Customer Agreement

Thank you for doing business with us. We strive to provide you with the highest quality Products and Services. If, at any time, you have any questions or problems, or are not completely satisfied, please let us know. Our goal is to do our best for you.



This IBM Customer Agreement (called the "Agreement") covers business transactions you may do with us to purchase Machines, license Programs, and acquire Services.



This Agreement and its applicable Attachments and Transaction Documents are the complete agreement regarding these transactions, and replace any prior oral or written communications between us.



By signing below for our respective Enterprises, each of us agrees to the terms of this Agreement. Once signed, 1) any reproduction of this agreement, an Attachment, or Transaction Document made by reliable means (for example, photocopy or facsimile) is considered an original and 2) all Products and Services you order under this Agreement are subject to it.



Agreed to: Agreed to: Splitrock Services, Inc. International Business Machines Corporation









By /s/ William R. Wilson By /s/ Martin J. Madden

------------------------- -----------------------------

Authorized signature Authorized signature





Name (type or print): Name (type or print):



William R. Wilson Martin J. Madden





Date: 3/2/1998 Date: 3/4/1998





Enterprise number: S383569 Agreement number: GB10597





Enterprise address: IBM Office address: Splitrock Services, Inc. 27 Commerce Drive 2170 Buckthorne Place, Suite 350 Cranford, NJ 07016 The Woodlands, Texas 77380



After signing, please return a copy of this Agreement to the local

"IBM Office address" shown above.









PAGE 1 OF 19 IBM CUSTOMER AGREEMENT TABLE OF CONTENTS - -------------------------------------------------------------------------------



SECTION TITLE PAGE SECTION TITLE PAGE

PART 1 - GENERAL ......................... 3 PART 4 - PROGRAMS ........................ 13



1.1 Definitions ..................... 3 4.1 License ......................... 13

1.2 Agreement Structure ............. 4 4.2 License Details ................. 13

1.3 Delivery ........................ 4 4.3 Program Features Not Used

1.4 Prices and Payment .............. 5 on the Designated Machine ....... 13

1.5 Types of Service for Machines ... 5 4.4 Additional License Copies ....... 14

1.6 Patents and Copyrights .......... 6 4.5 Program Testing ................. 14

1.7 Limitation of Liability ......... 7 4.6 Packaged Programs ............... 14

1.8 Mutual Responsibilities ......... 7 4.7 Program Protection .............. 14

1.9 Your Other Responsibilities...... 7 4.8 Program Services ................ 14

1.10 IBM Business Partners ........... 8 4.9 License Termination ............. 15

1.11 Changes to the Agreement Terms .. 8

1.12 Agreement Termination ........... 8 PART 5 - SERVICES ........................ 16

1.13 Geographic Scope ................ 8

1.14 Governing Law ................... 8 5.1 Maintenance Services ............ 16

5.2 Continuing Support Services...... 17

PART 2 - WARRANTIES ...................... 9 5.3 Project Support Services ........ 17

5.4 The Statement of Work ........... 18

2.1 The IBM Warranties .............. 9 5.5 Materials Ownership and License.. 18

2.2 Extent of Warranty .............. 10

2.3 Items Not Covered by Warranty ... 10



PART 3 - MACHINES ....................... 11



3.1 Title and Risk of Loss ......... 11

3.2 Production Status .............. 11

3.3 Installation ................... 11

3.4 Licensed Internal Code ......... 11







PAGE 2 OF 19

IBM CUSTOMER AGREEMENT



PART 1 - GENERAL - --------------------------------------------------------------------------------



1.1 DEFINITIONS



CUSTOMER-SET-UP MACHINE is an IBM Machine that you install according to our



DATE OF INSTALLATION is the following:



1. for an IBM Machine --



a. the business day after the day we install it or, if you defer

installation, make it available to you for installation, or



b. the second business day after the end of a Customer-set-up

Machine's standard transit allowance period;



2. for a non-IBM Machine, the second business day after its arrival; and



3. for a Program, the latest of --



a. the day after its testing period ends,



b. 10 days after we ship it, or



c. the day, specified in a Transaction Document, on which we authorize

you to make an Additional License Copy or a copy of a Program



DESIGNATED MACHINE is the machine, that we require you to identify to us by

type/model and serial number, on which you intend to use a Program for

processing. When we specify that you do not have to provide this

identification to us, the term "Designated Machine" means the single

machine on which you may use the Program at any one time.



ENTERPRISE is any legal entity (such as a corporation) and the subsidiaries

it owns by more than 50 percent. The term "Enterprise" applies only to the

portion of the enterprise located in the United States or Puerto Rico.



MACHINE is a machine, its features, conversions, upgrades, elements, or

accessories, or any combination of them. The term "Machine" includes an IBM

Machine and any non-IBM Machine (including other equipment) that we may

provide to you.



MATERIALS are literary works or other works of authorship (such as

programs, program listings, programming tools, documentation, reports,

drawings and similar works) that we may deliver to you. The term

"Materials" does not include Programs or Licensed Internal Code.



PRODUCT is a Machine or a Program.



PROGRAM is the following, including features and any whole or partial

copies:



1. machine-readable instructions;



2. a collection of machine-readable data, such as a data base; and



3. related licensed materials, including documentation and listings, in

any form.



The term "Program" includes an IBM Program and any non-IBM Program that we

may provide to you. The term does not include Licensed Internal Code or



SERVICE is performance of a task, provision of advice and counsel,

assistance, or use of a resource (such as access to an information data

base) we make available to you.



SPECIFICATIONS is a document that provides information specific to a

Product. For a Machine, we call the document "Official Published

Specifications." For a Program, we call it "Licensed Program

Specifications," or "License Information."



SPECIFIED OPERATING ENVIRONMENT is the Machines and Programs with which a

Program is designed to operate, as described in the Program's







PAGE 3 OF 19

1.2 AGREEMENT STRUCTURE





Some Products and Services have terms in addition to those we specify in

this Agreement. We provide the additional terms in documents called

"Attachments," which are also part of this Agreement. We make the

Attachments available to you for signature.



TRANSACTION DOCUMENTS



For each business transaction, we will provide you with the appropriate

"Transaction Documents" that confirm the specific details of the

transaction. Some Transaction Documents require signature, and others do

not. The following are examples of Transaction Documents that must be

signed by both of us with examples of the information they may contain:



1. addenda (contract-period duration, start date, and total quantity);



2. statements of work (scope of Services, responsibilities, deliverables,

Completion Criteria, estimated schedule, and charges).



The following are examples of administrative, unsigned Transaction

Documents with examples of the information they may contain;



1. exhibits (eligible Products by category);



2. invoices (item, quantity, price, and amount payable); and



3. supplements (Machine quantity and type ordered, price, estimated

shipment date, and warranty period). Certain supplements may require

signature if requested by either of us.



CONFLICTING TERMS



If there is a conflict among the terms in the various documents, those of

an Attachment prevail over those of this Agreement. The terms of a

Transaction Document prevail over those of both of these documents.



OUR ACCEPTANCE OF YOUR ORDER



A Product or Service becomes subject to this Agreement when we accept your

order. We accept your order by doing any of the following:



1. sending you a Transaction Document;



2. shipping the Product; or



3. providing the Service.



YOUR ACCEPTANCE OF ADDITIONAL TERMS



You accept the additional terms in an Attachment or Transaction Document by

doing any of the following:



1. signing the Attachment or Transaction Document;



2. using the Product or Service, or allowing others to do so; or



3. making any payment for the Product or Service.



1.3 DELIVERY



We will try to meet your delivery requirements for Products and Services

you order, and will inform you of their status. Transportation charges, if

applicable, will be specified in a Transaction Document.







PAGE 4 OF 19

1.4 PRICES AND PAYMENT



The amount payable for a Product or Service will be based on one or more

of the following types of charges:



1. one-time (for example, the price of a Machine);



2. recurring (for example, a periodic charge for Maintenance Services);



3. time and materials (for example, charges for Hourly Services); or



4. fixed price (for example, a specific amount agreed to between us for

Project Support Services).



Depending on the particular Product, Service, or circumstance, additional

charges may apply. We will inform you in advance whenever additional

charges apply.



For a Product with a one-time charge, payment is due on its Date of

Installation. Recurring charges for a Product begin on its Date of

Installation. Payment for Services is due as we specify, either in

advance, as the work progresses, or after the work is completed. You agree

to pay amounts due for Products and Services, including any late payment

fees, as we specify in the invoice.



If any authority imposes a duty, tax, levy, or fee, excluding those based

on our net income, upon any transaction under this Agreement, then you

agree to pay that amount as specified in the invoice or supply exemption

documentation. You are responsible for personal property taxes for each

Product from the date we ship it to you.



One-time and recurring charges may be based on measurements of actual or

authorized use (for example, number of users or processor size for

Programs and meter readings for Maintenance Services). You agree to

promptly notify us and pay any applicable charges if you change the basis

of measurement for usage based charges. Recurring charges will be adjusted

accordingly. We do not give credits or refunds for charges already due or

paid. In the event that we change the basis of measurement, the changes

will be subject to our price change terms.



We may increase recurring charges for Products and Services (including

hourly rates and minimums) by giving you three months' written notice. An

increase applies on the first day of the applicable invoice period on or

after the effective date we specify in the notice.



We may increase one-time charges without notice. However, an increase to

one-time charges does not apply to you if 1) we receive your order before

the announcement date of the increase and 2) one of the following occurs

within three months after our receipt of your order:



1. we ship you the Product;



2. with our authorization, you make an Additional License Copy of a

Program or a copy of a Distribution Feature; or



3. a Program's group-upgrade charge becomes due.



You receive the benefit of a decrease in charges for amounts which become

due on or after the effective date of the decrease.





1.5 TYPES OF SERVICE FOR MACHINES



We provide certain types of repair and exchange service either at your

location or at our service center to keep Machines in, or restore them to,

good working order.



Under carry-in service, you may deliver the failing Machine or ship it

suitably packaged (prepaid, unless we specify otherwise) to a location we

designate. After we have repaired or exchanged the Machine, we will return

it to you at our expense unless we specify otherwise.



Under on-site service, we may repair the failing Machine at your site or

exchange it, at our discretion, depending on the nature of the failure.







PAGE 5 OF 19

When a type of service involves the exchange of a Machine or part, the item

we replace becomes our property and the replacement becomes yours. You

represent that all removed items are genuine and unaltered. The replacement

may not be new, but will be in good working order and at least functionally

equivalent to the item replaced. The replacement assumes the warranty and

Maintenance Service status of the replaced item. Before we exchange a

Machine or part, you agree to remove all features, parts, options,

alterations, and attachments not under our service. You also agree to

ensure that the item is free of any legal obligations or restrictions that

prevent its exchange.



You agree to:



1. obtain authorization from the owner to have us service a Machine that

you do not own; and



2. where applicable, before we provide service -



a. follow the problem determination, problem analysis, and

service-request procedures that we provide,



b. secure all programs, data, and funds contained in a Machine, and



c. inform us of changes in a Machine's location.



1.6 PATENTS AND COPYRIGHTS



For purposes of this Section, the term "Product" includes Materials (alone

or in combination with Products we provide to you as a system) and Licensed

Internal Code.



If a third party claims that a Product we provide to you infringes that

party's patent or copyright, we will defend you against that claim at our

expense and pay all costs, damages, and attorney's fees that a court

finally awards, provided that you:



1. promptly notify us in writing of the claim; and



2. allow us to control, and cooperate with us in, the defense and any

related settlement negotiations.



If such a claim is made or appears likely to be made, you agree to permit

us to enable you to continue to use the Product, or to modify it, or

replace it with one that is at least functionally equivalent. If we

determine that none of these alternatives is reasonably available, you

agree to return the Product to us on our written request. We will then give

you a credit equal to your net book value for the Product, provided you

have followed generally-accepted accounting principles.



This is our entire obligation to you regarding any claim of infringement.



CLAIMS FOR WHICH WE ARE NOT RESPONSIBLE



We have no obligation regarding any claim based on any of the following:



1. anything you provide which is incorporated into a Product;



2. your modification of a Product, or a Program's use in other than its

Specified Operating Environment;



3. the combination, operation, or use of a Product with other Products

not provided by us as a system, or the combination, operation, or use

of a Product with any product, data, or apparatus that we did not

provide; or



4. infringement by a non-IBM Product alone, as opposed to its

combination with Products we provide to you as a system.







PAGE 6 OF 19

1.7 LIMITATION OF LIABILITY



Circumstances may arise where, because of a default on ...