DSC MARKETING SERVICES, INC. SUPPLY AGREEMENT COMMUNICATIONS EQUIPMENT

 

 

INDEX

 

			Page
ARTICLE 1.	SCOPE		1
ARTICLE 2.	ORDERING PROCEDURES		1
ARTICLE 3.	CONTRACT PRICE		2
ARTICLE 4.	PAYMENT TERMS		2
ARTICLE 5.	DELIVERY, TITLE AND RISK OF LOSS		3
ARTICLE 6.	TERMINATION		3
ARTICLE 7.	SUBCONTRACTING		3
ARTICLE 8.	WARRANTY		3
ARTICLE 9.	WARRANTY ON REPAIRED MATERIALS		4
ARTICLE 10.	LIMITATION OF LIABILITY		4
ARTICLE 11.	TECHNICAL SUPPORT		4
ARTICLE 12.	SOFTWARE LICENSE		5
ARTICLE 13.	TRAINING		5
ARTICLE 14.	DOCUMENTATION		5
ARTICLE 15.	PROPRIETARY RIGHTS/NON-DIVULGENCE		6
ARTICLE 16.	EXCUSABLE DELAY		6
ARTICLE 17.	GENERAL INDEMNITY		6
ARTICLE 18.	REMEDIES		7
ARTICLE 19.	PURCHASER’S RESPONSIBILITIES		8
ARTICLE 20.	HARDWARE AND SOFTWARE VERIFICATION		8
ARTICLE 21.	NOTICES		8
ARTICLE 21.	ENTIRETY OF AGREEMENT		8

 

ATTACHMENT A

 

      PRICE LIST

 

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SUPPLY AGREEMENT

 

This supply agreement (the “Agreement” is made and entered into on February 26, 1990, by and between DSC Marketing Services, Inc. (“DSC”), a Delaware corporation, with its principal place of business at 1000 Colt Road, Plano, Texas, and Consolidated Network Corp. (“Purchaser”), a               corporation, with its principal place of business at 11701 Bormon Drive, St. Louis, MO 63146.

 

ARTICLE 1.    SCOPE

 

1.1           The term of the Agreement shall run from the date first mentioned above through March 30, 1990.

 

1.2                                  During the term of this Agreement in accordance with each purchase order issued by Purchaser and accepted by DSC, DSC shall:

 

a.                                        Engineer, sell and deliver that equipment so specified in the order (“Equipment” being defined as the hardware component of each product being offered under the terms and conditions of the Agreement);

 

b.                                       Grant to Purchaser a nonexclusive, paid-up license to use the software (“Software” is defined as set forth in Article 12) during the useful life of the associated Equipment on the terms and conditions set forth in the Software License, Article 12; and

 

c.                                        Test and install the Equipment and/or Software (hereinafter “Installation Services”), if Purchaser elects to purchase such services or such services are included in the price of the Equipment or Software.

 

ARTICLE 2.    ORDERING PROCEDURES

 

2.1                                  The following procedures shall be followed with respect to each purchase order issued by Purchaser and accepted by DSC:

 

a.                                        During the term of this Agreement, Purchaser will inform DSC of its intent to purchase or license Equipment, Software, Installation Services, or Systems (“System” or “Systems” being defined as those products composed of a combination of both hardware and software) by sending to DSC a written order. This written order, hereinafter referred to as the “Purchase Order”, will state the type of Equipment, Software, System, or Installation Services that Purchaser wants to purchase or license, the price of the ordered items (hereinafter referred to as the “Contract Price”), as set forth in Attachment A, “Price List”, which is hereby incorporated by reference, and the proposed delivery dates and installation dates, if applicable.

 

b.                                       Each Purchase Order shall specifically incorporate by reference the terms and conditions of this Agreement. In the event of a conflict between the terms and conditions of this Agreement and of any Purchase Order issued hereunder or if the Purchase Order does not reference the terms and conditions of this Agreement, the terms and conditions of the Purchase Order shall control.

 

 

ARTICLE 3.    CONTRACT PRICE

 

3.1                                  The Contract Price for each item of Equipment, Software, Installation Services, or Systems is as specified in Attachment A and shall be paid to DSC in United States dollars. The Contract Price includes:

 

a.                                        The price of the Equipment;

 

b.                                       The fee for the licensing of the Software;

 

c.                                        If Installation Services are ordered, the charges for installing and testing each unit of Equipment, Software or System;

 

d.                                       The charges for the warranty of the Equipment and Software in accordance with Article 8;

 

3.2           The Price, as listed in Attachment A, shall not include:

 

a.                                        Taxes assessed against or payable by DSC in connection with the installation or the sale of the Equipment and the licensing of the Software. Unless prohibited by law, Purchaser shall pay to DSC the amount of any Federal, State, City or other tax which DSC may be required to pay on account of (a) the installation of the Equipment and Software; (b) the transportation, sale or use of the Equipment; (c) the transportation, licensing or use of the Software; and (d) any other aspect of DSC’s performance under this Agreement except for any tax assessed upon DSC’s net income;

 

b.                                       Charges for the shipment of the Equipment or any part thereof from its point of manufacture, DSC agrees to prepay for the Purchaser the cost of any such shipment from the point of manufacture to the destination designated by Purchaser, and Purchaser shall promptly pay the amount of said shipping costs to DSC upon receipt of the Invoice therefor, which payment shall be in addition to the Contract Price; and

 

c.                                        All utility charges including, but not limited to, charges for Central Office Trunks, Tie Lines, and supporting interconnecting devices, if required, from the utility.

 

ARTICLE 4.    PAYMENT TERMS

 

4.1                                  DSC will issue an invoice (“Invoice”) to Purchaser upon shipment. The Invoice shall state the Equipment, Software, or Systems so ordered and the Contract Price of such items. Installation Services shall be invoiced separately upon completion of the such Installation Services. The Invoice shall also state the total due to DSC from Purchaser (“Invoice Total”) which shall include the Contract Price, and any applicable taxes and/or delivery fees.

 

4.2                                  Payment of the Invoice Total shall be rendered within thirty (30) days after the date of the Invoice. All invoices not paid within thirty (30) days as stated herein shall be subject to a late payment charge of one percent (1%) per month on the unpaid balance.

 

4.3                                  Unless otherwise agreed to in writing by DSC, until the Invoice Total is paid in full, DSC shall retain a security interest in the Equipment. Purchaser agrees to execute and furnish to DSC any and all documentation necessary for the perfection of such security interest. Purchaser shall not sell or lease the Equipment, allow any liens or encumbrances to attach to the Equipment (other than DSC’s security interest), or remove the Equipment from the installation site without DSC’s written consent prior to payment in full of the Invoice Total.

 

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ARTICLE 5.    DELIVERY, TITLE AND RISK OF LOSS

 

5.1                                  Shipment of the Equipment and Software shall be F.O.B. DSC’s manufacturing site.

 

5.2                                  Risk of loss or damage to the Equipment shall pass to Purchaser upon delivery to the Purchaser.

 

5.3                                  Title to the Equipment shall pass to Purchaser upon Purchaser’s payment of the Invoice Total.

 

ARTICLE 6.    TERMINATION

 

Purchaser may at any time prior to shipment terminate any Purchase Order(s) placed by it hereunder. Purchaser shall notify DSC as soon as Purchaser knows of the need to terminate any Purchase Order. In such event, Purchaser’s liability to DSC with respect to such terminated Purchase Order(s) shall be as follows:

 

Number of Days Written		Termination Charge
Notice Given Prior to		(As a Percentage (%)
Scheduled Shipment Date		of the Invoice Total)
Over 60 days		0
45 to 60 days		15
30 to 45 days		30
15 to 30 days		45

 

ARTICLE 7.    SUBCONTRACTING

 

7.1                                  DSC reserves the right to subcontract such portions of the (a) Equipment manufacture and/or Software, and/or (b) Installation to subcontractors of DSC’s choice as DSC deems appropriate.

 

ARTICLE 8.    WARRANTY

 

8.1                                  THE WARRANTIES SET FORTH IN ARTICLE 8 AND ARTICLE 9 ARE IN LIEU OF ALL OTHER WARRANTIES WHETHER EXPRESSED OR IMPLIED, INCLUDING THE WARRANTIES OF MERCHANTABILITY AND FITNESS FOR INTENDED OR PARTICULAR PURPOSE.

 

8.2                                  DSC warrants that the Equipment sold to Purchaser or the Software licensed to Purchaser under this Agreement shall, under normal use and service, be free from defects in materials and faulty workmanship. If Installation Services are ordered, the warranty period shall be twelve (12) months from the earlier of the following dates:  (1) Completion of Installation (as defined in Article 20); or (2) thirty (30) days after shipment to Purchaser’s site. If Installation Services are not ordered, the warranty period shall be (12) months from shipment to Purchaser. (Hereinafter these periods of time shall be collectively referred to as the “Initial Warranty Period”).

 

8.3                                  DSC’s obligation and Purchaser’s sole remedy under this article are limited to the repair or replacement, at DSC’s option, of the defective Equipment or Software. DSC shall have no obligation to remedy any such defect if it can be shown:  (a) that the Equipment or Software was altered, repaired, or reworked by any party other than DSC without DSC’s written consent; (b) that such defects were the result of Purchaser’s improper storage, mishandling, abuse, or misuse of the Equipment or Software; (c) that such defects were the result of

 

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Purchaser’s use of the Equipment or Software in conjunction with equipment electronically or mechanically incompatible or of an inferior quality; or (d) that the defect was the result of damage by fire, explosion, power failure, or any act of nature.

 

8.4                                  In no event shall DSC be obligated to provide on-site maintenance. Subject to the provisions of this Warranty clause, defective parts or components will be returned by Purchaser to DSC’s point of manufacture facility, freight prepaid, and said defective parts will be repaired or replaced by DSC at no charge to Purchaser.

 

8.5                                  Some of the parts, components and subassemblies that make up the Equipment are not manufactured by DSC. In the event that such part, component or subassembly is noted as “Vendor Equipment” in Attachment A, DSC agrees in lieu of its warranty obligation described above, to pass through to Purchaser, to the maximum extent possible, the warranty provided by the manufacturer of the part, component or subassembly.

 

ARTICLE 9.    WARRANTY ON REPAIRED MATERIALS

 

DSC warrants that the Equipment or Software returned to DSC for repair shall be warranted from defective materials and workmanship for ninety (90) days from date of shipment from DSC to Purchaser or until the end of the Initial Warranty period, whichever is longer. Risk of loss or damage to Equipment or Software returned to DSC for repair or replacement shall be borne by Purchaser until delivery to DSC. Upon delivery of such Equipment or Software, DSC shall assume the risk of loss or damage until that time that the Equipment or Software being repaired or replaced is returned and delivered to Purchaser. Purchaser will pay all transportation costs for Equipment or Software shipped to DSC for repair or replacement. DSC shall pay all transportation costs associated with returning repaired or replaced Equipment or Software to Purchaser.

 

ARTICLE 10.         LIMITATION OF LIABILITY

 

IN NO EVENT SHALL DSC HAVE ANY LIABILITY TO PURCHASER FOR INCIDENTAL, CONSEQUENTIAL, OR INDIRECT DAMAGES, OR FOR LOSS, DAMAGE OR EXPENSE DIRECTLY OR INDIRECTLY ARISING FROM THE USE OF THE EQUIPMENT OR THE SOFTWARE, OR THE INABILITY TO USE THEM EITHER SEPARATELY OR IN COMBINATION WITH OTHER EQUIPMENT OR SOFTWARE, OR FROM ANY OTHER CAUSE.

 

ARTICLE 11.         TECHNICAL SUPPORT

 

11.1                            DSC shall provide the following remote technical support at no charge during the Initial Warranty Period. This service includes the following:

 

a.                                        Consultation and telephone assistance, 24 hours, seven days per week, for problem isolation and correction for hardware purchased and software licensed under this Agreement;

 

b.                                       Modem access support assistance when applicable;

 

11.2                            On-site call-out maintenance service is available at rates in effect at the time of request.

 

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ARTICLE 12.         SOFTWARE LICENSE

 

12.1                            Purchaser is hereby granted a nonexclusive, nontransferable, paid-up license to use the Software only in connection with Purchaser’s use of the Equipment purchased under this Agreement.

 

12.2                            Software licensed under this Agreement is defined as computer programs contained on a magnetic tape, disc, semiconductor device or other memory device or system memory consisting of:  (a) hardwired logic instructions which manipulate data in the central processor and which control input- output operations, error diagnostics and recovery routines; and (b) instruction sequences in machine-readable code that control call processing, peripheral equipment, administration and maintenance functions as well as associated documentation used to describe, maintain and use the programs.

 

12.3                            Purchaser agrees that the Software to be provided by DSC under the Agreement or any enhancement, modification, extension or expansion thereof, or an implementation of any of the foregoing shall, as between the parties hereto, be treated as the exclusive property of DSC and as proprietary to and a trade secret of DSC. All rights, title and interest in the Software are and shall remain with DSC subject, however, to a license to Purchaser to use the software solely in conjunction with the Equipment during the useful life of the Equipment. Purchaser shall:  (a) not modify the Software without the prior written consent of DSC; (b) not reproduce or copy the software in whole or in part; (c) not provide, disclose or make the Software or any portions or aspects thereof available to any person except to its employees on a “need-to-know” basis without prior written consent of DSC; (d) hold the Software and any portions or aspects thereof including related documentation in confidence for the benefit of DSC; (e) forthwith return to DSC any and all magnetic tape, disc, semiconductor device or other memory device or system and/or documentation of other material which has been replaced, modified, or updated; (f) utilize the Software or any portions or aspects thereof (including any methods or concepts utilized therein) solely in conjunction with the Equipment; (g) issue adequate instructions to all appropriate persons, and take all actions reasonably necessary to satisfy Purchaser’s obligations under this license.

 

12.4                            The obligations of the Purchaser hereunder shall not extend to any information or data relating to the Software which is now available to the general public or becomes available by reason of acts or failures to act not attributable to Purchaser.

 

12.5                            The obligations of Purchaser under this Article 12 shall survive the termination of this Agreement for any reason and shall continued even if the Software is no longer utilized with the Equipment.

 

ARTICLE 13.         TRAINING

 

DSC shall provide, at no additional charge during the Initial Warranty Period, the training specified in Attachment A. The training will take place at DSC’s facility, unless otherwise agreed to by the parties, and will consist of materials developed and controlled by DSC. All travel and living expenses for the training sessions shall be borne by Purchaser. Training after the Initial Warranty Period shall be at the then current DSC rates.

 

ARTICLE 14.         DOCUMENTATION

 

DSC shall furnish that documentation specified in Attachment A to Purchaser to be used for the operation and ongoing maintenance of the Equipment and Software. All such documentation is to be

 

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treated in accordance with the terms of Article 15.  Updates to documentation shall be at no charge during the Initial Warranty Period.

 

ARTICLE 15.         PROPRIETARY RIGHTS/NON DIVULGENCE

 

15.1                            All technical information, documentation, and Software supplied by DSC to Purchaser under this Agreement, except for that which may be in the public domain, shall, as between the parties hereto, be treated as the confidential and proprietary information of DSC. Purchaser, except as specifically authorized in writing by DSC, shall:  (a) treat and protect all technical information, documentation, and Software received from DSC or its suppliers as confidential or proprietary information; (b) not reproduce any technical information, documentation, or Software received from DSC or its suppliers, in whole or in part; (c) use any technical information, documentation, or Software received by DSC or its suppliers only for study, operation, or maintenance purposes in connection with the Equipment; (d) indemnify DSC for any loss or damages resulting from a breach of this Article 15; and (e) not disclose any technical information, documentation, or Software received from DSC to any third parties.

 

15.2                            If this Agreement is terminated or cancelled, or if Purchaser is found to have breached any of the provisions of Article 12 or 15, Purchaser agrees to immediately return all technical information, documentation, and Software to DSC. In any event, the obligations of Article 12 and 15 will survive termination of this Agreement.

 

ARTICLE 16.         EXCUSABLE DELAY

 

Neither DSC nor Purchaser shall suffer any liability for nonperformance, defective performance or late performance of the work due to causes beyond its control and without its fault or negligence such as, but not limited to, acts of God, war (including civil war), civil unrest, acts of government, fire, floods, explosions, the elements, epidemics, quarantine, restrictions, strikes, lock- outs, plant shutdown, material shortages, or delays in transportation or delays of its suppliers or subcontractors for like cause. In the event of an excusable delay as defined in the preceding sentence, then the party affected, upon giving prompt written notice to the other party, shall be excused from such performance on a day-to-day basis to the extent of such prevention, restriction, or interference (and the other party shall likewise be excused from performance of its obligations on a day-to-day basis to the extent such party’s obligations relate to the performance so prevented, restricted or interfered with), provided that the party so affected shall use its best efforts to avoid or remove such causes of nonperformance and both parties shall proceed to perform with dispatch whenever such causes are removed or cease to exist. DSC reserves the right to cancel or otherwise terminate this Agreement if Purchaser’s performance is delayed for a period of more than thirty (30) days.

 

ARTICLE 17.         GENERAL INDEMNITY

 

17.1                            DSC agrees to indemnify and hold Purchaser harmless with respect to any suit, claim or proceeding brought against Purchaser by a third party alleging that Purchaser’s use of the Equipment or the Software, separately or in combination, as a whole or in part, constitutes an infringement of any United States patent or copyright or misuse of proprietary or trade secret information. DSC agrees to defend Purchaser against any such claim and to pay all litigation costs, reasonable attorney’s fees, settlement payments and any damages awarded or resulting from any such claim.

 

17.2                            Purchaser shall promptly advise DSC of any such suit, claim, or proceeding and shall cooperate with DSC in the defense or settlement thereof. DSC shall have sole control of the defense of any action involving such a claim and of all negotiations for its settlement or compromise.

 

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17.3                            In the event that an injunction is obtained against Purchaser’s use of the Equipment and/or the Software, in whole or in part, as a result of any such claim, DSC shall use its best efforts to either:  (a) procure for Purchaser the right to continue using the portions of the Equipment or the Software enjoined from use; or (b) replace or modify the same with functionally equivalent or better Equipment and/or Software so that Purchaser’s use is not subject to any such injunction. In the event that DSC cannot perform the remedies set forth in 17.3(a) or 17.3(b), then the Purchaser shall have the right to return such Equipment and the Software to DSC. In the event of such return, DSC shall refund the depreciated value of the Equipment and the license to use the Software within thirty (30) days of the receipt by DSC of the Equipment and the Software.

 

17.4                            This indemnity shall not apply to claims arising in respect to the use of the Equipment or Software supplied by DSC or manufactured by its suppliers in accordance with any design or any special instruction furnished by the Purchaser, or which is used by the Purchaser in a manner or for a purpose not contemplated by this Agreement.

 

17.5                            The provisions of this Article 17 set forth the entire obligation of DSC with respect to any claim of patent infringement, copyright infringement or misuse of proprietary or trade secret information.

 

ARTICLE 18.         REMEDIES

 

18.1                            DSC shall have the right, prior to full payment of the Invoice Total, to suspend its performance under this Agreement by written notice to the Purchaser and forthwith remove and take possession of any Equipment and Software that have been delivered if the Purchaser shall:  (a) file a voluntary petition under any bankruptcy or insolvency law, or file a voluntary petition under the reorganization or arrangement provisions of any law of any jurisdiction, or have proceedings under any such laws instituted against it which are not terminated within thirty (30) days of such commencement; (b) become insolvent, bankrupt, or admit in writing of its inability to pay all debts as they mature or make a general assignment for the benefit of or enter into any composition or arrangement with creditors; (c) authorize, apply for, or consent to the appointment of a receiver, trustee, or liquidator of all or a substantial part of its assets, or have proceedings seeking such appointment commenced against it which are not terminated within thirty (30) days of such commencement; or (d) if Purchaser attempts to resell the Equipment or System without the consent of DSC.

 

18.2                            In the event of any material breach of this Agreement by either party which shall continue for thirty (30) or more days after written notice of such breach (including a reasonably detailed statement of the nature of such breach) shall have been given to the breaching party by the aggrieved party, the aggrieved party shall be entitled at its option:  (a) if the aggrieved party is the Purchaser, to suspend its performance under Article 4 of the Agreement for as long as the breach continues uncorrected; or (b) if the aggrieved party is DSC, to suspend performance of all of its obligations under the Agreement for as long as the breach continues uncorrected; or (c) to avail itself of any and all remedies available at law or equity whether or not it elects to suspend its performance under Article 18.2a or 18.2b as applicable.

 

18.3                            In the event (a) either party fails to timely discharge its obligations under this Agreement and (b) the aggrieved party employs an attorney in order to collect any amount due and unpaid, or to enforce any right or remedy hereunder, then the defaulting party agrees that, in addition to all amounts due hereunder, it shall pay all costs of collection or enforcement, including court costs and reasonable attorney’s fees.

 

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ARTICLE 19.         PURCHASER’S RESPONSIBILITIES

 

19.1                            The Purchaser shall insure all DSC-designated personnel access to the Purchaser’s premises and the Equipment during the times necessary to install, maintain and service the Equipment. DSC’s personnel shall comply with site and security regulations as specified by Purchaser.

 

19.2                            The Purchaser shall provide reasonable working space and facilities including heat, light, ventilation, electric current and outlets for use by DSC’s designated personnel. Adequate storage space for equipment and materials shall be made available by the Purchaser as required. All such facilities shall be provided at no charge to DSC.

 

19.3                            Any information DSC reasonably requests from the Purchaser and which is required for DSC to properly install or maintain the Equipment shall be provided by the Purchaser in a timely fashion and form reasonably specified by DSC.

 

19.4                            The Purchaser shall not perform, or attempt to perform, or cause to be performed any maintenance or repair to the Equipment during the term of this Agreement, other than pursuant to this Agreement, without prior written consent of DSC.

 

ARTICLE 20.         HARDWARE AND SOFTWARE VERIFICATION

 

20.1                            If installation services are ordered, DSC shall, upon completion of the installation, test the Equipment. Purchaser may witness the installation and test performance.

 

20.2                            When the Equipment and Software have satisfactorily completed all of DSC’s tests, DSC shall provide Purchaser with a “Hardware and Software Verification” certificate. Provision of the Hardware and Software Verification certificate to the Purchaser will be deemed, for purposes of this Agreement, as “Completion of Installation.”

 

ARTICLE 21.         NOTICES

 

Any notice hereunder by one party to the other party shall be given in writing by cable, telex, facsimile transmission, personal delivery or posted by certified air mail with proper postage, return receipt requested, and such notice shall be effective upon receipt to the parties at the following addresses:

 

If to DSC:		If to Purchaser:
DSC Marketing Services, Inc.		CNI
1000 Coit Road		11701 Borman Drive
Plano, Texas 75075		St. Louis, MO 63146
Attn:  Contract Manager		Attn:  James K. Ratchford

 

ARTICLE 21.         ENTIRETY OF AGREEMENT

 

21.1                            Purchaser may not assign or transfer this Agreement or any rights hereunder without the prior written consent of DSC. Such consent shall not be unreasonably withheld.

 

21.2                            This Agreement together with all attachments constitutes the entire agreement between DSC and the Purchaser with respect to the subject matter hereof and supersedes all previous negotiations, proposals, commitments, representations, writings, advertisements, publications and understandings of any nature whatsoever. In the event of any conflict

 

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between this Agreement and any Attachment, the provisions of this Agreement shall prevail provided, however, that to the extent possible this Agreement and the Attachments shall be construed so as to minimize conflict.

 

22.3                            Any changes to this Agreement requested either by the Purchaser or DSC may only be effected if mutually agreed upon in writing by duly authorized representatives of the parties hereto. This Agreement shall not be modified, supplemented, or any rights of a party to it waived except by such a writing.

 

22.4                            Failure by either party at any time to require performance by the other party or to claim a breach of any provision of this Agreement shall not be construed as affecting any subsequent breach of the right to require performance with respect thereto, or to claim a breach with respect thereto.

 

22.5                            The rights and obligations of the parties and all interpretations and performance of this Agreement shall be governed in all respects by the laws of the State of Texas.

 

21.6                            If any one or more of the provisions contained in this Agreement shall, for any reason, be held to be invalid, i