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EXHIBIT 10.4
INTERIM SERVICES AGREEMENT
THIS INTERIM SERVICES AGREEMENT ("Agreement"), dated as of September
23, 1998 (the "Effective Date"), is by and between XXXXXXXX XXXXXXXXXXXX, a
Delaware corporation ("QUALCOMM"), and LEAP WIRELESS INTERNATIONAL, INC., a
Delaware corporation ("Leap").
WHEREAS, QUALCOMM and Leap have entered into a Separation and
Distribution Agreement, dated as of the date hereof (the "Separation and
Distribution Agreement"), which provides, among other things, subject to the
terms and conditions thereof, for a transfer of assets and liabilities to Leap
(the "Separation") and the distribution of the outstanding shares of Leap to
QUALCOMM stockholders (the "Distribution"), and the execution and delivery of
certain other agreements (the "Ancillary Agreements") in order to facilitate and
provide for the foregoing; and
WHEREAS, in order to facilitate an orderly transition under the
Separation and Distribution Agreement, the parties desire that QUALCOMM provide
to Leap the Services (as defined below) on the terms set forth herein.
NOW, THEREFORE, in consideration of the above premises and for other
good and valid consideration, the receipt and adequacy of which are hereby
acknowledged, the parties, intending to be legally bound, agree as follows:
ARTICLE 1
SERVICES
1.1 Services.
(a) TYPE OF SERVICES. Except as otherwise provided herein, for
the term determined pursuant to Section 1.2 hereof, QUALCOMM shall provide or
cause to be provided to Leap such services as may reasonably be requested by
Leap and approved by QUALCOMM (which approval may not unreasonably be withheld)
from time to time following the date hereof (the "Services").
(b) SERVICES PERFORMED BY OTHERS. At its option and with the
consent of Leap (which consent shall not unreasonably be withheld), QUALCOMM may
cause any Service it is required to provide hereunder to be provided by any
other person or entity that is providing, or may from time to time provide, the
same or similar services for QUALCOMM.
1.2 TERM. The term of this Agreement shall commence on the date of the
Distribution and shall remain in effect until one year following the
Distribution ("Expiration Date"), unless earlier terminated under Section 1.7
("Termination Date"). This Agreement may be extended by the parties in writing
either in whole or with respect to one or more of the Services; provided,
however, that such extension shall only apply to the Service for which the
Agreement was extended. The parties may agree on an earlier expiration date for
a specific Service.
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1.3 CHARGES AND PAYMENT.
(a) CHARGES FOR SERVICES. Leap shall pay to QUALCOMM the
hourly rate of the employee(s) of QUALCOMM performing the Services plus
associated general and administrative expenses and overhead (which the parties
agree shall be in the aggregate an additional One hundred fifty percent (150%)
of the hourly rate of the employees). In addition, Leap shall pay to QUALCOMM
all out-of-pocket costs and expenses of QUALCOMM in performing such Services. To
the extent feasible, Leap shall enter into direct arrangements to obtain
products and services of third party vendors directly rather than having
QUALCOMM provide such Services.
(b) PAYMENT TERMS. QUALCOMM shall xxxx Xxxx monthly for all
charges pursuant to this Agreement. Such bills shall be accompanied by
reasonable documentation or other reasonable explanation supporting such
charges. Leap shall pay QUALCOMM for all Services provided hereunder within
thirty (30) days after receipt of an invoice therefor. Late payments shall bear
interest at the rate of 10% per annum, compounded monthly.
(c) PERFORMANCE UNDER ANCILLARY AGREEMENTS. Notwithstanding
anything to the contrary contained herein, Leap shall not be charged under this
Agreement for any Services that are specifically required to be performed by
QUALCOMM for Leap under the Separation and Distribution Agreement or any other
Ancillary Agreement and any such other Services shall be performed and charged
for in accordance with the terms of the Separation and Distribution Agreement or
such other Ancillary Agreement. Leap shall also not be charged for any services
performed before the date of the Distribution.
1.4 GENERAL OBLIGATIONS; STANDARD OF CARE.
(a) PERFORMANCE REQUIREMENTS: QUALCOMM. Subject to subsection
1.5(c), QUALCOMM shall maintain sufficient resources to perform its obligations
hereunder. Where no specific performance requirements for a specific Service are
agreed in writing, QUALCOMM shall use reasonable efforts to provide Services in
accordance with the policies, procedures and practices in effect before the date
hereof and shall exercise the same care and skill as it exercises in performing
similar services for itself.
(b) TRANSITIONAL NATURE OF SERVICES; CHANGES. The parties
acknowledge the transitional nature of the Services and that QUALCOMM may make
changes from time to time in the manner of performing the Services (e.g., if
QUALCOMM is making similar changes in performing similar services for itself and
its affiliates).
(c) RESPONSIBILITY FOR ERRORS; DELAYS. QUALCOMM's sole
responsibility to Leap:
(i) for errors or omissions in connection with
Services shall be to furnish correct information, payment and/or adjustment in
the Services, at no additional cost or expense to Leap; provided, Leap must
promptly advise QUALCOMM of any such error or omission of which it becomes aware
after having used reasonable efforts to detect any such errors or omissions; and
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(ii) for failure to adequately deliver any Service
because of impracticability, shall be to use reasonable efforts, subject to
subsection 1.5(c), to make the Services available and/or to resume performing
the Services as promptly as reasonably practicable.
(d) GOOD FAITH COOPERATION; CONSENTS. The parties will use
good faith efforts to cooperate with each other in all matters relating to the
provision and receipt of Services. Such cooperation shall include exchanging
information, providing electronic access to systems used in connection with
Services, performing true-ups and adjustments and obtaining all consents,
licenses, sublicenses or approvals necessary to permit each party to perform its
obligations hereunder. The costs of obtaining such consents, licenses,
sublicenses or approvals shall be allocated in an equitable manner between the
parties, consistent with Section 1.3. The parties will maintain reasonable
documentation related to the Services and cooperate with each other in making
such information available as needed.
(e) ALTERNATIVES. If QUALCOMM reasonably believes it is unable
to provide any Service, the parties shall cooperate to determine the best
alternative approach. Until such alternative approach is found or the problem
otherwise resolved to the satisfaction of the parties, QUALCOMM shall use
reasonable efforts, subject to Section 1.5(a) and Section 1.5(b), to continue
providing the Service. To the extent an agreed upon alternative approach
requires payment above and beyond that which is included in QUALCOMM's charge
for the Service in question, the Leap shall make any such additional payment
unless the parties otherwise agree in writing.
1.5 CERTAIN LIMITATIONS.
(a) IMPRACTICABILITY. QUALCOMM shall not be required to
provide any Service to the extent the performance of such Service becomes
"impracticable" as a result of a cause or causes outside the reasonable control
of QUALCOMM, or to the extent the performance of such Services would require
QUALCOMM to violate any applicable laws, rules or regulations, or would result
in the breach of any software license or other applicable contract.
(b) ADDITIONAL RESOURCES. In providing the Services, QUALCOMM
shall not be obligated to: (i) hire any additional employees; (ii) maintain the
employment of any specific employee; (iii) purchase, lease or license any
additional equipment or software; or (iv) pay any costs related to the transfer
or conversion of Leap's data to Leap or any alternate supplier of Services.
(c) NO SALE, TRANSFER, ASSIGNMENT. Leap may not sell, transfer
or assign, in whole or in part, its rights or obligations hereunder.
1.6 CONFIDENTIALITY.
(a) INFORMATION SUBJECT TO OTHER OBLIGATIONS. Leap agrees that
all confidential information regarding the Services, including, but not limited
to, price, costs, methods of operation, and software, shall be maintained in
confidence.
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(b) INTERNAL USE; TITLE, COPIES, RETURN. Except to the extent
inconsistent with the express terms of the Separation and Distribution Agreement
and any Ancillary Agreement other than this Agreement, Leap agrees that:
(i) title to all systems used in performing the
Services provided hereunder shall remain in QUALCOMM or its third party vendors;
(ii) to the extent the provision of any Service
involves intellectual property, including without limitation software programs
or patented or copyrighted material, or material constituting trade secrets,
Leap shall not copy, modify, reverse engineer, decompile or in any way alter any
of such material, or otherwise use such material in a manner inconsistent with
the terms and provisions of this Agreement, without QUALCOMM's express written
consent; and
(iii) upon the termination of any of the Services,
Leap shall return to QUALCOMM, as soon as practicable, any equipment or other
property of QUALCOMM relating to the Services which is owned or leased by it and
is or was in Leap's possession or control.
1.7 TERMINATION.
(a) ELECTION TO TERMINATE. Leap may terminate this Agreement
either with respect to all, or with respect to any one or more, of the Services
provided hereunder at any time and from time to time, for any reason or no
reason, by giving written notice to QUALCOMM at least thirty (30) days prior to
the date of such termination. QUALCOMM may terminate this Agreement either with
respect to all, or with respect to any one or more, of the Services provided
hereunder at any time and from time to time, for any reason or no reason, by
giving written notice to Leap at least ninety (90) days prior to the date of
such termination. In addition, the parties may at any time agree in writing to
terminate this Agreement with respect to some or all of the Services, effective
immediately or as indicated in such writing.
(b) AUTOMATIC TERMINATION. Except to the extent the parties
otherwise agree in writing, and except where a longer term is set forth in a
Schedule for any particular Service, this Agreement will automatically terminate
on the Expiration Date.
(c) TERMINATION OF LESS THAN ALL SERVICES. In the event of any
termination with respect to one or more, but less than all, Services, this
Agreement shall continue in full force and effect with respect to any Services
not terminated hereby.
1.8 DISCLAIMER OF WARRANTIES, LIMITATION OF LIABILITY AND
INDEMNIFICATION.
(a) DISCLAIMER OF WARRANTIES. QUALCOMM DISCLAIMS ALL
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT
TO THE SERVICES. QUALCOMM MAKES NO REPRESENTATIONS OR WARRANTIES AS TO THE
QUALITY, SUITABILITY OR ADEQUACY OF THE SERVICES FOR ANY PURPOSE OR USE.
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(b) LIMITATION OF LIABILITY; INDEMNIFICATION OF LEAP. QUALCOMM
shall have no liability to Leap with respect to its furnishing any of the
Services hereunder except for liabilities arising out of the willful misconduct,
fraud or gross negligence occurring after the Distribution Date of QUALCOMM.
QUALCOMM will indemnify, defend and hold harmless Leap in respect of all
liabilities related to, arising from, asserted against or associated with such
willful misconduct, fraud or gross negligence. In no event shall QUALCOMM or any
of its agents or affiliates have any liability for any incidental, indirect,
special or consequential damages, whether or not caused by or resulting from
negligence or breach of obligations hereunder and whether or not informed of the
possibility of the existence of such damages.
(c) LIMITATION OF LIABILITY; INDEMNIFICATION OF QUALCOMM. Leap
shall indemnify and hold harmless QUALCOMM in respect of all liabilities related
to, arising from, asserted against or associated with QUALCOMM's furnishing or
failing to furnish the Services provided for in this Agreement, other than
liabilities arising out of the willful misconduct, fraud or gross negligence
following the Distribution Date of QUALCOMM. In no event shall Leap have any
liability for any incidental, indirect, special or consequential damages,
whether or not caused by or resulting from negligence or breach of obligations
hereunder and whether or not informed of the possibility of the existence of
such damages.
1.9 REPRESENTATIVE. The parties shall each appoint a representative
(each, a "Representative") to facilitate communications and performance under
this Agreement. Each party may treat an act of a Representative of another party
as being authorized by such other party without inquiring behind such act or
ascertaining whether such Representative had authority to so act. Each party
shall have the right at any time and from time to time to replace its
Representative by giving notice in writing to the other party. Each
Representative is hereby authorized by the party he or she represents to approve
the establishment of new or modifications to existing Schedules.
ARTICLE 2
MISCELLANEOUS
2.1 TAXES. Leap shall bear all taxes, duties and other similar charges
(and any related interest and penalties) imposed as a result of its receipt of
Services under this Agreement, including any tax which Leap is required to
withhold or deduct from payments to QUALCOMM, except any net income tax imposed
upon QUALCOMM.
2.2 RELATIONSHIP OF PARTIES. Nothing in this Agreement shall be deemed
or construed by the parties or any third party as creating the relationship of
principal and agent, partnership or joint venture between the parties, it being
understood and agreed that no provision contained herein, and no act of the
parties, shall be deemed to create any relationship between the parties other
than the relationship of independent contractor nor be deemed to vest any
rights, interest or claims in any third parties.
2.3 MODIFICATION AND AMENDMENT; ENTIRE AGREEMENT. This Agreement may
not be modified or amended except in a writing signed by the parties. This
Agreement sets forth the entire agreement of the parties hereto with respect to
the subject matter hereof and supersedes all
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prior agreements and understandings between the parties with respect to the
subject matter hereof.
2.4 DISPUTE RESOLUTION. The parties acknowledge and agree that this
Agreement and any dispute hereunder shall be subject to and governed by the
dispute resolution provisions set forth in Article 10 of the Separation and
Distribution Agreement.
2.5 INCONSISTENCY. In the event of any inconsistency between the terms
of this Agreement and any of the Schedules hereto, other than charges, the terms
of this Agreement shall control.
IN WITNESS WHEREOF, the parties have executed this Interim Services
Agreement as of the date first above written.
XXXXXXXX XXXXXXXXXXXX:
By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
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Title: Executive Vice President &
Chief Financial Officer
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LEAP WIRELESS INTERNATIONAL, INC.:
By: /s/ XXXXXX X. XXXXX
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Name: Xxxxxx X. Xxxxx
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Title: President & Chief Executive Officer
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