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Fill and Sign the Management and Consulting Agreement Active Marketing Llc Form

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GENERAL AGREEMENT BETWEEN CHOICE ONE COMMUNICATION INC. AND LUCENT TECHNOLOGIES INC. TABLE OF CONTENTS Page ARTICLE I GENERAL TERMS AND CONDITIONS...................................................................... .... 1 1.1 DEFINITIONS:.................................................................... ................... 1 1.2 TERM OF AGREEMENT:...................................................................... ........... 3 1.3 SCOPE:.......................................................................... ................... 3 1.4 CUSTOMER RESPONSIBILITY:................................................................. .......... 4 1.5 ORDERS:......................................................................... ................... 4 1.6 CHANGES IN CUSTOMER'S ORDERS:...................................................................... 5 1.7 CHANGES IN PRODUCTS:....................................................................... ........ 5 1.8 PRICES:......................................................................... ................... 5 1.9 INVOICES AND TERMS OF PAYMENT:..................................................................... 6 1.10 PURCHASE MONEY SECURITY INTEREST:.................................................................. 7 1.11 TAXES:.......................................................................... ................... 8 1.12 TRANSPORTATION AND PACKING:........................................................................ 8 1.13 TITLE AND RISK OF LOSS:........................................................................... . 8 1.14 WARRANTY:....................................................................... ................... 9 1.15 INFRINGEMENT:......................................................................................11 1.16 CUSTOMER'S REMEDIES:...............................................................................12 1.17 INSURANCE:.........................................................................................13 1.18 USE OF INFORMATION:................................................................................13 1.19 DOCUMENTATION:.....................................................................................13 1.20 NOTICES:...........................................................................................14 1.21 FORCE MAJEURE:.....................................................................................14 1.22 ASSIGNMENT:........................................................................................14 1.23 TERMINATION OF AGREEMENT FOR BREACH:...............................................................15 1.24 ARBITRATION:.......................................................................................15 1.25 NON-SOLICITATION:..................................................................................16 1.26 INDEPENDENT CONTRACTOR:............................................................................16 1.27 RELEASES VOID:.....................................................................................16 1.28 PUBLICITY:.........................................................................................16 1.29 CONFIDENTIALITY OF AGREEMENT:......................................................................16 1.30 AMENDMENTS:........................................................................................16 1.31 SEVERABILITY:......................................................................................17 1.32 WAIVER:............................................................................................17 1.33 SURVIVAL:..........................................................................................17 1.34 SECTION HEADINGS:..................................................................................17 1.35 CHOICE OF LAW:.....................................................................................17 1.36 AMBIGUITIES:.......................................................................................17 ARTICLE II PROVISIONS APPLICABLE TO LICENSED MATERIALS..........................................................17 2.1 LICENSE FOR LICENSED MATERIALS:....................................................................17 2.2 CHANGES IN LICENSED MATERIALS:.....................................................................18 2.3 CANCELLATION OF LICENSE:...........................................................................18 2.4 OPTIONAL SOFTWARE FEATURES:........................................................................18 -i- - ii - 2.5 ADDITIONAL RIGHTS IN LICENSED MATERIALS:...........................................................19 2.6 INSTALLATION OF SOFTWARE:..........................................................................19 2.7 SOFTWARE ACCEPTANCE:...............................................................................19 2.8 MODIFICATIONS BY CUSTOMER TO USER CONTROLLED MODULES:..............................................20 2.9 ADDITIONAL SOFTWARE RIGHTS FOR 5ESS(R)SWITCH LICENSED MATERIALS....................................20 ARTICLE III PROVISIONS APPLICABLE TO ENGINEERING, INSTALLATION AND OTHER SERVICES................................21 3.1 SITE REQUIREMENTS:.................................................................................21 3.2 ADDITIONAL ITEMS TO BE PROVIDED BY CUSTOMER:.......................................................22 3.3 ITEMS TO BE FURNISHED BY SELLER....................................................................25 3.3.1 ENGINEERING:....................................................................................25 3.3.2 INSTALLATION:...................................................................................26 3.4 ACCEPTANCE.........................................................................................29 3.5 WORK OR SERVICES PERFORMED BY OTHERS:..............................................................29 ARTICLE IV ENTIRE AGREEMENT......................................................................................29 4.1 ENTIRE AGREEMENT...................................................................................29 The mailing, delivery or negotiation of this Agreement by Lucent or its agent or attorney shall not be deemed an offer by Lucent to enter into any transaction or to enter into any other relationship, whether on the terms contained herein or on any other terms. This Agreement shall not be binding upon Lucent, nor shall Lucent have any obligations or liabilities or Customer any rights with respect thereto, or with respect to the transactions contemplated by the Agreement, unless and until the Agreement has been approved by the executive officers and/or Board of Directors of Lucent and Lucent has executed and delivered this Agreement. Until such execution and delivery of this Agreement, Lucent may terminate all negotiation and discussion of the subject matter hereof, without cause and for any reason, without recourse or liability. This General Agreement Number LNM980612RMCO (hereinafter "General Agreement" or "Agreement") is made effective as of the 17th day of July, 1998 ("Effective Date") by and between Choice One Communication Inc., a Delaware corporation, with offices located at 333 West Commercial Street, Suite 2500, Inc., a Delaware corporation, acting through its Global Service Providers Group, with offices located at 600 Mountain Avenue, Murray Hill, New Jersey 07974 (hereinafter "Seller"). WHEREAS, Seller desires to supply to Customer and Customer desires to procure from Seller the products and services described herein, pursuant to the terms and conditions contained herein. NOW, THEREFORE, in consideration of the mutual promises herein contained and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties intending to be lawfully bound agree as follows: ARTICLE I GENERAL TERMS AND CONDITIONS 1.1 DEFINITIONS: For the purpose of this Agreement, the following definitions will apply: (a) "Affiliate" of a corporation means its Subsidiaries, any company of which it is a Subsidiary, and other Subsidiaries of such company. (b) "Bill and Hold Products" means Products, Licensed Materials, and/or parts thereof, which the Customer requests and Seller agrees to inventory or warehouse, at a price mutually agreed to by the parties, until final delivery to the Customer. (c) "Customer Price List" means Seller's published "Ordering and Price Guides" or other price notification releases furnished by Seller for the purpose of communicating Seller's prices or pricing related information to Customer, however, this does not include firm price quotations. (d) "Cutover" means the verification by Seller and Customer of actual usage over the installed Products. This function occurs after Turnover and is not performed by Seller unless specifically requested by Customer and is usually covered under a separate Professional Services Agreement. (e) "Delivery Date" means the date required under this Agreement by which all deliverables ordered by Customer are to be delivered to the destination specified in the order. (f) "Designated Processor" means the Product for which licenses to Use Licensed Materials are granted. - 2 - (g) "Firmware" means a combination of (1) hardware and (2) Software represented by a pattern of bits contained in such Hardware. (h) "Fit" means physical size or mounting arrangement (e.g., electrical or mechanical connections). (i) "Form means physical shape. (j) "Function" means the operation the Product performs. (k) "Hazardous Materials" means material designated as a "hazardous chemical substance or mixture" pursuant to Section 6 of the Toxic Substance Control Act; a "hazardous material" as defined in the Hazardous Materials Transportation Act (49 U.S.C. 1801, et seq.); "hazardous substance" as defined in the Occupational Safety and Health Act Hazard Communication Standard (29 CFR 1910.1200) or as defined in the Comprehensive Governmental Response, Compensation and Liability Act, 42 U.S.C. 9601(14), or other pollutant or contaminant. (l) "Installation Complete Date," means the date on which OS Software or transmission systems Software is installed by Seller at the location specified in the order and determined by Seller to be ready for Use by Customer. (m) "Licensed Materials" means the Software and Related Documentation for which licenses are granted by Seller under this Agreement; no Source Code versions of Software are included in Licensed Materials. (n) "OS Software" means the object code Software, for operations systems, embodied in any medium, including firmware. (o) "Product" means equipment hardware, and parts thereof, but the term does not mean Software whether or not such Software is part of Firmware. (p) "Related Documentation" means materials useful in connection with Software such as, but not limited to, flowcharts, logic diagrams and listings, program descriptions and Specifications. (q) "Services" means any engineering, installation or repair services to be performed by Seller under this Agreement, but the term "Services" does not include any services provided by the Professional Services Division of Seller's Network Systems Group unless otherwise expressly agreed to in writing by theparties. (r) "Software" means a computer program consisting of a set of logical instructions and tables of information that guide the functioning of a processor. Such program may be contained in any medium whatsoever, including hardware containing a pattern of bits, representing such program. However, the term "Software" does not mean or include such medium. - 3 - (s) "Source Code" means any version of Software incorporating high-level or assembly language that generally is not directly executable by aprocessor. (t) "Specifications" means Sellers or its vendor's technical specifications for particular Products or Software furnished hereunder. (u) "Statement of Work" (SOW) means the detailed description of the actual Services to be performed which includes the expected completion dates of such Services as shown in Exhibit 1. (v) "Subsidiary" means any corporation in which Customer owns more than fifty percent (50%) of the eligible voting stock; such corporation shall be deemed to be a Subsidiary of such Customer only as long as such ownership or control exists. (w) "Turnover" means, with respect to Products and Software to be installed by Seller, the point at which Seller has completed the installation and notifies Customer that the installation is completed and that Seller has confirmed that the installed Product and/or Software comply with Seller's Specifications. This term does not mean Cutover which is separately defined herein. (x) "Use," with respect to Licensed Materials means loading the Licensed Materials, or any portion thereof, into a Designated Processor for execution of the instructions and tables contained in such Licensed Materials. 1.2 TERM OF AGREEMENT: The term of this Agreement shall commence on the Effective Date and shall continue in effect thereafter for a period of three (3) years ("Term"). This Agreement may be extended as. mutually agreed to in writing by the parties. 1.3 SCOPE: (a) The terms and conditions of this Agreement shall apply to all transactions occurring during the Term whereby Products, Licensed Materials or Services are provided by Sellers Global Service Providers Group (formerly Network Systems Group) to Customer. Purchase orders placed under this General Agreement for Seller's 5ESS(R)-2000 Switching Systems Products, Transmission Systems Products and related Licensed Materials shall be governed by the terms set forth in Appendix A attached hereto and made a part hereof. Except as expressly stated in this Agreement, this Agreement shall not apply to any products, licensed materials or services offered for supply by any other group (e.g., Microelectronics, Business Communications Systems) within Lucent. By placing orders with Seller, including change and/or addition orders, or using any Products, Licensed Materials, or Services provided hereunder, Customer agrees to be bound to the terms of this Agreement. Customer understands and agrees that all Products, Licensed Materials, or Services furnished by Seller to Customer pursuant to this Agreement shall be for Customers own internal use in the United States only. Products, Licensed Materials or Services furnished under this Agreement are not: being supplied for resale and shall not be resold byCustomer. - 4 - (b) All firm price quotes made by Seller to Customer shall incorporate the terms and conditions of this Agreement. Any conflicting terms and conditions of a firm price quote, signed by an authorized representative of Seller and Customer and dated after the effective date of this Agreement, will supersede the comparable terms of this Agreement. 1.4 CUSTOMER RESPONSIBILITY: Customer shall, at no charge to Seller, provide Seller with such technical information, data, technical support or assistance as may reasonably be required by Seller to fulfill its obligations under this Agreement, any subordinate agreement or order. If Customer fails to provide the technical information, data, support or assistance, Seller shall be discharged from any such obligation. 1.5 ORDERS: (a) All orders submitted by Customer for Products, Licensed Materials, and Services shall incorporate and be subject to the terms and conditions of this Agreement. Any order submitted pursuant to a firm price quotation shall include such firm price quotation number. All orders, including electronic orders, shall contain the information as detailed below: (i) Complete and correct ship to and bill to address; (ii) The quantity and type of Products, Licensed Materials, and Services being ordered; (iii) The price; (iv) The requested Delivery Date in accordance with Seller's standard interval for the Products, Licensed Materials, and Services being ordered. In the event a non-standard interval has been mutually agreed to by the parties, reference to the specific document agreeing to the interval needs to be included; (v) The requested completion date in accordance with Sellers standard interval for the Products, Licensed Materials, and Services being ordered; (vi) Reference to this Agreement; (vii) If an order is for Bill and Hold Products, the phrase "Bill and Hold" must be clearly and conspicuously stated, in the order. The requested Delivery Date of any order must be in accordance with Sellers published standard order intervals in effect on the date of receipt of order by Seller. Seller reserves the right to change such standard order intervals without notification to Customer but only with respect to future orders. Such change shall not affect orders accepted by Seller prior to the change to the standard order intervals. Electronic orders shall be binding on Customer notwithstanding the absence of a signature. All orders are subject to acceptance by Seller. Seller reserves the right to place any order on hold, delay shipment, and/or reject any order due to, but not limited to the breach or default by Customer of its obligations under this Agreement or Customer's insufficient credit limits. Terms and conditions on Customer's purchase order which are inconsistent with the provisions of this Agreement and any pre-printed terms and conditions on Customer's purchase order shall be ineffective, void and of no force and effect. Orders shall be sent to the following address: - 5 - Lucent Technologies Inc. Customer Service 6701 Roswell Road Building D - 3rd Floor Atlanta, GA 30328-2501 (b) if an order is for Bill and Hold Products, the phrase "Bill and Hold" must clearly and conspicuously appear on the order. In the event Customer orders Bill and Hold Products, Seller will defer final shipment of such Product(s) until the final ship date indicated on the purchase order or such final ship date as is mutually agreed between the parties provided that in no event shall Seller be obligated to hold Bill and Hold Products longer than one (1) year from the date of the applicable purchase order. Customer agrees to pay to Seller a monthly stocking fee for any Bill and Hold Products held beyond the final ship date indicated on the purchase order or otherwise mutually agreed todate. 1.6 CHANGES IN CUSTOMER'S ORDERS: Changes by Customer to an order which has been previously accepted by Seller (a "Change Order") are subject to acceptance by Seller. Change Orders shall be treated as a separate order and shall follow Seller's change order process. In the event Seller accepts a Change Order and such change affects Seller's ability to meet its obligations under the original order, any price (or discount, if applicable), shipment date or Services completion date quoted by Seller with respect to such original order is subject to change. Seller will provide to Customer written quotations and expected completion dates for any requested Change Orders. 1.7 CHANGES IN PRODUCTS: Prior to shipment, Seller may at any time make changes in Products. Seller may modify the Product(s) drawings and Specifications or substitute Products of later design. Seller agrees that such modifications or substitutions will not impact upon Form, Fit, or Function under normal and proper use of the ordered Product as provided in Sellers Specifications. With respect to changes, modifications, and substitutions that do impact the Form, Fit, or Function of the ordered Product, Seller shall notify Customer in writing thirty (30) days prior to the date the changes become effective. In the event the Customer objects to the change, Customer shall notify Seller within thirty (30) days from the date of notice. Upon receipt of notice, Seller shall not furnish modified Products to Customer on any orders in process. 1.8 PRICES: (a) To the extent Customers order is subject to a firm price quotation made by Seller, prices, fees, and charges (hereinafter "Prices) shall be as set forth in Sellers firm price quotation. (b) Except as expressly stated in this Agreement, in all other cases Prices shall be those contained in Sellers Customer Price Lists. The applicable Customer Price Li st shall be the issue that is in effect on the date of Seller's receipt of the order. The requested Delivery Date of such order must be in accordance with Sellers published shipping or planning interval or thirty (30) days from the date of order receipt, whichever is longer. Prices for Products and license fees for Licensed Materials to be shipped, or Services to be performed beyond the published - 6 - shipping interval will be based upon the date required for order entry by Seller in accordance with Customers requested date. and applying the Price from the Customer Price List as of that date. (c) Seller may amend its Prices, other than those subject to firm price quotations and, except when applicable Prices are adjusted for changes in raw material prices, Seller agrees to provide thirty (30) days written notice of any increase in Prices contained in Sellers Customer Price Lists. When Prices contained in Sellers Customer Price Lists are adjusted for changes in raw material prices, Sellers new Prices will be revised effective the first day of any given month. The basis for raw material adjustments will be provided to Customer upon request. 1.9 INVOICES AND TERMS OF PAYMENT: (a) Payment for Products, Licensed Materials and Services (including transportation charges and taxes, if applicable) will be due in accordance with the payment schedule described below. Upon acceptance of the purchase order and initial payment required below, Seller will commence the order fulfillment process. Seller shall notify Customer when the Products and/or Licensed Materials are ready for shipment. Upon such notification, Customer shall arrange the electronic transfer of funds for the second payment in accordance with subsection (c) below. Upon receipt of the second scheduled payment, Seller will release the shipment for delivery to Customer. Seller will provide Customer a "record only" invoice after receipt of the second payment. Such invoice will reflect the amount due and payments received through the date of the invoice. If Seller is responsible for installation, the final payment will be invoiced upon Turnover or as soon thereafter as practical. For furnish only orders the third and final payments will be invoiced upon shipment or as soon as practical thereafter. In either case the payment is due for receipt by Seller within thirty (30) days of the date of the invoice. With respect to the payment for Products, Licensed Materials and Services specified in this General Agreement, in the event that Customer enters into a loan agreement with a third party lender to finance the procurement of the Products, Licensed Materials and Services, under this Agreement, the "Loan Agreement" between Customer and lender may authorize lender to pay proceeds directly to Seller. Seller agrees to accept payment from lender in satisfaction of Customer's payment obligation hereunder; however, that the Terms of Payment set forth in this Section shall be complied with in full. - ---------------------------------------------------------------------------------------------------------------------- Payment Milestone Schedule Percent of Total Amount of Purchase Order Due - ------------------------------------------------------------------------------ ---------------------------------------- To Accompany Purchase Order (Initial Payment) 15% - ---------------------------------------------------------------------------------------------------------------------- Prior to Shipment of Products (Second Payment) 40% - ---------------------------------------------------------------------------------------------------------------------- Due to Seller within thirty (30) days of Shipment of 30% Products (Third Payment) - ------------------------------------------------------------------------------ ---------------------------------------- Due to Seller within thirty (30) days of date of invoice 15% (Final Payment) - ---------------------------------------------------------------------------------------------------------------------- - 7 - (b) For Products, Licensed Materials and Services (including transportation charges and taxes, if applicable) that are not required to be paid in advance, Seller will invoice Customer, all amounts due for Products and Licensed Materials upon shipment and all amounts due for Services, upon completion of Services or, in either event, as soon as practical thereafter Customer shall pay such invoiced amounts for receipt by Lucent within thirty (30) days of the invoice date. Bill and Hold Products will be invoiced by Seller upon the earlier of (i) completion of assembly at Seller's facility or (ii) upon stocking at Customer's designated location. Such invoice will serve as Seller's notification that Bill and Hold Products are complete and ready to be released by Customer for final shipment. A sample invoice is provided in Exhibit 2 for informational purposes only. (c) Customer shall pay all amounts due Seller hereunder using Electronic Funds Transfer ("EFT") whether amounts have been invoiced by Seller or are due as advance payments. EFT payments by Customer shall be made to the following account of Seller or such other account as is subsequently designated by Seller in writing and, concurrent with the EFT payment, Customer shall fax a copy of the remittal to Seller's Manager Cash Operations at 770-750-4288. Chase Manhattan Bank New York, New York Account Name: Lucent Technologies Inc. ACCT. 910144-9099 ABA 021000021 (d) If Customer fails to pay any invoiced amount when due, the invoiced amount will be subject to a late payment charge at the rate of one and one half percent (1-1/2%) per month, or portion thereof, of the amount due (but not to exceed the maximum lawful rate). Customer agrees to pay Sellers attorneys fees and other costs incurred by Seller in the collection of any amounts invoicedhereunder. (e) Customer agrees to review all invoices furnished by Seller hereunder upon receipt and, notify Seller of any billing discrepancies within ten (10) days of receipt of the applicable invoice. Such inquiries can be directed to Seller in writing or by telephone. Inquiries shall be made to the telephone number or, if in writing, to the address identified on the invoice. 1.10 PURCHASE MONEY SECURITY INTEREST: (a) Seller reserves and Customer agrees that Seller shall have a purchase money security interest in all Products and Licensed Materials heretofore supplied or hereafter supplied to Customer by Seller under this Agreement until any and all payments and charges due Seller under this Agreement including, without limitation, shipping and installation charges, are paid in full. Seller shall have the right, at any time during the Term and without notice to Customer, to file in any state or local jurisdiction such financing statements (e.g., UCC-1 financing statements) as Seller deems necessary to perfect its purchase money security interest hereunder. Upon request by Seller, Customer hereby agrees to execute all documents necessary to secure Sellers purchase money security interest including without limitation, UCC-1 or such other documents Seller deems reasonably necessary. Notwithstanding the foregoing obligation of - 8 - Customer to execute, Customer hereby irrevocably appoints Seller as its attorney-in-fact for purposes of executing and filing such financing statements and such other documents prepared by Seller or its designated agent for purposes of perfecting Sellers security interest hereunder. Customer also agrees that this Agreement may be filed by Seller in any state or local jurisdiction as a financing statement (or as other evidence of the Seller's purchase money security interest). (b) In addition to any other remedy available to Seller as provided herein, by common law and by statute, Seller may exercise its right to reclaim all Products and Licensed Materials sold to Customer pursuant to UCC-702 or such other applicable provision as it may exist from state to state, upon discovery of Customers insolvency, provided Seller demands in writing reclamation of such goods before ten (10) days after receipt of such goods by Customer, or if such ten (10) day period expires after the commencement of a bankruptcy case, before twenty (20) days after receipt of such goods by the Customer. 1.11 TAXES: Customer shall be liable for all taxes and related charges, however designated, imposed upon or based upon the provision, sale, license or Use of Products, Licensed Materials or Services levied upon the sale, excluding taxes on Seller's net income, unless Customer provides Seller with a valid tax exempt certificate. Seller's failure to collect taxes in accordance herewith shall not be deemed to be an authorization to resell Products or Services or sublicense Licensed Materials. 1.12 TRANSPORTATION AND PACKING: Seller, in accordance with its normal practices, shall arrange for prepaid transportation to destinations in. the contiguous United States and shall invoice transportation charges to Customer. Premium transportation will be used only at Customer's request. Seller shall pack Products for delivery in the contiguous United States, in accordance with its standard practices for domestic shipments. Where, in order to meet Customer's requests, Seller packs Products in other than its normal manner or for destinations outside the contiguous United States, Customer shall pay the additional charges for such packing andtransportation. 1.13 TITLE AND RISK OF LOSS: Title to Products only and risk of loss to Products and Licensed Materials shall pass to Customer upon delivery to the Customer. Title to all Licensed Materials (whether or not part of Firmware) furnished by Seller, and all copies thereof made by Customer, including translations, compilations and partial copies are, and shall remain, the property of Seller. Title to Products only and risk of loss for Products and Licensed Material for Bill and Hold Products shall pass to Customer upon stocking at Seller's facility or Customers designated location, whichever occurs earlier. Customer shall notify Seller promptly of any claim with respect to loss which occurs while Seller has the risk of loss and shall cooperate in every reasonable way to facilitate the settlement of any claim. For purposes of this section, "delivery" shall mean the point at which Seller or Seller's supplier or agent turns over possession of the Product or Licensed Materials to Customer, Customer's employee, Customer's designated carrier, Customer's warehouse, or other Customers agent and not necessarily the final destination shown on the order. - 9 - 1.14 WARRANTY: (a) Seller warrants to Customer only, that during the applicable Warranty Periods set forth below (i) Sellers manufactured Products (exclusive of Software) will be free from defects in material and workmanship and will conform to Seller's Specifications for such Products; (ii) Software developed by Seller will be free from those defects which materially affect performance in accordance with Sellers Specifications; and (iii) Services will be performed in a workmanlike manner and in accordance with good usage and accepted practices in the community in which Services are provided. With respect to Products or Software or partial assembly of Products furnished by Seller but neither manufactured by Seller nor purchased by Seller pursuant to its procurement Specifications ("Vendor Items"), Seller, to the extent permitted, does hereby assign to Customer the warranties given to Seller by its vendor(s) of such Vendor Items. (b) For purposes of this Agreement the term "Warranty Period" means the period of time listed below which, unless otherwise stated, commences on date of shipment or, if installed by Seller the earliest of either: (i) acceptance by Customer; or (ii) thirty (30) days from the date Seller submits its notice of completion of its installation; or (iii) the date Customer first Outs Products and/or Licensed Materials into service. For Bill and Hold Products the warranty will commence upon the date of stocking at Sellers facility or Customer's designated location. The Warranty Period for any Product or Software (or part thereof) repaired or replaced under this Section 1.14 is the period listed in the right column below or the unexpired portion of the new Product Warranty Period, whichever is longer. - ---------------------------------------------------------------------------------------------------------------------- SELLERS MANUFACTURED PRODUCTS AND SOFTWARE WARRANTY PERIOD - ------------------------------------------------------------------------------ ---------------------------------------- Base Period New Product Repaired Product or Part - ------------------------------------------------------------------------------ ---------------------------------------- Switching Systems Products 24 Months 6 Months - ---------------------------------------------------------------------------------------------------------------------- Central Office Power Equipment: - ---------------------------------------------------------------------------------------------------------------------- Associated with Switching Systems 24 Months 6 Months - ---------------------------------------------------------------------------------------------------------------------- Not Associated with Switching Systems 12 Months 6 Months - ---------------------------------------------------------------------------------------------------------------------- Transmission Systems Products: - ---------------------------------------------------------------------------------------------------------------------- DACS-IV 2000 60 Months 6 Months - ---------------------------------------------------------------------------------------------------------------------- FT-2000 OC-48 60 Months 6 Months - ---------------------------------------------------------------------------------------------------------------------- DDM-2000 OC-3/OC-12 60 Months 6 Months - ---------------------------------------------------------------------------------------------------------------------- DDM-2000 FIBER REACH 60 Months 6 Months - ---------------------------------------------------------------------------------------------------------------------- SLC 2000 Access System 60 Months 6 Months - ---------------------------------------------------------------------------------------------------------------------- SLC 2000 MSDT 60 Months 6 Months - ---------------------------------------------------------------------------------------------------------------------- SLC Series 5 (System and Plug In) 60 Months 6 Months - ---------------------------------------------------------------------------------------------------------------------- Other Transmission Products (i.e., DDM Plus Repeater 24 Months 6 MonthsCases) - ------------------------------------------------------------------------------ ---------------------------------------- Network Cable Systems Products 12 Months 3 Months - ---------------------------------------------------------------------------------------------------------------------- All Other Products 2 Months 2 Months - ----------------------------------------------------------------------------------------------------------------------Software: - ---------------------------------------------------------------------------------------------------------------------- - 10 - - ---------------------------------------------------------------------------------------------------------------------- Switching System Software 12 Months 6 Months - ---------------------------------------------------------------------------------------------------------------------- Transmission Systems Software 12 Months 6 Months - ---------------------------------------------------------------------------------------------------------------------- Operations Systems Software 3 Months 1 Month - ---------------------------------------------------------------------------------------------------------------------- All Other Software 3 Months 1 Month - ---------------------------------------------------------------------------------------------------------------------- (c) If, under normal and proper use, a defect or non-conformity appears in Sellers manufactured Products or Software during the applicable Warranty Period and Customer promptly notifies Seller in writing of such defect or non-conformance and follows Seller's instructions regarding return of defective or non-conforming Product or Software, Seller, at its option, will either repair, replace or correct the same without charge at its manufacturing or repair facility or provide a refund or credit based on the original purchase price or license fee. If engineering or installation Services prove not to be performed as warranted within a six (6) month period commencing on the date of completion of the Services, Seller, at its option, either will correct the defect or non-conforming Services or render a full or pro-rated refund or credit based on the original charges for the Services. No Product or Software will be accepted for repair or replacement without the written authorization of and in accordance with instructions of Seller. Removal and reinstallation expenses as well as transportation expenses associated with returning such Product or Software to Seller shall be borne by Customer. Seller shall pay the costs of transportation of the repaired or replacing Product or Software to any United States destination designated by Customer. If Seller determines that returned Product or Software is not defective, Customer shall pay Sellers costs of handling, inspecting, testing and transportation and, if applicable travel and related expenses. In repairing or replacing any Product, part of Product, or Software medium under this warranty, Seller may use either new, remanufactured, reconditioned, refurbished or functionally equivalent Products or parts. Replaced Products or parts shall become Seller's property. (d) With respect to Seller's manufactured Products which Seller has ascertained are not readily returnable for repair, Seller, at its option, with concurrence from Customer, may elect to repair or replace the Products at Customer's site. Customer's concurrence shall not be unreasonably withheld. If a visit to Customer's site is necessary, reasonable prior notification will be given when access is required. Customer, at its expense, shall make the Products accessible for repair or replacement and shall restore the site after Seller has completed its repairs or replacement. (e) Seller makes no warranty with respect to defective conditions or non-conformities resulting from any of the following: Customers modifications, misuse, neglect, accident or abuse; improper wiring, repairing, splicing, alteration, installation, storage or maintenance; use in a manner not in accordance with Sellers or its vendor's Specifications, or operating instructions or failure of Customer to apply previously applicable Seller's modifications or corrections. In addition, Seller makes no warranty with respect to Products which have had their serial numbers or month and year of manufacture removed, altered and with respect to expendable items, including, without limitation, fuses, light bulbs, motor brushes and the like. No warranty is made that Software will run uninterrupted or error free, and in addition Seller makes no warranty with respect to defects related to Customer's data base errors. (f) THE FOREGOING WARRANTIES ARE EXCLUSIVE AND ARE IN LIEU OF ALL OTHER EXPRESS AND IMPLIED WARRANTIES, INCLUDING BUT NOT LIMITED - 11 - TO WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. CUSTOMER'S SOLE AND EXCLUSIVE REMEDY SHALL BE SELLER'S OBLIGATION TO REPAIR, REPLACE, CREDIT, OR REFUND AS SET FORTH ABOVE IN THIS WARRANTY. 1.15 INFRINGEMENT: (a) In the event of any claim, action, proceeding or suit by a third party against Customer alleging an infringement of any United States patent, United States copyright, or United States trademark, or a violation in the United States of any trade secret or proprietary rights by reason of the use, in accordance with Sellers Specifications, of any Product or Licensed Materials furnished by Seller to Customer under this Agreement, Seller, at its expense, will defend Customer, subject to the conditions and exceptions stated below. Seller will reimburse Customer for any cost, expense or attorneys' fees, incurred at Seller's written request or authorization, and will indemnify Customer against any liability assessed against Customer by final judgment on account of such infringement or violation arising out of such use. (b) If Customer's use shall be enjoined or in Seller's opinion is likely to be enjoined, Seller will, at its expense and at its option, either (1) replace the enjoined Product or Licensed Materials furnished pursuant to this Agreement with a suitable substitute free of any infringement; (2) modify it so that it will be free of the infringement; or (3) procure for Customer a license or other right to use it. If none of the foregoing options are practical, Seller will remove the enjoined Product or Licensed Materials and refund to Customer any amounts paid to Seller therefor less a reasonable charge for any actual period of use by Customer. (c) Customer shall give Seller prompt written notice of all such claims, actions, proceedings or suits alleging infringement or violation and Seller shall have full and complete authority to assume the sole defense thereof, including appeals, and to settle same. Customer shall, upon Seller's request and at Sellers expense, furnish all information and assistance available to Customer and cooperate in every reasonable way to facilitate the defense and/or settlement of any such claim, action, proceeding or suit. (d) No undertaking of Seller under this section shall extend to any such alleged infringement or violation to the extent that it: (1) arises from adherence to design modifications, specifications, drawings, or written instructions which Seller is directed by Customer to follow, but only if such alleged infringement or violation does not reside in corresponding commercial Product or Licensed Materials of Seller's design or selection; or (2) arises from adherence to instructions to apply Customers trademark, trade name or other company identification; or (3) resides in a product or licensed materials which are not of Seller's origin and which are furnished by Customer to Seller for use under this Agreement; or (4) relates to uses of Product or Licensed Materials provided by Seller in combinations with other Product or Licensed Materials, furnished either by Seller or others, which combination was not installed, recommended or otherwise approved by Seller. In the foregoing cases numbered (1) through (4), Customer will defend and save Seller harmless, subject to the same terms and conditions and exceptions stated above, with respect to the Seller's rights and obligations under this section. - 12 - (e) The liability of Seller and Customer with respect to any and all claims, actions, proceedings or suits by third parties alleging infringement of patents, trademarks or copyrights or violation of trade secrets or proprietary rights because of, or in connection with, any Products or Licensed Materials furnished pursuant to this Agreement shall be limited to the specific undertakings contained in this section. 1.16 CUSTOMER'S REMEDIES: (a) CUSTOMER'S EXCLUSIVE REMEDIES AND THE ENTIRE LIABILITY OF SELLER, ITS AFFILIATES AND THEIR EMPLOYEES, AND AGENTS, AND ITS SUPPLIERS FOR ANY CLAIM, LOSS, DAMAGE, OR EXPENSE OF CUSTOMER OR ANY OTHER ENTITY ARISING OUT OF THIS AGREEMENT, OR THE USE OR PERFORMANCE OF ANY PRODUCT, LICENSED MATERIALS, OR SERVICES, WHETHER IN AN ACTION FOR OR ARISING OUT OF BREACH OF CONTRACT, TORT, INCLUDING NEGLIGENCE, INDEMNITY, OR STRICT LIABILITY, SHALL BE AS FOLLOWS: 1) FOR INFRINGEMENT - THE REMEDY SET FORTH IN THE "INFRINGEMENT' SECTION; 2) FOR THE NON-PERFORMANCE OF PRODUCTS, SOFTWARE, AND SERVICES DURING THE WARRANTY PERIOD - THE REMEDY SET FORTH IN THE APPLICABLE WARRANTY SECTION; 3) FOR TANGIBLE PROPERTY DAMAGE AND PERSONAL INJURY CAUSED BY SELLER'S NEGLIGENCE - THE AMOUNT OF THE PROVEN DIRECT DAMAGES; 4) FOR EVERYTHING OTHER THAN AS SET FORTH ABOVE - THE AMOUNT OF THE PROVEN DIRECT DAMAGES NOT TO EXCEED $100,000 PER OCCURRENCE INCLUDING AWARDED COUNSEL FEES AND COSTS. (b) NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, SELLER, ITS AFFILIATES AND THEIR EMPLOYEES, AND AGENTS, AND ITS SUPPLIERS SHALL NOT BE LIABLE FOR ANY INCIDENTAL, INDIRECT, OR CONSEQUENTIAL DAMAGES OR LOST PROFITS, REVENUES OR SAVINGS ARISING OUT OF THIS AGREEMENT, OR THE USE OR PERFORMANCE OF ANY PRODUCT, LICENSED MATERIALS, OR SERVICES, WHETHER IN AN ACTION FOR OR ARISING OUT OF BREACH OF CONTRACT, TORT, INCLUDING NEGLIGENCE, OR STRICT LIABILITY. THIS SECTION 1.16(B), SHALL SURVIVE FAILURE OF AN EXCLUSIVE OR LIMITED REMEDY. (c) CUSTOMER SHALL GIVE SELLER PROMPT WRITTEN NOTICE OF ANY CLAIM. ANY ACTION OR PROCEEDING AGAINST SELLER MUST BE BROUGHT WITHIN TWENTY-FOUR (24) MONTHS AFTER THE CAUSE OF ACTION ACCRUES. - 13 - 1.17 INSURANCE: Both parties shall maintain during the term of this Agreement the following insurance coverage as well as other insurance required by law in the jurisdictions where the work is performed: (1) Workers' Compensation and related insurance as required by law; (2) employers liability insurance with a limit of at least five hundred thousand ($500,000) dollars for each occurrence; (3) Commercial General Liability (CGL) insurance with a limit of at least one million dollars ($1,000,000) dollars per occurrence; and (4) automobile liability insurance with a limit of at least one million ($1,000,000) dollars for bodily injury, including death, to any one person. Each party shall furnish prior to the start of work, if requested by the other, certificates of the insurance required by this clause. Each party shall notify the other in writing at least thirty (30) days prior to cancellation of or any material change in the policy. Notwithstanding the above, Seller shall have the option where permitted by law to self-retain any or all of the foregoing risks. 1.18 USE OF INFORMATION: All technical and business information in whatever form recorded which bears a legend or notice restricting its use, copying, or dissemination or, if not in tangible form, is described as being proprietary or confidential at the time of disclosure and is subsequently summarized in a writing so marked and delivered to the receiving party within thirty (30) days of disclosure to the receiving party (all hereinafter designated "Information") shall remain the property of the furnishing party. The furnishing party grants the receiving party the right to use such Information only for purposes expressly permitted in this section. Such Information (1) shall not be reproduced or copied, in whole or part, except for use as authorized in this Agreement; and (2) shall, together with any full or partial copies thereof, be returned or destroyed when no longer needed. Moreover, when Seller is the receiving party, Seller shall use such Information only for the purpose of performing under this Agreement, and when Customer is the receiving party, Customer shall use such Information only (1) to order; (2) to evaluate Sellers Products, Licensed Materials and Services; or (3) to install, operate and maintain the particular Products and Licensed Materials for which it was originally furnished. Unless the furnishing party consents in writing, such Information, except for that part, if any, which is known to the receiving party free of any confidential obligation, or which becomes generally known to the public through acts not attributable to the receiving party, shall be held in confidence by the receiving party. The receiving party may disclose such Information to other persons, upon the furnishing party's prior written authorization, but solely to perform acts which this section expressly authorizes the receiving party to perform itself and further provided such other person agrees in writing (a copy of which writing will be provided to the furnishing party at its request) to the same conditions respecting use of Information contained in this section and to any other reasonable conditions requested by the furnishing party. 1.19 DOCUMENTATION: Seller shall furnish to Customer, at no additional charge, one (1) copy of the documentation for Products and/or one (1) copy of the Related Documentation for Software licensed to Customer. Such documentation shall be that which is customarily provided by Seller to its Customers at no additional charge. Such documentation shall be sufficient to enable - 14 - Customer to operate and maintain such Products and Software in accordance with Seller's Specifications. Such documentation shall be provided either prior to, included with, or shortly after shipment of Products and/or Software from Seller to Customer. Additional copies of such documentation are available at prices set forth in Seller's Customer Price Lists. 1.20 NOTICES: (a) Any notice, demand or other communication (other than an order) required, or which may be given, under this Agreement shall, unless specifically otherwise provided in this Agreement, be in writing and shall be given or made by nationally recognized overnight courier service, confirmed facsimile, or certified mail, return receipt requested and shall be addressed to the respective parties as follows: If to Seller: Lucent Technologies Inc. Global Commercial Markets 5440 Millstream Road, E2N32 I-85 & Mt. Hope Church Road McLeansville, North Carolina 27301 Attn: Contract Manager If to Customer: Choice One Communication Inc. 333 West Commercial St., Suite 2500 East Rochester, NY 14445 Attn: Kevin Dickens, SVP Engineering and Operations (b) Any such notice shall be effective upon receipt. Each party may change its designated representative who is to receive communications and notices and/or the applicable address for such communications and notices by giving notice thereof to the other party provided herein. 1.21 FORCE MAJEURE: Except for payment obligations, neither party shall be held responsible for any delay or failure in performance to the extent that such delay or failure is caused by fires, strikes, embargoes, explosions, earthquakes, floods, wars, water, the elements, labor disputes, government requirements, civil or military authorities, acts of God or by the public enemy, inability to secure raw materials or transportation facilities, acts or omissions of carriers or suppliers, or other causes beyond its control whether or not similar to theforegoing. 1.22 ASSIGNMENT: Except as provided in this section, neither party shall assign this Agreement or any right or interest under this Agreement, nor delegate any work or obligation to be performed under this Agreement, (an "assignment') without the other party's prior written consent. Any attempted - 15 - assignment in contravention of this shall be void and ineffective. Nothing shall preclude a party from employing a subcontractor in carrying out its obligations under this Agreement. A party's use of such subcontractor shall not release the party from its obligations under this Agreement. Notwithstanding the foregoing, Seller has the right to assign this Agreement and to assign its rights and delegate its duties under this Agreement, in whole or in part, at any time and without Customer's consent, to any present or future subsidiary or "Affiliate" of Seller or to any combination of the foregoing. Such assignment or delegation shall release Seller from any further obligation or liability thereon. Seller shall give Customer prompt written notice of the assignment. For the purposes of this section, the term "Agreement" includes this Agreement, any subordinate agreement placed under this Agreement and any order placed under this Agreement or subordinated agreement. 1.23 TERMINATION OF AGREEMENT FOR BREACH: In the event either party is in material breach or default of the terms of this Agreement and such breach or default continues for a period of ten (10) days with respect to payment obligations or thirty (30) days with respect to any other obligations after the receipt of written notice from the other party, then the party not in breach or default shall have the right to terminate this Agreement without any charge, obligation or liability except for Products or Licensed Materials already delivered and Services already performed. The party not in breach or default shall provide full cooperation to the other party in every reasonable way to facilitate the, remedy of the breach or default hereunder within the applicable cure period. Notwithstanding the foregoing, if the nature of the material breach or default is such that it is not a payment obligation and it is incapable of cure within the foregoing thirty (30) day period, then the thirty (30) day cure period may be extended for a reasonable period of time (in no event to exceed an additional thirty (30) days), provided that the party in breach or default is proceeding diligently and in good faith to effectuate a cure. 1.24 ARBITRATION: If a dispute arises out of or relates to this Agreement, or its breach, the parties agree to escalate such dispute to their respective senior executives for good faith negotiations seeking a mutually agreeable resolution. This demand for escalation shall be in writing and notice shall be served in accordance with the notice provision of this Agreement. If the dispute is not resolved through such escalation within fifteen (15) days after the date of escalation, either party shall have the right to submit the dispute to a sole mediator selected by the parties or, at any time at the option of a party, to mediation by the American Arbitration Association (AAN). If not thus resolved, it shall be referred to a sole arbitrator selected by the parties within thirty (30) days of the mediation or, in the absence of such selection, to AAA arbitration which shall be governed by the United States Arbitration Act, and judgment on the award may be entered in any court having jurisdiction. The arbitrator may determine issues of arbitrability, but may not award punitive damages or limit, expand or otherwise modify the terms of this Agreement. The parties, their representatives, other participants and the mediator and arbitrator shall hold the existence, content and result of mediation and arbitration in confidence, except as such disclosure may be necessary for the purpose of recording or otherwise acting upon the arbitrator's award. - 16 - 1.25 NON-SOLICITATION: During the term of this Agreement and for a period of one (1) year from the termination of this Agreement or a Statement of Work, the parties agree not to employ, make an offer of employment to, or enter into a consulting relationship with any employee, subcontractors or consultant of the other party who is directly involved with the delivery of Services under this Agreement, except upon the prior written consent of the affected party. 1.26 INDEPENDENT CONTRACTOR: All work performed by either party under this Agreement shall, be performed as an independent contractor and not as an agent of the other, and no persons furnished by the performing party shall be considered the employees or agents of the other. 1.27 RELEASES VOID: Neither party shall require releases or waivers of any personal rights from representatives or employees of the other in connection with visits to its premises, nor shall such parties plead such releases or waivers in any action orproceeding. 1.28 PUBLICITY: Neither party shall issue or release for publication any articles, advertising, or publicity material relating to Products, Licensed Materials, or Services under this Agreement or mentioning or implying the name, trademarks, logos, trade name, service mark or other company identification of the other party or any of its Affiliates or any of its personnel without the prior written consent of the other party. 1.29 CONFIDENTIALITY OF AGREEMENT: Notwithstanding the obligations contained in Section 1.17 (Use of Information) of this Agreement the parties shall keep all provisions of this Agreement and any order submitted hereunder (including, without limitation, prices and pricing related information) confidential except as reasonably necessary for performance by the parties hereunder and except to the extent disclosure may be required by applicable laws or regulations, in which latter case, the party required to make such disclosure shall promptly inform the other prior to such disclosure in sufficient time to enable such other party to make known any objections it may have to such disclosure. The disclosing party shall take all reasonable steps and exercise all reasonable efforts directed by Seller to secure a protective order, seek confidential treatment, or otherwise assure that this Agreement and/or any order will be withheld from the public record. 1.30 AMENDMENTS: Any supplement, modification or waiver of any provision of this Agreement must be in writing and signed by authorized representatives of bothparties. - 17 - 1.31 SEVERABILITY: If any portion of this Agreement is found to be invalid or unenforceable, the parties agree that the remaining portions shall remain in effect. The parties further agree that in the event such invalid or unenforceable portion is an essential part of this Agreement, they will immediately begin negotiations for a replacement. 1.32 WAIVER: If either party fails to enforce any right or remedy available under this Agreement, that failure shall not be construed as a waiver of any right or remedy with respect to any other breach or failure by the other party. 1.33 SURVIVAL: The fights and obligations of the parties which by their nature would continue beyond the termination, cancellation, or expiration of this Agreement, shall survive such termination, cancellation or expiration. 1.34 SECTION HEADINGS: The section headings in this Agreement are inserted for convenience only and are not intended to affect the meaning or interpretation of this Agreement. 1.35 CHOICE OF LAW: The construction and interpretation of, and the rights and obligations of the parties pursuant to this Agreement, shall be governed by the laws of the State of New York without regard to its conflict of laws. provision. 1.36 AMBIGUITIES: The parties represent that they are sophisticated businesses with access to their own legal, financial and business advisors and that each party has had the opportunity to consult with advisors of their own choosing before entering into this Agreement. The parties therefore acknowledge and agree that the rule of law that ambiguities are construed against the drafter shall not apply to the interpretation of this Agreement. ARTICLE II PROVISIONS APPLICABLE TO LICENSED MATERIALS 2.1 LICENSE FOR LICENSED MATERIALS: (a) Upon delivery of Licensed Materials pursuant to this Agreement, Seller grants to Customer a personal, nontransferable, and nonexclusive license to Use Licensed Materials on a Designated Processor in the United States for its own business operations. No license is granted - 18 - to Customer to Use the Licensed. Materials outside the United States or to sublicense such Licensed Materials furnished by Seller. Customer shall not reverse engineer, decompile or disassemble Software furnished as, object code to generate corresponding Source Code. Unless otherwise agreed in writing by Seller, Customer, shall

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