DEFINITIVE AGREEMENT
BETWEEN
SBC OPERATIONS INC.
AND
CONCENTRIC NETWORK CORPORATION
PROPRIETARY INFORMATION
The Information contained herein is for the use of SBC Operations, Inc. (and its
Affiliated Companies) and Concentric Network Corporation only and is not for
disclosure without prior written approval.
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PART I - DEAL TERMS ...................................... 8
-------------------
1. SCOPE AND STRUCTURE OF RELATIONSHIP................. 8
2. DEFINITIONS......................................... 8
3. PRODUCT SPECIFICATION AND PLANNING.................. 8
3.1 SBC Acceptance of Products..................... 8
3.2 Damages for delay.............................. 9
4. NEW PRODUCTS AND SERVICES........................... 9
4.1 New Products Committee......................... 10
4.3 Upgrades....................................... 10
6. USE OF SBC TRANSPORT................................ 10
7. NATURE OF THE RELATIONSHIP.......................... 10
7.2 Non-Exclusive Relationship..................... 11
8. PRICING AND PRICE PROTECTION........................ 11
8.1 Systems and Billing............................ 11
8.2 [*]............................................ 13
9. REPORTING........................................... 13
10. CHANNEL SYNERGIES AND CONFLICT...................... 13
10.1 Channel Plan.................................. 14
10.2 RFP Responses................................. 14
10.3 Employee Conduct.............................. 14
[*]...................................................... 14
12. FORECASTING AND FUTURE NETWORK COVERAGE............. 14
13. BRANDING............................................ 15
[*]...................................................... 15
15. CUSTOMER CARE/TECH SUPPORT.......................... 15
16. SALES TRAINING...................................... 15
17. TERM OF AGREEMENT................................... 15
18. TERMINATION......................................... 15
PROPRIETARY INFORMATION
The Information contained herein is for the use of SBC Operations, Inc.
(and its Affiliated Companies) and Concentric Network Corporation only and is
not for disclosure without prior written approval.
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18.1 Termination at End of Term.................... 15
18.2 Termination For Convenience................... 16
18.3 Termination for Cause......................... 16
18.4 Termination evolving from Regulatory
Contingencies................................. 17
19. CUSTOMER TRANSITION PROVISIONS...................... 17
19.1 Customer Transition Plan...................... 17
19.2 Customer Migration............................ 17
20. STEERING COMMITTEE AND STRATEGIC RELATIONSHIP....... 17
20.1 Steering Committee............................ 17
20.2 Additional Areas for Cooperation.............. 17
20.3 Technology Committee.......................... 17
21. NETWORK OPERATIONS.................................. 18
22. PUBLICITY........................................... 18
PART II - STANDARD TERMS AND CONDITIONS................... 18
---------------------------------------
1. DEFINITIONS......................................... 18
2. BENEFIT OF AGREEMENT EXTENDING TO SBC AFFILIATES.... 21
3. NO INTERLATA ACTIVITIES BY SBC..................... 21
4. REPRESENTATIONS AND WARRANTIES...................... 22
4.1 Authorization.................................. 22
4.2 Compliance with Specifications................. 22
4.3 Year 2000...................................... 22
4.4 Warranty Limits................................ 23
5. LIABILITY LIMITS.................................... 23
6. INDEMNIFICATION AND INFRINGEMENT.................... 23
6.1 Infringement................................... 23
6.2 Indemnification................................ 25
7. INSURANCE........................................... 26
8. CUSTOMER INFORMATION................................ 27
9. NON-SOLICITATION OF SBC CUSTOMERS................... 28
10. INTELLECTUAL PROPERTY RIGHTS........................ 28
10.1 CNC Software.................................. 28
10.2 SBC Software.................................. 29
10.3 Trademarks.................................... 29
PROPRIETARY INFORMATION
The Information contained herein is for the use of SBC Operations Inc.
(and its Affiliates Companies) and Concentric Network Corporation only
and is not for disclosure without prior written approval.
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10.4 New Developments.............................. 30
10.5 General....................................... 31
11. CONFIDENTIAL INFORMATION............................ 32
11.1 SBC's Information............................. 32
11.2 CNC's Information............................. 32
13. RECORDS AND AUDITS.................................. 33
14. CURE................................................ 34
15. DISPUTE ESCALATION.................................. 34
16. ARBITRATION......................................... 34
17. GOVERNING LAW....................................... 35
18. RELATIONSHIP OF PARTIES............................. 35
19. REMEDIES............................................ 35
20. AMENDMENT AND WAIVER................................ 35
21. RELEASES VOID....................................... 36
22. FORCE MAJEURE....................................... 36
23. ASSIGNMENT.......................................... 37
24. CONFLICT OF INTEREST................................ 37
25. LIENS PROHIBITED.................................... 38
26. SEVERABILITY........................................ 38
27. SURVIVAL............................................ 38
28. COMPLIANCE WITH LAWS/REGULATORY CONTINGENCY......... 38
28.1 Compliance With Laws.......................... 38
28.2 Regulatory Contingency........................ 39
29. TAXES............................................... 39
30. ACCESS TO PREMISES.................................. 40
31. USE OF SBC SYSTEMS.................................. 41
32. WORK DONE BY OTHERS................................. 41
PROPRIETARY INFORMATION
The Information contained herein is for the use of SBC Operations Inc.
(and its Affiliates Companies) and Concentric Network Corporation only
and is not for disclosure without prior written approval.
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33. SECURITY............................................ 41
34. INSPECTIONS......................................... 41
35. INDEPENDENT CONTRACTOR/ SBC AGENT................... 42
36. DIVERSION OF EMPLOYMENT............................. 43
37. UNIVERSAL DESIGN.................................... 43
38. HEADINGS............................................ 43
39. NOTICES............................................. 44
40. ENTIRE AGREEMENT/RELATIONSHIP AMONG DOCUMENTS....... 44
41. SIGNATURES.......................................... 47
ATTACHMENTS............................................... 47
-----------
1. MARKETING SERVICE DESCRIPTION........................ 47
2. TECHNICAL SERVICE DESCRIPTION........................ 47
3. DEPLOYMENT AND DELIVERY.............................. 47
4. USE OF SBC TRANSPORT................................. 47
5. CNC'S EXISTING STRATEGIC RELATIONSHIPS............... 47
6. BILLING.............................................. 47
7. SYSTEMS.............................................. 47
8. PRICING.............................................. 47
9. PERFORMANCE COMMITMENTS AND REPORTS.................. 47
10. SALES CHANNEL CONFLICTS.............................. 47
11. FORECASTING.......................................... 47
12. BRANDING............................................. 47
13. CUSTOMER CARE AND TECHNICAL SUPPORT.................. 47
14. SALES TRAINING AND SUPPORT........................... 47
PROPRIETARY INFORMATION
The Information contained herein is for the use of SBC Operations Inc.
(and its Affiliates Companies) and Concentric Network Corporation only
and is not for disclosure without prior written approval.
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15. NETWORK MANAGEMENT AND MONITORING.................... 47
16. PROVISIONING......................................... 47
17. SERVICE LEVEL AGREEMENTS............................. 47
18. WHOLESALE DIAL ACCESS................................ 47
19. EXECUTIVE ORDERS AND ASSOCIATED REGULATIONS.......... 47
20. CONSULTING SERVICES.................................. 47
21. ACCEPTANCE TEST PLAN AND PROCEDURES.................. 47
PROPRIETARY INFORMATION
The Information contained herein is for the use of SBC Operations Inc.
(and its Affiliates Companies) and Concentric Network Corporation only
and is not for disclosure without prior written approval.
-6-
This Definitive Agreement ("Agreement"), effective as of April 1, 1999 (the
"Effective Date"), is made between SBC Operations Inc., a Delaware corporation,
(herein referred to as "SBC") with offices located at 175 East Houston Street,
San Antonio, TX 78215 and Concentric Network Corporation ("CNC"), a Delaware
corporation, with offices located at 1400 Parkmoor Avenue, San Jose, CA 95126.
For the purpose of this Agreement, SBC and CNC are each a "Party" and
collectively, the "Parties."
This Agreement is made with reference to the following facts, which form the
basis for this Agreement:
A. SBC is one of a group of companies affiliated which share the parent company
SBC Communications, Inc. providing telecommunications and network services to
individual and business end-users worldwide. Affiliates of SBC offer internet
access and network services on a IntraLATA basis (hereinafter defined).
B. CNC is a network and Internet service provider offering IntraLATA and
InterLATA (hereinafter defined) services, with particular emphasis on Virtual
Private Network ("VPN") and similar services offered to small and medium sized
business customers.
C. The Parties previously have entered into the Trial Agreement dated October
19, 1998 pursuant to which the Parties are operating a trial of certain
cooperatively offered products and services, the Stock Purchase Agreement dated
October 19, 1998 pursuant to which SBC has acquired a certain percentage of
CNC's stock, and the Web Hosting General Agreement dated October 9, 1998
("Hosting GA") pursuant to which CNC is providing web hosting services to SBC,
its affiliates and customers. The Parties also have had discussions regarding a
broader strategic relationship.
D. The Parties wish to formalize their previous discussions regarding a
strategic relationship pursuant to which SBC will purchase certain IntraLATA
products and services from CNC, and make such IntraLATA products and services
available to end user customers of SBC. The products and services delivered to
SBC's customers through this strategic relationship are intended to be
competitive offerings, achieved through successful planning, implementation and
improvement of technology, business processes, and strategic deployment of the
Parties' integrated products and services, with the goal of enhancing
competition and offering end user customers compelling, quality products and
services in a highly competitive, rapidly evolving marketplace. In addition,
the Parties wish to set forth in this Agreement (including the attachments and
schedules attached hereto) all the terms and conditions governing the strategic
relationship between them.
NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:
PROPRIETARY INFORMATION
The Information contained herein is for the use of SBC Operations, Inc.
(and its Affiliated Companies) and Concentric Network Corporation only and is
not for disclosure without prior written approval.
-7-
PART I - DEAL TERMS
-------------------
1. SCOPE AND STRUCTURE OF RELATIONSHIP
CNC hereby agrees to provide SBC with the Products and Services described in
ATTACHMENT 1, Marketing Service Description, on the terms and conditions set
forth herein. In addition, CNC agrees to make available to SBC for resale to end
users all enhancements and upgrades to Products and Services, as well as new
products and services which are related or complementary to the Products and
Services, as set forth in Part I, Section 4 below.
2. DEFINITIONS
All capitalized terms not otherwise defined will have the meaning set forth in
Part II, Section 1, Definitions.
3. PRODUCT SPECIFICATION AND PLANNING
All Products and Services to be delivered by CNC hereunder will conform in all
material respects to the descriptions and specifications set forth in ATTACHMENT
2, Technical Service Description, as such Attachment 2, Technical Service
Description or other applicable attachments, may be modified from time to time
by the express written agreement of the Parties. CNC will provide electronic
and hard copies of all descriptions of the Products and Services and their
functionality, including all sales and technical materials prepared by CNC,
subject to the licensing requirements herein, including third party obligations.
SBC will have access to these Service descriptions and sales material and
authority to adapt, brand and publish them for use with its sales force and
other SBC personnel and SBC customers.
3.1 SBC Acceptance of Products
CNC will deliver new Products and Services, as well as upgrades to Products
and Services in accordance with ATTACHMENT 2, Technical Service Description
or other applicable attachments, on or before the initial launch, new
product or upgrade dates set forth in ATTACHMENT 3, Deployment and
Delivery. A Product or Service or upgrade will be deemed delivered when SBC
reasonably determines that the performance and reliability of such Product
or Service conforms in all material respects to the descriptions and
specifications set forth in ATTACHMENT 2, Technical Service Description, or
other applicable attachments. Failure by SBC to respond or test the product
within thirty (30)
PROPRIETARY INFORMATION
The Information contained herein is for the use of SBC Operations, Inc.
(and its Affiliated Companies) and Concentric Network Corporation only and is
not for disclosure without prior written approval.
-8-
days from the date the Product or Service is delivered to SBC for testing,
will relieve CNC from Damages for Delay. Notwithstanding any implication to
the contrary, if after SBC accepts a Product or Service and it does not
perform to its required specifications, CNC will bring such Product or
Service into compliance as specified by the warranty provisions of this
Agreement without cost to SBC. If, prior to acceptance by SBC, any of the
Products or Services are found conform in all material respects with
ATTACHMENT 2, Technical Service Description, SBC may require CNC to
correct, at CNC's sole expense, any problems and otherwise ensure that the
applicable Product or Service conforms in all material respects to
ATTACHMENT 2, Technical Service Description, and damages for delay, as set
forth in Part I, Section 3.2, Damages for Delay, will apply until
acceptance by SBC.
3.2 Damages for delay
CNC understands that the achievement of the dates for development,
delivery and launch of Products and Services is critical for SBC's plans
to provide Products and Services to its customers as rapidly as possible
and for the success of the Parties' relationship. CNC agrees to take all
commercially reasonable actions to ensure that the planned delivery
schedules are met for launch by SBC of the Products and Services set forth
on ATTACHMENT 3, Deployment and Delivery. Because it may be difficult to
quantify the consequences of a failure to meet mutually agreed upon launch
dates, the Parties agree to the penalties set forth on ATTACHMENT 3,
Deployment and Delivery, for delays in commercial availability of Products
and Services, where the delay has not been caused by SBC or its agents
failing to timely perform its or their obligations expressly set forth
under ATTACHMENT 2, Technical Service Description, or other applicable
attachments.
4. NEW PRODUCTS AND SERVICES
It is the intention of the Parties mutually to benefit from the relationship
established by this Agreement by giving SBC advance notice of, and the
opportunity to offer comments on, and potentially participate in the development
of, enhancements and upgrades to the Products and Services covered hereunder
(collectively "Upgrades") as well as new products and services related to or
complementary to the Products and Services hereunder, including without
limitation Virtual Private Network products and services (collectively "New
Products").
PROPRIETARY INFORMATION
The Information contained herein is for the use of SBC Operations, Inc.
(and its Affiliated Companies) and Concentric Network Corporation only and is
not for disclosure without prior written approval.
-9-
[*] Certain information on this page has been omitted and
filed separately with the Securities Exchange Commission.
Confidential treatment has been requested with respect to
the omitted portions.
4.1 New Products Committee
The Parties will establish a New Products Committee, composed of
representatives from both CNC and SBC. The New Products Committee will meet
from time to time as the Parties determine, but no less frequently than
quarterly during the term of this Agreement. The purpose of the New
Products Committee will be for CNC to keep SBC apprised of potential
Upgrades and New Products, and for SBC to offer comments and suggestions
with respect to product development. If the Parties mutually agree, SBC may
participate in financing or developing Upgrades or New Products, but such
participation shall take place only pursuant to a fully executed Statement
of Work pursuant to Attachment 20, Consulting Services or other written
agreement of the Parties, addressing ownership of the developed
intellectual property and other material issues.
[*]
4.3 Upgrades
CNC agrees to make available to SBC for resale to end users all Upgrades,
including without limitation upgraded or improved SLA's applicable to
Products and Services, as soon as practicable, but no later than such
upgrades are made available to any third party or offered to end users by
CNC. Upgrades to any Product or Service will, when made available pursuant
to the previous sentence and accepted by SBC pursuant to mutually approved
criteria, be considered Products and Services hereunder.
[*]
6. USE OF SBC TRANSPORT
Products and Services offered hereunder will incorporate transport components
(e.g., T1 and other high speed access lines, frame relay, and local access
transport components) provided by Affiliates of SBC, as set forth in more detail
in, and subject to the conditions contained in, ATTACHMENT 4, or [*]
7 NATURE OF THE RELATIONSHIP
[*]
PROPRIETARY INFORMATION
The Information contained herein is for the use of SBC Operations, Inc.
(and its Affiliated Companies) and Concentric Network Corporation only and is
not for disclosure without prior written approval.
-10-
7.2 Non-Exclusive Relationship
Except as set forth in Section 7.1 above, the relationship created by this
Agreement is non-exclusive, and nothing contained herein will be deemed to
restrict either Party from quoting, offering to sell or selling products or
services to or acquiring products or services from others, entering into
agreements with other entities for the provision of products and services.
Furthermore, nothing in this Agreement will be deemed to restrict the
prices at which any service may be offered or sold outside of this
Agreement, or affect or influence in any way CNC's provision of InterLATA
Products and Services.
8. PRICING AND PRICE PROTECTION
8.1 Systems and Billing
(a) SBC is responsible for billing and collection of payment for all
Products and Services, as specified in ATTACHMENTS 6 Billing and 7
Systems. CNC will provide SBC with billing information for Products
and Services to allow SBC to accurately bill Customers. CNC will
invoice SBC for SBC Products and Services CNC provides directly to
SBC. CNC will provide customer invoice data to SBC for InterLATA
Products and Services received. In connection with the billing of
Customers, CNC agrees to comply with any rules, regulations, terms and
conditions to which SBC may be subject, due to regulatory
considerations.
(b) CNC will render an invoice in duplicate on a monthly basis, for all
Products and Services purchased by SBC hereunder and will
simultaneously provide SBC with all information necessary to allow SBC
to bill on behalf of CNC with respect to all InterLATA Services. The
invoice will conform in all respects to the requirements specified in
ATTACHMENTS 6, Billing and 7, Systems, and will comply with any legal
or regulatory requirements of which SBC notifies CNC from time to
time. SBC will pay CNC within sixty (60) days of the date of such
invoices.
(c) CNC acknowledges that it is vital to SBC's relationship with end user
customers that invoices to such customers be presented on a timely
basis, in order to minimize customer inquiries and associated costs.
Accordingly, CNC will use its best efforts to supply SBC with invoices
PROPRIETARY INFORMATION
The Information contained herein is for the use of SBC Operations, Inc.
(and its Affiliated Companies) and Concentric Network Corporation only and is
not for disclosure without prior written approval.
-11-
within 30 days after delivery of products and Services. SBC will have
no obligation to pay untimely invoices which are defined, for the
purpose of this Section 8.1(C) as: (I) usage invoices received by SBC
more than thirty (30) days after such usage is incurred and (ii)
monthly recurring and non-recurring charge invoices received more than
one hundred twenty (120) days after the delivery of Products or
Services. Provided, however, that if SBC in fact receives payment
from end users on account of any such untimely CNC invoices, SBC will
make payment to CNC of the corresponding amounts otherwise due to CNC
hereunder. If SBC disputes any invoice rendered or amount paid, SBC
will so notify CNC and the Parties will use their best efforts to
resolve such dispute expeditiously. Notwithstanding the foregoing,
the expectation is that all upgrades and changes to a Customer's
Products or Services resulting in changes to recurring and non-
recurring charges will be made by the Customer through SBC, so that
SBC has adequate information to accurately bill such upgrades and
changes, as specified in Attachment 6, Billing.
(d) All amounts payable to CNC hereunder, with respect to any InterLATA
products and services as to which SBC bills end users on behalf of
CNC, will be reduced by any bad debts and amounts uncollectible from
end users. SBC will bear the risk of all bad debts and uncollectible
amounts in connection with IntraLATA Products and Services; provided,
however, that the Parties will take the following steps to reduce the
severity of customer complaints and associated churn and uncollectible
amounts:
(i) From time to time and on a case by case basis, the Parties will
cooperate in good faith to accommodate Customer complaints,
including by means of credits and discounts, to the extent
reasonable and necessary to maintain Customer satisfaction and
reduce Customer terminations.
(ii) Without limiting subsection (I) above, from time to time and on
a case by case basis, the Parties will adjust the Product and
Service installation date for Customer billing purposes, if
delays in installation for such Customer are attributable to
CNC.
(iii) The Parties will cooperate in good faith to develop an
equitable plan for billing start dates and allocations for
Customers with multiple sites.
PROPRIETARY INFORMATION
The Information contained herein is for the use of SBC Operations, Inc.
(and its Affiliated Companies) and Concentric Network Corporation only and is
not for disclosure without prior written approval.
-12-
[*] Certain information on this page has been omitted and
filed separately with the Securities Exchange Commission.
Confidential treatment has been requested with respect to
the omitted portions.
(iv) The Parties will cooperate in good faith to develop procedures
to implement subsections (i) and (ii), including establishing a
single point of contact, escalation procedures, and regular
reviews of customer feedback
(e) All claims for moneys due from SBC will be subject to deduction by SBC
for any credit due from CNC. Notwithstanding the foregoing sentence,
if credits have arisen under another contract between the Parties, the
credits may be applied to this Agreement only if purchases under such
other contract have ended, either as a result of expiration or
termination of such contract. Any amount due SBC that is not so
applied against CNC's invoices for any reason will be paid to SBC by
CNC within forty-five (45) days after demand by SBC.
8.2 [*]
(e) The Parties will establish single points of contact for pricing
related issues and an escalation procedure for resolving pricing
disputes.
(f) Notwithstanding anything to the contrary herein, including the
foregoing Sections, nothing in this Section 7.2, will apply to
the provision of InterLATA services by CNC. SBC will have no
authority over any InterLATA transport charges to Customers, all
of which will be established solely by CNC.
[*]
9. REPORTING
The Parties have defined reports which will be issued for use by Customers, and
for each of the Parties' internal use. These reports will be issued when a
Customer's Service is launched and will continue for the duration of the
Service. A list of such reports is attached and specified in ATTACHMENT 9,
Performance Commitments and Reports. Such reports include but are not limited
to, web enabled customer facing reports and reports to each of the Parties' for
internal management needs.
10. CHANNEL SYNERGIES AND CONFLICT
PROPRIETARY INFORMATION
The Information contained herein is for the use of SBC Operations, Inc.
(and its Affiliated Companies) and Concentric Network Corporation only and is
not for disclosure without prior written approval.
-13-
[*] Certain information on this page has been omitted and
filed separately with the Securities Exchange Commission.
Confidential treatment has been requested with respect to
the omitted portions.
10.1 Channel Plan
SBC will be responsible for the sales and marketing of the Products and
Services. The Parties will resolve RFP conflicts as provided below in
Section 10.2 and channel conflicts as provided in ATTACHMENT 10, Sales
Channel Conflicts. Any sales conflicts not resolved as provided herein,
will be referred to the Steering Committee specified in Part 1, Section 20,
Steering Committee.
10.2 RFP Responses
The Parties acknowledge that the spirit of the relationship established by
this Agreement calls for CNC to involve SBC in RFP responses, and both
Parties agree to use good faith efforts to cooperate to accomplish such
objective. Without limiting the foregoing, CNC will, whenever reasonably
possible, respond to RFP's with proposals which utilize SBC products,
services and transport components in addition to those required to be
utilized by CNC in providing service to CNC customers pursuant to
Attachment 4, Use of SBC Transport hereto.
10.3 Employee Conduct
The employees of each Party will not disclose the strategic relationship
between SBC and CNC in sales efforts, press releases, marketing materials,
or other media unless mutually agreed in writing in advance. The Parties
recognize that in the marketplace, the Parties' channels may overlap and
that selling on a comparative basis is not necessarily a violation of this
Section 9.3. In particular, employees of each of the Parties will be
allowed to comparatively sell Products and Services.
[*]
12. FORECASTING AND FUTURE NETWORK COVERAGE
ATTACHMENT 11, Forecasting, details a process by which SBC and CNC will use
reasonable efforts to accurately forecast Customer acquisition and network
usage. ATTACHMENT 3, Deployment and Delivery, details CNC network coverage and
expansion and deployment plans.
PROPRIETARY INFORMATION
The Information contained herein is for the use of SBC Operations, Inc.
(and its Affiliated Companies) and Concentric Network Corporation only and is
not for disclosure without prior written approval.
-14-
[*] Certain information on this page has been omitted and
filed separately with the Securities Exchange Commission.
Confidential treatment has been requested with respect to
the omitted portions.
13. BRANDING
[*]
[*]
15. CUSTOMER CARE/TECH SUPPORT
Subject to the Act and as specified in ATTACHMENT 13, Customer Care/ Technical
Support, SBC and CNC will provide Customer Care (herein after defined in
ATTACHMENT 13, Customer Care/ Technical Support) on all Products and Services.
CNC will provide customer care on InterLATA Products and Services. If, as a
result of a call to either SBC or CNC, it is determined that the trouble is not
attributable to the IntraLATA Products and Services, the call will be referred
to CNC for Customer Care. Each Party will bear its own costs with respect to
the Customer Care inquiries it handles unless otherwise provided in a separate
agreement.
16. SALES TRAINING
CNC will provide SBC with supplemental sales performance training on a monthly
basis, to help improve the capabilities of the sales team. SBC sales trainers
will be instructed in this sales performance training, as specified in
ATTACHMENT 14, Sales Training and Support, and at the fees identified therein,
where applicable.
17. TERM OF AGREEMENT
This Agreement is effective upon the Effective Date and unless sooner terminated
as provided herein, will remain in full force and effect for an initial term of
three (3) years following the Effective Date. Thereafter, the Agreement will be
automatically renewed for three (3) successive one (1) year terms, unless either
party has provided the other party with notice of termination, in accordance
with Part I, Section 18, Termination, herein. Termination is complete only upon
each Parties' satisfaction of its obligations under this Agreement.
18. TERMINATION
18.1 Termination at End of Term
Either Party may terminate this Agreement without penalty by providing not
less than sixty (60) days written notice to the other Party, provided that
the
PROPRIETARY INFORMATION
The Information contained herein is for the use of SBC Operations, Inc.
(and its Affiliated Companies) and Concentric Network Corporation only and is
not for disclosure without prior written approval.
-15-
[*] Certain information on this page has been omitted and
filed separately with the Securities Exchange Commission.
Confidential treatment has been requested with respect to
the omitted portions.
termination date does not become effective until the completion of the
initial three year term or any extension thereof.
18.2 Termination For Convenience
Commencing six (6) months after the Effective Date, SBC may, at its sole
option, terminate this Agreement, or unilaterally modify ATTACHMENTS 1,
Marketing Service Description and 2 Technical Service Description, in order
to remove from the scope of this Agreement any Product or Service offered
pursuant to this Agreement, at any time. SBC acknowledges that if SBC
terminates the IntraLATA portion of the Products and Services, CNC will
terminate its arrangements with end-user customers to provide the InterLATA
portion of all Products and Services, subject to an appropriate transition
period which matches the transition period provided for IntraLATA Products
and Services provided in Part I, Section 19.1, Customer Transition Plan.
Upon termination, pursuant to this Section18.2, (other than pursuant to
Attachment 9, Performance Commitments), as liquidated damages for such
termination, SBC will compensate CNC for the difference between the amount
of revenue CNC would have received on the total number of outstanding
Customer term contracts (including set-up and monthly fees) had a greater
term discount not been applied.
[*]
18.3 Termination for Cause
Either Party may terminate this Agreement in the event of a material breach
of contract which remains unremedied for a period of thirty (30) days
following written notice of such breach. If SBC terminates this Agreement
on account of an uncured CNC breach, then SBC will have no further
obligations to CNC hereunder, including without limitation pursuant to Part
I, Sections 5 SBC Revenue Commitment and 19.2, and Termination for
Convenience, except for any invoices due and owing to CNC for services
provided. If CNC terminates this Agreement on account of an uncured SBC
breach, then CNC will have no further obligations to SBC hereunder, except
as provided in Part 1, Section 19, Customer Transition Provisions.
PROPRIETARY INFORMATION
The Information contained herein is for the use of SBC Operations, Inc.
(and its Affiliated Companies) and Concentric Network Corporation only and is
not for disclosure without prior written approval.
-16-
[*] Certain information on this page has been omitted and
filed separately with the Securities Exchange Commission.
Confidential treatment has been requested with respect to
the omitted portions.
18.4 Termination evolving from Regulatory Contingencies
Through no fault of either Party, there may be instances in which this
Agreement terminates due to government laws or regulations. Such
termination is addressed in Part II, Section 27.7, Regulatory Contingency.
19. CUSTOMER TRANSITION PROVISIONS
19.1 Customer Transition Plan
[*]
19.2 Customer Migration
[*]
20. STEERING COMMITTEE AND STRATEGIC RELATIONSHIP
20.1 Steering Committee
The Parties have established a "Steering Committee" consisting of two (2)
representatives of management from each Party who will collectively oversee
and address issues relating to the continuation of the contractual
relationship. The Steering Committee will meet from time to time to ensure
that the goals of the relationship are being met. Each Party may change
its representative to the Steering Committee from time to time in its sole
discretion.
20.2 Additional Areas for Cooperation
[*]
20.3 Technology Committee
The Steering Committee will establish a technology committee, to meet no
less frequently than quarterly, with the intention that, subject to all
applicable legal and regulatory requirements, the Parties will engage in
joint discussions to allow coordination of technology issues and
integration of technology, hardware and software to maintain
interoperability and otherwise enhance the Parties' ability to perform
their respective obligations under this Agreement and to provide
competitive, innovative, high quality services to end users.
PROPRIETARY INFORMATION
The Information contained herein is for the use of SBC Operations, Inc.
(and its Affiliated Companies) and Concentric Network Corporation only and is
not for disclosure without prior written approval.
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21. NETWORK OPERATIONS
21.1 As specified in ATTACHMENT 15, Network Management and Monitoring, SBC
will provide all single points of contact ("SPOCs") and tier one
network operations support for IntraLATA transmission elements, non-
transmission oriented services, and administrative services, provided
that SBC may, in its discretion, require CNC to provide network
operations support where the problem is isolated to Products and
Services developed by CNC. CNC will provide network operations
support for InterLATA Products and Services, for CNC's network and for
network elements leased by CNC from a third party to deliver InterLATA
Products and Services.
21.2 Each Party will bear its own costs with respect to network operations
support it handles. The Parties have established processes to
coordinate network operations support to be provided by the Parties
under this Agreement. Such processes are specified in ATTACHMENT 15,
Network Management and Monitoring/Network Operations Center.
22. PUBLICITY
Neither Party will use the other Party's name or any language, pictures or
symbols which could imply the other Party's identity in any (i) written or oral
advertising presentation or communication, or (ii) brochure, press release,
newsletter, book or other written material of whatever nature, without the other
Party's prior written consent. To the extent CNC believes that the execution of
any of the potential agreements discussed in this Agreement is a financially
disclosable event, CNC will notify SBC, with the exception of confidentiality
constraints in accordance with SEC regulations and laws, of CNC's opinion in
advance of execution of such agreement.
PART II - STANDARD TERMS AND CONDITIONS
---------------------------------------
1. DEFINITIONS
All capitalized terms not otherwise defined will have the meaning set forth
below:
PROPRIETARY INFORMATION
The Information contained herein is for the use of SBC Operations, Inc.
(and its Affiliated Companies) and Concentric Network Corporation only and is
not for disclosure without prior written approval.
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"Act" - means the Telecommunications Act of 1996 (47 U.S.C. 151 et seq.), Pub.
L. No. 104-104, 110 Stat. 56, as amended from time to time.
"Affiliate" - means (i) any corporation or other entity owning, either directly
or indirectly, today or in the future, a majority of the outstanding stock of a
Party ("Parent"), or (ii) any corporation or other entity in which a majority of
the ownership interest is held, either directly or indirectly, today or in the
future, by the Parent of a Party or by such Party; but only so long as such
majority ownership exists.
"Confidential Information" - means non-public information treated by the
disclosing Party as confidential, including trade secrets, technical, financial
and business information, names of existing and potential customers or partners,
existing and potential business ventures, reports, plans, technology, products,
services, processes, methods, data or any other confidential and proprietary
information. In order to be treated as confidential hereunder, information must
be: (i) reduced to tangible form and marked clearly as confidential or
proprietary, or (ii) with respect to any oral presentation, such presentation
must deal with information previously or concurrently designated in writing as
confidential. Confidential information will not include any information in the
public domain other than as a result of a Party's failure to comply with its
obligations hereunder, information already known to or in the possession of the
disclosee, information independently developed by the disclosee or information
which is obtained by the disclosee without restriction on disclosure.
"Consulting Services"- means any work, direction of work, technical information,
technical consulting, or other technical services (including but not limited to
design services, analytical services, quality assurance, and other specialized
services furnished by CNC under this Agreement as specified in a mutually agreed
Statement of Work.
"Customer" - means any person or business who purchases Products and Services
(hereinafter defined) from SBC, as described in this Agreement.
"Customer Information"- means information which identifies a Customer which
includes but is not limited to name, phone number, email address, IP address,
Customer call records, data transmitted by the Customer, credit card account
information, street address, or any other information which is unique to
individual Customers.
"Documentation"- means all material associated with Products, Services and
InterLATA (all hereinafter defined) Products and Services, including, but not
limited to, test data, flow charts, documentation, manuals, data file listings,
input and output
PROPRIETARY INFORMATION
The Information contained herein is for the use of SBC Operations, Inc.
(and its Affiliated Companies) and Concentric Network Corporation only and is
not for disclosure without prior written approval.
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formats, user instructions, training materials and any other written documents
normally supplied to customers of CNC.
"Global Service Provider" or "GSP" means a provider of communication services
for InterLATA transport of Customer data.
"Hosting General Agreement" -means the agreement signed between Southwestern
Bell Communications Internet Services and Concentric Network Corporation on
October 9, 1998 for the provision of Web Hosting and Consulting Services.
"IntraLATA" - means those services, revenues, and functions related to
telecommunications originating and terminating within a single Local Access and
Transport Area ("LATA") within SBC's Service Region (hereinafter defined).
"InterLATA" - means those services, revenues, and functions related to
telecommunications originating in one LATA and terminating in another LATA or
outside of a LATA. "InterLATA" will have the same meaning as "InterLATA
Services" as used in Section 3(21) of the Communications Act of 1936, as amended
by the Act.
"Marketing Service Description or MSD" -means the most current version of the
Marketing Service Description written by SBC, as mutually agreed from time to
time, which is attached and incorporated to this Agreement as ATTACHMENT 1,
Marketing Service Description ("MSD").
"Order" - means a SBC document executed hereunder ordering s (hereinafter
defined) and/or Products (hereinafter defined) and will be deemed to incorporate
(i) the provisions of this Agreement (including the Attachments attached
hereto), as it may from time to time be amended, (ii) the specifications
applicable to such Order and (iii) any subordinate documents attached to or
referenced in this Agreement, such specifications or such Order.
"Product"- means any Service (hereinafter defined) or data Product and
associated Documentation, purchased, or ordered by SBC or SBC's customers
pursuant to Orders issued hereunder by SBC.
"SBC's Service Region" - means all geographical areas in which SBC offers
telecommunications services or internet services, whether by wire line or
wireless transmission, including without limitation, SBC's eight state region,
which includes California, Texas, Missouri, Oklahoma, Nevada, Arkansas, Kansas,
and Connecticut, as such may be expanded by mergers and/ or acquisitions or
otherwise.
PROPRIETARY INFORMATION
The Information contained herein is for the use of SBC Operations, Inc.
(and its Affiliated Companies) and Concentric Network Corporation only and is
not for disclosure without prior written approval.
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"Service"- means a data service deployed by SBC on CNC's network or in CNC's
hosting facilities for which SBC is requesting branding, provisioning,
maintenance and performance guarantees as detailed in this Agreement or its
attachments.
"Service Level Agreements or SLAs" - means specific levels of performance agreed
to be provided by CNC to either SBC customers, SBC or both for the performance
of CNC Products or Services where a credit may attach for failure to meet
performance levels.
"Statements of Work" - means a document executed hereunder pursuant to which SBC
will order Consulting Services to be provided in connection therewith which will
be deemed to incorporate (i) the provisions of this Agreement as it may, from
time to time, be amended, (ii) the agreed upon specifications applicable to such
Statement of Work and (iii) any subordinate documents attached to or referenced
in this Agreement, such specifications or such Statements of Work.
"Technical Service Description or TSD" -means the most current version of the
Technical Service Description written by SBC, as mutually agreed from time to
time, which is attached and incorporated to this contract as ATTACHMENT 2,
Technical Service Description ("TSD").
2. BENEFIT OF AGREEMENT EXTENDING TO SBC AFFILIATES
SBC Affiliates may place Orders which incorporate the terms and conditions of
this Agreement, either directly or, in the event the Parties mutually determine
that a direct relationship between CNC and such SBC Affiliate would be
inappropriate, through one or more SBC Affiliates designated by the Parties
from time to time to place Orders on behalf of other SBC Affiliates. All
amounts payable to CNC pursuant to such SBC Affiliate Orders will be considered
Revenues for the purposes of Part I, Section 5, SBC Revenue Commitment. An
SBC Affiliate placing Orders under this Agreement will be responsible for its
own obligations, including but not limited to, all charges incurred in
connection with such Order. The provisions of this Agreement will not be
construed as requiring SBC to indemnify CNC, or to otherwise be responsible, for
any acts or omissions of an Affiliate, nor will any provision of this Agreement
be construed as requiring an Affiliate to indemnify CNC, or to otherwise be
responsible, for the acts or omissions of SBC.
3. NO INTERLATA ACTIVITIES BY SBC
CNC is responsible for all InterLATA portions of the Products and Services.
Without limiting the foregoing, CNC will provide status and resolution
information on all trouble
PROPRIETARY INFORMATION
The Information contained herein is for the use of SBC Operations, Inc.
(and its Affiliated Companies) and Concentric Network Corporation only and is
not for disclosure without prior written approval.
-21-
tickets and status and disposition of customer service activities, for the
InterLATA portion of the Products and Services. Nothing in this Agreement
authorizes SBC to act as a reseller of InterLATA Products and Services.
Notwithstanding anything to the contrary contained herein, SBC will not (i)
establish the criteria, (ii) establish prices, terms or conditions, (iii) serve
as the exclusive marketing agent or (iv) serve as the initial point of contact
for customer care issues, of the InterLATA Products and Services.
4. REPRESENTATIONS AND WARRANTIES
4.1 Authorization
(a) CNC warrants that it is a corporation duly existing in good
standing in its state of incorporation, and is duly authorized to
enter into and perform all of its obligations hereunder.
(b) SBC warrants that it is a corporation duly existing in good
standing in its state of incorporation, and is duly authorized to
enter into and perform all of its obligations hereunder.
4.2 Compliance with Specifications
CNC hereby represents and warrants to SBC that the Products and Services
will perform in all material respects in the manner specified in
ATTACHMENTS 1, Marketing Service Description, 2, Technical Service
Description, and 9, Performance Commitments and Reports, or other
applicable attachments.
4.3 Year 2000
CNC hereby represents and warrants to SBC that the hardware and software
that comprise CNC's Products and Services provided pursuant to this
Agreement will include Year 2000 Capabilities. CNC will obtain warranties
from its non-compliant third party software providers as soon as they are
commercially available. All warranties for hardware and software will
survive inspection, payment, and use according to the terms hereof.
Additionally, CNC currently has a program in place to address Year 2000
compliance, such that CNC will operate Year 2000 compliant Products and
Services prior to October 31, 1999.
PROPRIETARY INFORMATION
The Information contained herein is for the use of SBC Operations, Inc.
(and its Affiliated Companies) and Concentric Network Corporation only and is
not for disclosure without prior written approval.
-22-
4.4 Warranty Limits
THE WARRANTIES SET FORTH IN THIS SECTION ARE THE SOLE AND EXCLUSIVE
WARRANTIES MADE BY THE PARTIES. THE PARTIES MAKE NO OTHER WARRANTIES OF ANY
KIND, EXPRESS OR IMPLIED, WITH RESPECT TO THE PRODUCTS AND SERVICES OR ANY
RELATED SERVICES OR SOFTWARE. WITH THE EXCEPTION OF THE WARRANTIES
SPECIFIED IN THIS SECTION 4, THE PARTIES EXPRESSLY DISCLAIM ANY WARRANTIES:
(A) OF DESIGN, MERCHANTABILITY, NONINFRINGEMENT OR FITNESS FOR A PARTICULAR
PURPOSE, EVEN IF THEY HAVE BEEN INFORMED OF SUCH PURPOSE; OR (B) THAT THEIR
SERVICES OR ANY RELATED SERVICES OR SOFTWARE WILL BE ERROR-FREE, SECURE OR
WITHOUT INTERRUPTION, (EXCEPT AS SPECIFIED HEREIN).
5. LIABILITY LIMITS
IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY LOSS OF PROFITS OR
ANY INCIDENTAL, SPECIAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES RESULTING FROM ANY
CLAIMS OR DEMANDS BROUGHT AGAINST THE OTHER PARTY, EVEN IF SUCH PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. NOTWITHSTANDING ANY PROVISIONS
CONTAINED IN THIS AGREEMENT TO THE CONTRARY, CNC'S ENTIRE LIABILITY TO SBC
CONCERNING PERFORMANCE OR NONPERFORMANCE BY CNC OR IN ANY WAY RELATED TO THE
SUBJECT MATTER OF THIS AGREEMENT, AND REGARDLESS OF WHETHER A CLAIM IS BASED IN
CONTRACT, NEGLIGENCE OR IN TORT, WILL NOT EXCEED TWENTY-FIVE MILLION DOLLARS
($25,000,000) OR THE AMOUNT RECEIVED BY CNC FROM SBC DURING THE TERM, WHICHEVER
IS GREATER. SBC'S ENTIRE LIABILITY TO CNC IS CAPPED AT THE MONETARY VALUE OF
THE AMOUNT RECEIVED BY CNC FROM SBC DURING THE TERM. THE FOREGOING LIMITATION
WILL NOT REDUCE EITHER PARTIES OBLIGATIONS UNDER PART II, SECTION 6,
INDEMNIFICATION, OR LIABLITY FOR PERSONAL INJURY.
6. INDEMNIFICATION AND INFRINGEMENT
6.1 Infringement
PROPRIETARY INFORMATION
The Information contained herein is for the use of SBC Operations, Inc.
(and its Affiliated Companies) and Concentric Network Corporation only and is
not for disclosure without prior written approval.
-23-
(a) In the event of any claim or allegation against SBC for any
infringement or misappropriation of any third party copyright, patent,
trademark, trade secret by reason of, and in the exercise by SBC of
the rights and licenses granted herein with respect to Products and
Services provided by CNC, hereunder, CNC will, at its expense,
indemnify SBC and defend such claim, and pay any costs, expenses and
finally awarded damages in connection therewith, including the
reasonable fees and expenses of the attorneys for such defense
provided that SBC will cooperate with CNC in connection therewith and
notify CNC of such claim or action within a reasonable time. The
foregoing will not limit SBC's ability to participate in any such
action at its own expense, and CNC will keep SBC informed of, and will
consult with, any independent attorneys appointed by SBC, regarding
such litigation. CNC may not agree to any settlement that would or
might have any effect upon SBC or its affiliates without first
obtaining SBC's consent in writing.
(b) If the permitted use by SBC of Products and Services provided by CNC,
has become, or in CNC's opinion is likely to become, the subject of
any claim of such infringement, CNC may at its option and expense
either (i) procure for SBC the right to continue using the Products
and Services provided by CNC , (ii) replace or modify Products and
Services provided by CNC to make them non-infringing, provided that
such modified Products and Services are equal or superior to the
unmodified Products and Services in all material respects, (iii)
substitute an equivalent for Products and Services provided by CNC
provided that such replacement Products and Services are equal or
superior to the original Products and Services in all material
respects . In the event CNC does not comply with the foregoing, SBC
may terminate or modify this Agreement and without limiting SBC's
other remedies, CNC will reimburse SBC for any damages related to
replacement of infringing Products and Services.
(c) CNC will not have any liability to SBC if any allegation of
infringement is based upon (a) the interconnection and/or modification
and/or use of Products or Services, or associated documentation in
combination with other devices not furnished by CNC and which have not
been disclosed to CNC as part of SBC's proposed configuration where
the Product, Service or associated documentation would not by itself
be infringing, or (b) if the infringement arises out of compliance
with SBC's specifications or designs or out of modifications made to
the Product or Service or associated documentation, unless such
modifications are made by CNC.
PROPRIETARY INFORMATION
The Information contained herein is for the use of SBC Operations, Inc.
(and its Affiliated Companies) and Concentric Network Corporation only and is
not for disclosure without prior written approval.
-24-
(d) SBC will, at its expense, indemnify CNC and defend claims of
infringement, and pay any costs, expenses and finally awarded damages
in connection with SBC provided third party software for which and to
the extent that SBC has received indemnification from the applicable
third party and SBC proprietary software utilized in connection with
the Products and Services including the reasonable fees and expenses
of CNC attorneys for such defense.
6.2 Indemnification
(a) CNC will indemnify, defend and hold harmless SBC (including its
agents, employees, officers, and directors) from and against any and
all liability, loss, finally awarded damages, court cost, attorneys'
fees or other expense of any kind which arises out of any claim,
demand, suit for damages, injunction or other relief, on account of,
but not limited to, (a) injury to or death of any person, (b) damage
to any property, including theft, or (c) any lien, caused by,
resulting from or attributable to the Products and Services provided
by CNC hereunder or (d) the acts or omissions resulting from the
negligence or misconduct of CNC (including any of its agents, or
subcontractors but excepting the active negligence or willful
misconduct solely of SBC or its employees, subcontractors or agents)
in furnishing the Products and Services hereunder.
(b) CNC agrees to defend SBC, at no cost or expense to SBC, against any
such liability, claim, demand, suit or legal proceeding. SBC agrees
to notify CNC within a reasonable time of any written claims or
demands against SBC for which CNC is responsible under this clause.
The foregoing will not limit SBC's ability to participate in any such
action at its own expense, and CNC will keep SBC informed of, and will
consult with, any independent attorneys appointed by SBC, regarding
such litigation.
(c) CNC agrees not to implead or bring any action against SBC or SBC's
employees based on any claim by any person for personal injury or
death that occurs in the course or scope of employment of such person
by CNC and that arises out of the Products and Services furnished
under this Contract.
PROPRIETARY INFORMATION
The Information contained herein is for the use of SBC Operations, Inc.
(and its Affiliated Companies) and Concentric Network Corporation only and is
not for disclosure without prior written approval.
-25-
(d) SBC will indemnify, defend and hold harmless CNC (including its
agents, employees, officers, and directors) from and against any and
all liability, loss, damage, court cost, attorneys' fees or other
expense of any kind which arises out of any claim, demand, suit for
damages, injunction or other relief, on account of acts or omissions
resulting from the gross negligence or willful misconduct of SBC
employees, contractors, and agents. SBC agrees to defend CNC, at no
cost or expense to CNC, against any such liability, claim, demand,
suit or legal proceeding.
7. INSURANCE
7.1 With respect to performance hereunder, and in addition to CNC's
obligation to indemnify, CNC agrees to maintain, at all times during
the term of this Agreement, the following minimum insurance coverages
and limits and any additional insurance and/or bonds required by law:
(a) Workers' Compensation insurance with benefits afforded under the
laws of the state in which the Products and Services are to be
performed and Employers Liability insurance with minimum limits
of $100,000 for Bodily Injury-each accident, $500,000 for Bodily
Injury by disease-policy limits and $100,000 for Bodily Injury by
disease-each employee.
(b) Commercial General Liability insurance with minimum limits of:
$2,000,000 General Aggregate limit; $1,000,000 each occurrence
sub-limit for all bodily injury or property damage incurred in
any one occurrence; $1,000,000 each occurrence sub-limit for
Personal Injury and Advertising; $2,000,000 Products/Completed
Operations Aggregate limit, with a $1,000,000 each occurrence
sub-limit for Products/Completed Operations. Fire Legal
Liability sub-limits of $300,000 are required for lease
agreements. SBC and its Affiliates will be named as an
Additional Insured on the Commercial General Liability policy.
(c) If use of a motor vehicle is required, Automobile Liability
insurance with minimum limits of $1,000,000 combined single
limits per occurrence for bodily injury and property damage,
which coverage will extend to all owned, hired and non-owed
vehicles.
PROPRIETARY INFORMATION
The Information contained herein is for the use of SBC Operations, Inc.
(and its Affiliated Companies) and Concentric Network Corporation only and is
not for disclosure without prior written approval.
-26-
7.2 SBC and its Affiliates requires that companies affording insurance
coverage have a B+ VII or better rating, as rated in the A.M. Best Key
rating Guide for Property and Casualty Insurance Companies.
7.3 A certificate of insurance stating the types of insurance and policy
limits provided the CNC must be received prior to commencement of any
work.
7.4 CNC will also require all subcontractors who may enter upon the work
site to maintain the same insurance requirements listed above.
7.5 To the extent that SBC employees are on CNC's location or performing
services hereunder, SBC will provide similar coverage by self
insurance methods with additional insurance coverage beyond self
insurance.
8. CUSTOMER INFORMATION
8.1 All SBC Customer Information is owned by SBC including any knowledge
base and contents therein used to support the activities contemplated
by this Agreement. SBC Customer Information may be provided to CNC
for day to day management of the business, but will remain the
property of SBC.
8.2 SBC Customer Information will be transmitted and maintained securely
as confidential and guarded with methods and practices acceptable to
SBC in accordance with the confidentiality provisions of this
Agreement. SBC Customer Information will not be shared with third
parties or used by CNC, either during or after the Term, for marketing
purposes unless approved by SBC in advance in writing. Notwithstanding
the above, CNC may share aggregate CNC customer information that
includes aggregate SBC Customer Information, so long as individual or
aggregate SBC Customer Information is not separable from such
aggregate CNC customer information.
8.3 All Customer Information is to be returned to SBC upon termination of
this Agreement and CNC will not retain or have access to any SBC
Customer Information unless agreed in advance by SBC in writing as
part of a transition plan.
PROPRIETARY INFORMATION
The Information contained herein is for the use of SBC Operations, Inc.
(and its Affiliated Companies) and Concentric Network Corporation only and is
not for disclosure without prior written approval.
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8.4 It is acknowledged that CNC will have a direct relationship with
Customers in order to provide CNC's InterLATA Products and Services
associated with the Products and Services offered under this
Agreement, and such relationship may result in CNC obtaining
information regarding Customers equivalent to all or part of the SBC
Customer Information with respect to such Customers ("CNC InterLATA
Customer Information"). CNC agrees to use such CNC InterLATA Customer
Information solely to provide Products and Services to Customers under
this Agreement, and without limiting the foregoing, such CNC InterLATA
Customer Information will not be shared with third parties or used by
CNC, either during or after the Term, for marketing purposes unless
approved by SBC in advance in writing.
9. NON-SOLICITATION OF SBC CUSTOMERS
CNC agrees that during the term of this Agreement and for a period of three (3)
years from any expiration or termination of this Agreement, CNC will not solicit
business from any end user Customers of SBC who purchase Products or Services by
or including any means which targets or identifies such Customers as SBC
Customers. This provision is not meant to prevent CNC from soliciting such
customers incidentally as part of a broad marketing campaign not directed at
Customers, but is intended to prevent the targeting by CNC of Customers by
virtue of their status as Customers, even if such targeting is a subpart of a
broader marketing campaign, e.g. by means of including Customers as a group as
targets of a broader marketing campaign.
10. INTELLECTUAL PROPERTY RIGHTS
10.1 CNC SOFTWARE
For the Term, CNC hereby grants to SBC and Customers under this Agreement,
and SBC hereby accepts, a nonexclusive, nontransferable license to use and
distribute CNC software for use solely with providing Products and
Services to Customers.
(a) CNC warrants that third party software is licensed in accordance with
the license agreement supplied by the supplier of such software, and
that SBC's use and distribution of such software will not violate such
license. CNC will provide SBC applicable licensing information for any
third party software provided, such that SBC may determine its ability
to comply. Upon acceptance of the third party software, SBC will
comply
PROPRIETARY INFORMATION
The Information contained herein is for the use of SBC Operations, Inc.
(and its Affiliated Companies) and Concentric Network Corporation only and is
not for disclosure without prior written approval.
-28-
with the terms of such licenses. SBC will not be permitted to
translate, transform, decompile, reverse engineer, disassemble, or
otherwise determine or attempt to determine source code from the
executable code of any software provided by CNC pursuant to this
Agreement or to permit or authorize a third party to do so.
(b) Notwithstanding the foregoing paragraph, SBC will be permitted to
reproduce or modify software provided by CNC pursuant to this
Agreement but only in a manner approved by CNC in advance.
Title to CNC software, is and will remain the exclusive property of CNC
and/or its suppliers. All Customer contracts for Products or Services will
be consistent with the licensing provisions of this Section 10.1.
10.2 SBC SOFTWARE
For the Term, SBC hereby grants to CNC, and CNC hereby accepts, a
nonexclusive, nontransferable license to use and distribute SBC software
for use solely with providing Products and Services to Customers.
(a) SBC warrants that third party software is licensed in accordance
with the end user license agreement supplied by the supplier of
such software. CNC will not be permitted to translate, transform,
decompile, reverse engineer, disassemble, or otherwise determine
or attempt to determine source code from the executable code of
any software provided by SBC pursuant to this Agreement or to
permit or authorize a third party to do so.
(b) Notwithstanding the foregoing, CNC will be permitted to reproduce
or modify software provided by SBC pursuant to this Agreement but
only in a manner approved by SBC in advance.
Title to SBC Software is and will remain the exclusive property of SBC
and/or its suppliers. All Customer contracts for Products or Services will
be consistent with the licensing provisions of this Section 10.2.
10.3 Trademarks
During the term of this Agreement, each Party is authorized by the other
Party to make reasonable use of the other Party's trademarks (including
such Party's
PROPRIETARY INFORMATION
The Information contained herein is for the use of SBC Operations, Inc.
(and its Affiliated Companies) and Concentric Network Corporation only and is
not for disclosure without prior written approval.
-29-
licensors' trademarks), solely in connection with the marketing,
advertisement and promotion of Products and Services in accordance with
this Agreement, including without limitation ATTACHMENT 12, Branding,
provided that each Party will have the right and opportunity to disapprove
any materials which make use of the trademarks of such Party or such
Party's licensors that the other Party uses or proposes to use. Each Party
will use such trademark notices as the other Party may designate from time
to time in connection with any use of such other Party's or other Party's
licensors' trademarks as permitted hereunder. Upon expiration or
termination of this Agreement, each Party's rights to use any of the other
Party's' trademarks will terminate, except in connection with activities
permitted pursuant to Part II, Section 19, Customer Transition Provisions,
above. Nothing contained in this Agreement will give either Party any
interest in any of the other Party's or the other Party's licensors'
trademarks, logos, trade names or designations other than the limited
rights expressly granted in this Section 10.3.
10.4 New Developments
(a) During the Term of this Agreement and in connection with its
obligations hereunder, CNC may develop new technologies, products
and services which incorporate intellectual property rights ("New
Developments"). It is the intention of the Parties that prior to
undertaking any work on a New Development, CNC and SBC will agree
in a separate written Statement of Work, as defined in Attachment
20, Consulting Services as to the Parties' respective rights in
and with respect to such New Development. If any such New
Development is developed in the absence of such a Statement of
Work, then within thirty (30) days of completion of such
development, CNC will specify in writing to SBC that the
intellectual property rights fall within one of these four (4)
categories :
(i) CNC Developments - proprietary development owned by CNC and
licensed from CNC by SBC upon the terms set forth in this
Part II, Section 10.1, CNC Software.
(ii) SBC Custom Developments - Developments owned and financed by
SBC and developed by CNC . Any custom application or
technology designed by CNC at SBC's request and financed by
SBC, which will be owned by
PROPRIETARY INFORMATION
The Information contained herein is for the use of SBC Operations, Inc.
(and its Affiliated Companies) and Concentric Network Corporation only and is
not for disclosure without prior written approval.
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SBC and licensed to CNC in accordance with Part II, Section
10.2, SBC Software.
(iii) Jointly Financed Developments - Developments jointly owned
and financed by CNC and SBC, owned by both Parties in equal
undivided shares, and subject to worldwide nonexclusive use
by either Party without any obligation to account to the
other Party.
(iv) Modified or Enhanced Developments - CNC or SBC software
enhanced at SBC's request and financed by SBC. With regard
to such Developments, SBC will own such modifications or
enhancements in accordance with Part II, Section 10.2, SBC
Software, while SBC and CNC retain ownership of their
respective intellectual property underlying such
modifications or enhancements.
(b) Within thirty (30) days of receipt of CNC's notice, SBC will
notify CNC if it disagrees as to the classification of the New
Development contained in such notice from CNC, and, if the
Parties cannot resolve such disagreement informally, the dispute
resolution provisions of Part II, Section 16, Arbitration, will
apply. If SBC fails to respond to any notice from CNC under this
Section 9, then there will be a rebuttable presumption that the
contents of such are correct. If CNC fails to notify SBC as
specified hereunder, then SBC may notify CNC of its understanding
of the status of such New Development, and CNC will have thirty
(30) days to respond to such notification as set forth above. If
neither Party notifies the other regarding such New Development,
then SBC will be automatically granted a worldwide, perpetual,
non-exclusive right to use the New Development in its business,
and to sublicense its rights in such New Development to its
Affiliates and Customers.
10.5 General
Except as expressly provided to the contrary above in this Section 10, all
intellectual property rights of each Party are expressly reserved by such
Party, and no license, express or implied, is created by this Agreement.
PROPRIETARY INFORMATION
The Information contained herein is for the use of SBC Operations, Inc.
(and its Affiliated Companies) and Concentric Network Corporation only and is
not for disclosure without prior written approval.
-31-
11. CONFIDENTIAL INFORMATION
11.1 SBC's Information
No Confidential Information obtained by CNC from SBC under, or in
contemplation of, this Agreement, including the existence or substance of
the discussions regarding the contemplated transactions, will become CNC's
property. All copies of such information in written, graphic or other
tangible form will be returned to SBC upon request. Unless such
information was or is (i) previously known to CNC free of any obligation to
keep it confidential, or (ii) subsequently made public by SBC or (iii)
independently developed by CNC without the use of SBC Confidential
Information, or (iv) rightfully received by CNC from a source other than
SBC without violation of any obligation of confidentiality, or (v) required
to be disclosed under a valid order created by a court or government agency
(provided that CNC provides prior written notice to SBC of such obligation
and the opportunity to oppose such disclosure), CNC will keep it
confidential, will use it only in performing hereunder, and may use it for
other purposes only upon such terms as may be agreed upon in writing by
SBC. SBC will have the right to review and approve CNC's procedures for
handling such information and may make such inspections, as SBC deems
necessary to assure that such information is being properly protected. In
such event, CNC will fully cooperate with SBC in ensuring such information
is being properly protected.
11.2 CNC's Information
No Confidential Information obtained by SBC from CNC under, or in
contemplation of, this Agreement, including the existence or substance of
the discussions regarding the contemplated transactions will become SBC's
property. All copies of such information in written, graphic or other
tangible form will be returned to CNC upon request. Unless such
Information was or is (i) previously known to SBC free of any obligation to
keep it confidential, or (ii) subsequently made public by CNC, or (iii)
independently developed by SBC without the use of CNC Confidential
Information, or (iv) rightfully received by SBC from a source other than
CNC without violation of any obligation of confidentiality, or (v) required
to be disclosed under a valid order created by a court or government agency
(provided that SBC provides prior written notice to CNC of such obligation
and the opportunity to oppose such disclosure), SBC will keep it
confidential, will use it only in performing hereunder, and may use it for
other purposes only upon such terms as may be agreed upon in writing by
PROPRIETARY INFORMATION
The Information contained herein is for the use of SBC Operations, Inc.
(and its Affiliated Companies) and Concentric Network Corporation only and is
not for disclosure without prior written approval.
-32-
[*] Certain information on this page has been omitted and
filed separately with the Securities Exchange Commission.
Confidential treatment has been requested with respect to
the omitted portions.
CNC. CNC will have the right to review and approve SBC's procedures for
handling such information and may make such inspections, as CNC deems
necessary to assure that such information is being properly protected. In
such event, SBC will fully cooperate with CNC in ensuring such Information
is being properly protected.
The provisions of this Section 11 are deemed retroactive to May 13, 1998 and
supercede Nondisclosure Agreement No. 980200, signed by both Parties on May 13,
1998.
12. CNC PARTITIONING
[*]
13. RECORDS AND AUDITS
CNC will maintain accurate records of all matters which relate to CNC's
obligations hereunder in accordance with generally accepted accounting
principles and practices uniformly and consistently applied in a format that
will permit audit. CNC will retain such records for a period of two (2) years
from the date of expiration or termination of the Agreement. , SBC may appoint a
nationally recognized accounting firm as an independent third party auditor to
audit CNC's records, directly relevant to this Agreement, no more than once per
year, upon twenty (20) business days notice [*]. Such audits will be solely at
SBC's expense, will not unreasonably interfere with CNC's normal operations, and
will be subject to CNC's reasonable security and confidentiality requirements.
Notwithstanding the foregoing,
PROPRIETARY INFORMATION
The Information contained herein is for the use of SBC Operations, Inc.
(and its Affiliated Companies) and Concentric Network Corporation only and is
not for disclosure without prior written approval.
-33-
[*] Certain information on this page has been omitted and
filed separately with the Securities Exchange Commission.
Confidential treatment has been requested with respect to
the omitted portions.
the audit procedures set forth in Part I, Section 8.2, [*], govern all audits
concerning [*].
14. CURE
The Parties will not be deemed to be in default under any of the terms of this
Agreement, and the non-defaulting Party may not seek or attempt to enforce any
remedy for any claimed default, unless defaulting Party fails to cure or
correct same within thirty (30) days or such longer period as mutually agreed,
following receipt of written notice thereof from the non-defaulting Party.
15. DISPUTE ESCALATION
Any disputes, controversies or claims arising from this Agreement will first be
addressed by the Steering Committee. Either Party may call a meeting of the
Steering Committee upon ten (10) days prior written notice. If the Steering
Committee is unable to resolve such dispute or conflict within ten (10) calendar
days following its first meeting discussing such dispute, either Party may
invoke the provisions of the Part II, Section 16, Arbitration.
16. ARBITRATION
16.1 Any dispute, controversy or claim which relates in any way to this
Agreement and which has not been resolved by the Parties using the
Dispute Escalation process described in the Part II, Section 15,
Dispute Escalation, will be submitted to binding arbitration before an
arbitration panel established under the rules of the American
Arbitration Association.
16.2 The arbitration panel will consist of three arbitrators; one selected
by each Party, and the third selected by the arbitrators selected by
the Parties. Resolution of disputes, controversies or claims will be
determined by a majority vote of the arbitration panel.
16.3 The arbitration will be held in San Francisco, California unless the
Parties otherwise mutually agree in writing. The Parties agree to
cooperate in order to bring a reasonable and prompt conclusion to such
arbitration, not
PROPRIETARY INFORMATION
The Information contained herein is for the use of SBC Operations, Inc.
(and its Affiliated Companies) and Concentric Network Corporation only and is
not for disclosure without prior written approval.
-34-
to exceed 75 days. The arbitration panel will allow reasonable
discovery, and may require the transcription of testimony.
16.4 The Parties will equally bear the fees, costs and expenses of the
arbitration, including the costs or fees of any expert or witness;
provided, however, that the arbitration panel may award to the
prevailing Party damages which compensate it for any such costs and
fees, including legal costs, associated with the arbitration. Any
payments owed by either Party related to the subject matter so
arbitrated may be suspended, and the interest or other late charges
due thereon may be tolled, at the discretion of the paying Party for
the duration of the arbitration.
17. GOVERNING LAW
This Agreement will be construed in accordance with the laws of the State of
California, without regard to that State's choice of law provisions.
18. RELATIONSHIP OF PARTIES
This Agreement is not intended to constitute, create, give effect to or
otherwise recognize a joint venture, partnership or formal business organization
of any kind between the Parties. The rights and obligations of the Parties will
be only those expressly set forth herein.
19. REMEDIES
All remedies specified in this Agreement are cumulative, and are not intended to
be exclusive of any other remedies to which the injured Party may be entitled at
law or equity. Notwithstanding the foregoing, if Damages for Delay, as
prescribed in Part I, Section 3.2, are triggered, those damages will be
exclusive for the time period covered. It the occurrence continues beyond the
time period for which damages were selected, the remedies described under this
Agreement will be available to SBC. The use of one or more available remedies
will not bar the use of any other available remedy for the purpose of enforcing
the provisions of this Agreement.
20. AMENDMENT AND WAIVER
PROPRIETARY INFORMATION
The Information contained herein is for the use of SBC Operations, Inc.
(and its Affiliated Companies) and Concentric Network Corporation only and is
not for disclosure without prior written approval.
-35-
No amendment or waiver of any provisions of this Agreement will be effective
unless the same will be in writing and signed by a duly authorized
representative on behalf of the Party against whom such amendment, waiver or
consent is claimed. In addition, no course of dealing or failure of any Party
to enforce strictly any term, right or condition of this Agreement will be
construed as a waiver of such term, right or condition. Waiver by either Party
of any default by the other Party will not be deemed a waiver by the non-
defaulting Party of any other default.
21. RELEASES VOID
Neither Party will require waivers or releases of any personal rights from
representatives of the other in connection with visits to each other's
respective premises.
22. FORCE MAJEURE
22.1 Neither Party hereto will be held responsible for any delay or
failure in performance of any part of this Agreement to the extent
that such delay or failure is caused by fire, earthquake, tornado,
hurricane, flood, explosion, war, strike, embargo, government
requirement, civil or military authorities, Act of God or by the
public enemy, transportation facilities, acts or omissions of carriers
or other causes beyond the control of CNC or SBC. If any force
majeure condition occurs, the Party delayed or unable to perform will
give prompt notice thereof to the other Party hereto and the Party
affected by the other's inability to perform may elect to:
(a) Terminate this Agreement or any Order or part of either as to
Products not already shipped or Products and Services not already
performed if such delay or failure continues for more than thirty
(30) days.
(b) Suspend this Agreement for the duration of the force majeure
condition, buy or sell elsewhere Products or Services to be
bought or sold hereunder, and deduct from any commitment the
quantity bought or sold or for which such commitments have been
made elsewhere.
(c) Resume performance hereunder once the force majeure condition
ceases with an option in the affected Party to extend the period
of
PROPRIETARY INFORMATION
The Information contained herein is for the use of SBC Operations, Inc.
(and its Affiliated Companies) and Concentric Network Corporation only and is
not for disclosure without prior written approval.
-36-
this Agreement up to the length of time the force majeure
condition endured.
22.2 Unless written notice to the contrary is given within thirty (30)
days after such affected Party is notified of the force majeure
condition, option (b) above will be deemed selected.
23. ASSIGNMENT
23.1 Neither Party hereto may assign, subcontract or otherwise transfer
its rights or obligations under this Agreement except with the prior
written consent of the other Party hereto, which consent will not be
unreasonably withheld or delayed; provided, however, (i) SBC will have
the right to assign this Agreement to any present or future Affiliate
of SBC without securing the consent of CNC and may grant to any such
assignee the same rights and privileges SBC enjoys hereunder and (ii)
CNC will have the right to assign this Agreement to any purchaser of
all or substantially all its assets if such purchaser has a net worth
equivalent to or greater than CNC as represented by the most recent
financial statements of CNC and such purchaser, provided that no such
assignment or transfer will relieve SBC or CNC of any obligation to
perform hereunder until same will have been performed by the assignee
or transferee.
23.2 Any attempted assignment not consented to in the manner prescribed
herein, except an assignment confined solely to monies due or to
become due, will be void. It is expressly agreed that any assignment
of monies will be void if (i) CNC fails to give SBC at least thirty
(30) days prior written notice of such assignment or (ii) such
assignment attempts to impose upon SBC obligations to the assignee
additional to the payment of such moneys or preclude SBC from dealing
solely and directly with CNC in all matters pertaining to this
Agreement, including the negotiation of amendments or settlements of
charges due.
24. CONFLICT OF INTEREST
CNC represents and warrants that no officer, director, employee or agent of SBC
has been or will be employed, retained or paid a fee, or otherwise has received
or will receive any personal compensation or consideration, by or from CNC or
any of CNC's officers, directors, employees or agents in connection with the
obtaining, arranging or
PROPRIETARY INFORMATION
The Information contained herein is for the use of SBC Operations, Inc.
(and its Affiliated Companies) and Concentric Network Corporation only and is
not for disclosure without prior written approval.
-37-
negotiation of this Agreement or other documents or agreements entered into or
executed in connection herewith.
25. LIENS PROHIBITED
All Products and Services furnished to SBC by CNC hereunder will be free from
any claims, third party liens or encumbrances. Should CNC as a general
contractor of Products and Services subcontract such Product and Service
delivery to subcontractors that have mechanics lien rights under applicable law,
SBC may require satisfactory proof that all parties furnishing labor and/or
materials for the Products and Services have been paid before making payment to
CNC.
26. SEVERABILITY
With the exception of regulatory events governed by Part II, Section 28,
Compliance with Laws/Regulatory Contingency if any provision or any part of a
provision of this Agreement will be invalid or unenforceable, such invalidity or
non-enforceability will not invalidate or render unenforceable any other portion
of this Agreement. The entire Agreement will be construed as if it did not
contain the particular invalid or unenforceable provision(s) and the rights and
obligations of the CNC and SBC will be construed and enforced accordingly.
27. SURVIVAL
Each Party's respective obligations under this Agreement which by their terms
would continue beyond the termination, or expiration hereof, including but not
limited to, those in the clauses entitled COMPLIANCE WITH LAWS, INTELLECTUAL
PROPERTY, INDEMNIFICATION, INSURANCE, LIABILITY, PUBLICITY, RELEASES VOID,
INVOICING AND PAYMENT, CONFIDENTIAL INFORMATION and WARRANTY, will survive the
termination or expiration of this Agreement.
28. COMPLIANCE WITH LAWS/REGULATORY CONTINGENCY
28.1 Compliance With Laws
Each Party agrees to comply with the provisions of the Fair Labor Standards
Act, the Occupational Safety and Health Act, and all other applicable
federal, state,
PROPRIETARY INFORMATION
The Information contained herein is for the use of SBC Operations, Inc.
(and its Affiliated Companies) and Concentric Network Corporation only and is
not for disclosure without prior written approval.
-38-
county and local laws, ordinances, regulations and codes (including the
identification and procurement of required permits, certificates, approvals
and inspections) in the performance of this Agreement. CNC further agrees,
during the term hereof, to comply with all applicable Executive and Federal
regulations as set forth in Attachment 19, Executive Orders and Associated
Regulations.
28.2 Regulatory Contingency
It is the intent of the Parties that nothing contained in this Agreement be
construed so as to make the activities of SBC constitute electronic
publishing (as such term is defined in Section 274 of the Act), or the
provision of interLATA services (as such term is defined in Section 272 of
the Act). In the event that SBC determines in good faith that regulations
issued or interpreted by a governmental entity subsequent to this Agreement
have such a result or otherwise cause SBC or any Affiliate, including SBC
Communications Inc. or one of its Affiliates, to be a provider of
electronic publishing services or interLATA services or to be in violation
of the Act, the Parties agree to work together in good faith to renegotiate
the objectionable terms or conditions so as to render the activities of SBC
consistent with the Act, order or regulation and the Parties intent
hereunder. If an agreement to modify the terms of this Agreement cannot be
reached following such good faith negotiations, either Party may
immediately terminate this Agreement without further liability. In the
event that SBC determines in good faith that regulations issued or
interpreted by a governmental entity subsequent to this Agreement that
require SBC to add carriers other than CNC, or cause any other material
change in circumstances which makes this Agreement between the Parties
infeasible, the Parties agree to work together in good faith to negotiate a
mutually acceptable accommodation. If the Parties are unable to negotiate a
mutually acceptable accommodation, and the Steering Committee is unable to
fashion an acceptable resolution, then this Agreement will terminate
without consequence to either Party. If either of such terminations
occurs, SBC may, at its option, discontinue its revenue commitments to CNC
without further liability, as stated in Part II, Section 5, SBC's Revenue
Commitments to CNC.
29. TAXES
29.1 CNC agrees to pay and hold SBC and its affiliates harmless from and
against any penalty, interest, additional tax or other charge that may
be levied or assessed as a result of the delay or the failure of CNC
for any
PROPRIETARY INFORMATION
The Information contained herein is for the use of SBC Operations, Inc.
(and its Affiliated Companies) and Concentric Network Corporation only and is
not for disclosure without prior written approval.
-39-
reason to pay any tax or file any return or information required by
law, rule or regulation or by this Agreement to be paid or filed by
CNC.
29.2 Upon request by SBC, the Parties will consult with respect to the
basis and rates upon which CNC will pay any taxes for which SBC is
obligated to reimburse CNC under this Agreement. If SBC determines
that in its opinion any such taxes are not payable or should be paid
on a basis less than the full price or at rates less than the full tax
rates, or that no tax is due or is required to be withheld from SBC
because SBC intends to sell the property in substantially the same
condition as received from CNC, CNC will comply with such
determination. If the taxing authority seeks collection for a greater
amount of taxes than that so determined by SBC, CNC will promptly
notify SBC. If SBC desires to contest such collection, SBC will
promptly notify CNC. Although CNC will cooperate with and provide
reasonable assistance to SBC, SBC will direct the conduct of any
proceedings, hearings or litigation involved in any contest with
respect to taxes for which SBC is obligated to reimburse CNC under
this Agreement. SBC will reimburse CNC for any taxes, interest,
penalties or out of pocket expenses of witnesses appearing in such
proceedings, which CNC may be required to pay because of CNC's
complying with SBC' determinations with respect to the payment or
contesting any such taxes.
29.3 If any taxing authority advises CNC that it intends to audit CNC with
respect to any taxes for which SBC is obligated to reimburse CNC under
this Agreement, CNC will (a) promptly so notify SBC, (b) afford SBC an
opportunity to participate on an equal basis with CNC in such audit
with respect to such taxes, and (c) keep SBC fully informed as to the
progress of such audit. Each Party will bear its own expenses with
respect to any such audit and the responsibility for any additional
tax resulting from such audit will be determined in accordance with
the applicable provisions of this Section
30. ACCESS TO PREMISES
Each Party will, at no charge, permit the other reasonable access to its
premises in connection with the performance of this Agreement or any Order.
Employees and representatives of each Party will, while on the other's premises,
comply with all reasonable site rules and regulations.
PROPRIETARY INFORMATION
The Information contained herein is for the use of SBC Operations, Inc.
(and its Affiliated Companies) and Concentric Network Corporation only and is
not for disclosure without prior written approval.
-40-
31. USE OF SBC SYSTEMS
SBC reserves the right to determine how CNC's personnel provided to perform
Products and Services hereunder will access SBC's network remotely and locally.
CNC agrees and promises to use the applicable SBC computer systems on which the
Services are provided in a professional and effective manner, and only for the
purposes of the performance of this Agreement. Any other intentional use or
misuse of such computer systems will constitute a breach of this Agreement. CNC
acknowledges that any person CNC selects to work under this Agreement will be
expected to fully comply with the known requirements, conditions, or
restrictions applicable to the use of SBC's computers or telephone network or
applicable to accessing SBC's database, network or information systems. CNC
will indemnify and hold SBC harmless for any failure (whether negligent or
intentional) to meet these known requirements, conditions, or restrictions by
any of these persons. CNC further agrees to cooperate fully in any SBC inquiry
into alleged violations by CNC's personnel with respect to SBC's computers,
property or Confidential Information.
32. WORK DONE BY OTHERS
If any part of the Products and Services is dependent upon work done by others,
CNC will inspect and promptly report to SBC any defect that renders such other
work unsuitable for CNC's proper performance. CNC's silence will constitute
approval of such other work as fit, proper and suitable for CNC's performance of
the Products and Services.
33. SECURITY
The Parties have established internal security methods and procedures as
specified in ATTACHMENT 15, Network Management and Monitoring. These security
methods and procedures pertain, but are not limited to, physical plant (network
operations center and points of presence); security between nodes (routers);
computer access; authentication; access controls (which personnel gain access to
certain applications); use of firewalls, tunneling, encryption; and network
security.
34. INSPECTIONS
PROPRIETARY INFORMATION
The Information contained herein is for the use of SBC Operations, Inc.
(and its Affiliated Companies) and Concentric Network Corporation only and is
not for disclosure without prior written approval.
-41-
SBC may inspect or test, during normal business hours at all reasonable times
and places, upon five (5) days notice and request, any Products or Services
pertaining to any Order. The exercise of, or failure to exercise, this right
will not relieve CNC of its obligation to furnish all Products and Services
materially in compliance with this Agreement and the applicable Order. If,
prior to acceptance by SBC, any Products and/or Services are found not compliant
in all material respects with ATTACHMENT 2, Technical Service Description, SBC
will have the right to reject the same, and at no charge to SBC, to require (i)
that such Products be repaired or replaced promptly with Products that are
compliant in all material respects with ATTACHMENT 2, Technical Service
Description, at CNC's risk and expense (including freight charges), and (ii) the
performance or re-performance of such Products and Services. Detailed
inspection records are to be maintained by CNC and made available to SBC upon
request.
35. INDEPENDENT CONTRACTOR/ SBC AGENT
35.1 CNC represents that it is engaged in an independent business and will
perform its obligations under this Agreement as an independent
contractor and not as the agent or employee of SBC, except as
specified in Section 35.2, below. Each Party is solely responsible
for its acts and those of its agents, employees, and subcontractors
(also collectively referred to as "Personnel" hereunder). All CNC
Personnel performing Products and Services hereunder are solely the
employees of CNC and are not the agents or employees of SBC. CNC has
and retains the right to exercise full control of and supervision over
the employment, compensation and discharge of all Personnel assisting
in the performance of its obligations under this Agreement. Each
Party is solely responsible for all matters relating to the payment of
compensation to its Personnel and will comply with all worker's
compensation, unemployment, disability insurance, social security,
withholding, and all other applicable federal, state and local Laws
and Regulations governing such matters.
35.2 For the purpose of placing orders for Customer circuits with
Southwestern Bell Telephone, Pacific Bell, Southern New England
Telephone and if and when appropriate, Ameritech, (collectively the
"Telco") and only in this instance as specified hereunder, to the
extent that CNC will be an agent of SBC Internet Services ("SBCIS").
Such agency will be accomplished through a letter agreement between
SBCIS and Customers, such that a letter of agency will authorize SBCIS
to order Telco services on behalf of the Customer and permit CNC to
place orders as SBCIS' agent.
PROPRIETARY INFORMATION
The Information contained herein is for the use of SBC Operations, Inc.
(and its Affiliated Companies) and Concentric Network Corporation only and is
not for disclosure without prior written approval.
-42-
36. DIVERSION OF EMPLOYMENT
SBC and CNC agree that during the Term they will not knowingly solicit for hire
any person who is employed by such other Party and who has been engaged in the
performance of activities related to this Agreement, without the express written
permission of the original employing Party.
37. UNIVERSAL DESIGN
37.1 CNC advocates, supports, and encourages its suppliers to advocate and
support the manufacturing and provision of products which embrace the
concept of "universal design." CNC will use commercially reasonable
efforts to manufacture and provide Products and Services, including
future versions of Products and Services, which are accessible to the
widest range of consumers including those with disabilities.
37.2 CNC will reasonably cooperate with SBC in addressing disability
access issues, including but not limited to hearing aid interference,
that may arise in connection with a Customer's use of CNC's Products
and Services furnished hereunder. Specifically, CNC agrees:
(a) to ensure that its equipment is designed, developed and
fabricated to be accessible to and usable by people with
disabilities, and
(b) to ensure that the service is accessible to and usable to people
with disabilities, or
(c) to ensure that the equipment or service is compatible with
existing peripheral devices or specialized customer premises
equipment commonly used by individuals with disabilities to
achieve access, if the requirements of subsection (a) and (b) are
not readily achievable.
38. HEADINGS
The headings of the clauses in each Section are inserted for convenience only
and are not intended to affect the meaning or interpretation of this Agreement.
PROPRIETARY INFORMATION
The Information contained herein is for the use of SBC Operations, Inc.
(and its Affiliated Companies) and Concentric Network Corporation only and is
not for disclosure without prior written approval.
-43-
39. NOTICES
Except as otherwise provided in this Agreement, all notices or other
communications hereunder will be deemed to have been duly given when received in
writing and either (i) delivered in person, (ii) delivered to an agent, such as
an overnight or similar delivery services, or (iii) delivered by the United
States Mail and addressed as follows:
To SBC Operations: To CNC:
Pacific Bell Internet Services & Concentric Network Corporation, Inc.
Southwestern Bell Internet Services 1400 Parkmoor Avenue
303 Second St., North Tower, Suite 650 San Jose, CA 95126
San Francisco, California, 94107 Phone: (408) 817-2800
Phone: (415) 442-4900 Fax: (408) 817-2875
Fax: (415) 357-1659 Attention: Manager-Contracts
Attention: Senior Attorney
With a copy (which will not be With a copy (which will not be
considered formal notice) to: considered formal notice) to:
SBC Operations, Inc. Concentric Network Corporation, Inc.
Suite 150, 111 Soledad Street, Rm 10Q5 1400 Parkmoor Avenue
San Antonio, TX 78205 San Jose, CA 95126
Phone: (210) 351-3660 Phone: (408) 817-2800
Fax: (210) 370-1953 Fax: (408) 817-2875
Attention: Director, Strategic Alliances Attn.: Senior Vice President and
General Manager of the Network
Services Division
The address to which notices or communications may be given by either Party may
be changed by written notice given by such Party to the other pursuant to this
Section 38.
40. ENTIRE AGREEMENT/RELATIONSHIP AMONG DOCUMENTS
40.1 Neither Party is bound by the provisions of this Agreement until it
is executed in writing by authorized individuals from each Party. The
terms contained in this Agreement, including all exhibits,
attachments, and schedules, supercede all previous agreements or
documents entered into
PROPRIETARY INFORMATION
The Information contained herein is for the use of SBC Operations, Inc.
(and its Affiliated Companies) and Concentric Network Corporation only and is
not for disclosure without prior written approval.
-44-
between the Parties. Notwithstanding the foregoing, the Trial
Agreement, dated October 19, 1998 will remain in effect until the
completion of the Product and Service trial and the Web Hosting
Agreement, dated October 9, 1998 and the Stock Purchase Agreement
dated October 19, 1998 are unaffected by this Agreement.
40.2 The order of precedence between the Parts and Sections of this
Agreement are as follows in descending order: (i) Part I, of this
Agreement, (ii) Part II, of this Agreement, (iii) Attachments to this
Agreement, and (iv) any Statement of Work or Order arising out of
this Agreement. Notwithstanding the foregoing, any qualifying
superceding statement referencing a specific provision of this
Agreement, which is contained within an Attachment to this Agreement,
is governed by that provision.
PROPRIETARY INFORMATION
The Information contained herein is for the use of SBC Operations, Inc.
(and its Affiliated Companies) and Concentric Network Corporation only and is
not for disclosure without prior written approval.
-45-
41. SIGNATURES
This Agreement shall be effective as of the Effective Date specified above.
Concentric Network Corporation, Inc. SBC Operations, Inc.
By: By:
------------------------------------ ------------------------------------
Print Name: Henry Nothhaft Print Name: Al Porta
---------------------------- ----------------------------
Title: Chairman, President and CEO Title: VP, Technology and Development
--------------------------------- ---------------------------------
Date: Date:
---------------------------------- ----------------------------------
SBC Internet Services
By:
------------------------------------
Print Name: Steven Hubbard
----------------------------
Title: President and CEO
---------------------------------
Date:
----------------------------------
PROPRIETARY INFORMATION
The Information contained herein is for the use of SBC Operations, Inc.
(and its Affiliated Companies) and Concentric Network Corporation only and is
not for disclosure without prior written approval.
-46-
ATTACHMENTS
------------
1. MARKETING SERVICE DESCRIPTION
2. TECHNICAL SERVICE DESCRIPTION
3. DEPLOYMENT AND DELIVERY
4. USE OF SBC TRANSPORT
5. CNC'S EXISTING STRATEGIC RELATIONSHIPS
6. BILLING
7. SYSTEMS
8. PRICING
9. PERFORMANCE COMMITMENTS AND REPORTS
10. SALES CHANNEL CONFLICTS
11. FORECASTING
12. BRANDING
13. CUSTOMER CARE AND TECHNICAL SUPPORT
14. SALES TRAINING AND SUPPORT
15. NETWORK MANAGEMENT AND MONITORING
16. PROVISIONING
17. SERVICE LEVEL AGREEMENTS
18. WHOLESALE DIAL ACCESS
19. EXECUTIVE ORDERS AND ASSOCIATED REGULATIONS
20. CONSULTING SERVICES
21. ACCEPTANCE TEST PLAN AND PROCEDURES
PROPRIETARY INFORMATION
The Information contained herein is for the use of SBC Operations, Inc.
(and its Affiliated Companies) and Concentric Network Corporation only and is
not for disclosure without prior written approval.
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Attachment 1A
-------------
Marketing Service Description
-----------------------------
Package and Feature Matrices
----------------------------
The following Package/Feature Matrices for Online Office Packages and EVPN
define the components that are included and those that are optional for each
package.
Attachment 1B provides additional technical detail and description of offered
services. Attachment 1C provides component hardware configurations for all
Online Office and EVPN customer sites.
[*]
[*] Certain information from this Exhibit has been omitted and filed
separately with the Securities Exchange Commission. A total of 5 pages from
Exhibit 1A to the agreement have been omitted. Confidential treatment has been
requested with respect to the omitted portions.
Proprietary Information
Not for disclosure outside of SBC Operations Inc. and its Affiliates or
Concentric Network Corporation without prior written agreement.
Attachment 1B
-------------
Marketing Service Description
-----------------------------
Concentric Network's House of IP (HoIP) Services v1.0
-----------------------------------------------------
[*]
[*] Certain information from this Exhibit has been omitted and filed
separately with the Securities Exchange Commission. A total of 6 pages from
Exhibit B to the Agreement have been omitted. Confidential treatment has been
requested with respect to the omitted portions.
Confidential Information
Not for disclosure outside of SBC Operations Inc. and its Affiliates or
Concentric Network Corporation without prior written agreement.
Page 1
Attachment 1C
-------------
Marketing Service Description
-----------------------------
Access Configurations for House of IP
-------------------------------------
Following are the Access Configurations for the House of IP products. These
configurations are split into four groups.
[*]
[*] Certain information from this Exhibit has been omitted and filed
separately with the Securities Exchange Commission. A total of 8 pages from
Exhibit 1C to the agreement have been omitted. Confidential treatment has been
requested with respect to the omitted portions.
Confidential Information
Not for disclosure outside of SBC Operations Inc. and its Affiliates or
Concentric Network Corporation without prior written agreement.
1
Attachment 2
------------
House of IP
-----------
[*]
[*] Certain information from this Exhibit has been omitted and filed
separately with the Securities Exchange Commission. A total of 179 pages from
Exhibit 2 to the agreement have been omitted. Confidential treatment has been
requested with respect to the omitted portions.
Attachment 3
------------
Deployment and Delivery
-----------------------
1.1 Broad Deployment Phase 1 Launch Schedule
CNC will provide Products and Services to SBC as outlined in ATTACHMENT 1,
Marketing Service Description, of the Agreement, or another appropriate
attachment to the Agreement, according to the following launch schedule
such that services are available for customer turn up on the dates listed
below:
[*]
[*] Certain information from this Exhibit has been omitted and filed
separately with the Securities Exchange Commission. A total of 4 pages from
Exhibit 3 to the agreement have been omitted. Confidential treatment has been
requested with respect to the omitted portions.
Confidential Information
Not for disclosure outside of SBC Operations Inc. and Concentric
Network Corporation without prior written agreement.
1
ATTACHMENT 4
------------
CNC Use of SBC Transport and Services
I. Dedicated Access
A. Where available, (i) SBC services and facilities, and (ii) Affiliate or
third party services and facilities designated by SBC from time to time
subject to the approval of CNC, such approval not to be unreasonably
withheld, will be used exclusively for connections and transport
between the Customer and CNC's POP in connection with Products and
Services made available pursuant to this Agreement; provided, however,
that the foregoing will in no event be construed as giving SBC any
right to determine CNC's activities with respect to InterLATA services
within the SBC Service Region.
[*]
[*] Certain information from this Exhibit has been omitted and filed
separately with the Securities Exchange Commission. A total of 2 pages from
Exhibit 4 to the agreement have been omitted. Confidential treatment has been
requested with respect to the omitted portions.
Confidential Information
Not for disclosure outside of SBC Operations Inc. and its Affiliates or
Concentric Network Corporation without prior written agreement.
1
Attachment 5
CNC's Existing Strategic Relationships
--------------------------------------
[*]
[*] Certain information from this Exhibit has been omitted and filed
separately with the Securities Exchange Commission. A total of 3 pages from
Exhibit 5 to the agreement have been omitted. Confidential treatment has been
requested with respect to the omitted portions.
Confidential Information
Not for disclosure outside of SBC Operations Inc. and its Affiliates or
Concentric Network Corporation without prior written agreement.
Attachment 6
------------
Customer Billing/Finance
------------------------
Process Overview
SBC will initiate a request for service from CNC with the submission of a
service order, statement of work, and purchase order. The purchase order will
be the source of financial information exchanged with CNC and shall reflect any
service requested through the service order and statement of work. The SBC
purchase order will contain a flag denoting it as a "New", "Change",
"Disconnect" or "Cancel" order and will include a target date for CNC
provisioning. CNC will use the service order, statement of work, and the
purchase order to provision services.
Upon completion of provisioning of a customer's service CNC will generate an
invoice to SBC. The invoice will address charges associated with the completed
purchase order. The initial completed purchase order will include all services
and equipment associated with the installation of the customer's service.
Subsequent invoices will include the recurring charges and will be generated on
a monthly basis.
CNC will bill SBC for recurring charges in advance and usage charges in arrears.
Invoices will be categorized by SBIS, PBIS, and Nevada Bell and will list
charges by purchase order number. The preferred media for information exchange
is electronic. All electronic exchanges will be controlled via a mutually agreed
upon control mechanism.
[*] Certain information from this Exhibit has been omitted and filed
separately with the Securities Exchange Commission. A total of 3 pages from
Exhibit 6 to the agreement have been omitted. Confidential treatment has been
requested with respect to the omitted portions.
Confidential Information
Not for disclosure outside of SBC Operations Inc. and its Affiliates or
Concentric Network Corporation without prior written agreement.
1
Attachment 7
------------
Systems
-------
Scope
Attachment 7 "Systems" defines the desired working relationship that will exist
between the systems organizations of SBC and CNC. Members from both
organizations will meet on a regular basis to determine and coordinate systems
development efforts.
The House of IP Market Launch OSS Planning Scope Document will be developed by
the Parties. This document will describe the scope of the Operations Support
Systems development work required to support the House of IP product set. CNC
will be an integral member of the development effort.
[*]
[*] Certain information from this Exhibit has been omitted and filed
separately with the Securities Exchange Commission. A total of 4 pages from
Exhibit 7 to the agreement have been omitted. Confidential treatment has been
requested with respect to the omitted portions.
Confidential Information
Not for disclosure outside of SBC Operations Inc. and its Affiliates or
Concentric Network Corporation without prior written agreement.
Page 1 of 1
Attachment 8
------------
Pricing
-------
[*]
[*] Certain information from this Exhibit has been omitted and filed separately
with the Securities Exchange Commission. A total of 9 pages from Exhibit 8 to
the agreement have been omitted. Confidential treatment has been requested with
respect to the omitted portions.
Attachment 9
------------
Performance Commitments and Reports
-----------------------------------
The Definitive Agreement describes a variety of areas where the Parties have
agreed to performance commitments including Warranties in the DA at Part II,
Section 4 and Service Level Agreements contained in the Marketing Service
Description and Attachment 17. This Attachment 9 provides further definition of
performance in addition to Warranties and SLAs, specifically performance
commitments and performance objectives.
[*]
[*] Certain information from this Exhibit has been omitted and filed
separately with the Securities Exchange Commission. A total of 6 pages from
Exhibit 9 to the agreement have been omitted. Confidential treatment has been
requested with respect to the omitted portions.
Confidential Information
Not for disclosure outside of SBC Operations Inc. and its Affiliates or
Concentric Network Corporation without prior written agreement.
1
Attachment 10
-------------
Sales Channel Conflicts
-----------------------
Since CNC provides its services to a variety of resellers, wholesalers, and
those it categorizes as OEMs, such as SBC and its affiliates, sales conflicts
will naturally arise between where multiple providers, all of whom use CNC as
part of their network solution.
[*]
[*] Certain information from this Exhibit has been omitted and filed
separately with the Securities Exchange Commission. A total of 1 page from
Exhibit 10 to the agreement have been omitted. Confidential treatment has been
requested with respect to the omitted portions.
Confidential Information
Not for disclosure outside of SBC Operations Inc. and its Affiliates or
Concentric Network Corporation without prior written agreement.
Page 1 of 1
Attachment 11
-------------
Forecasting
-----------
A. General. The Parties recognize that CNC requires visibility into data about
SBC's order flow process to be able to meet capacity requirements as well as
performance requirements. The Parties will use reasonable efforts to design
processes such that CNC receives information in sufficient time to meet SBC
requirements.
[*]
[*] Certain information from this Exhibit has been omitted and filed
separately with the Securities Exchange Commission. A total of 2 pages from
Exhibit 11 to the agreement have been omitted. Confidential treatment has been
requested with respect to the omitted portions.
Confidential Information
Not for disclosure outside of SBC Operations Inc. and its Affiliates or
Concentric Network Corporation without prior written agreement.
Attachment 12
-------------
Branding
--------
Use of Trademarks
-----------------
The Parties will comply with Part II, Section 9.3 titled Trademarks in the use
of each other's trademarks.
Approval for Use Process
------------------------
Such use of either Party's proprietary marks shall be subject to the approval
requirements recited below:
CNC agrees that all artwork or copy to be used by CNC or its licensee(s) on
merchandising, advertising, or promotional materials which includes SBC or an
affiliate's ("SBC") name or SBC's logo shall be submitted to SBC or its
designated representative for approval at least ten (10) business days prior to
the production or manufacture of such materials, which approval shall not be
unreasonably withheld. Should SBC wish to comment upon or disapprove such
materials, SBC shall provide written commentary or notice of disapproval
(including the basis therefore) with ten (10) business days following SBC's
receipt thereof. If such notice is not received with the ten (10) business day
period, such artwork or copy shall be deemed approved. Once artwork or copy has
been approved, it may be reused without any need to secure additional approvals
if the artwork or copy is reused without material alteration.
SBC agrees that all artwork or copy to be used by SBC or its licensee(s) on
merchandising, advertising, or promotional materials which includes CNC's name
or CNC's logo shall be submitted to CNC or its designated representative for
approval at least ten (10) business days prior to the production or manufacture
of such materials, which approval shall not be unreasonably withheld. Should
CNC wish to comment upon or disapprove such materials, CNC shall provide written
commentary or notice of disapproval (including the basis therefor) with ten (10)
business days following CNC's receipt thereof. If such notice is not received
with the ten (10) business day period, such artwork or copy shall be deemed
approved. Once artwork or copy has been approved, it may be reused without any
need to secure additional approvals if the artwork or copy is reused without
material alteration.
The Parties will work toward creating uniform documentation which details the
general principles for use of each other's logos and trademark as appropriate.
None the less, each new instance of logo or trademark will follow the process
detailed above.
Confidential Information
Not for disclosure outside of SBC Operations Inc. and its Affiliates or
Concentric Network Corporation without prior written agreement.
-1-
CNC shall exercise best efforts to determine that all licensed third party use
of SBC's name and proprietary marks shall be consistent with usage(s) approved
by SBC as provided above.
Neither of the parties shall (i) file any application for any mark or obtain or
attempt to obtain ownership of any mark or trade name, in any country of the
world, which refers to or is suggestive of the names comprising any
distinguishing part of the proprietary rights of the other party, or (ii) use
the proprietary rights of the other party or any part of it in its trading name
or in the name of any of its products or services. Both parties shall ensure
that their respective Affiliates will comply with the restrictions set forth.
Should SBC or CNC, as the case may be, use its own proprietary rights in or on
materials also bearing or incorporating proprietary rights of the other party,
such use shall be such as to avoid the creation or appearance of joint rights or
a joint trademark by suitable spatial separation one from the other and
distinctive script and type-face.
Confidential Information
Not for disclosure outside of SBC Operations Inc. and its Affiliates or
Concentric Network Corporation without prior written agreement.
-2-
Attachment 13
-------------
Customer Care / Technical Support
---------------------------------
THIS ATACHMENT GOVERNS AND REFERS ONLY TO SUPPORT OF INTRALATA PRODUCTS AND
SERVICES. CNC WILL BE SOLELY RESPONSIBLE FOR SUPPORT OF INTERLATA PRODUCTS AND
SERVICES, AND ANY CUSTOMER INQUIRIES RECEIVED BY SBC PERTAINING TO THE INTERLATA
PORTION OF PRODUCTS AND SERVICES WILL BE IMMEDIATELY REFERRED TO CNC.
1.1 Objectives:
. Determining customer information needs across all processes and
providing that information in the most appropriate delivery method,
including product documentation, self-help online resources,
email/fax, and live phone support. All processes will be designed to
minimize live support needs.
. Providing customer service within performance targets provided herein
and in as part of the Definitive Agreement, on a consistent basis
. Mutually determining processes and procedures that will reduce
customer care cost. These processes and procedures will include but
not be limited to motivational metrics that create a desire to reduce
cost, and self-help solutions
. Continuously reducing handle time and average number of calls per
subscriber
. Improving service and reducing expenses via technology driven
processes and enablers; shift access from voice to self-help media
. Retaining account base
1.2 Technical Support Responsibilities
Technical support encompasses providing all information within the technical
support boundaries required to maintain a customer's service.
[*]
[*] Certain information from this Exhibit has been omitted and filed
separately with the Securities Exchange Commission. A total of 4 pages from
Exhibit 13 to the agreement have been omitted. Confidential treatment has been
requested with respect to the omitted portions.
Confidential Information
Not for disclosure outside of SBC Operations Inc. and its Affiliates or
Concentric Network Corporation without prior written agreement.
Page 1 of 1
Attachment 14
-------------
Sales Training and Support
--------------------------
Training in General
-------------------
a) If requested by SBC, CNC shall provide, upon mutually agreed upon fees,
terms, and conditions, full and complete training courses taught by
qualified and knowledgeable instructors for all of the Products and
Services covered by this Agreement, as deemed necessary for the Term of
this Agreement. The training shall be available to SBC, at SBC's option,
as formal courses conducted at CNC's site and/or, if available, as
computer based training and/or "suitcased" courses at SBC's sites. At the
same time, SBC is aware that CNC does not have a training division and
that requests for training will take into account the resource
availability of each Party.
b) Prior to providing training, CNC shall issue a training quote to the SBC
Project Lead or other similar contact describing the content of the class,
location, scheduled dates for the training, required experience level,
cost per attendee or total cost of the course, plus an estimate of travel
expenses. A CNC representative shall coordinate with the SBC Project Lead
to meet the needs of the employees requesting training. Once the quote is
accepted, CNC may finalize plans for training. SBC may cancel a scheduled
training with 20 days notice at no cost to SBC. In addition SBC may cancel
a scheduled training class with 48 hours notice, but shall reimburse CNC
for any unavoidable out-of-pocket costs incurred by CNC.
c) Each Service deployed by CNC and branded for SBC will include necessary
training for SBC employees to implement and deploy the Service. At a
minimum, CNC will provide two (2) seats at no charge per major release to
SBC. Initial training will normally be provided prior to or concurrent
with the installation date of the product at each applicable installation
site.
d) At SBC's request, CNC will train SBC's trainers to provide such training
to SBC's employees. Compensation, if any, will be determined prior to
commencement of the training.
e) CNC training will consist of the following:
1. Sales Training - Designed to communicate basic information about the
-- --------------
Product, sales strategies, customer solution selling, etc.
[*] Certain information from this Exhibit has been omitted and filed
separately with the Securities Exchange Commission. A total of 1 page from
Exhibit 14 to the agreement have been omitted. Confidential treatment has been
requested with respect to the omitted portions.
Confidential Information
Not for disclosure outside of SBC Operations Inc. and its Affiliates or
Concentric Network Corporation without prior written agreement.
Page 1 of 1
2. Customer Service Training - Designed to communicate the basic skills and
-- -------------------------
knowledge of the applicable industry, products, and solution problem
solving to support SBC's operation of the Product
3. SBC will provide CNC personnel sales training on jointly marketed
products and services if applicable.
f) To the extent that CNC has the right to do so, CNC agrees to provide a
master copy of all training materials and documentation with permission
for SBCIS to copy for the purposes of providing training to SBC's
employees. SBC agrees to duplicate and abide by all copyright and
proprietary notices which appear in the original. Unless CNC is
contractually restricted from granting such a right, SBC may modify CNC's
course materials and documentation for SBC's internal use or may request
that CNC modify materials and documentation at an agreed upon price.
g) If requested by SBC, CNC shall develop and provide at a cost to be
mutually agreed by the Parties, the license and courseware interactive
video for all the Products and Services covered by this Agreement for
delivery to SBC's employees by either SBC or CNC instructors at SBC's
discretion.
f) To the extent requested by SBC in its request for a quotation, CNC shall
provide training on weekends or holidays.
g) Reasonable travel and living expenses for CNC's employees associated with
courses provided on SBC's premises shall be reimbursed.
[*]
[*] Certain information from this Exhibit has been omitted and filed
separately with the Securities Exchange Commission. A total of 1 page from
Exhibit 14 to the agreement have been omitted. Confidential treatment has been
requested with respect to the omitted portions.
Confidential Information
Not for disclosure outside of SBC Operations Inc. and its Affiliates or
Concentric Network Corporation without prior written agreement.
Page 2 of 1
Attachment 15
-------------
Network Management and Monitoring
---------------------------------
* SBC requires the capability for its customer care and operations groups to
have tools to proactively monitor the health, availability, and performance
of the SBC services rendered by CNC in order to provide the highest level
of support for SBC's customers and report on the performance and
availability requirements documented in the Definitive Agreement . This
section describes the initial Monitoring Service capabilities to be
provided to SBC by CNC to monitor the services rendered to SBC by CNC,
including systems, network & customer premises equipment & services.
[*]
[*] Certain information from this Exhibit has been omitted and filed
separately with the Securities Exchange Commission. A total of 4 pages from
Exhibit 15 to the agreement have been omitted. Confidential treatment has been
requested with respect to the omitted portions.
Confidential Information
Not for disclosure outside of SBC Operations Inc. and its Affiliates or
Concentric Network Corporation without prior written agreement.
1
Attachement 16
--------------
Provisioning
------------
SBC and CNC agree to cooperate in the following areas: Customer Service,
Reporting, and Performance Measurement. This will be accomplished as outlined
below:
[*]
[*] Certain information from this Exhibit has been omitted and filed
separately with the Securities Exchange Commission. A total of 1 page from
Exhibit 16 to the agreement have been omitted. Confidential treatment has been
requested with respect to the omitted portions.
Confidential Information
Not for disclosure outside of SBC Operations Inc. and its Affiliates or
Concentric Network Corporation without prior written agreement.
Page 1 of 1
Attachment 17
-------------
Service Level Agreements
------------------------
The following are Service Level Agreements which CNC has made to SBC for
purchase of IntraLATA services.
Latency
CNC will guarantee that the average round trip packet transmission time for all
network traffic will not exceed 80 milliseconds edge-to-edge within the CNC
Network, as measured over a calendar month. For these guarantees, the CNC
Network is defined as the CNC backbone, as bounded by its nationally deployed
SuperPOPs, as well as the 400+ MCI points of presence (POPs) used by CNC to
supplement its local presence, and the backhaul connections between the
SuperPOPs and the MCI POPs. Excluded from the definition at this time are any
other provider networks (including, but not restricted to, Frame Relay and DSL
providers), as well as any private peering, public peering, and NNI connections.
In the event that CNC fails to meet this latency guarantee, CNC will provide a
credit of 1% for every millisecond of average packet latency above the target of
80ms. Any excess latency caused by force majeure, scheduled maintenance, or by
the customer or the customer's equipment will be excluded from the calculations.
The credit will be calculated by applying the appropriate percentage to the SBC
wholesale costs for the month's CNC network charges for all eligible
connections. Eligible connections for this guarantee are all T1, T3 and Frame
Relay connections provided to EVPN and Online Office Business Class customers.
ISDN lines are excluded from SLAs at this time. SBC can receive a maximum
credit of 100% of the IntraLATA monthly recurring charges owed by SBC to CNC for
eligible lines when the latency guarantee is not met under this section. Latency
statistics will be gathered utilizing tools developed and utilized by CNC's
Network Operations Center. For informational purposes, daily average latency
statistics is expected to be available for SBC review via a Web site by April
30, 1999, but compliance or non-compliance with the guarantee will be based on
the average round-trip latency values over the entire calendar month.
Network Availability guarantee of 100% edge-to-edge
CNC will guarantee that the Concentric Backbone Network will be available to
customers 100% of the time during a calendar month. For these guarantees, the
CNC Network is defined as the CNC backbone, as bounded by its nationally
deployed SuperPOPs, as well as the 400+ MCI points of presence (POPs) used by
CNC to supplement its local presence, and the backhaul connections between the
SuperPOPs and the MCI POPs. Also included is the NNI circuit(s) between the CNC
Network and the SBC network. Excluded from the definition at this time are any
other provider networks (including, but not restricted to, Frame Relay and DSL
providers), as well as any private peering, public peering, and NNI connections
to carriers other than SBC. In the event that CNC fails to
Confidential Information
Not for disclosure outside of SBC Operations Inc. and its Affiliates or
Concentric Network Corporation without prior written agreement.
1
meet this guarantee, CNC will provide a credit of 1/30 of the monthly service
charges for every hour, or fraction thereof, of network downtime experienced
by an end user. The amount of downtime will be calculated by determining the
total number of minutes of premise-to-premise downtime (backbone plus local
loop) for every eligible connection. Eligible connections for this guarantee
are all T1, T3 and Frame Relay connections provided to EVPN and Online Office
Business Class customers. The amount of edge-to-edge downtime experienced by
the eligible customer will then be calculated by subtracting any downtime due
to local loop or customer premise router failures, and then subtracting any
backbone outages due to force majeure, scheduled maintenance, and any downtime
caused by the customer or the customer's equipment, as well as any downtime
caused by problems with the SBC-managed router(s) terminating the CNC-SBC
NNI(s). The result is the amount of downtime experienced by the eligible
customer caused by edge-to-edge network availability failures. The credits
will be calculated by applying the guarantee against the SBC wholesale costs
for the month's CNC network charges for all eligible connections. SBC can
receive a maximum credit of 100% of the monthly wholesale costs to eligible
lines when the network availability guarantee is not met under this section.
Network availability statistics will be gathered utilizing tools developed and
utilized by CNC's Network Operations Center, as well as tools such as HP
Openview and CNC's trouble ticketing system. For informational purposes, daily
network availability statistics is expected to be available for SBC review via
a Web site by April 30, 1999, but compliance or non-compliance with the
guarantee will be based on the availability values calculated at month's end.
24 Hour Call Success Rate
CNC will guarantee that the average call success rate for all dial network
traffic will not fall below 95% or the industry average for 24 hour call success
rate, whichever is higher, as measured monthly by Inverse Technologies, a third
party rating service. In the event that CNC fails to meet this guarantee, CNC
will provide a credit of 10% for every letter grade (as defined by Inverse)
below target. The credit will be calculated by applying the appropriate
percentage to the SBC wholesale costs for the month's CNC dial network charges
for all eligible connections. Eligible connections for this guarantee are all
secure analog dial customers. SBC can receive a maximum credit of 100% of the
monthly wholesale costs for eligible dial users when the guarantee is not met
under this section. Inverse Technology places thousands of calls into 40+ key
locations around the country and reports the results on a monthly basis to CNC.
Initial Modem Connect Speed Guarantee
CNC will guarantee that the average initial modem connect speed for all dial
network traffic will not fall below 27.5kbps or the industry average, as
measured monthly by Inverse Technologies, a third party rating service. In the
event that CNC fails to meet this guarantee, CNC will provide a credit of 10%
for every letter grade (as defined by Inverse) below target. The credit will be
calculated by applying the appropriate percentage to the SBC wholesale costs for
the month's CNC dial network charges for all eligible
Confidential Information
Not for disclosure outside of SBC Operations Inc. and its Affiliates or
Concentric Network Corporation without prior written agreement.
2
connections. Eligible connections for this guarantee are all secure analog
dial customers. SBC can receive a maximum credit of 100% of the monthly
wholesale costs for eligible dial users when the guarantee is not met under
this section. Inverse Technology places thousands of calls into 40+ key
locations around the country and reports the results on a monthly basis to
CNC. For this metric, Inverse measures using 33.6kbps modems.
Packet Loss
CNC will guarantee that the average round trip packet loss for all network
traffic will not exceed 1% edge-to-edge within the CNC Network, as measured over
a calendar month. For these guarantees, the CNC Network is defined as the CNC
backbone, as bounded by its nationally deployed SuperPOPs, as well as the 400+
MCI points of presence (POPs) used by CNC to supplement its local presence, and
the backhaul connections between the SuperPOPs and the MCI POPs. Excluded from
the definition at this time are any other provider networks (including, but not
restricted to, Frame Relay and DSL providers), as well as any private peering,
public peering, and NNI connections. In the event that CNC fails to meet this
packet loss guarantee, CNC will provide a credit of 1% for every tenth of a
percent of packet loss above the target of 1%. Any excess packet loss caused by
force majeure, scheduled maintenance, or by the customer or the customer's
equipment will be excluded from the calculations. The credit will be calculated
by applying the appropriate percentage to the SBC wholesale costs for the
month's CNC network charges for all eligible connections. Eligible connections
for this guarantee are all T1, T3 and Frame Relay connections provided to EVPN
and Online Office Business Class customers with. SBC can receive a maximum
credit of 100% of the IntraLATA monthly recurring charges owed by SBC to CNC for
eligible lines when the latency guarantee is not met under this section. Packet
loss statistics will be gathered utilizing tools developed and utilized by CNC's
Network Operations Center. For informational purposes, daily average packet loss
statistics is expected to be available for SBC review via a Web site by April
30, 1999, but compliance or non-compliance with the guarantee will be based on
the average round-trip packet loss values over the entire calendar month.
SLAs Across Network Boundaries
------------------------------
For SLAs across network boundaries, the Parties agree to put processes in place
to provide SLAs across network boundaries prior to product launch under
Attachment 3, Deployment and Delivery. In addition, CNC commits to extending
the SLAs contained in this Attachment 17 available on DSL no later than 90 days
following execution of this Agreement. During the initial 90 day period, CNC
will provide latency, network availability and packet SLAs as defined above for
DSL; however, the measurement of these SLAs will not extend to CNC equipment
unique to DSL.
Credit Procedures
-----------------
Until an electronic procedure is established, CNC will provide a manually
produced spreadsheet which details the SLA failures and Customers which qualify
for a credit. This spreadsheet will be delivered 5 days after the end of the
month each month. Each SBC
Confidential Information
Not for disclosure outside of SBC Operations Inc. and its Affiliates or
Concentric Network Corporation without prior written agreement.
3
customer will be listed by eligible site and customer name separately on the
spreadsheet. In addition, the CNC spreadsheet will indicate where some but not
all customer site are eligible for a credit. At the same time, CNC will either
deliver a check equal to the credit due to SBC for the SLAs or a Product
credit at SBC's option.
Lastly, CNC's metrics and data used to determine credits for SLAs will be made
available for SBC's reasonable inspection to confirm the accuracy of the SLA
calculations provided by CNC.
Confidential Information
Not for disclosure outside of SBC Operations Inc. and its Affiliates or
Concentric Network Corporation without prior written agreement.
4
Attachment 18
-------------
Wholesale Dial Access Services
------------------------------
In the near future, subject to legal and regulatory requirements, SBC or its
Affiliates will be offering a wholesale dial access/modem pooling service which
will allow CNC to aggregate its dial access traffic on a LATA by LATA basis
("Dial Access [*]
[*] Certain information from this Exhibit has been omitted and filed
separately with the Securities Exchange Commission. A total of 2 pages from
Exhibit 18 to the agreement have been omitted. Confidential treatment has been
requested with respect to the omitted portions.
Confidential Information
Not for disclosure outside of SBC Operations Inc. and its Affiliates or
Concentric Network Corporation without prior written agreement.
1
Attachment 19
-------------
Executive Orders and Associated Regulations
-------------------------------------------
Work under this contract may be subject to the provisions of certain Executive
Orders, federal laws, state laws, and associated regulations governing
performance of this contract including, but not limited to: Executive Order
11246, Executive Order 11625, Executive Order 11701, and Executive Order 12138,
Section 503 of the Rehabilitation Act of 1973 as amended and the Vietnam Era
Veteran's Readjustment Assistance Act of 1974. To the extent that such
Executive Orders, federal laws, state laws, and associated regulations apply to
the work under this contract, and only to that extent, Contractor agrees to
comply with the provisions of all such Executive Orders, federal laws, state
laws, and associated regulations, as now in force or as may be amended in the
future, including, but not limited to the following:
1. EQUAL EMPLOYMENT OPPORTUNITY DUTIES AND PROVISIONS OF GOVERNMENT CONTRACTORS
In accordance with 41 C.F.R.(S)60-1.4(a), the parties incorporate herein by
this reference the regulations and contract clauses required by that section,
including but not limited to, Contractor's agreement that it will not
discriminate against any employee or applicant for employment because of race,
color, religion, sex, or national origin. The Contractor will take affirmative
action to ensure that applicants are employed, and that employees are treated
during employment, without regard to their race, color, religion, sex, or
national origin.
2. AGREEMENT OF NON SEGREGATED FACILITIES
In accordance with 41 C.F.R.(S)60-1.8, Contractor agrees that it does not
and will not maintain or provide for its employees any facilities segregated
on the basis of race, color, religion, sex, or national origin at any of its
establishments, and that it does not and will not permit its employees to
perform their services at any location, under its control, where such
segregated facilities are maintained. The term "facilities" as used herein
means waiting rooms, work areas, restaurants and other eating areas, time
clocks, rest rooms, wash rooms, locker rooms and other storage or dressing
areas, parking lots, drinking fountains, recreation or entertainment areas,
transportation, and housing facilities provided for employees; provided, that
separate or single-user restroom and necessary dressing or sleeping areas
shall be provided to assure privacy between the sexes.
3. AGREEMENT OF AFFIRMATIVE ACTION PROGRAM
Contractor agrees that it has developed and is maintaining an Affirmative
Action Plan as required by 41 C.F.R.(S)60-1.4(b).
4. AGREEMENT OF FILING
Contractor agrees that it will file, per current instructions, complete and
accurate reports on Standard Form 100 (EE0-1), or such other forms as may be
required under 41 C.F.R.(S)60-1.7(a).
5. AFFIRMATIVE ACTION FOR HANDICAPPED PERSONS AND DISABLED VETERANS, VETERANS
OF THE VIETNAM ERA.
In accordance with 41 C.F.R.(S)60-250.20, and 41 C.F.R.(S)60-741.20, the
parties incorporate herein by this reference the regulations and contract
clauses required by those provisions to be made a part of government contracts
and subcontracts.
6. UTILIZATION OF SMALL, SMALL DISADVANTAGED AND WOMEN-OWNED SMALL BUSINESS
CONCERNS
As prescribed in 48 C.F.R., Ch. 1, 19.708(a):
(a) It is the policy of the United states that small business concerns,
small business concerns owned and controlled by socially and economically
disadvantaged individuals and small business concerns owned and controlled by
women shall have the maximum practicable opportunity to participate in
performing contracts let by any Federal agency, including contracts and sub-
contracts for systems, assemblies, components, and related services for major
systems. It is further the policy of the United States that its prime
contractors establish procedures to ensure the timely payment amounts due
pursuant to the terms of the subcontracts with small business concerns, small
business concerns owned and controlled by socially and economically
disadvantaged individuals and small business concerns owned and controlled by
women.
Confidential Information
Not for disclosure outside of SBC Operations Inc. and its Affiliates or
Concentric Network Corporation without prior written agreement.
1
(b) The Contractor hereby agrees to carry out this policy in the awarding of
subcontracts to the fullest extent consistent with efficient contract
performance. The Contractor further agrees to cooperate in any studies or
surveys as may be conducted by the United States Small Business Administration
or the awarding agency of the United States as may be necessary to determine the
extent of the Contractor's compliance with this clause.
(c) As used in this contract, the term small business concern shall mean a
small business as defined pursuant to section 3 of the Small Business Act and
relevant regulations promulgated pursuant thereto. The term small business
concern owned and controlled by socially and economically disadvantaged
individuals shall mean a small business concern which is at least 51 percent
unconditionally owned by one or more socially and economically disadvantaged
individuals; or, in the case of any publicly owned business, at least 51 per
centum of the stock of which is unconditionally owned by one or more socially
and economically disadvantaged individuals; and (2) whose management and daily
business operations are controlled by one or more such individuals. This term
also means small business concern that is at least 51 percent unconditionally
owned by an economically disadvantaged Indian tribe or Native Hawaiian
Organization, or a publicly owned business having at least 51 percent of its
stock unconditionally owned by one of these entities which has its management
and daily business controlled by members of an economically disadvantaged Indian
tribe or Native Hawaiian Organization, and which meets the requirements of 13
CRF part 124. The Contractor shall presume that socially and economically
disadvantaged individual include Black Americans, Hispanic Americans, Native
Americans, Asian-Pacific Americans, Subcontinent Asian Americans, and other
minorities, or any other individual found to be disadvantaged by the
Administration pursuant to section 8(a) of the Small business Act. The
Contractor shall presume that socially and economically disadvantaged entities
also include Indian Tribes and Native Hawaiian Organizations.
(d) The term "small business concern owned and controlled by women" shall
mean a small business concern (i) which is at least 51 percent owned by one or
more women, or, in the case of any publicly owned business, at least 51 percent
of the stock of which is owned by one or more women, and (ii) whose management
and daily business operations are controlled by one or more women; and
(e) Contractors acting in good faith may rely on written representations by
their sub-contractors regarding their status as a small business concern, a
small business concern owned and controlled by socially and economically
disadvantage individuals or a small business concern owned and controlled by
women.
7. SMALL, SMALL DISADVANTAGED AND WOMEN-OWNED SMALL BUSINESS SUB-CONTRACTING
PLAN. The sub-contractor will adopt a plan similar to the plan required by 48
CFR Ch. 1 at 52.219-9.
Confidential Information
Not for disclosure outside of SBC Operations Inc. and its Affiliates or
Concentric Network Corporation without prior written agreement.
2
Attachment 20
-------------
CONSULTING SERVICES
-------------------
In addition to the applicable terms of the Definitive Agreement to which this
Exhibit is attached, the terms of this Exhibit H will govern the terms of the
provision of Consulting Services, as described in an executed Statement of Work,
to SBC by CNC. All capitalized terms used and not otherwise defined herein will
have the meanings ascribed thereto in the Definitive Agreement.
[*]
[*] Certain information from this Exhibit has been omitted and filed
separately with the Securities Exchange Commission. A total of 9 pages from
Exhibit 20 to the agreement have been omitted. Confidential treatment has been
requested with respect to the omitted portions.
Confidential Information
Not for disclosure outside of SBC Operations Inc. and its Affiliates or
Concentric Network Corporation without prior written agreement.
1
Attachment 21
-------------
Acceptance Test Plan and Procedures
-----------------------------------
The Parties have agreed to the test plan included in this attachment for the
initial Product acceptance for the May 7, 1999 launch in the initial cities
which include Austin, in Texas and San Francisco, Oakland, San Jose, Los
Angeles, and Orange County in California.
[*]
[*] Certain information from this Exhibit has been omitted and filed
separately with the Securities Exchange Commission. A total of 2 pages from
Exhibit 21 to the agreement have been omitted. Confidential treatment has been
requested with respect to the omitted portions.
Confidential Information
Not for disclosure outside of SBC Operations Inc. and its Affiliates or
Concentric Network Corporation without prior written agreement.
1
Definitive Agreement - SBC Operations Inc. and Concentric Network Corp.
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