHETHER IMPLIED, EXPRESS OR
STATUTORY, WITH RESPECT TO THE PRODUCTS AND SERVICES PROVIDED TO
SPLITROCK HEREUNDER, INCLUDING WITHOUT LIMITATION WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE.
9. Rights in Software. With respect to all and all software components of
the products provided by Ericsson hereunder and related documentation
(collectively, the "Software"), Ericsson hereby grants to Splitrock, and
Splitrock hereby accepts from Ericsson, a perpetual, non-exclusive and
non-transferable license to use and possess the Software in strict
accordance with the following use provisions:
(a) Splitrock will use the Software solely as an integral part of the
products in which the Software is originally installed or embedded
and for the operation of such products.
(b) Splitrock may make only one copy of the Software for backup or
archival purpose; provided that any such copy will contain all
proprietary notices, including the copyright notices of Ericsson
or its licensor, which appear on or are encoded within the
Software.
3
(c) The Software (including any and all copies thereof) shall remain
the exclusive property of Ericsson or its licensor.
(d) Splitrock may not merge the Software with other software to form a
derivative work or otherwise modify or alter the Software in any
manner.
(e) Splitrock may not reverse engineer, decompile or otherwise derive
the source code from the Software.
10. Confidentiality. Each party agrees that all confidential documents, work
product and information (including all computer code and related
materials) received or otherwise obtained from the other party pursuant
to this Agreement, whether before or after the Effective Date, will be,
and will be deemed to have been, received in confidence and will be used
only for the purpose of carrying out the obligations of, or as otherwise
contemplated by, this Agreement. Without the other party's prior written
consent, neither party may disclose any such information to any third
party, and each party will disclose such information only to such of its
officers, employees and agents that have a need to know such information
for the purposes contemplated hereby. However, the provisions of this
Section 10 will not apply to any such information that (i) is or becomes
generally available to the public without the fault or negligence of
either party, (ii) is already in the possession of the receiving party
without being subject to another confidentiality obligation, (iii) is or
becomes available to the receiving party on a non-confidential basis from
a source other than the disclosing party; provided that such source is
not bound by a confidentiality obligation of the disclosing party, (iv)
is required to be disclosed pursuant to an arbitration proceeding
conducted in accordance with this Agreement, or (v) is required to be
disclosed pursuant to a requirement of any governmental authority or any
statute, rule or regulation; provided that the party required to disclose
such information of the other party provide to the other party notice of
such requirement of any such disclosure and cooperates with the other
party to prevent or restrict any such disclosure to the extent allowed by
applicable law.
11. Infringement Indemnification, Ericsson will, at its expense, indemnify,
defend and hold Splitrock harmless from and against any claim or action
asserted or brought against Splitrock alleging that the products provided
by Ericsson hereunder directly infringes any United States patent,
copyright, trademark or trade secret of any third party; provided that
Splitrock (i) promptly notifies Ericsson of any such claim or action,
(ii) provides to Ericsson all reasonably necessary assistance in
defending any such claim or action, (iii) permits Ericsson to direct the
defense or any such claim or action, including all settlement discussions
or decisions.
In the event the use of the Products by Splitrock as contemplated hereby
is enjoined, or in the event that Ericsson desires to minimize its
potential liability
4
hereunder, Ericsson may fulfill its obligations hereunder by (i)
substituting non-infringing equivalent products, (ii) modifying the
infringing products or portion thereof, so that such products no longer
infringe but remain functionally equivalent, (iii) obtain for Splitrock,
at Ericsson's expense, the right to continue the use of such Products, or
(iv) if none of the preceding is commercially feasible, refund to
Splitrock the purchase price for the infringing products, less the
accumulated depreciation or amortization of such products as reflected in
Splitrock's books. This Section 11 states Ericsson's entire liability for
infringement of patent, copyright, trademark or trade secret.
Ericsson's indemnification obligations set forth in this Section 11 will
not apply to any infringement arising from (i) modification of the
products by anyone other than Ericsson, (ii) any combination of the
products with products or services provided by Splitrock or any third
party, or (iii) any products developed by Ericsson for Splitrock in
strict compliance with Splitrock's written instructions. Splitrock agrees
to indemnify, defend and hold Ericsson harmless from and against any and
all claims or actions asserted or brought against Ericsson based upon any
of the foregoing infringement circumstances caused by Splitrock.
12. Mutual Indemnity. Each party will indemnify, defend and hold the other
party harmless from any and all actions or claims to the extent such
actions or claims arise out of or result from any negligent act or
omission or willful misconduct of the indemnifying party or its
employees, agents or contractors.
13. Termination for Cause. In the event that either party materially or
repeatedly defaults in the performance of any of its duties or
obligations hereunder (except for a default in payments to Ericsson) and
does not substantially cure such default within thirty (30) days after
being given written notice specifying such default, then the party not in
default may, by giving written notice thereof to the defaulting party at
any time thereafter and before such default is substantially cured,
terminate this Agreement as of the date specified in the notice of
termination. In addition to other available remedies, in the event that
Splitrock defaults in the performance of any of its duties or obligations
hereunder (including without limitation default in payments to Ericsson),
Ericsson may suspend the performance of any of its duties or obligations
hereunder until such default is cured by Splitrock to Ericsson's
reasonable satisfaction, and Splitrock will pay to Ericsson an addition
amount equal to the charges, costs and expenses reasonably incurred by
Ericsson as a result of any such default by Splitrock.
14. Termination for Non-Payment. In the event that Splitrock defaults in the
payment when due of any amount due to Ericsson hereunder and does not
cure such default within ten (10) days after being given written notice
specifying such default, then Ericsson may, by giving written notice
thereof to Splitrock at any time thereafter and before such default is
cured, terminate this Agreement as of the date specified in the notice of
termination.
5
15. Limitation of Liability. In no event shall either party be liable for any
special, incidental, indirect or consequential damages in connection with
this Agreement, whether based on action or claim in contract, equity,
negligence, intended conduct, tort or otherwise, even if such damages are
foreseeable.
16. Dispute Resolution. The parties agree to resolve any dispute relating to
this Agreement as set forth below:
(a) Negotiation. In the event of any dispute between the parties of
any kind or nature arising out of or relating to this Agreement,
upon the written request of either party, each party will appoint
a designated representative whose task will be to meet with the
other party's designated representative to resolve such dispute.
Such representatives will discuss the dispute and negotiate in
good faith to resolve the dispute or renegotiate the applicable
section or provision without the necessity of any formal
proceeding relating thereto.
(b) Arbitration. If one of the designated representatives concludes
in good faith that amicable resolution through such continued
negotiation of the matter in issue is not likely to occur, then,
upon the request of either party, the dispute will be submitted to
arbitration in accordance with the Commercial Arbitration Rules of
the America Arbitration Association then in effect (the "Rules")
or such other procedures as may be agreed upon by the parties.
Three independent arbitrators will be selected in accordance with
the Rules and the arbitrators will allow such discovery as is
appropriate, consistent with the purposes of arbitration in
accomplishing fair, speedy and cost effective resolution of
disputes. Unless otherwise mutually agreed in writing by the
parties, the arbitration proceedings will be conducted in the City
of Dallas, Texas. The arbitrators will reference the rules of
evidence of the Federal Rules of Civil Procedure then in effect in
setting the scope of discovery. Judgment on the award rendered by
the arbitrators may be entered in any court of competent
jurisdiction; provided that any such award rendered by the
arbitrators shall be strictly in conformance to and in accordance
with the terms and conditions of this Agreement.
(c) Exclusive Remedy. Other than those matters involving injunctive
relief as a remedy or any action necessary to enforce the award of
the arbitrators, the parties agree that the provisions of this
Section are a complete defense to any suit, action or other
proceeding instituted in any court or before any administrative
tribunal with respect to any dispute, controversy or claim
arising under or in connection with this Agreement. Nothing in
this Section prevents the parties from exercising their rights to
terminate this Agreement in accordance with this Agreement.
6
17. Legal Compliance. This Agreement and each party's obligations hereunder
will be subject to, and each party will comply with, all applicable laws,
rules, regulations, ordinances, codes, orders and judgments.
18. Assignment. This Agreement will be binding on the parties and their
respective successors and assigns, but neither party may assign this
Agreement without the other party's prior written consent.
19. Notices. Wherever under this Agreement one party is required or permitted
to give notice to the other party, such notice will be deemed given when
delivered in hand to an appropriate representative of the other party or
three days after being mailed by United States mail, registered or
certified mail, return receipt requested, postage prepaid, and addressed
as follows:
If to Ericsson: If to Splitrock:
Ericsson Inc. Splitrock Services, Inc.
000 Xxxxxxxxxxxxx Xxxxxxx 0000 Xxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxx 00000-0000 The Xxxxxxxxx, Xxxxx 00000
Attention: Vice President-Bus. Dev. Attention: Xxxx Xxxxxx, President
Fax No.: (000) 000-0000 Fax No.: (000) 000-0000
With a copy to: With a copy to:
Ericsson Inc. Splitrock Services, Inc.
0000 Xxxx Xxxxxxx Xxxx 0000 Xxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxx 00000 Xxx Xxxxxxxxx, Xxxxx 00000
Attention: General Counsel Attention: General Counsel
Fax No.: (000) 000-0000 Fax No.: (000) 000-0000
Any writing which may be mailed pursuant to the foregoing may also be
delivered by express mail, telegraph, telex or facsimile and will be
effective when received by the addressee. Either party may from time to
time change its address for notification purposes by giving the other
party prior written notice of the new address and the date upon which it
will become effective.
20. Relationship of Parties. Ericsson, in providing products and services to
Splitrock hereunder, is acting only as an independent contractor and does
not undertake by this Agreement or otherwise to perform an obligation of
Splitrock, whether regulatory or contractual, or to assume any
responsibility for Splitrock's business or operations. Ericsson has the
sole right and obligation to supervise, manage, contract, direct,
procure, perform or cause to be perform, all work to be performed by
Ericsson hereunder unless otherwise provided herein.
21. Restriction on Hiring. Each party agrees that, during the term of this
Agreement and for two years thereafter, it will not, except with the
other party's prior written
7
consent, solicit for its employment, employ, engage as an independent
contractor, otherwise obtain the services of any person employed then or
within the preceding twelve months by the other party if that person was
involved in the performance of this Agreement.
22. Force Majeure. Each party will be excused from performance hereunder for
any period and to the extent that it is prevented from such performance,
in whole or in part, as a result of delays caused by the other party or
an act of God, natural disaster, war, civil disturbance, court order,
labor dispute, third party non-performance, or other cause beyond its
reasonable control and which it could not have prevented by reasonable
precautions, including failures or fluctuations in electrical power,
heat, light, air conditioning or telecommunications equipment, and such
non-performance will not be a default hereunder or a ground for
termination hereof.
23. Attorneys' Fees. If any legal action or other proceeding is brought for
the enforcement of this Agreement of any arbitration award, or because of
an alleged dispute, breach, default, or misrepresentation in connection
with any of the provisions of this Agreement, the prevailing party will
be entitled to recover reasonable attorneys' fees and other costs
incurred in that action or proceeding, in addition to any other relief to
which it may be entitled.
24. Third Party Beneficiaries. This Agreement is for the benefit of the
parties hereto and is not intended to confer any rights or benefits on
any third party, including any employees, creditor or affiliate of either
party.
25. Severability. If any provision of this Agreement is illegal,
unenforceable or void, then both parties will be relieved of all
obligations arising under that provision, but only to the extent the
provision is illegal, unenforceable or void. If the illegal,
unenforceable or void provision does not relate to the payments to be
made to Ericsson hereunder and if the remainder of this Agreement is
capable of substantial performance, then each provision not so affected
will be enforced to the extent permitted by law.
26. Waiver. No delay or omission by either party to exercise any right or
power hereunder will impair that right or power or be construed to be a
waiver thereof. A waiver by either party of any of the covenants to be
performed by the other party or any breach thereof will not be construed
to be a waiver of any succeeding breach thereof or of any other covenant
herein contained.
27. Press Releases. All media releases, public announcements and public
disclosures by either party relating to this Agreement or its subject
matter, including promotional or marketing materials, will be
coordinated with and approved in writing by the other party prior to
release. This restriction does not apply to (i) any announcement intended
solely for internal distribution by the
8
disclosing party, or (ii) any announcement required by legal, accounting
or regulatory requirements beyond the reasonable control of the
disclosing party.
28. Counterparts. This Agreement may be executed in several counterparts, all
of which taken together will constitute one single agreement between the
parties.
29. Amendments. No amendment, change, waiver or discharge hereof will be
valid unless in writing and signed by an authorized representative of
each party.
30. Governing Law. This Agreement will be governed by and construed in
accordance with the laws, other than the choice of law rules, of the
State of Texas.
31. Entire Agreement. This Agreement, including each schedule and exhibit
referred to herein and attached hereto, each of which is incorporated
herein for all purposes, constitutes the entire agreement between the
parties with respect to the subject matter hereof and supersedes all
prior and contemporaneous representations, understandings or agreements
relating to the subject matter hereof.
IN WITNESS WHEREOR, Ericsson and Splitrock have each caused this Agreement to be
signed and delivered by its duly authorized representative, as of the Effective
Date.
ERICSSON INC. SPLITROCK SERVICES, INC.
By: /s/ XXXX XXXXXXX By: /s/ XXXXXXX XXXXXX
---------------------------- ------------------------------
Printed Name: Xxxx Xxxxxxx Printed Name: Xxxxxxx Xxxxxx
------------------ --------------------
Title: Vice President Title: President
------------------------- ---------------------------
