PURCHASE ORDER Exhibit
10.6
From Cornes & Co. Ltd., Tokyo
DATE: 8 July 1998
Page: 1 of 1
Our Fax: 03-5821-1632
To: TSI TelSys Inc.
Attn: Mr. Chuck Kozlowski, Director, Sales
Cc: Mr. Kent Koji Matsumoto
From: Norio Ogita, Manager, Business Administration
Subject: Booking
(Destination: Tokyo)
Please book following Products under Order No. ZLS-2163/97B
(AMEND)
DRTS Program
for Tsukuba Primary Station
Model No. Description Qty Order
Amount
Low Rate System BBE #1A
* *
Software for Low Rate System
BBE #1A * *
High-rate BBE #1
* *
High-Rate BBE #2
* *
Mission BBE 0 OPR
* *
Software of Mission BBE-OPR
Peripheral Equipment *
System design support * *
Request for Total
Shipping Customer: Price
30- April NEC- Yokohama US$1,088,800
2000
* Confidential portions omitted and filed separately with the
Commission.
Appendix
A. Program: DRTS
B. Our Ref: TSI's Quote #1297009-02 (dated 17/Dec/97)
DRTS Delivery/Payment Schedule chart issued by TSI (dated
16/Apr/98)
C. Payment terms:
#1) 10% of the total amount - US$108,880
-- After TSI's acknowledgement of this purchase order (Net
30) Completed
-- Note:: The payment was completed in Feb/98 under our PO
#ZLS-2163/97A.
#2) 10% of the total amount - US$108,880
-- After TSI's acknowledgment of this purchase order (Net 30)
Completed
-- Note: The payment was completed in Feb/98 under our PO
#ZLS 2163/97A.
#3) 6.5% of the total amount - US$71,040
-- After completion of design plus drawing package,
-1) 75% of US$71,040 (US$53,280), payable in Jun/98 (net 30)
-2) 25% of US$71,040 (US$17,760), payable in Jul/98 (net 30)
#4) 55.1% of the total amount - US$600,000
-- After completion of FAT at TSI (Immediate)
#5) 18.4% of the total amount - US$200,000
-- After NEC's witness at NEC (Net 30)
D. The shipping request should read as "FAT at TSI to be completed
then the
system to be shipped from TSI by 30/Apr/2000 after NEC's
approval of the
shipment".
E. THE #4 AND #5 PAYMENTS SHALL BE MADE IN ACCORDANCE WITH AN
ACTUAL SCHEDULE.
BEST REGARDS,
Norio Ogita
MANAGER
Business Administration
CORNES & CO. LTD., TOKYO
(Sales Engineer in Charge: M. Sakuraba)
December 17, 1997
Mr. Masaki Sakuraba
Cornes & Co. Ltd.,
Ryukakusan Bldg., 5F., 2-5-12
Higashi Kanda, Chiyoda-ku,
Tokyo, 101 Japan
Subject: DRTS Program- Revised Firm Fixed Price Proposal
Reference: NEC/Cornes and TSI TelSys Negotiation dated December
16, 1997
Dear Sakuraba-San:
TSI TelSys Inc. is pleased to provide our revised firm fixed price
proposal for
the DRTS Program Base-Band Equipment which incorporates the
results of the
reference negotiation. A negotiation overview sheet is attached
for your
convenience and provides a review of the pricing, delivery,
technical and
contractual elements of this proposal.
This quote shall remain valid from the above date to December 25,
1997. The
information contained in this proposal is considered proprietary
to TSI TelSys
and must be kept confidential in accordance with our non-
disclosure agreement.
Please extend our thanks and congratulations to the Cornes &
Company team, who
have contributed a great deal to the success of this DRTS
proposal/negotiation
process. We sincerely look forward to continuing this success
with Cornes on
the many opportunities ahead of us in Japan.
Should you have any technical questions regarding this proposal,
please contact
Mr. Jeff Shi at (410) 872-3955. Any contractual questions may be
addressed to
Mr. Edward J. O'Malley at (410) 872-3943.
Sincerely,
TSI TelSys Inc.
James R. Chesney
President
Enclosures
Attachment A - DRTS Negotiation Overview
December 17, 1997
I. Pricing -The pricing negotiated is based upon the
VME/VIPstation
configurations attached herewith.
II. Delivery - The following delivery schedules were agreed
upon*:
a) Tsukuba Primary Station - Nov. 30, 1998
b) Tsukuba Secondary Station (Low Rate) - Oct. 30,1998
c) Tsukuba Secondary Station (High Rate) - Apr. 30, 2000
d) Hatoyama (EOC) Station - June 30, 1998
e) Redu (ESA) Station - Sept. 30, 1998
The NRE effort described on the attached sheet "NEC DRTS
Custom
Engineering Work" dated December 17, 1997, shall be performed
in parallel
with the delivery of the Hatoyama (EOC) Station (40% of the
engineering
effort will be linked to this effort), Redu Station (40% of
the
engineering effort will be linked to this effort), Tsukuba
Primary Station
(10% linked to this effort), and Tsukuba Secondary Station
Low Rate System
(10% linked to this effort).
* These delivery commitments are based upon contract award
and acceptance
by TSI TelSys by December 25, 1997, unless otherwise agreed
to in writing.
I. Technical Baseline - Our technical basis is the NEC Technical
Specification "BBE Requirement (CCSDS-N-001)" received on
November 21,
1997, as revised by the negotiation minutes dated December
16, 1997.
Based upon this specification and subsequent negotiation, we
have provided
configuration descriptions/diagrams, and an NRE list for the
DRTS program
which identifies what customization is included in this
proposal. TSI
TelSys substantially meets the technical requirements found
in the
specification noted above, however, TSI TelSys takes
exception to and/or
requires clarification to a few requirements and these are
noted on the
NRE list.
II. Terms and Conditions - The terms and conditions negotiated
with Cornes and
documented in Revision 5 dated December 2, 1997, will apply
to this order
with the exception of payment terms. Payment terms are under
consideration by NEC/Cornes at this time. TSI TelSys proposed
a 20%
payment at the time of contract acceptance (Net 30), 60% at
Factory
Acceptance Test (Net 0), and 20% at the time of NEC
Acceptance (Net 30).
We anticipate closure on this issue prior to December 25,
1997. Payment
of the NRE is proposed to be on the same percentage basis as
a deliverable
and will be linked to the Hatoyama Station (40%), Redu
Station (40%),
Tsukuba Primary Station (10%), and Tsukuba Secondary Station
Low Rate
System (10%).
November 12, 1997
Mr. Norio Ogita
Manager, Business Administration
Cornes & Co. Ltd.
Ryukakusan Bldg., 5F, 2-5-12
Higashi Kanda, Chiyoda-ku
Tokyo 101
JAPAN
Subject: CORNES - TSI TELSYS INTERNATIONAL SALES REPRESENTATIVE
AGREEMENT
Dear Mr. Ogita:
TSI TelSys is pleased to offer two originals of the final
version of the
International Sales Representative Agreement between Cornes &
Co. and TSI
TelSys for Cornes's review and signature. The entire
agreement between the
parties consists of the following documents:
<circle> TSI TelSys Inc. International Sales Representative
Agreement,
including Exhibits A - D.
<circle> TSI TelSys letter dated September 16, 1997, detailing
the Standard
Payment Terms for Cornes purchase orders.
<circle> Cornes facsimile message dated October 7, 1997,
acknowledging and
agreeing to the payment terms and suggesting minor revisions.
<circle> TSI TelSys letter dated November 4, 1997, agreeing to
the revisions
and confirming the parties' agreement that the payment terms
outlined in the
September 16 letter control any conflicting terms in
Exhibit B to the
International Sales Representative Agreement.
Please note that your requested change to Section 5 of the
Agreement has been
modified. We believe this modification is consistent with
the intent and
spirit of your request.
If these documents meet with Cornes's approval, we ask that you
sign and date
the Agreement on page 11 and initial and date the first page
of each of the
other three documents to confirm Cornes's acceptance. If you
would return all
the documents with Cornes's signatures to us, we will execute
the original
documents and return one set of original documents to you for your
records.
Thank you for your continued confidence in TSI TelSys. We look
forward to a
growing, mutually beneficial relationship with Cornes.
Sincerely,
TSI TelSys Inc.
Edward J. O'Malley, Jr.
Director, Contracts and Procurement
Attachments: International Sales Representative Agreement
September 16, 1997 Standard Payment Terms
October 7, 1997 Cornes Agreement to Standard Payment
Terms
November 4, 1997 Confirmation of Standard Payment Terms
cc: Kent Koji Matsumoto, Counsel (w/attachments)
TSI TelSys Terms - Cornes - Rev 5 - 12/2/97
Exhibit B
TSI TELSYS INC.
INTERNATIONAL TERMS AND CONDITIONS OF SALE
1. PRICES
TSI TelSys prices are exclusive of taxes, shipping, and insurance.
2. QUOTATIONS
Unless otherwise indicated therein, TSI TelSys quotations shall be
valid for
thirty (30) days from date of issuance.
3. CONTRACTS/PURCHASE ORDERS
A contract will be formed only upon TSI TelSys' acceptance of
Customer's or
Representatives written purchase order or contract specifying the
model number,
options, and quantities of each product ordered, and the requested
shipping
dates, shipping destinations, and invoice point.
Customer's submission of a purchase order or contract in response
to any
quotation including these terms and conditions shall be deemed
acceptance of
these terms and conditions to the exclusion of any other terms or
conditions
appearing in such purchase order or contract unless otherwise
agreed to in
writing by TSI TelSys. TSI TelSys' acknowledgment of Customer's
order is
expressly made conditional upon Customer's assent to the terms
and conditions
detailed herein, which assent shall be presumed conclusively from
Customer's
failure to reasonably object in writing or from Customer's
acceptance of any or
all of the products ordered.
4. SCHEDULING OF SHIPMENTS
TSI TelSys will schedule shipments based on Customer's request and
TSI TelSys'
shipping capability at the time Customer's order is accepted.
Upon such
acceptance, TSI TelSys will issue an acknowledgment which will
indicate the
estimated shipping dates.
5. RESCHEDULING AND CANCELLATION
Customer may request that orders be rescheduled or canceled only
by written
request submitted to the TSI TelSys. All such requests shall be
subject to
acceptance by TSI TelSys in its sole discretion. Any request to
cancel shall
be subject to payment of cancellation charges as follows:
Cancellation Date Charge
Within 30 Days ARO* 30% of Order Amount
31-59 Days ARO 50% of Order Amount
60 Days + ARO Noncancellable
* After receipt of order
6. SOFTWARE LICENSES AND WARRANTY
Software products are furnished subject to a separate license
agreement which
includes a limited software warranty, a copy of which is attached.
7. SHIPPING AND DELIVERY
Delivery is FOB TSI TelSys, Columbia, Maryland, USA. TSI TelSys
shall arrange
for shipment to the attention of Cornes & Co. at the Tokyo, Japan
Airport or
other specified location. Cornes & Co. shall be responsible for
import
duties/requirements and the reimbursement of all shipping expenses
to TSI
TelSys.
TSI TelSys will not be held responsible for delays due to the
denial, revocation, suspension, or governmental delay in the
issuance of any
export license or authorization, the inability of Cornes to meet
its payment
obligations under this contract or for delays in delivery because
of causes
beyond its reasonable control (e.g, Acts of God - floods, fire,
etc.).
8. INSPECTION/ACCEPTANCE
TSI TelSys shall only tender for acceptance those items that
conform to its
technical specifications. If the product has been customized to
meet the
specific Customer requirements, the Customer may inspect or test
any supplies
or services that have been tendered for acceptance subject to
mutually
agreeable inspection acceptance test procedures. In the event that
inspection
and test is required, the customer must complete this process
within 15
calendar days.
9. INTELLECTUAL PROPERTY RIGHTS
TSI TelSys shall own all rights in patents, copyrights, computer
software,
data, trade secrets and other intellectual property rights related
to the
design and development of its commercial hardware systems and
software.
10. EXPORT RESTRICTIONS
Customer shall neither export, reexport, nor transfer, directly or
indirectly,
any product or technical data received hereunder, to any country
or user in
which such export, reexport or transfer is restricted by United
States or local
country law or regulations without first obtaining any required
governmental
license, authorization, certification, or approval.
If Customer resells or otherwise disposes of any product or
technical data
purchased hereunder, it shall comply with any export restrictions
applicable to
such transfer.
The Customer shall notify TSI TelSys prior to the export,
reexport, or transfer
of technical data or the product from its original destination.
The Customer
shall include name of the end user, end use and country
destination and the
documentation required by the U.S Export Administration in its
submission to
TSI TelSys.
TSI TelSys shall have no liability for delayed delivery or non-
delivery
resulting from denial, revocation, suspension, or governmental
delay in
issuance of any necessary export license or authorization.
11. TITLE, RISK OF LOSS, AND SECURITY INTEREST
Title and risk of loss for all hardware products shall pass to
Customer upon
tender of the products by TSI TelSys to the carrier. Title to
software
products and all copies thereof shall remain in TSI TelSys or
others from whom
TSI TelSys has obtained a licensing right. TSI TelSys reserves a
security
interest in each hardware product shipped until the entire amount
due therefore
has been paid.
12. TAXES
Any and all state and local sales, use, excise, privilege, and
similar taxes
imposed on TSI TelSys, or which TSI TelSys has a duty to collect
in connection
with the sale, delivery, or use of any product, will appear as
separate items
on the invoice, and will be paid by Customer. If sales to
Customer are exempt
from such taxes, Customer shall furnish to TSI TelSys a
certificate of
exemption.
13. PAYMENT
TSI TelSys shall submit an invoice to Cornes and Co. for all
payment
milestones. Cornes & Co. shall pay 25% of the contract value upon
contract
award. Upon receipt of satisfactory evidence of successful
factory acceptance
test (FAT) completion, Cornes & Co. will pay 65% of the contract
value.
Shipment of the product is contingent on receipt of this FAT
payment. Upon
delivery of the product and the receipt of valid shipping
documentation, Cornes
& Co. shall release the final payment of 10%.
All orders shall be paid by Cornes & Co. via wire transfer to TSI
TelSys'
specified account and be made in United States dollars. The
following bank
information is provided for this purpose:
Bank Information:
Nations Bank N.A.
10320 Little Patuxent Parkway, Suite 814
Acct. No. 20-0370-9508
Lois V. Warden, Vice President (410) 964-6634.
All orders shall be shipped F.O.B. TSI TelSys Plant, 7100 Columbia
Gateway Dr.,
Columbia, Maryland, USA. Should Customer become delinquent in
the payment of
any amount due hereunder, TSI TelSys, at its option and upon
notice to
Customer, may suspend performance under any outstanding order.
Customer agrees
to pay any third-party collection expenses, including attorney's
fees, that
may become necessary to affect collection of any unpaid amounts.
14. HARDWARE WARRANTY
Hardware products are furnished subject to a separate warranty
agreement, a
copy of which is attached. TELSYS SPECIFICALLY DISCLAIMS ANY AND
ALL IMPLIED
WARRANTIES, INCLUDING, WITHOUT LIMITATION, WARRANTIES OF
MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE. UNLESS MODIFIED IN WRITING AND
SIGNED BY THE
AUTHORIZED REPRESENTATIVES OF BOTH PARTIES, THIS WARRANTY IS
UNDERSTOOD TO BE
THE COMPLETE AND EXCLUSIVE WARRANTY BETWEEN THE PARTIES. NO
TELSYS SALES
REPRESENTATIVE, DEALER, RESELLER, AGENT OR EMPLOYEE IS AUTHORIZED
TO MAKE ANY
MODIFICATION, EXTENSION, OR ADDITION TO THIS WARRANTY UNLESS
OTHERWISE ALLOWED
BY THIS AGREEMENT
15. INFRINGEMENT
TSI TelSys, at its expense, will defend Customer against any
claim based on an
allegation that a product furnished hereunder infringes a patent
or copyright
of another in the United States, and TSI TelSys will pay any
resulting costs,
damages, and attorneys' fees finally awarded against Customer that
are
attributable to such claim, or will pay the part of any settlement
that is
attributable to such claim; provided, that: 1) Customer notifies
TSI TelSys
promptly in writing of the claim; 2) TSI TelSys is permitted to
control the
defense or settlement of the claim; and 3) Customer cooperates
reasonably in
such defense or settlement at TSI TelSys' expense.
In its defense of settlement of any such claim, TSI TelSys may:
1) procure for
Customer the right to continue using the product; 2) modify the
product so
that it becomes non-infringing; or 3) replace the product with an
equivalent
product not subject to such claim. If the use of any product
furnished
hereunder is enjoined and none of the preceding alternatives is
reasonably
available to TSI TelSys, TSI TelSys will provide Customer an
opportunity to
return the product and receive a refund of the purchase price
paid, less a
reasonable allowance for use.
TSI TelSys shall have no liability to Customer for claims of
infringement based
upon: 1) the use of any product in combination with any product
not supplied
by TSI TelSys or; 2) the use of any product designed,
manufactured, or modified
to the specifications of Customer.
The foregoing states the entire obligation and liability of TSI
TelSys with
respect to infringement and claims thereof.
16. LIMITATION OF LIABILITY
EXCEPT AS PROVIDED IN THE PRECEDING SECTION REGARDING
INFRINGEMENT, IN NO EVENT
SHALL TSI TELSYS OR ITS VENDORS BE LIABLE FOR ANY DIRECT,
INDIRECT, SPECIAL,
INCIDENTAL, OR CONSEQUENTIAL DAMAGES ARISING OUT OF CUSTOMER'S
PURCHASE OR USE
OF ANY PRODUCT, EVEN IF TSI TELSYS OR THE VENDOR HAS ADVANCE
NOTICE OF THE
POSSIBILITY OF SUCH DAMAGES.
17. WAIVER
The failure of either party to enforce at any time any provision
of these terms
and conditions shall not be construed to be a waiver of such
provision or the
right thereafter to enforce each and every provision. No waiver
by either
party, either express or implied, of any breach of any of these
terms and
conditions shall be construed as a waiver of any other breach of
such term or
condition.
18. ASSIGNMENT
Customer may not assign or otherwise transfer its rights or
obligations
hereunder without the prior written consent of TSI TelSys. No
attempt to
assign or transfer in violation of this provision shall be valid
or binding
upon TSI TelSys.
19. GOVERNING LAW
The rights of the parties hereunder shall be governed by the laws
of the State
of Maryland, USA.
20. NOTICES
All notices required or authorized by these terms and conditions
shall be
given in writing and shall be deemed effective upon receipt (this
includes
facsimile receipts). Notices to Customer shall be sent to the
address shown in
the Customer's order.
21. DISPUTES
Any disputes arising under this contract shall be settled by
compulsory,
binding arbitration between the parties hereto in accordance with
the
commercial arbitration rules of the State of Maryland, USA. If
the parties
cannot agree upon an arbitrator within thirty (30) days after
demand by either
of them, either or both parties may request the State of Maryland
to name a
panel of five (5) arbitrators. TSI TelSys shall strike the names
of two (2) on
this list, the Representative shall then strike two (2) names, and
the
remaining name shall be the arbitrator. Any reviews of the
Arbitrator's
decision shall be made in accordance with the Maryland Uniform
Arbitration Act
TSI TelSys Inc.'s Limited Hardware Warranty
V6A 4/8/97
TSI TelSys Inc.'s ("TELSYS") Warranty obligations are limited to
the terms set
forth below:
1. LIMITED WARRANTY. TELSYS warrants this hardware product
against defects in
materials and workmanship, under normal use and service, for a
period of one
(1) year from the date of receipt by the Purchaser.
If the Purchaser discovers a defect within the warranty period,
TELSYS will, at
its discretion, repair the product with either new or refurbished
replacement
parts at no charge. If TELSYS is unable to restore the product to
good working
order, TELSYS will replace the product with either new or
refurbished
equipment, at its discretion. In the event that TSI TelSys is
unable to repair
or replace the defective equipment, it will provide a refund for
the purchase
price of the product. All products that are replaced will become
the property
of TELSYS. Any replaced or repaired product is warranted for the
remainder of
the initial warranty period or ninety days, whichever is longer.
TELSYS shall
not be responsible for any software, firmware, information or
memory data of
the Purchaser contained in, stored on, or integrated with any
products for
system components returned to TELSYS pursuant to any warranty.
2. RETURN PROCEDURES. To obtain service under this warranty
within the
established period, the Purchaser must:
Call TELSYS Technical Service Support Operations at 1-888-849-CARE
(2273)
between 8 a.m. and 5 p.m. EST, Monday through Friday, excluding
holidays.
To insure that your product qualifies for return to factory
warranty service,
you will be asked to provide the model and serial number of your
product, the
date of original purchase, and the Purchaser's name, address, and
phone number.
Products returned to TELSYS' Technical Service Support Operations
must be pre-
authorized by TELSYS with a Return Material Authorization (RMA)
number marked
on the outside of the package, and sent prepaid, insured, and
packaged
appropriately for safe shipment. The repaired or replaced item
will be shipped
to the Purchaser at TELSYS' expense, not later than (90) ninety
days after
receipt by TELSYS.
3. APPLICABILITY.
This warranty applies only to hardware products (including
internal components)
supplied by TELSYS that can be identified by the "TELSYS"
trademark, trade
name, or logo affixed to them. Any warranty on external third-
party hardware
(i.e., Sun Workstation) installed by TELSYS with this product is
provided by
the hardware vendor, not TELSYS. This warranty does not apply to
damage caused
by accident, abuse, misuse, improper installation or testing,
misapplication,
or service (including upgrades and expansions) performed by anyone
who is not a
TELSYS Authorized Service Provider or any other cause beyond the
range of the
intended use, or by fire, lightning, or other hazard; if the
product has been
modified without the written permission of TELSYS; if any TELSYS
serial number
has been removed or defaced; or if you cannot provide proof of
original
purchase as described above.
4. LIMITATIONS OF REMEDIES AND DAMAGES.
IN NO EVENT WILL TELSYS, ITS PARENT OR SUBSIDIARIES OR ANY OF THE
LICENSORS,
DIRECTORS, OFFICERS, EMPLOYEES OR AFFILIATES OF ANY OF THE
FOREGOING BE LIABLE
TO THE PURCHASER FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT OR
SPECIAL DAMAGES
WHATSOEVER (INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS OF
BUSINESS
PROFITS, BUSINESS INTERRUPTION, LOSS OF BUSINESS INFORMATION AND
THE LIKE,)
WHETHER FORESEEABLE OR UNFORESEEABLE, ARISING OUT OF THE USE OF OR
INABILITY TO
USE THE SOFTWARE OR ACCOMPANYING WRITTEN MATERIAL, REGARDLESS OF
THE BASIS OF
THE CLAIM AND EVEN IF TELSYS OR A TELSYS REPRESENTATIVE HAS BEEN
ADVISED OF THE
POSSIBILITY OF SUCH DAMAGE. TELSYS'S LIABILITY TO THE PURCHASER
FOR DIRECT
DAMAGES FOR ANY CAUSE WHATSOEVER, AND REGARDLESS OF THE FORM OF
THE ACTION,
WILL BE LIMITED TO THE ACTUAL PURCHASE PAID FOR THE PRODUCT.
Some states do not allow the exclusion or limitation of incidental
or
consequential damages or exclusion of implied warranties, so the
above
limitations or exclusions may not apply to the Purchaser. This
warranty gives
the Purchaser specific legal rights, and the Purchaser may also
have other
rights that vary from state to state.
THE WARRANTY AND REMEDIES SET FORTH ABOVE ARE EXCLUSIVE AND IN
LIEU OF ALL
OTHERS, WHETHER ORAL OR WRITTEN, EXPRESS OR IMPLIED. TELSYS
SPECIFICALLY
DISCLAIMS ANY AND ALL IMPLIED WARRANTIES, INCLUDING, WITHOUT
LIMITATION,
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE. UNLESS
MODIFIED IN WRITING AND SIGNED BY THE AUTHORIZED REPRESENTATIVES
OF BOTH
PARTIES, THIS WARRANTY IS UNDERSTOOD TO BE THE COMPLETE AND
EXCLUSIVE WARRANTY
BETWEEN THE PARTIES. NO TELSYS SALES REPRESENTATIVE, DEALER,
RESELLER, AGENT
OR EMPLOYEE IS AUTHORIZED TO MAKE ANY MODIFICATION, EXTENSION, OR
ADDITION TO
THIS WARRANTY UNLESS OTHERWISE ALLOWED BY THIS AGREEMENT.
Addendum A to Limited Hardware Warranty
April 8, 1997
TSI TelSys agrees to indemnify and hold Cornes & Co. harmless from
all claims,
demands and actions arising out of TSI TelSys equipment defects
and/or failure
provided that Cornes & Co. follows the instructions detailed in
this paragraph.
This indemnification is only applicable where Cornes & Co. is the
importer of
TSI TelSys products. In the event that Cornes & Co. is sued as a
result of
"alleged" defects in TSI TelSys products, Cornes & Co. shall
notify TSI TelSys
immediately (in writing) upon verbal or written notice by the end
customer.
Cornes & Co. agrees to allow TSI TelSys to control the defense or
settlement of
the claim and will cooperate reasonably in such defense or
settlement at TSI
TelSys' expense. Despite this indemnification, TSI TelSys'
standard
hardware/software warranties shall apply to all purchase orders
issued by
Cornes & Co. who shall pass on these limited warranties to the end
user and
these shall become the basis for any claims from end users that
our products
did not perform in accordance with TSI TelSys stated warranty
provisions.
TSI TelSys Inc.'s Software License
V5A 4/8/97
The enclosed computer program(s)("Software") is licensed, not
sold, to you by
TSI TelSys, Inc. ("TELSYS") for use only under the terms of this
License, and
TELSYS reserves any rights not expressly granted to the Licensee.
The Licensee
owns the disk(s) on which the Software is recorded or fixed, but
TELSYS retains
ownership of the Software itself.
1. LICENSE. This License allows the Licensee to:
(a) Use one copy of the Software on a single computer at a time.
To "use" the
Software means that the Software is either loaded in the temporary
memory (i.e.
RAM) of a computer or installed on the permanent memory of a
computer (i.e.
hard disk, CD ROM, etc.) The Licensee may install the Software on
a common
storage device which is accessible by multiple computers, provided
that if more
computers have access to the common storage device than the number
of licensed
copies of the Software, you must have some Software mechanism
which locks-out
any concurrent users in excess of the number of licensed copies of
the Software
(an additional license is not needed for the one copy of Software
installed on
the common storage device accessed by multiple computers provided
the number of
licensed copies is not exceeded by the number of concurrent
users.).
(b) Make one copy of the Software in machine readable form solely
for backup
purposes.
2. PROPRIETARY MATERIAL AND RESTRICTIONS. "Proprietary
Material" shall mean
the Programs(s) in any form and the algorithms, technology and
know-how
embodied therein and all documentation, manuals and other material
related
thereto. Customer expressly acknowledges that the Proprietary
Material is
confidential and proprietary property of TELSYS and hereby agrees
to receive
and maintain it as it would its own confidential and proprietary
material.
Licensee shall not cause or permit disclosure of any Proprietary
Material to
any person other than the Licensee's employees and consultants
whose
responsibilities require access to such material without the prior
written
consent of TELSYS.
The Software contains trade secrets in its human perceivable form
and, to
protect them, the Licensee may not REVERSE ENGINEER, DECOMPILE,
DISASSEMBLE OR
OTHERWISE REDUCE THE SOFTWARE TO ANY HUMAN PERCEIVABLE FORM.
LICENSEE MAY NOT
MODIFY, ADAPT, TRANSLATE, RENT, LEASE, LOAN OR CREATE DERIVATIVE
WORKS BASED
UPON THE SOFTWARE OR ANY PART THEREOF.
3. TERMINATION. This License is effective until terminated.
This License
will terminate immediately without notice from TELSYS or judicial
resolution if
Licensee fails to comply with any provision of this License. Upon
such
termination you must destroy the Software, all accompanying
written materials
and all copies thereof, and Sections 2, 5, 6, and 7 will survive
any
termination.
4. EXPORT LAW ASSURANCES. You agree that neither the Software
nor any direct
product thereof is being or will be shipped, transferred or
reexported,
directly or indirectly, into any country prohibited by the United
States Export
Administration Act and the regulations thereunder or will be used
for any
purpose prohibited by the Act.
5. LIMITED WARRANTY. TELSYS warrants that the Software programs
(which
include embedded third party software) licensed from it will
perform in
substantial conformance to the program specifications therefor for
a period of
one year from the date of receipt from TELSYS. TELSYS warrants
the storage
media containing Software against failure during the warranty
period. No
updates are provided. TELSYS' obligation hereunder shall be to
replace any
defective media with Software which substantially conforms to
TELSYS'
applicable published specifications or in the event that that
replacement is
not possible, to refund the purchase price paid by the Licensee
for any
defective Software products. TELSYS makes no warranty that its
Software
products will work in combination with any hardware or
applications Software
products independently purchased by the Customer from third party
vendors.
THIS LIMITED WARRANTY IS THE ONLY WARRANTY PROVIDED BY TELSYS AND
TELSYS
EXPRESSLY DISCLAIMS ALL OTHER WARRANTIES, EITHER EXPRESSED OR
IMPLIED,
INCLUDING BUT NOT LIMITED TO IMPLIED WARRANTIES OF MERCHANTABILITY
AND FITNESS
FOR A PARTICULAR PURPOSE WITH REGARD TO THE SOFTWARE AND
ACCOMPANYING WRITTEN
MATERIALS. Because some jurisdictions do not allow the exclusion
or limitation
of implied warranties, the above limitation may not apply to you.
6. LIMITATION OF REMEDIES AND DAMAGES. IN NO EVENT WILL TELSYS,
ITS PARENT OR
SUBSIDIARIES OR ANY OF THE LICENSORS, DIRECTORS, OFFICERS,
EMPLOYEES OR
AFFILIATES OF ANY OF THE FOREGOING BE LIABLE TO THE LICENSEE FOR
ANY
CONSEQUENTIAL, INCIDENTAL, INDIRECT OR SPECIAL DAMAGES
WHATSOEVER(INCLUDING,
WITHOUT LIMITATION, DAMAGES FOR LOSS OF BUSINESS PROFITS, BUSINESS
INTERRUPTION, LOSS OF BUSINESS INFORMATION AND THE LIKE) WHETHER
FORESEEABLE OR
UNFORESEEABLE, ARISING OUT OF THE USE OF OR INABILITY TO USE THE
SOFTWARE OR
ACCOMPANYING WRITTEN MATERIAL, REGARDLESS OF THE BASIS OF THE
CLAIM AND EVEN IF
TELSYS OR A TELSYS REPRESENTATIVE HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH
DAMAGE. TELSYS'S LIABILITY TO THE LICENSEE FOR DIRECT DAMAGES FOR
ANY CAUSE
WHATSOEVER, AND REGARDLESS OF THE FORM OF THE ACTION, WILL BE
LIMITED TO THE
ACTUAL PRICE PAID FOR THE LICENSE TO USE THE SOFTWARE.
7. U.S. GOVERNMENT RESTRICTED RIGHTS. This License will be
construed under
the laws of the State of Maryland, except for that body of law
dealing with
conflicts of law. If any provision of this License shall be held
by a court of
competent jurisdiction to be contrary to law, that provision will
be enforced
to the maximum extent permissible, and the remaining provision of
this License
will remain in full force and effect. If the Licensee is a U.S.
Government
user then the Software is provided with "RESTRICTED RIGHTS" as set
forth in
subparagraphs (c)(1) and (2) of the Commercial Computer Software-
Restricted
Rights clause at FAR 52.227-19 or subparagraph (c)(1)(ii) of the
Rights in
Technical Data and Computer Software clause at DFARS 252.227-7013,
as
applicable.
EXHIBIT C
V2 2/28/97
TSI TELSYS, INC. ("TSI TELSYS")
EQUIPMENT MAINTENANCE, SOFTWARE MAINTENANCE, AND INSTALLATION
PROGRAM
TERMS AND CONDITIONS
1. SCOPE
1. TSI TELSYS SHALL BE OBLIGATED TO PROVIDE INSTALLATION
AND/OR
MAINTENANCE FOR ALL EQUIPMENT AS MAY BE REQUESTED BY THE
CUSTOMER
DURING THE CONTRACT TERM OF THIS AGREEMENT. SERVICES WILL
BE PROVIDED
IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.
2. The System Installation, Silver Maintenance, Gold
Maintenance, and
Platinum Maintenance Options described herein are for
services rendered
within the Continental United States (CONUS). Additional
charges for
Outside the Continental United States (OCONUS) are stated
in Paragraph
7.
3. THE SCOPE OF THIS AGREEMENT APPLIES TO INSTALLATION AND
MAINTENANCE
SERVICES ONLY. FOR PRODUCT REPAIR SERVICE PROGRAMS AND
NON-CONTRACT
MAINTENANCE SERVICES, CONTACT TSI TELSYS DIRECTLY.
2. TERM
The initial term of this Agreement shall be a period of one
(1) year from
the effective date of maintenance service (not applicable to
installation
service). This Agreement will automatically renew for an
additional one-
year term unless the Customer provides written notice of
cancellation
thirty (30) days prior to the expiration of this Agreement.
TSI may
increase the maintenance charges hereunder at the renewal of
a term,
however the revised charges shall not exceed the then-current
published
TSI TelSys rates for the same level and type of support.
3. OBLIGATIONS OF TSI TELSYS
A. TSI TELSYS WILL COMPLY WITH ALL REGULATIONS AND PROCEDURES IN
EFFECT AT THE
CUSTOMER SITE WHEN PROVIDING SERVICES UNDER THIS AGREEMENT.
B. TSI TELSYS MAY USE NEW OR REFURBISHED REPLACEMENT PARTS WHICH
OPERATE LIKE
NEW PARTS IN EFFECTING REPAIRS. ALL PARTS WHICH HAVE BEEN
REPLACED SHALL
BECOME THE PROPERTY OF TSI TELSYS.
C. TSI TELSYS WILL PROVIDE THE CUSTOMER WITH A SITE PREPARATION
GUIDE AND
CHECKLIST, AND WILL SCHEDULE INSTALLATION WITH THE CUSTOMER.
4. OBLIGATIONS OF CUSTOMER
a. CUSTOMER PERSONNEL SHALL NOT PERFORM MAINTENANCE OR
ATTEMPT REPAIRS TO
EQUIPMENT WHILE SUCH EQUIPMENT IS UNDER MAINTENANCE WITH
TSI TELSYS
UNLESS PRIOR WRITTEN APPROVAL IS PROVIDED BY TSI TELSYS.
b. THE CUSTOMER SHALL PERMIT ACCESS TO TSI TELSYS PERSONNEL
TO THE
EQUIPMENT WHICH REQUIRES MAINTENANCE OR INSTALLATION,
SUBJECT TO
REASONABLE SECURITY MEASURES. THE CUSTOMER SHALL SHIP THE
EQUIPMENT
BACK TO TELSYS AS NECESSARY AND IN ACCORDANCE WITH THIS
AGREEMENT.
c. IF SYSTEMS INSTALLATION SERVICE IS PURCHASED, THE CUSTOMER
SHALL
PREPARE THE SITE IN ACCORDANCE WITH THE SITE PREPARATION
GUIDE PROVIDED
BY TSI TELSYS AND FAX A COMPLETED SITE PREPARATION
CHECKLIST TO THE TSI
TELSYS SERVICE OPERATIONS CENTER PRIOR TO THE SCHEDULED
INSTALLATION
DATE, AND PROVIDE A SITE CONTACT FOR THE TSI TELSYS FIELD
ENGINEER.
d. THE CUSTOMER SHALL: (I) INSURE THAT THE EQUIPMENT IS
INSTALLED IN A
LOCATION WHICH MEETS THE ENVIRONMENTAL CONDITIONS CALLED
FOR BY TSI
TELSYS' PRODUCT SPECIFICATIONS; (II) MAINTAIN CURRENT
BACKUPS OF TSI
TELSYS SOFTWARE; (III) INSTALL ALL TSI TELSYS' SOFTWARE
UPDATES WITHIN
SIX MONTHS OF RECEIPT; AND (IV) LIMIT ACCESS TO ANY TSI
TELSYS
TECHNICAL INFORMATION TO CUSTOMER EMPLOYEES AND AGENTS
WITH A SPECIFIC
NEED RELATED TO USE OF THE SOFTWARE AND OTHER RELATED
DOCUMENTATION
PROVIDED BY TSI TELSYS.
5. AVAILABLE INSTALLATION AND REMEDIAL MAINTENANCE
A. STANDARD SYSTEM INSTALLATION (SSI) SERVICE - PROVIDES FOR CONUS
ON-SITE
INSTALLATION OF A TSI TELSYS PRODUCT, MONDAY THROUGH FRIDAY,
FROM 8 A.M. TO
5 P.M. EASTERN STANDARD TIME (EST).
FEATURES OF SSI SERVICE ARE:
1) HARDWARE-UNPACK AND SET-UP IN RACK, SHELF, OR TABLE;
2) SOFTWARE-UNPACK MEDIA AND DOCUMENTATION, LOAD
SOFTWARE, AND
CONFIGURE AND INITIALIZE SOFTWARE TO COMPLY WITH
PUBLISHED
OPERATING STANDARDS AND MANUALS.
THE CUSTOMER MUST ORDER THE STANDARD SYSTEM INSTALLATION
SERVICE WHEN
PURCHASING TSI TELSYS EQUIPMENT UNLESS A WRITTEN WAIVER IS
REQUESTED BY
THE CUSTOMER AND APPROVED BY TSI TELSYS.
6. MAINTENANCE
a. Silver Maintenance (SM) Service - Provides for remedial
maintenance
and enhanced technical support for TSI TelSys products, Monday
through Friday,
from 8 a.m. to 5 p.m. (EST).
Features of Silver Maintenance service are:
(1) RETURN TO FACTORY REPAIR OF NON-FUNCTIONING
EQUIPMENT - TSI
TELSYS WILL SHIP THE REPAIRED EQUIPMENT BACK TO THE
CUSTOMER
WITHIN TEN (10) BUSINESS DAYS OF RECEIPT AT THE
TSOC;
(2) LABOR AND MATERIALS FOR THE REPAIR OF THE TELSYS
PRODUCT AT THE
TSOC;
(3) TOLL-FREE NUMBER ACCESS NUMBER TO THE TSOC;
(4) SYSTEM SOFTWARE BUG FIXES (PATCHES);
(5) MODULE EXCHANGE (SUBJECT TO AVAILABILITY);
(6) NOTIFICATION OF RELEASED ENGINEERING CHANGES.
B. GOLD MAINTENANCE (GM) SERVICE - COMPRISES SILVER
MAINTENANCE SERVICE
PLUS THESE ADDITIONAL FEATURES
FEATURES OF GOLD MAINTENANCE SERVICE ARE:
(1) THE FEATURES OF SILVER MAINTENANCE PLUS;
(2) REMOTE DIAGNOSTICS PERFORMED BY THE TSOC
(SCHEDULED);
(3) SYSTEM SOFTWARE UPDATES (E.G., A MINOR REVISION
FROM VERSION
3.0 TO 3.1);
(4) 24 HOUR MODULE EXCHANGE (SUBJECT TO AVAILABILITY);
(5) HARDWARE UPDATES
(6) PREPAID SHIPPING (CARRIER) CHARGES WITH A VALID
RMA NUMBER FROM
THE TSOC .
C. FEATURES OF PLATINUM SERVICE ARE:
(1) GOLD MAINTENANCE SERVICE PLUS THESE ADDITIONAL
FEATURES;
(2) TELSYS WILL SHIP THE REPAIRED OR A REPLACEMENT PART
BACK THE
NEXT BUSINESS DAY AFTER RECEIPT AT THE TSOC;
(3) SYSTEM SOFTWARE UPGRADES (E.G., A MAJOR REVISION
FROM VERSION
3.1 TO 4.0) WHICH INCLUDE NEW FEATURES AND OPTIONS
IN ADDITION TO
SYSTEM OPERATIONAL ENHANCEMENTS AND BUG FIXES;
(4) ON-SITE MAINTENANCE SERVICE AT A CUSTOMER CONUS
SITE. A
QUALIFIED SERVICE TECHNICIAN WILL BE DISPATCHED TO
THE CUSTOMER
LOCATION WITHIN THE NEXT BUSINESS DAY PLUS
REASONABLE PREPARATION
AND TRAVEL TIME;
(5) ALL TRAVEL CHARGES ASSOCIATED WITH ON-SITE CONUS
SUPPORT
(6) HARDWARE UPDATES PROVIDED AT REGULAR INTERVALS;
(7) INSTALLATION OF PURCHASED TSI OPTIONS.
NOTE: TSI TELSYS WILL, AT ITS SOLE DISCRETION,
DETERMINE THE
NECESSITY AND APPROPRIATENESS OF AN ON-SITE CALL VERSUS
AN OFF-SITE
REPAIR OF THE EQUIPMENT AT THE TSOC. SHOULD TSI TELSYS
DETERMINE
THAT AN ON-SITE CALL IS REQUIRED, IT ALONE WILL DECIDE
ON THE
DURATION AND QUANTITY OF ON-SITE MAINTENANCE CALLS
NECESSARY TO
REPAIR THE EQUIPMENT
A. SOFTWARE SERVICE (SS) PROVIDES FOR REMEDIAL MAINTENANCE SUPPORT
AND UPGRADES
FOR TSI TELSYS' SOFTWARE PRODUCTS, MONDAY THROUGH FRIDAY, FROM
8 A.M. TO 5
P.M. (EST).
FEATURES OF THE SOFTWARE SERVICE ARE:
(1) SEMI-ANNUAL SYSTEM SOFTWARE UPGRADES;
(2) SYSTEM SOFTWARE ENHANCEMENTS;
(3) SYSTEM SOFTWARE BUG FIXES (PATCHES);
(4) REMOTE DIAGNOSTICS VIA THE TSOC;
(5) TOLL-FREE ACCESS TO THE TSOC.
7. COVERAGE AND ELIGIBILITY- EQUIPMENT MAINTENANCE
a. TO BE ELIGIBLE FOR MAINTENANCE COVERAGE UNDER THIS
AGREEMENT, THE
EQUIPMENT MUST BE DETERMINED BY TSI TELSYS TO BE IN GOOD
OPERATING
CONDITION. IN ORDER TO DETERMINE THAT THE EQUIPMENT IS IN
GOOD
OPERATING CONDITION:
(1) THE EQUIPMENT MUST PRESENTLY BE UNDER A TSI TELSYS
WARRANTY OR
MAINTENANCE AGREEMENT;
(2) EQUIPMENT OUTSIDE OF A TSI TELSYS WARRANTY OR
MAINTENANCE
AGREEMENT MUST HAVE BEEN REPAIRED BY TSI TELSYS
WITHIN NINETY
(90) DAYS OF THE REQUEST FOR A TSI TELSYS
DETERMINATION OF
CONDITION;
(3) IF THE EQUIPMENT IS OUTSIDE A TSI TELSYS WARRANTY OR
MAINTENANCE
AGREEMENT, IT MUST BE EXAMINED BY TSI TELSYS AND
REPAIRED, IF
NECESSARY, AT THE CUSTOMER'S EXPENSE PRIOR TO
ISSUANCE OF A
MAINTENANCE AGREEMENT.
a. A WRITTEN MAINTENANCE ORDER SHALL BE THE ONLY BASIS FOR
MAINTENANCE IN
ACCORDANCE WITH THE TERMS AND CONDITIONS OF THIS
MAINTENANCE AGREEMENT.
TSI TELSYS WILL CONFIRM A MAINTENANCE ORDER BY PROVIDING
THE CUSTOMER
WITH A RETURN MATERIAL AUTHORIZATION (RMA) WITHIN TWENTY-
FOUR (24)
HOURS OF THE CUSTOMER'S REQUEST. ORDER RENEWALS WILL BE
AUTOMATICALLY
ACCEPTED FOR EQUIPMENT WHICH MAY HAVE BEEN DISCONTINUED
FROM USE FOR
TEMPORARY PERIODS OF TIME NOT LONGER THAN 120 CALENDAR
DAYS.
b. ALL WRITTEN CORRESPONDENCE FROM THE CUSTOMER SHALL BE
DIRECTED TO THE
TSOC.
c. MAINTENANCE SERVICE SHALL COMMENCE ON A MUTUALLY AGREED
DATE BETWEEN
THE CUSTOMER AND THE TSOC, WHICH WILL BE SPECIFIED IN THE
MAINTENANCE
ORDER. MAINTENANCE ORDERS SHALL NOT BE MADE EFFECTIVE
BEFORE THE
EXPIRATION OF ANY APPLICABLE MAINTENANCE OR WARRANTY
PERIODS.
8. TIME AND MATERIAL RATES FOR ON-SITE SERVICE (EQUIPMENT
MAINTENANCE)
Should the Customer request On-Site maintenance during the periods
below, the
following rates and conditions shall apply.
a. CONUS Support
TIME PERIOD RATE
(1) REGULAR HOURS (8 A.M. TO 5 P.M. LOCAL) $ * **
(2) AFTER HOURS (MONDAY THROUGH FRIDAY) $ *
(3) AFTER HOURS (SATURDAY, SUNDAY, HOLIDAYS) $ *
* Confidential portions omitted and filed separately with the
Commission.
**ONLY APPLICABLE TO CUSTOMER REQUESTS UNDER THE SILVER AND
GOLD SERVICE
OPTIONS. THERE IS NO ADDITIONAL CHARGE FOR MAINTENANCE SERVICE
DURING
REGULAR HOURS FOR THE PLATINUM SERVICE OPTION.
THERE SHALL BE A FOUR (4) HOUR MINIMUM CHARGE FOR ON-SITE SERVICE.
A FULL HOUR
SHALL BE CHARGED FOR ANY SIXTY (60) MINUTE PERIOD OR ANY FRACTION
THEREOF. THE
REGULAR AND AFTER HOUR RATES DO NOT INCLUDE REASONABLE AND ACTUAL
TRAVEL
EXPENSES WHICH SHALL BE CHARGED TO THE CUSTOMER FOR EACH ON-SITE
SERVICE CALL.
B. OCONUS SUPPORT
SHOULD THE CUSTOMER REQUIRE THAT ON-SITE INSTALLATION AND/OR
MAINTENANCE BE
PERFORMED OCONUS, ADDITIONAL COSTS SHALL BE CHARGED TO THE
CUSTOMER. SUCH
CHARGES WILL BE LIMITED TO REASONABLE AND ACTUAL TRAVEL EXPENSES,
INCLUDING
TRAVEL COSTS, PER DIEM AND LODGING IF OVERNIGHT STAY IS NECESSARY.
THESE
EXPENSES WILL BE IN ADDITION TO THE HOURLY CHARGES DESCRIBED ABOVE
FOR CONUS
REGULAR AND AFTER HOURS SUPPORT. SUCH ADDITIONAL CHARGES WILL
APPLY TO EACH
ON-SITE MAINTENANCE REQUEST, AND IT WILL BE LIMITED TO ONE ROUND
TRIP PER
SERVICE CALL.
9. EQUIPMENT RETURN
a. PRODUCTS RETURNED TO TSI TELSYS FOR MAINTENANCE MUST BE PRE-
AUTHORIZED BY
TSI TELSYS WITH AN RMA NUMBER MARKED ON THE OUTSIDE OF THE
PACKAGE, AND SENT
PRE-PAID, INSURED, AND PACKAGED APPROPRIATELY FOR SAFE
SHIPMENT. THE
CUSTOMER SHALL BE RESPONSIBLE FOR RISK OF LOSS OR DAMAGE TO THE
EQUIPMENT
UNTIL RECEIVED AND ACCEPTED AT THE TSOC. TSI TELSYS SHALL BE
RESPONSIBLE
FOR RISK OF LOSS OR DAMAGE UNTIL THE EQUIPMENT HAS BEEN
RETURNED TO THE
CUSTOMER.
b. WHEN TSI TELSYS REMOVES EQUIPMENT FOR OFF-SITE REPAIR, IT SHALL
BE
RESPONSIBLE FOR ANY LOSS OR DAMAGE TO THE PRODUCT FROM THE TIME
OF REMOVAL
UNTIL THE TIME OF RETURN OF THE EQUIPMENT TO THE CUSTOMER.
10. EQUIPMENT MOVEMENT
Relocation of products to a site other than the site specified
initially by
Customer may affect the availability of service and will relieve
TSI TelSys'
obligation to provide On-Site service unless:
a) Customer notifies TSI TelSys thirty (30) days prior to such
relocation; b)
TSI TelSys confirms that the relocation does not affect the
availability of
service; and c) Customer agrees to pay any adjustment of charges
which may
result from the relocation.
Upon request of the Customer, TSI TelSys will supervise product
relocation,
including de-installation, crating, uncrating and reinstallation,
or perform
other associated services at the hourly rates denoted in Paragraph
7 of this
Agreement.
11. LIMITATIONS
TSI TelSys shall not be obligated under this Agreement to:
a. SERVICE ANY PRODUCT THAT HAS BEEN DAMAGED, ABUSED, OVERUSED
OR MISUSED AS
DEFINED BY TSI TELSYS AND THROUGH NO FAULT OF TSI TELSYS;
b. SERVICE ANY PRODUCT THAT HAS RECEIVED UNAUTHORIZED
MODIFICATION, REPAIR
OR SERVICE THAT IMPAIRS PERFORMANCE OR IMPEDES NORMAL
SERVICE;
c. PAINT OR REFINISH ANY PRODUCT FOR COSMETIC PURPOSES ONLY;
d. REPAIR ANY DAMAGE OR MALFUNCTION CAUSED BY THE USE OF NON-
TSI TELSYS
EQUIPMENT;
e. SERVICE ANY PRODUCT THAT HAS NOT RECEIVED THE REQUIRED USER
MAINTENANCE
AND CLEANING AT THE FREQUENCY AND AS PRESCRIBED IN THE USER
MANUAL.
f. PROVIDE OR REPLACE CONSUMABLE ITEMS USED WITH TSI EQUIPMENT
(I.E.
MAGNETIC MEDIA, LAMPS, ETC.)
ANY SERVICE IDENTIFIED IN 10.A-E ABOVE AND PROVIDED BY TSI
TELSYS AT THE
CUSTOMER'S REQUEST SHALL BE CHARGED TO CUSTOMER AT TSI
TELSYS' THEN
CURRENT RATES FOR PARTS AND AT THE HOURLY RATES IN PARAGRAPH
7 FOR
SERVICE.
12. WARRANTIES
a. TSI TelSys warrants new and refurbished "as new" parts for the
duration of
this maintenance Agreement or ninety (90) days after installation,
whichever is
later.
b. IN CONNECTION WITH THIS AGREEMENT, SERVICES RENDERED HEREUNDER
AND PARTS
SUPPLIED PURSUANT HERETO, TSI TELSYS MAKES NO WARRANTY, EITHER
EXPRESSED OR
IMPLIED, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTY OF FITNESS
FOR PARTICULAR
PURPOSE OR OF MERCHANTABILITY. TSI TELSYS' SOLE OBLIGATION SHALL
BE LIMITED TO
TSI TELSYS' REASONABLE EFFORTS AT THE MAINTENANCE, REPAIR, OR
REPLACEMENT OF
ANY DEFECTIVE PRODUCT. Some states do not allow the exclusion of
implied
warranties, so the exclusion above may not apply to the Customer.
13. LIMITATION OF LIABILITIES
TSI TELSYS AND/OR ITS REPRESENTATIVE'S LIABILITY UNDER OR ARISING
OUT OF THIS
AGREEMENT, WHETHER FOR BREACH OF CONTRACT, TORT, OR OTHERWISE
SHALL BE LIMITED
TO A REFUND OF THE PRO RATA ANNUAL MAINTENANCE CHARGES PAID, IF
ANY, FOR THE
ITEM OF PRODUCT INVOLVED IN THE CLAIM. IN NO EVENT WILL TSI
TELSYS OR ITS
REPRESENTATIVES BE LIABLE FOR ANY INDIRECT, SPECIAL
ORCONSEQUENTIAL DAMAGES,
INCLUDING, BUT NOT LIMITED TO, LOSSESOF BUSINESSAND/OR PROFITS,
WHETHER
FORESEEABLE OR NOT, CAUSED BY ITS PRODUCT OR SERVICES RELATED
THERETO. Some
states do not allow the limitation or exclusion of liability
forincidental or
consequential damages, so the limitation above may not apply to
the Customer.
14. BREACH OF CONTRACT AND REMEDIES
Should Customer: (i) default in the payment of any sum of money
due beyond the
thirtieth (30th) day after the same is due; or (ii) default in the
performance
of any other of its obligations under this Agreement, which
default continues
for thirty (30) days after receipt by Customer of notice thereof
from TSI
TelSys; or (iii) permit any person other than a TSI TelSys
authorized service
technician to alter or change any TSI TelSys product without TSI
TelSys' prior
written consent, then in any such event TSI TelSys may at its
option proceed
with the following: (a) terminate this Agreement; and (b) convert
any unpaid
and/or future charges for any and all services rendered to
Customer under this
Agreement to TSI TelSys' then-current rates. The rights afforded
TSI TelSys
under this Paragraph 13 will not be deemed to be exclusive, but
shall be in
addition to any rights or remedies provided by law.
15. MISCELLANEOUS
a. THIS AGREEMENT CONSTITUTES HE ENTIRE UNDERSTANDING BETWEEN THE
CUSTOMER AND
TSI TELSYS WITH RESPECT TO THE SUBJECT MATTER OF THE AGREEMENT
AND MAY BE
AMENDED OR MODIFIED ONLY BY WRITTEN AGREEMENT BETWEEN THE
PARTIES. IN THE
EVENT THAT THERE IS ANY VARIANCE BETWEEN THE TERMS OF THIS
AGREEMENT AND THE
CUSTOMER'S PURCHASE ORDER TERMS, THE TERMS AND CONDITIONS OF
THIS AGREEMENT
SHALL PREVAIL.
b. IF ANY TERM OR PROVISION OF THIS AGREEMENT SHALL BE FOUND TO BE
ILLEGAL OR
UNENFORCEABLE, THEN, NOTWITHSTANDING, THIS AGREEMENT SHALL
REMAIN IN FULL
FORCE AND EFFECT, AND SUCH TERM OR PROVISION WILL BE STRICKEN,
PROVIDED THAT
IN SUCH EVENT THE PARTIES AGREE TO NEGOTIATE IN GOOD FAITH
SUBSTITUTE
ENFORCEABLE PROVISIONS MOST NEARLY REFLECT THE PARTIES ORIGINAL
INTENT IN
ENTERING INTO THIS AGREEMENT.
c. THIS AGREEMENT SHALL BE BINDING ON THE PARTIES HERETO AND THEIR
SUCCESSORS
AND ASSIGNS, BUT IS NOT ASSIGNABLE BY CUSTOMER IN ANY PART
WITHOUT THE PRIOR
WRITTEN CONSENT OF TSI TELSYS, AND ANY ATTEMPTED ASSIGNMENT
WITHOUT SUCH
CONSENT SHALL BE NULL AND VOID. TSI TELSYS RESERVES THE RIGHT
TO ASSIGN THE
PERFORMANCE OF THIS AGREEMENT TO A QUALIFIED THIRD PARTY.
d. THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF
MARYLAND.
e. NEITHER PARTY SHALL BE RESPONSIBLE TO THE OTHER FOR A DEFAULT,
DELAY OR
FAILURE TO PERFORM HEREUNDER IF SUCH DEFAULT, DELAY OR FAILURE
TO PERFORM
(INCLUDING, BUT NOT LIMITED TO, MEETING THE RESPONSE TIME
REQUIREMENT OF
THIS AGREEMENT) IS DUE TO ONE OR MORE CAUSES BEYOND ITS
REASONABLE CONTROL
INCLUDING, BUT NOT LIMITED TO, LABOR DISPUTES, CIVIL
DISTURBANCES,
EPIDEMICS, WAR, EMBARGOES, FIRE, ACTS OF GOD OR DEFAULT OF A
COMMON CARRIER
OR SUPPLIER. THIS SECTION SHALL NOT APPLY TO THE CUSTOMER'S
OBLIGATION TO
PAY THE FEE(S) SET FORTH IN THIS AGREEMENT.
September 16, 1997
Mr. Norio Ogita, Manager, Business Administration
Cornes & Co. Ltd.,
Ryukakusan Bldg., 5F., 2-5-12
Higashi Kanda, Chiyoda-ku,
Tokyo, 101 Japan
Subject: Cornes Purchase Orders
Standard Payment Terms
Dear Mr. Ogita:
A few weeks ago, I had the pleasure of meeting Ishibashi-San and
we had very
fruitful and beneficial discussion on a variety of business
topics. One of the
primary issues we discussed involved the payment terms for future
orders. An
overview of our discussions on payment terms is provided below for
your
confirmation and approval:
Scenario #1:
This scenario is characterized by an on-site (at TSI TelSys)
customer witness
and approval of factory acceptance testing. The milestones for
payment of this
type of contract are detailed as follows:
Milestone Amount Payment Terms
Contract Award 25% of CV* Net 30 days
FAT 55% of CV Immediate
Customer Acceptance 20% of CV Net 30 days
* Contract Value
Scenario #2:
This scenario is characterized by customer witness and approval of
acceptance
testing at the customer site only. The milestones for payment of
this type of
contract are detailed as follows:
Milestone Amount Payment Terms
Contract Award 25% of CV Net 30 days
Customer Acceptance 75% of CV Per terms of LOC
The letter of credit terms are proposed as a separate addendum to
this letter.
In this scenario, since TSI TelSys will not receive payment until
the letter of
credit terms are satisfied, it is appropriate that title pass upon
End-Customer
acceptance at their plant. Therefore, the F.O.B. point for these
types of
orders shall be "Customer's Plant". TSI TelSys will take
responsibility for
shipment of the products to the Tokyo Airport and request that
Cornes, as our
importer, take responsibility on our behalf in transporting the
equipment to
the Customer site. All additional costs related to transporting
the equipment
(including, but not limited to, freight forwarder, shipping, and
insurance
costs) will be billed separately to Cornes and shall be paid on
Net 30 day
terms.
In the unlikely event that Customer acceptance is not granted
within thirty
(30) days of installation, TSI TelSys reserves the right to
require return of
the equipment to facilitate remediation or negotiate other
arrangements with
Cornes, at TSI TelSys' sole discretion.
Scenario #3:
In the rare cases that our contract situation does not fit into
the first two
scenarios, the parties agreed to remain open minded and
cooperative in
discussing alternative payment terms which are appropriate for
that contract.
Please indicate your acceptance to this change to this proposal by
signing the
block below and returning a copy via facsimile to my attention.
Thank you for
your consideration.
Should you have any questions regarding this letter, please
contact me at (410)
872-3943.
Sincerely,
TSI TelSys Inc.
Edward J. O'Malley
Director, Contracts and Procurement
Acknowledged and Agreed:
Cornes & Co. Ltd
_________________________
Signature
_________________________
Name
_________________________
Title
_________________________
Date
FACSIMILE MESSAGE
From Cornes & Co. Ltd., Tokyo
Date: 7 October 1997
TO: TSI TelSys Inc.
ATTN: Mr. K. Matsumoto
CC: Mr. E. O'Malley
From: Norio Ogita, Manager, Business Administration
Subject: Agreement
Thank you for your fax of 18 September and we will make the
following comments.
We agree with your proposal of scenario 1, 2 and 3. These 3
scenarios might be
stipulated in the side letter attached to the formal agreement and
you remain
the old (you proposed previously) wording in the formal agreement,
i.e. Art.
No. 13 of Exhibit B, Payment. Please refer the last paragraph of
our fax of 24
July 1997.
As far as we understand, scenario 3 should be applicable, if we
can not obtain
the customer's consent of payment of 25% at the time of contract,
although we
will try to avoid such a case.
We should be pleased, if you would confirm this before signing.
We put our signature and return the attached document on the
payment.
One thing we would like to comment is the wording on L/C.
We normally receive a document from our bank and they state on the
document
"irrevocable documentary credit" in stead of stating "irrevocable,
non-
transferable letter of credit".
Best regards,
N. Ogita
Manager, Business Administration
November 4, 1997
Mr. Norio Ogita, Manager, Business Administration
Cornes & Co. Ltd.,
Ryukakusan Bldg., 5F., 2-5-12
Higashi Kanda, Chiyoda-ku,
Tokyo, 101 Japan
Subject: Cornes Purchase Orders
Standard Payment Terms
Reference: Cornes facsimile dated October 7, 1997
Dear Mr. Ogita:
TSI TelSys Inc. is pleased to confirm our agreement to the
reference letter.
Specifically, we will consider our letter of September 16, 1997,
to be
incorporated into our previously negotiated terms of April 8,
1997, via
attachment. These payment terms will supersede those relevant
sections found
in Article 13 of Exhibit B.
TSI TelSys agrees to handle scenario 3 on a case-by-case basis and
has no
problem with Cornes position on this issue. We agree to revise
the letter of
credit wording from "irrevocable, non-transferable letter of
credit" to an
"irrevocable documentary credit" as Cornes proposed.
Thank you for your patience and follow-up in bringing these issues
to closure.
Should you have any questions regarding this letter, please
contact me at (410)
872-3943.
Sincerely,
TSI TelSys Inc.
Edward J. O'Malley
Director, Contracts and Procurement
TSI TelSys Proposed Letter of Credit Terms for Cornes
TSI TelSys proposes the following letter of credit terms for
Cornes
consideration:
Seventy-five (75%) of the total order amount shall be paid via an
irrevocable,
non-transferable Letter of Credit, confirmed by a U.S. Bank
acceptable to TSI
TelSys Inc., payable at sight to the order of TSI TelSys Inc. in
U.S. funds at
the counter of its advising bank above upon presentation of the
appropriate
documents as defined below.
1) Reimbursement Criteria:
"Presentation of the original End-Customer Acceptance Test
Approval Form signed
by the TSI TelSys and End-Customer representative(s) (see attached
form)."
2) TSI TelSys bank information is as follows:
Advising Bank Reimbursement Bank (payments made
to this
bank)
Nations Bank N.A. Nations Bank N.A.
Attn: LC Dept. 10320 Little Patuxent Parkway,
Suite 814
121 West Trade Street Acct. No. 20-0370-9508
21st Floor Lois V. Warden, Vice President
(410) 964-6634
Charlotte, NC 28244
3) Accompanying Documentation:
This is defined as the original End-Customer Acceptance Test
Approval Form
signed by the TSI TelSys and End-Customer representative (see
attached form).
4) Cornes shall assure that the Issuing bank's internal bank
reference number
is included on the letter of credit.
Cornes shall provide an advance copy of the letter of credit via
facsimile to
TSI TelSys Inc. for review and approval prior to providing a final
version to
its bank. The letter of credit must be in place and acknowledged
by TSI
TelSys' bank within ten (10) business days of the order placement
with TSI
TelSys. Delays in opening the letter of credit by the Customer
will result in
delay of the contracted shipment date.