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Condesco Telecommunication Services Agreement

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COMDISCO DISASTER RECOVERY TELECOMMUNICATIONS SERVICES, A DIVISION OF COMDISCO, INC. SERVICES AGREEMENT


AGREEMENT dated March 25, 1996 between COMDISCO DISASTER RECOVERY SERVICES, A DIVISION OF COMDISCO, INC. ("Comdisco") with offices located at 6111 North River Road, Rosemont, IL 60018, and PHOENIX NETWORK , INC. ("Customer"), with offices located at 550 California Street, 11th Floor, San Francisco, CA 94104.


1. SERVICES


A. Comdisco agrees to provide Customer with the telecommunication network and related services (the "Services") and the Services related products (the "Products") specified in Exhibit A.


B. Customer is responsible for, at its expense, (i) obtaining all necessary site preparations required by Comdisco's installation and maintenance specifications attached hereto as Exhibit B; (ii) all cabling and conduits for the connection of power; (iii) transportation and in-transit insurance, installation, and deinstallation of any Products; (iv) operation and maintenance of any equipment or software provided by Customer (including the transmission and reception of signals); (v) returning the Products to Comdisco or the vendor upon termination of this Agreement, in the same operating order, condition and appearance as when received, less normal wear and tear, to the address specified by Comdisco within the continental United States; and (vi) the cost of relocating Products and Services once installed by Comdisco. Comdisco shall not be responsible for the security of any transmissions.


C. Customer will give Comdisco reasonable access to its premises to install, inspect, maintain, service, replace, relocate and remove Products and Services. Customer will also provide access to representatives of organizations maintaining any Products.


2. USE OF SERVICES AND PRODUCTS


A. Customer will not modify the Products and Services without the prior written consent of Comdisco ("Modification") which will not be unreasonably withheld. If Modification occurs, Comdisco is released from any liability or obligation to Customer for the modified portion of the Product or Services, Customer will be liable to Comdisco for any costs or damages incurred by Comdisco (including damage to the Comdisco network) caused by a Modification for which consent was not received pursuant to this paragraph.


B. Any Product provided to Customer is for Customer to access and use the Services. Customer agrees not to use any Product for any other purpose. Customer will not use the Products and Services to knowingly violate any law or to aid any unlawful act.


C. Customer is responsible for ensuring that any equipment or software provided by Customer will not (i) interfere with any of the Products or Services; (ii) endanger the safety of Comdisco 2 employees or the public; (iii) damage or require alteration to the Products or Services. Upon notice from Comdisco that the equipment or software provided by Customer is causing or is likely to cause such a hazard or interference, the Customer will remove the equipment or software. Comdisco may require Customer provided equipment be certified by Comdisco prior to use with Products or Services.


3. TERM. The term of this Agreement begins upon acceptance by Comdisco ("Commencement Date") and continues for 36 months beginning on the first day of the month following the Commencement Date (or beginning on the Commencement Date if it is the first day of the month) ("Initial Term"). Customer shall have the right to terminate this Agreement upon ninety (90) days prior written notice to Comdisco. At the expiration of the Initial Term, the Agreement will automatically renew for successive ninety (90) day terms, at Comdisco's then current rate for the Products and Services, unless Customer or Comdisco gives notice of termination at least thirty (30) days prior to the end of the Initial Term or a renewal term.


4. FEES AND TAXES


A. Customer will pay Comdisco for the Services and Products as specified in Exhibit A. Comdisco will invoice Customer monthly for the monthly fees and Customer will pay the monthly fees within thirty (30) days from the date of invoice. All other usage fees and charges (including applicable taxes) incurred by Customer in any calendar month will be invoiced to Customer during the following calendar month and Customer will pay them within thirty (30) days from the date of invoice. If any payment is not made when due, Customer will pay interest at the lesser of 18% per year or the maximum percentage permitted under applicable law. Comdisco will have the right to increase any monthly fees, upon 30 days prior written notice, due to an increase in the rates of underlying carriers. Notwithstanding anything to the contrary herein, Comdisco shall not increase its fees, in the aggregate, more than ten percent (10%) per year for the first two years of this Agreement.


B. Customer agrees to pay when due or reimburse and indemnify and hold Comdisco harmless from all taxes, fees or other charges of any nature whatsoever (together with any related interest or penalties not arising from negligence on the part of Comdisco) now or hereafter imposed or assessed during the term of this Agreement against Comdisco, Customer or the Services and Products by any federal, state, county, or local governmental authority (except only Federal, state or local taxes based on or measured by the net income of Comdisco).


5. LIMITED WARRANTY. Comdisco warrants that it has all necessary rights to provide the Services and Products to Customer. EXCEPT AS SET FORTH IN THIS PARAGRAPH, COMDISCO MAKES NO, AND EXPRESSLY DISCLAIMS, ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, FOR THE SERVICES, THE PRODUCTS OR ANY OTHER EQUIPMENT, SOFTWARE, OR PRODUCT USED BY CUSTOMER OR COMDISCO IN CONNECTION WITH THE SERVICES (OR THE RESULTS OF THE SERVICES OR PRODUCTS) INCLUDING WITHOUT LIMITATION ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Unforeseen downtime and unscheduled maintenance may interrupt Customer's access to the Services. Comdisco does not guarantee that access to the Services will be uninterrupted. Comdisco will attempt to minimize the duration of any such occurrence. In the event Services are interrupted for a period of twenty-


3 four (24) consecutive hours, Customer shall have the right to immediately terminate this Ag
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