INTELLICOM SOLUTIONS, INC.
Services Agreement
This Agreement is entered into as of this 1st day of January, 1996 by
and between IntelliCom Solutions, Inc. ("IntelliCom"), a Pennsylvania
corporation with offices at 000 Xxxxxxxxx Xxxxxxxxx, Xxxxx, XX 00000, and
Intelligent Electronics, Inc., ("Customer") a Pennsylvania corporation with
offices at 000 Xxxxxxxxx Xxxxxxxxx, Xxxxx, XX 00000.
WHEREAS, IntelliCom is in the business of providing Consulting Services
(as defined below) and Telecommunications Services (as defined below);
WHEREAS, Customer wishes to obtain certain Consulting Services and all
of its requirements for Telecommunications Services from and through IntelliCom,
and IntelliCom wishes to provide such services, in each case on the terms set
forth in this Agreement;
NOW THEREFORE, in exchange for the mutual consideration set forth
herein, the receipt and sufficiency of which is hereby acknowledged, and
intending to be legally bound, the parties hereby agree as follows:
1. DEFINITIONS. For the purposes of this Agreement:
a. "Affiliate" means any corporation or legal entity that controls,
or is controlled by, or is under common control with Customer as of January 1,
1995 or at the time IntelliCom provides the service contemplated by
this Agreement, except that the term "Affiliate" shall not be construed to
include CS Computers, Inc., CS Computers of California, Inc., The Future Now or
any of The Future Now's subsidiaries.
b. "Consulting Services" means the capacity planning, traffic
engineering, network design, telecommunications management and other
Telecommunications-related consulting services described in Attachment A to this
Agreement.
c. "Telecommunications Service" means a service for transmitting
voice, data, video or other information between two or more locations, including
without limitation (i) any and all intraLATA, interLATA and interstate common
carrier communications services, and (ii) any enhanced telecommunications
services, including without limitation frame relay, asynchronous transfer mode
transmission, packet switching services and any other similar service.
2. SCOPE OF SERVICES. Subject to the terms and conditions of this
Agreement, IntelliCom agrees to provide the following Consulting Services:
a. IntelliCom shall assign an IntelliCom account manager, reasonably
satisfactory to Customer, to manage IntelliCom's performance of this Agreement.
b. IntelliCom shall provide the capacity planning, call accounting,
network design and similar services.
c. IntelliCom shall (i) assist Customer's Denver-based operations to
order Telecommunications Services and to resolve problems and disputes
associated with such Telecommunications Services, and (ii) provide, or act as
agent for the remaining operations of Customer and its Affiliates in
provisioning and otherwise arranging for the purchase of, all of Customer's and
its Affiliates' respective requirements for Telecommunications Services during
the term of this Agreement.
d. IntelliCom shall provide to Customer and its Affiliates such
other Consulting Services as Customer may reasonably require from time to time,
including without limitation those Consulting Services described in Attachment A
to this Agreement not otherwise referred to in this Section 2.
3. TELECOMMUNICATIONS SERVICES. The Telecommunications Services
obtained by Customer and its Affiliates pursuant to this Agreement shall be
governed by the following additional terms:
a. Customer agrees that Customer and its Affiliates shall purchase
pursuant to this Agreement all of their requirements for Telecommunications
Services, but in no event less than the minimum requirements imposed by
IntelliCom's existing agreements with MCI Telecommunications, Inc. and
CompuServe and as described more fully in Attachment B hereto. In the event
Customer and its Affiliates fail during any relevant period to meet this minimum
requirement, Customer agrees to reimburse IntelliCom in full for any penalties
or similar payments IntelliCom is required to pay the applicable carrier or
other provider (net of any credits granted by such carrier or provider for
failure to provide service as required by its underlying agreement with
IntelliCom) as a result of such shortfall. Nothing in this Agreement shall
preclude Customer from obtaining from other sources services that Intellicom is
unable or unwilling to provide pursuant to this Agreement.
b. Customer agrees that Customer and its Affiliates shall execute
such documents as IntelliCom may reasonably request for the purposes of
designating IntelliCom as the authorized agent of Customer and its Affiliates
for the purposes of arranging Telecommunications Services for Customer and its
Affiliates, authorizing IntelliCom to receive invoices for such
Telecommunications Services on behalf of Customer and its Affiliates, and to
take such other actions in the performance of this Agreement as IntelliCom
reasonably considers necessary.
c. Customer acknowledges that certain of the Telecommunications
Services to be provided pursuant to this Agreement are governed by tariffs filed
with the Federal Communications Commission or the governments of one or more
states. In the event of conflict between this Agreement and the applicable
tariff, the applicable tariff shall control.
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d. IntelliCom at Customer's request may from time to time arrange
for services supplied by companies other than IntelliCom. Customer acknowledges
that all such Telecommunications Services are supplied by carriers and other
providers pursuant to tariffs, agreements between IntelliCom and the providers,
or a combination thereof. Customer further acknowledges that the quality and
reliability of such Telecommunications Services is beyond IntelliCom's direct
control. Customer accordingly agrees that IntelliCom's sole responsibility with
respect to such Telecommunications Services shall be to make all commercially
reasonable efforts to enforce such tariffs and agreements for the benefit of
Customer and its Affiliates, including all covenants, representations and
warranties set forth therein.
4. PAYMENT.
a. Fees and Charges. In exchange for the services contemplated by
this Agreement, Customer agrees to pay IntelliCom the following fees and
charges:
(1) For Consulting Services, time and materials charges at the
rates established by Attachment A hereto.
(2) For IntelliCom's tariffed Telecommunications Services, the
fees and charges specified by the applicable tariffs. The rates applicable as of
the date of this Agreement are set forth in Attachment C hereto.
(3) For IntelliCom's non-tariffed Telecommunications Services, an
amount comparable to the rates IntelliCom charges its best commercial customers
for similar volumes of such services. The rates applicable as of the date of
this Agreement are set forth in Attachment D hereto.
(4) For Telecommunications Services provided by carriers other
than IntelliCom, an administrative fee equal to the applicable percentage
(described below) of the time and other usage charges billed by carriers and
other companies for Telecommunications Services provided to Customer and its
Affiliates, provided, that such fees and charges shall be in addition to the
amounts invoiced by carriers and other providers of Telecommunications Services
as contemplated by Section 2.c hereof, which amounts Customer and its Affiliates
shall pay within twenty days of IntelliCom's request. For the Telecommunications
Services listed in Attachment E to this Agreement, the applicable percentage
shall be five and one-quarter percent (5.25%). For other Telecommunications
Services, the percentage shall be determined by mutual agreement of the parties.
b. Invoices. IntelliCom from time to time, but not more frequently
than monthly, shall invoice Customer for Consulting Services and
Telecommunications Services provided pursuant to this Agreement. In addition to
the other amounts due under this Agreement, Customer agrees to pay an amount
equal to the applicable sales, use and excise taxes resulting or arising from
the parties' performance of this Agreement. Customer shall pay such invoices
within thirty (30) days of the invoice date.
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c. Late Charges. In the event Customer fails to pay any monies when
due (other than amounts subject to a bona fide dispute between the parties),
Customer agrees to pay on demand a late charge equal to the lesser of (i) 1 1/2%
for each month or portion thereof that the monies remain past due, or (ii) the
highest amount permitted by law.
5. TERM.
The initial term of this Agreement shall commence on January 1, 1996
and shall continue for a period of five (5) years. Thereafter, this Agreement
automatically shall renew for six (6) consecutive two (2) year terms, except
this Agreement will expire at the conclusion of any term if:
(i) Customer, at least ninety (90) days prior to the expiration of
such term notifies IntelliCom that it has received from an
unrelated third party a bona fide offer to provide (or has
received from multiple unrelated third parties bona fide
offers that in combination would provide) Telecommunications
Services that in quantity, quality and duration are equal to
or better than the services then being provided to Customer by
IntelliCom, and
(ii) the aggregate dollar cost to Customer for such
Telecommunications Services is five percent (5%) or more below
the aggregate amounts charged by IntelliCom for such
Telecommunications Services, and
(iii) IntelliCom fails at least thirty (30) days prior to the
expiration of such term to notify Customer that it will match
such bona fide offer commencing at the beginning of the
succeeding renewal term, and
(iv) Customer notifies IntelliCom at least ten (10) days prior to
the expiration of such term of Customer's intention to permit
this Agreement to expire.
Notwithstanding the foregoing, if IntelliCom defaults on its obligations with
respect to the provision of Consulting Services, Customer shall be entitled to
terminate this Agreement insofar as it relates to Consulting Services, provided,
however, that such termination shall not affect the parties' obligations with
respect to Telecommunications Services.
6. WARRANTY; DISCLAIMERS.
a. IntelliCom warrants that (i) the Consulting Services provided by
it pursuant to this Agreement shall be performed in a professional manner and in
conformity with the standards prevailing in the industry, and (ii) the
non-tariffed Telecommunications Services supplied by IntelliCom shall in all
material respects comply with IntelliCom's specifications therefor.
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b. EXCEPT AS EXPRESSLY SET FORTH IN SECTION 6.a HEREOF AND THE
APPLICABLE TARIFFS, INTELLICOM MAKES NO REPRESENTATION OR WARRANTY WITH RESPECT
TO THE SUBJECT MATTER OF THIS AGREEMENT AND HEREBY DISCLAIMS ALL OTHER
WARRANTIES AND CONDITIONS, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY
IMPLIED WARRANTY OF MERCHANTABILITY OR IMPLIED WARRANTY OF FITNESS FOR A
PARTICULAR PURPOSE. WITHOUT LIMITING THE FOREGOING, INTELLICOM MAKES NO
REPRESENTATION OR WARRANTY CONCERNING TELECOMMUNICATIONS SERVICES OBTAINED BY
CUSTOMER AND ITS AFFILIATES PURSUANT TO THIS AGREEMENT, AND INTELLICOM SHALL
HAVE NO RESPONSIBILITY FOR SUCH TELECOMMUNICATIONS SERVICES EXCEPT AS EXPRESSLY
SET FORTH IN THIS AGREEMENT.
7. LIMITATION OF LIABILITY.
a. INTELLICOM'S LIABILITY TO CUSTOMER FOR ANY LOSS OR DAMAGE TO
CUSTOMER, CUSTOMER'S AFFILIATES, AGENTS OR LICENSEES OR END USERS ARISING OUT OF
THE EQUIPMENT AND SERVICES PROVIDED PURSUANT TO THIS AGREEMENT, WHETHER SUCH
LIABILITY SHALL ARISE BY REASON OF NEGLIGENCE, BREACH OF CONTRACT, BREACH OF
WARRANTY OR ANY OTHER THEORY, SHALL BE LIMITED TO (i) THE REPAIR OR REPLACEMENT
OF THE DEFECTIVE EQUIPMENT OR CORRECTION OF THE DEFECTIVE SERVICE, AND
(ii) REFUNDS OR CREDITS, AT INTELLICOM'S OPTION, FOR TELECOMMUNICATIONS SERVICES
PAID FOR BUT NOT PROVIDED AS REQUIRED.
b. INTELLICOM SHALL NOT UNDER ANY CIRCUMSTANCES BE LIABLE FOR
(i) DELAYS IN ITS PERFORMANCE ATTRIBUTABLE TO CUSTOMER, (ii) DAMAGE TO OR LOSS
BY CUSTOMER OF EQUIPMENT OR MATERIALS CAUSED BY CUSTOMER OR TO SUBCONTRACTORS,
AGENTS OR EMPLOYEES, OR (iii) LOSSES OR DELAYS CAUSED BY FORCE MAJEURE EVENTS.
IN NO EVENT SHALL INTELLICOM BE LIABLE TO CUSTOMER FOR LOST PROFITS OR FOR ANY
CONSEQUENTIAL, INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES ARISING OUT OF THIS
AGREEMENT, EVEN IF INTELLICOM HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES. NO ACTION, REGARDLESS OF FORM, ARISING OUT OF THIS AGREEMENT MAY BE
BROUGHT MORE THAN ONE YEAR AFTER THE CAUSE OF ACTION ACCRUES. THE AGGREGATE
LIABILITY OF INTELLICOM HEREUNDER SHALL NOT EXCEED THE PAYMENTS RECEIVED BY
INTELLICOM PURSUANT TO THIS AGREEMENT.
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8. GENERAL PROVISIONS.
8.1 Notices. Any notice required or permitted by this Agreement
shall be in writing and shall be properly addressed to the other party at the
following address or to such other address as may be provided in writing by
either party from time to time, shall be sent by any recognized commercial
overnight courier or United States registered or certified mail, return receipt
requested, and shall be concurrently sent by facsimile:
To IntelliCom: IntelliCom Solutions, Inc.
000 Xxxxxxxxx Xxxx.
Xxxxx, XX 00000
Attention: Vice President,
Operations
Fax Number: (000) 000-0000
To Customer: Intelligent Electronics, Inc.
000 Xxxxxxxxx Xxxxxxxxx
Xxxxx, XX 00000
Attention: Legal Department
Fax Number: (000) 000-0000
8.2 Independent Contractors. In performing their respective
obligations hereunder, each of the parties shall operate as and have the status
of an independent contractor and shall not act as or be a partner, or employee
of the other party.
8.3 Assignment and Binding Effect. Neither party shall transfer,
assign, subcontract or delegate in whole or in part any of its rights or
obligations under this Agreement without the prior written consent of the other
party, provided, that such consent shall not be required for the assignment of
this Agreement by either party in connection with the sale of substantially all
of such party's business to which this Agreement relates.
8.4 Waiver. Any waiver of any right or default hereunder shall be
effective only in the instance given and shall not operate as or imply a waiver
of any similar right or default on any other occasion. Either party may elect to
continue performance notwithstanding such breach by the other party but such
performance shall not constitute a waiver of such breach nor otherwise limit the
non-breaching party's remedies. No waiver of any provision of this Agreement
shall be effective unless in writing and signed by the party against whom it is
sought to be performed.
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8.5 Sole Agreement. This Agreement, including the Attachments
hereto, set forth the entire agreement and understanding of the parties relating
to its subject matter, and supersede and merge all prior and contemporaneous
agreements, negotiations and understandings between the parties, both oral and
written, with respect thereto. Neither Customer nor IntelliCom shall be bound by
any oral agreement or representation irrespective of by whom or when made. No
change or modification to this Agreement will be binding unless it is in writing
and signed by an authorized representative of IntelliCom and Customer.
8.6 Authority. Each of the parties to this Agreement hereby
represents and warrants that all required corporate authorizations have been
procured prior to execution of this Agreement and the parties designated as
signatories on behalf of IntelliCom and Customer each have the requisite
corporate authority to do so.
8.7 Force Majeure. Neither party shall be deemed in default of this
Agreement to the extent that performance of the party's respective obligations
or attempts to cure any breach are delayed or prevented by reason of any act of
God, fire, natural disaster, act of government, or any other cause beyond the
reasonable control of such party, provided that such party gives the other party
written notice of the condition within ten (10) business days of discovery
thereof. Except for Customer's obligations to make payments pursuant to this
Agreement, if proper notice is given, the time for performance or cure shall be
extended for a period equal to the duration of the force majeure event or
circumstance described in the notice.
8.8 Surviving Provisions. The warranties, disclaimers and
limitations of liability provision shall survive the termination of this
Agreement.
8.9 Choice of Law; Jurisdiction and Venue. This Agreement shall be
governed by and construed in accordance with the laws of the Commonwealth of
Pennsylvania and any action under this Agreement may be brought in the United
States District Court for the Eastern District of Pennsylvania or in the Courts
of the Commonwealth of Pennsylvania.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the Effective Date.
INTELLIGENT ELECTRONICS, INC.
BY: /s/ Xxxxxxx X. Xxxxx
------------------------
Title: President and Chief Operating Officer
INTELLICOM SOLUTIONS, INC.
BY: /s/ Xxxxxxx Xxxxxxx
------------------------
Title: Chief Operating Officer
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List of Attachments
Attachment A Consulting Services
Attachment B Minimum Purchase Requirements
Attachment C IntelliCom Tariffed Services -- Current Rates and Charges
Attachment D IntelliCom Non-Tariffed Services -- Current Rates and Charges
Attachment E Third Party Services
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ATTACHMENT A
CONSULTING SERVICES
Value Added Services.
Rate: No additional hourly charge
o Assistance to IE personnel in understanding voice and data carrier programs.
o Assisting with the development of existing data networks (additional lines ad
equipment).
o New order generation to Long Distance Carrier.
o Trouble Ticket generation to carrier(s) for problems/outages.
o Monitor trouble ticket and provide status reports to close of ticket.
o Work with IE personnel/carriers to perform regular maintenance on circuits.
o Assistance with billing problems.
Knowledge Services.
Rate: $150.00 per hour
o Provide ongoing management and monitoring of the IE program, circuits, and
systems.
o Busy/peak hour monitoring.
o Development of design and implementation plans for new phone and voice mail
systems/applications.
o Development of Corporate Policy for departmental and personal calling.
o Development of design and implementation strategies for LAN/WAN/Remote Access
networks (i.e. CDF 1-4, IRIS to IQ Pro migration, Network Management System,
and Broadband migration strategy (voice, data, and video over same
transport)).
o Interoperability (Bridge/Router configuration, protocol engineering,
equipment testing/recommendations).
o Internet Services (Development of IE Web page to allow users access to view
IE Sourcebook, marketing materials, new programs, view graphical product
displays, and potentially place orders on-line).
o Computer/Telephony Services (Making the PBX's communicate to computer systems
as requested by Xxxx Xxxxxx and Xxxxxxxxx Xxxxxxx).
o Performance Monitoring - monitoring network traffic patterns/peak utilization
periods and recommend/implement changes when necessary.
o Contingency Planning (Disaster Recovery site re-design).
o LAN/WAN Integration and Transport training.
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Account Management Services.
Rate: $1000.00 per month
o Provide circuit configuration, coordination, and installation.
o Provide voice traffic management reports and make recommendations for
re-engineering as necessary.
o X.25/Frame Relay billing to IRIS users.
o Frame Relay billing for corporate locations - summary and detail billing and
network management reports.
o Frame Relay billing for reseller locations (50% to DG/50% to reseller) -
summary and detail billing and network management reports.
o Assist IE sales reps with customers who require ISDN circuits for new
products such as Digiboard, Intel, IBM, and AT&T ISDN products.
o Provision and order ISDN for corporate use.
o Data Network Management - manage and monitor routers and transport links and
provide management reports.
o Remote network changes and re-configurations.
o Train appropriate IE personnel on the efficient use of videoconferencing
systems.
o Set-up video conferences as necessary.
Note: Out-of-pocket expenses and materials costs are billed at cost.
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ATTACHMENT B
MINIMUM PURCHASE REQUIREMENTS
TELECOMMUNICATIONS SERVICES
Tariffed Services: $1,000,000 per year, including:
o Four (4) T1 Circuits
o $65,000 per month of dedicated
access and/or egress
Non-tariffed Services: $1,200,000 per year
Additional Tariffed or
Non-Tariffed: $2,000,000 per year
CONSULTING SERVICES:
At discretion of the Customer.
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