*** Text omitted and filed separately
confidential treatment requested
under 17 C.F.R. Sections 200.80,
200.83 and 240.24b-2
EQUIPMENT PURCHASE AGREEMENT
This agreement (the "Agreement") is made this 27 day of June, 1996 by
and between United Communication Industry Public Company Limited, a Thailand
corporation having its principal place of business at 499/5 Benchachinda Bldg.,
16th Floor, Tower B, Vibhavadi Rangsit Road, Chatuchak, Bangkok, Thailand 10900
(hereinafter "UCOM") and Titan Information Systems Corporation, a Delaware
corporation having its principal place of business at 3033 Science Park Road,
San Diego, California 92121, U.S.A. (hereafter "Titan").
WITNESSETH
WHEREAS, UCOM desires to develop and operate a VSAT network for the
BAAC which will be deployed throughout Thailand on the THAICOM 2 system (as
defined) in order to provide administrative telephone service and data to BAAC
bank branches; and
WHEREAS, Titan will supply numerous multi-port satellite modems with
data, fax and voice capability; and
WHEREAS, the VSAT's will be under the control of a single dedicated
Network Control Station ("NCS") comprised of the DAMA network control hardware
and software and (NCT and NMS) link control channel located in Bangkok; and
WHEREAS, UCOM desires to purchase from Titan and Titan desires to sell
to UCOM the modems (NCT and NMS) collectively, each including their Key Elements
(as defined), the Key Equipment (as defined) for use in the BAAC Network and to
provide certain related services, pursuant to the terms and conditions set forth
herein.
NOW THEREFORE, in consideration of the promises and covenants herein
contained, the parties agree as follows:
1. DEFINITIONS
The following terms shall have the following meaning in this
Agreement:
(a) "BAAC" shall mean the Bank for Agriculture and Agricultural
Co-Operatives, the Ministry of Finance, the Government of
Thailand.
(b) "Key Elements" shall mean the key elements of the HUB and NCS as
set forth on the Schedule 2(a).
(c) "Key Equipment" shall mean the key equipment for (i) VSATs, (ii)
the HUB (including any and all Key Elements listed on Schedule
2(a)), and (iii) the NCS (including any and all Key Elements
listed on Schedule 2(a)).
1
(d) "NCS" shall mean the dedicated network control station and all of
the Key Elements of such NCS as set forth on Schedule 2(a), which
are located at the Bangkok HUB, as determined by UCOM, and which
shall control frequency assignments for voice, fax and data
transmissions in the VSAT network.
(e) "NCT" shall mean the Network Control Terminal (hardware)
(f) "NMS" shall mean the Network Management System (software)
(g) "THAICOM 2" shall mean that certain satellite, part of the
Thaicom satellite system launched in 1995 and which shall operate
from 113 degrees E.L. orbital location.
(h) "VSAT" shall mean the satellite earth station which will be
deployed throughout Thailand within the C-band coverage area of
the THAICOM 2 in order to provide the BAAC with administrative
voice and data communications.
2. SALE AND PURCHASE OF PRODUCTS AND SERVICES
Subject to the provisions of this Agreement, Titan shall sell to
UCOM and UCOM shall purchase from Titan certain hardware, software and
documentation (collectively, the "Products") as set forth in Schedule 2(a)
and further referenced herein. The Products shall be brand new and never
previously used and be in accordance with the descriptions indicated in the
said Schedule. The technical requirements for the Products hereunder are
attached hereto as Schedule 2(b). UCOM will make all arrangements to ship
Products, [...***...] to locations within Thailand as designated by UCOM.
UCOM has the right to purchase additional quantities of the products at the
established contract price for [...***...] from the date of this
contract.
3. DELIVERY, TITLE AND RISK OF LOSS
(a) Delivery of the Products shall be in accordance with the Delivery
Schedule attached hereto as Schedule 3. The prices for any and
all Products sold pursuant to this Agreement and set forth herein
shall include export packing, costs of supervision for
installation of the Master HUB in Bangkok, costs of supervision
for installation of the Products at 10 (ten) remote sites, costs
of training and instruction for UCOM and BAAC's personnel in San
Diego, California, and expenses in acceptance testing of the
Products in San Diego, California and shall be [...***...] UCOM
shall be responsible for delivery of all Products from Titan's
plant in San Diego, California to its desired location in
Thailand.
* Confidential Treatment Requested
2
The Delivery Schedule may be modified from time to time by UCOM
and Titan through mutual agreement.
(b) [...***...]Titan shall be responsible for any United States
taxes and customs duties on the Products to be delivered
hereunder (including without limitation export taxes and duties).
(c) Title and risk of loss to the Products shall remain with Titan
until UCOM takes possession of the Products [...***...]
thereafter, title and risk of loss to the Products will be with
UCOM. UCOM hereby grants to Titan a security interest in the
Products until the Products have been paid in full. UCOM
irrevocably appoints Titan as its lawful attorney-in-fact coupled
with an interest with full authority to execute and file UCC-1
documents and any other necessary documents to perfect and
enforce its security interest. Upon payment in full to Titan
for the Products, Titan shall forthwith take all necessary
action to release and remove from any record any lien imposed
in any Products covered under this Agreement.
4. PAYMENTS.
(a) The total price ("Total Price") for the Products to be purchased
by UCOM from Titan hereunder is [...***...] This price is
exclusive of shipping and other related costs except for the
costs as specified in Paragraph 3(a).
(b) UCOM shall post an irrevocable letter of credit in an amount to
cover the payment for each delivery to secure payment for the
Products to be delivered hereunder.
(c) The payments shall be in accordance with the Payment Schedule
attached hereto as Schedule 3.
(d) The Payment Schedule may be modified from time to time by UCOM
and Titan through mutual agreement in order to comply with
modified delivery schedule made between BAAC and UCOM.
(e) Acceptance Testing of the Master HUB and Modems shall be
accomplished in San Diego. During the Acceptance Test, the
equipment shall be required to meet the Acceptance Test criteria
described in Schedule 2(c). Acceptance Testing will be performed
on only the First
* Confidential Treatment Requested
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Article or initial delivery of equipment. Acceptance by UCOM of
the initial delivery of Products shall mean acceptance of all of
the Products to be delivered hereunder in accordance with the
Delivery Schedule attached hereto as Schedule 3. UCOM
understands and agrees that this Equipment Purchase Agreement
covers a total [...***...] and that, except as provided in
Paragraph 19(b), or (c) hereof or otherwise mutually agreed by
the parties, UCOM is obligated to purchase and Titan is obligated
to deliver this entire amount in accordance with the terms and
conditions of this Agreement.
5. FORCE MAJEURE
Titan and UCOM shall not be liable or any failure to perform, or delay
in performance caused by circumstances beyond their reasonable control which
make such performance commercially impracticable including, but not limited to
fire, storm, flood, earthquake, explosion, accidents, acts of the public enemy,
war, rebellion, insurrection, sabotage, epidemic, quarantine restrictions, labor
disputes, labor shortages, embargoes, or failures or delays in transportation,
inability to secure raw materials or machinery, acts of God, acts of any
national, state, provincial or local government authority, whether or not valid,
and judicial action, whether or not valid.
6. WARRANTY
(a) Titan warrants all Products delivered hereunder against defects
in materials and workmanship for a period of [...***...]
from delivery. For purposes of this paragraph, delivery shall
mean the arrival of the Products at the destination in Thailand.
Titan's liability under this warranty is limited (at Titan's
discretion) to replacing or repairing the Product that was
defective at the time delivered to UCOM and within a period of
[...***...] after each delivery, provided that Titan will
not be liable under this warranty unless (i) Titan is promptly
notified in writing upon the discovery of defects by UCOM, and
(ii) the defective unit is returned to Titan, transportation
charges paid by UCOM. In no event shall Titan be liable to UCOM
for loss of profits, loss of use, or damages of any kind.
Titan's warranties shall not be enlarged, diminished, or affected
by, and no obligation or liability shall arise or grow out of
Titan's rendering of technical advice or service in connection
with the Products furnished hereunder. No person, firm or
corporation is authorized to assume for Titan any expanded
liability in connection with this Agreement, or the sale of the
Products hereunder.
(b) This Warranty shall not apply to any Products, or parts thereof,
that (a) has had the Serial Number, Model Number, or other
identification marks altered, removed, or rendered illegible; (b)
has been damaged by or subject to improper installation or
operation, misuse, neglect, or used in any way
* Confidential Treatment Requested
-4-
with products not previously approved in writing by Titan, or for
any cause beyond Titan's control; (c) has been repaired or
altered by other than Titan personnel and/or has been subject to
the opening of any sealed cabinet boxes without Titan's prior
written consent; and/or (d) has been used in any way other than
in strict accordance with Titan's installation and operation
instructions provided with the Products. This Warranty does not
cover labor required to remove or reinstall warranted Products on
site. In the event that Titan elects to replace a defective item
of Products, Titan shall, at its expenses, immediately ship such
replacement item to the location specified by UCOM. Thereupon,
UCOM shall ship the defective item to Titan.
(c) THE ABOVE WARRANTY IS IN LIEU OF, AND EXCLUDES, AND EACH PARTY
HEREBY WAIVES, ANY OTHER REPRESENTATIONS, GUARANTEES AND
WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, INCLUDING, WITHOUT
LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
7. OPERATION AND MAINTENANCE MANUALS
One (1) set of operation and maintenance manual in English language
shall be provided with each unit of the Products to be delivered
hereunder as part of the sale of Products hereof. The contents of the
manual shall include the installation instructions, machinery data,
operation instructions, maintenance recommended spare parts list.
8. SUPERVISING, TRAINING, AND TEACHING
Titan shall provide one time free of charges supervising, training and
teaching services for UCOM and BAAC's personnel in the installation, use, repair
and maintenance of all Products sold hereunder in San Diego, California.
Additional supervising, training, and teaching services by Titan personnel shall
be done on a time and material basis. Supervising Training and Teaching has
been previously provided to UCOM and BAAC personnel in San Diego, California.
Additional on-site training will be provided to UCOM and BAAS personnel as part
of the demonstration system installation and initial installation for the first
ten (10) sites utilizing the CCM-4000.
9. SERVICING
Titan agrees to provide under a separate contract additional equipment
and spare parts for the Products sold hereunder in order to enable UCOM and BAAC
make repairs, maintenance and replacements thereto so that the Products can be
operational, for a period of not less than [...***...] from the date on which
UCOM has issued to Titan a testing completion certificate of the Products.
Titan further agrees to provide necessary repairing and maintenance services
provided that UCOM and Titan will jointly and mutually agree on the periodic
upgrade
*Confidential Treatment Requested
-5-
or revision of the Products to eliminate obsolete parts, reasonable prices and
conditions thereof, separate and apart from this agreement.
10. TESTING AND ACCEPTANCE OF DELIVERY OF PRODUCTS
(a) If the Products undergoing First Article Testing meet the
Acceptance Test Criteria set forth in Schedule 2(c) attached
hereto, UCOM shall issue a testing completion certificate to
Titan. Such certificate shall be evidence of the final
acceptance of delivery of the First Article. The testing
completion certificate will be issued within thirty (30) days of
the completion of the First Article Testing at San Diego,
California.
(b) Titan and a UCOM authorized representative agree that if the Key
Equipment has failed to meet the Acceptance Test Criteria UCOM
shall notify Titan of such failure in writing and Titan shall be
granted thirty (30) days to correct the Key Equipment (the "Cure
Period"). Following the Cure Period, the Key Equipment shall
again be required to meet the Acceptance Test Criteria. The Key
Equipment shall be deemed to have had Successful Testing upon
delivery of the Certification by Titan and a UCOM authorized
representative to UCOM of such Successful Testing.
11. EARLY AND LATE DELIVERIES
If Titan delivers to UCOM Products in advance of the delivery schedule
set forth in Schedule 3, UCOM shall pay to Titan [...***...] per day of the
value of Products comprising that single delivery, up to a maximum of
[...***...]. Approval from UCOM is not required for Titan to ship Products
in advance of the delivery schedule. If Titan delivers to UCOM
the Products beyond the delivery schedule set forth in Schedule 3, Titan shall
pay to UCOM [...***...] of the value of Products comprising that single delivery
up to a maximum of [...***...].
12. CONFIDENTIALITY
UCOM acknowledges that certain aspects of the design, production and
operation of the Products are proprietary information and trade secrets of
Titan, and shall not be disclosed or otherwise transferred by UCOM, its
employees, agents or affiliates to any third party except to BAAC, and UCOM
shall not use, appropriate or copy any trade secrets of Titan without Titan's
prior written consent. UCOM also agrees not to incorporate or in any way use
any of Titan's trade secrets or proprietary information (disclosed separately or
embodied in any of the Products) in its or any other party's products or
businesses.
- 6 -
13. PROPERTY RIGHTS
This Agreement shall not be construed as granting, expressly or
implied, during the term of this Agreement or thereafter, any rights concerning
any patent, copyright or other intellectual property rights in force concerning
the Products and belonging to Titan. Titan shall solely own and have exclusive
rights to all United States and foreign patents, trademarks service marks,
copyrights, mask works, trade secrets and other intellectual property, whether
patented or not, regarding Titan's intellectual property concerning the
Products. Title to all such intellectual property concerning the Products is
and shall always remain with Titan, and UCOM's use thereof shall be restricted
as expressly provided hereunder.
14. LIMITATION OF LIABILITY
TITAN SHALL NOT BE LIABLE FOR ANY ACTUAL, SPECIAL OR CONSEQUENTIAL
DAMAGES, OR INJURIES OF ANY KIND SUFFERED BY UCOM AND/OR ANY END USER RESULTING
FROM THE USE OR INABILITY TO USE THE PRODUCTS, INTEGRATION OF THE PRODUCTS WITH
GOODS OR SERVICES NOT PROVIDED BY TITAN, LOSS OF GOODWILL OR PROFITS AND/OR FROM
ANY OTHER CAUSES WHATSOEVER, EVEN IF IT HAS BEEN ADVISED OF THE POSSIBILITY OF
SUCH DAMAGES.
15. INFRINGEMENT
UCOM shall indemnify and defend Titan against any claim that the
Products, by reason of conforming to UCOM's specifications, infringe on any
United States patent or copyright registered as of the date of this Agreement,
provided Titan promptly notifies UCOM in writing with fifteen (15) days after it
becomes aware of such a claim, affords UCOM exclusive control of the defense or
settlement of such claim, and give UCOM all information and assistance requested
by UCOM to settle or defend such a claim.
16. WAIVER
No waiver of, no delay in the exercise of, and no omission to exercise
any rights or remedies by either party shall be construed as a waiver by such
party of any other rights or remedies that such party may have under this
Agreement, nor shall such waiver, delay, or omission be considered a waiver of
the same rights or remedies in subsequent instances. The parties further agree
that no single or partial exercise of any right, power or privilege hereunder
shall preclude its further exercise.
17. THIRD PARTY AND CONTINGENT LIABILITY
The parties hereto shall indemnify and hold harmless each other from
and against all claims or remedies, suits, actions, liabilities and damages,
whether in tort, in contract or otherwise, including reasonable costs,
reasonable expenses and reasonable attorneys' fees incident thereto, which may
be suffered by, accrued against, charged to or recoverable from the
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indemnified party by reason of injury to or death of any person or by reason of
loss of or damage to property arising from the indemnifying party's negligent
act, omissions or willful misconduct.
18. COMPLIANCE WITH LAW
UCOM agrees that it will neither undertake, nor cause or permit to be
undertaken, with respect to the Products, any activities which either (i) is
illegal under any laws, decrees, rules or regulations in effect in the place
where the Products is used, or in the United States, or (ii) would have the
effect of causing Titan to be in violation of any laws, decrees, rules or
regulations in effect in the United States or in the place where the Products
are used.
19. TERM AND TERMINATION
(a) This Agreement shall expire [...***...] from the date
hereof unless terminated sooner in accordance with the provisions
of this Agreement or extended by mutual agreement.
(b) Either party shall have the right to terminate this Agreement in
its entirety, for cause, forthwith at any time, by giving written
notice to the other party in the event that the other party (i)
commits a non-curable default of violation of this Agreement;
(ii) commits a curable default or violation of this Agreement
which is not remedied within thirty (30) days after written
notice thereof; or (iii) becomes insolvent, or has a petition
filed against it as a bankrupt or insolvent, or executes an
assignment for the benefit of creditors, or has a receiver
appointed for any reason, with termination in such cases being
effective as of the date of the happening of the contingency
referred to.
(c) UCOM's sole right to terminate this contract are only those
specified in 19(b) above.
(d) Paragraph 12, 13, and 17 shall survive the termination or
expiration of this Agreement, and shall be specifically
enforceable by injunctive and other relief against UCOM in the
event of UCOM's breach since both parties agree that money
damages would be inadequate compensation to Titan in the event of
UCOM's breach.
20. ATTORNEY FEES
If any legal action is necessary to enforce the terms of this
Agreement, the prevailing party shall be entitled to reasonable attorneys' fees
in addition to any other relief to which that party may be entitled. This
provision shall be construed as applicable to the entire Agreement.
*Confidential Treatment Requested
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21. EXPORT CONTROLS
Titan shall obtain all export licenses from the United States
Government for shipment of the Products to Thailand. UCOM shall promptly execute
all documents and forward the same to Titan and perform such acts as Titan
reasonably requests to enable Titan to obtain an export license to ship the
Products to destinations designated by UCOM. UCOM warrants that the Products
shall be resold or used only within the countries designated by Titan in the
applications to the United States Government for such export license unless UCOM
secures appropriate export licensing to ship Products to another destination.
Titan shall cooperate promptly with all reasonable requests of UCOM to secure
such additional export authorization. Upon request, UCOM agrees to furnish
the United States Government further written assurance (in a form complying with
current United States Law) that in no event shall the Products, any part
thereof, and/or design or technical data in any form relating to the Products to
be directly or indirectly disclosed, transferred, or shipped in any way to any
country prohibited from receiving such materials under the United States export
laws and regulations.
22. ENTIRE AGREEMENT
This Agreement and its schedules attached hereto contain the entire
understanding of the parties on this subject and supersede all previous
understandings or agreements, whether oral or written. This Agreement cannot be
amended or modified, in whole or in part without a written instrument signed by
both parties hereto.
23. DISPUTES
This Agreement and the performance or breach thereof, shall be
governed, interpreted and construed in accordance with the substantive and
procedural laws of State of California, United States of America.
Any dispute, controversy, claim or difference arising out of, or in
connection with, or resulting from this Agreement, its application or
interpretation, or a breach thereof, which cannot be settled amicably by the
parties, such be resolved definitively and exclusively by arbitration under the
Rules of Conciliation and Arbitration of International Chamber of Commerce (the
"Rules") then prevailing, which arbitration shall be held in Singapore.
Arbitration shall be by a single arbitrator within thirty (30) calendar days
after demand for arbitration, then the arbitration shall be chosen in accordance
with the Rules. It is agreed that all documentary submissions, presentations,
and proceeding shall be in the English language. The decision of the arbitration
shall be final and binding on the parties and the judgement upon any award
rendered may be entered in any court having jurisdiction thereof.
24. EXECUTION AND SEVERABILITY
This Agreement shall become effective only upon being signed by an
authorized agent of the last party to sign. In the event that any of the
provisions of this Agreement or the application of any such provision to the
parties hereto with respect to their obligations hereunder
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shall be held by a court or other tribunal of competent jurisdiction to be
unenforceable, the remaining provisions of this Agreement shall remain in full
force and effect.
25. ASSIGNMENT
Both parties shall not transfer, pledge, or assign this Agreement, or
any rights or obligations hereunder, without first obtaining in each instance
the prior written consent of the other party.
26. NOTICES
All notices and demands of any kind which either party may be required
or desire to serve upon the other under the terms of this Agreement shall be in
writing and shall be served be (i) personal service, (ii) postage prepaid mail,
or (iii) facsimile, at the addresses set forth above, or the such other address
as the parties may specify in writing. Such notices shall be deemed effective
upon receipt by the party to whom addressed.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date and year first written above.
UNITED-COMMUNICATION INDUSTRY PUBLIC COMPANY LIMITED
By: /s/ PRASERT ATSAWASUWAN (PRASERT ATSAWASUWAN)
-----------------------------
Title: VICE PRESIDENT
--------------------------
TITAN INFORMATION SYSTEMS CORPORATION
By: /s/ L.L. Fowler
-----------------------------
L.L. Fowler
Title: Corporate V.P.
--------------------------
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Schedule 1
Intentionally left blank
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Schedule 2(a) Key Elements
MASTER HUB (Network Control Station)
[...***...]
SATELLITE MASTER STATION (SMS)
[...***...]
SATELLITE SUB STATION (SSS)
[...***...]
* Confidential Treatment Requested
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Schedule 2(b) Technical Requirements for the Products
[...***...]
* Confidential Treatment Request
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[...***...]
* Confidential Treatment Requested
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Schedule 2(c) Acceptance Test Criteria
1. Set up the equipment in accordance with the attached SSS, SMS and Main
HUB block diagrams.
2. Acceptance testing will be done over an active satellite channel.
Testing will be done utilizing a United States coverage C-band satellite with
the Motorola 6500 series router and the Codan C-band tranceiver.
3. Validate data rate requirements
[...***...]
4. Demonstrate the X.25 protocol operation through the Motorola 6500
Series Router.
5. Verify voice operation at [...***...].
UCOM provided equipment.
1. UCOM will provide a minimum of three (3) Motorola Series 6500 Routers
for interface testing with the CCM-400 modems. This equipment is required
within 30 days of contract award. A United States based technical point of
contact will be provided to Titan by UCOM.
2. UCOM will provide a minimum of one (1) Codan 5 watt C-band satellite
tranceivers to utilize for operational satellite testing within thirty (30) days
of contract award.
* Confidential Treatment Requested
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Schedule 3 PAYMENT SCHEDULE
[...***...]
* Confidential Treatment Requested
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SATELLITE SUB STATION (SSS)
- --------------------------------------------------------------------------------
[ART]
HUB
- -------------------------------------------------------
[ART]
September 18, 1997
MEMORANDUM OF UNDERSTANDING
This Memorandum of Understanding presents the agreements reached between UCOM
and Titan Information Systems ("Titan") during discussions held at UCOM's
Headquarters in Bangkok Thailand, during the period September 16 through 18,
1997, concerning Titan's performance on the BAAC Project.
1. Titan recognizes that it has been late in delivering hardware and
software that meets contract specifications and that this has
caused serious difficulties for UCOM on the BAAC project. To
resolve issues related to the Equipment Purchase Agreement dated
27 June 1996 (the "Contract") [...***...] Titan agrees
[...***...]
2. To accomplish the intent of 1. above, future payments from UCOM
to Titan for deliveries against the existing Contract will be
[...***...] specified in the Contract. Additionally, the final
payment made under this Contract will be [...***...] of the
amount of money already paid to Titan to date, in conjunction
with this contract [...***...]
3. UCOM agrees to pay Titan for product that it has already shipped
to Thailand, but for which it has not yet been paid, in
accordance with the following terms:
a) UCOM will make an initial payment via bank transfer by
September 24, 1997 if possible and by September 30,
1997 at the latest, [...***...] for product already
shipped but not yet paid by UCOM. as follows:
[...***...]
b) UCOM will make final payment of [...***...] as soon as
all 64 of the modems which have already been delivered,
are [...***...] capability and tested to prove proper
operation.
* Confidential Treatment Requested
4. Titan expects to ship an additional 36 modems, capable of 80 MHz
operation, by the end of September, 1997. Titan will extend up to
[...***...] payment terms to UCOM on this shipment to provide
time for UCOM to deal with any special requirements that may be
imposed by the Thai Government because of the national monetary
crisis.
5. Titan agrees to promptly initiate application for an American
EX/IM Bank loan facility which would be used by UCOM to buy Titan
and possibly other American products required for the BAAC
project, if UCOM requests such assistance.
/s/ Prasert Atsawasuwan
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Prasert Atsawasuwan
Vice President
United Communications Industry Public Co. Ltd. (Networks)
/s/ Frederick L. Judge
- ------------------------------------
Frederick L. Judge
President & CEO
Titan Information Systems Corp.
* Confidential Treatment Requested