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EXHIBIT 10.1
EQUIPMENT SUPPORT SUBCONTRACT
This Agreement, consisting of this Equipment Support Subcontract along with
Schedules A through G, is between OLIVETTI NORTH AMERICA, INC. ("ONA"), a
Washington corporation, with corporate headquarters at ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ and MAI SYSTEMS CORPORATION, ("MAI"), a Delaware
corporation, with corporate headquarters at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇, and is effective on December 2, 1996 ("Effective Date").
1. PURPOSE
MAI sells computers and computer systems and provides service for the
equipment it sells to its customers. As part of that business, MAI
provides warranty service for many of the products it sells and has
also entered into contracts with many of its customers to provide
maintenance, repair, and related services for these products. In
order to provide these services, MAI employs a number of computer
service technicians working out of a number of field offices
throughout the United States. MAI is planning to discontinue its
current field service operations and needs a company with a qualified
field service organization to perform the field service portion of
MAI's contracts with its customers. ONA is also in the business of
selling computers and computer systems and also maintains a computer
service field organization throughout the United States. ONA has
agreed to provide MAI with computer field service throughout the
United States under the terms and conditions set forth in this
agreement.
2. APPLICATION OF AGREEMENT
This Agreement is intended to cover not only the provision of computer
field service operations under those contracts MAI has with its
customers as of the Effective Date of this Agreement ("Existing
Customer Agreements"), but contracts MAI enters into with its
customers after the Effective Date as well ("New Customer
Agreements"). However, the terms under which ONA will provide
services related to Existing Customer Agreements differ in some
respects from those under which it will provide services related to
New Customer Agreements.
Schedules A through E define the services ONA will perform and the
manner in which MAI will support ONA and pay ONA for those services
with respect to New Customer Agreements. Schedule F identifies the
ways in which the treatment of these same issues will differ with
respect to Existing Customer Agreements.
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3. EXCLUSIVITY/RIGHT TO BID
This Agreement is intended to establish an exclusive relationship
whereby ONA will provide all of MAI's Maintenance Service needs (for
both Warranty Service and Contract Service) under Existing Customer
Agreements. MAI agrees to have ONA provide all its field service
requirements of this type under the Existing Customer Agreements and
that it will not perform those obligations itself or contract with any
other person or entity to provide such requirements so long as this
Agreement is in force.
MAI further agrees that with respect to all of its other Equipment
Support needs it may have during the term of this Agreement, it shall,
at a minimum, provide ONA with the opportunity to bid on the provision
of such services. MAI further agrees to provide the use of office
space and access to MAI's existing office equipment (telephones,
copiers, fax machine, etc.) at MAI's corporate headquarters for an ONA
employee to work on-site to serve as an account contact and to respond
to requests for bids from MAI. ONA agrees to reimburse MAI for long
distance telephone charges incurred by this employee.
4. MAI EMPLOYEES
a. MAI shall terminate the employment of those MAI employees
identified by name and title on Schedule G (the "Target
Employees") effective December 1, 1996.
b. Prior to the Effective Date, ONA will offer employment to the
Target Employees on the following terms:
(1) a salary or hourly wage no less than that being paid
to the Target Employee by MAI,
(2) ONA's normal terms and conditions of employment for
similar employees,
(3) treatment of the Target Employees' credited years of
service with MAI (as shown on Schedule G ) as service
with ONA for all purposes except as follows:
a) Notice/Severance Pay. Target Employees
identified on Schedule G as Customer Support
Engineers, Senior Customer Support Engineers,
Customer Support Specialists, District
Product Specialists, Senior Field Materials
Coordinators, National Product Support
Specialists or Logistics Planners (1) will
not be entitled to payment of more than 12
weeks of severance pay under ONA's
Notice/Severance Pay Policy regardless of
their actual years of service (MAI, ONA, or
combined), and (2) shall not be entitled to
receive notice pay under ONA's
Notice/Severance Pay Policy.
b) Pension Plan. A Target Employee's years of
service with MAI will not be considered for
purposes of computing the pension benefit to
which that employee is entitled under ONA's
Defined Benefit Pension Plan. However, those
years of service with MAI will be considered
for
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purposes of satisfying the vesting
requirements of that plan. Regardless of a
Target Employee's ONA hire date, such
employee shall not become a participant in
ONA's Defined Benefit Pension Plan until at
least January 1, 1997.
c) ONA agrees not to layoff any Target Employees
identified on Schedule G as managers during
the twelve (12) month period beginning on the
Effective Date. This shall not prohibit ONA
from terminating such employees for cause.
(4) ONA's offer of employment to a Target Employee shall
be contingent on that Target Employee agreeing to
transfer his or her accrued vacation balance to ONA
instead of having the value of that balance paid in
cash by MAI upon termination of employment. MAI
agrees to reimburse ONA for the value of all vacation
balances transferred to ONA by Target Employees (the
"Transferred Total"). This reimbursement shall be
made beginning January 1, 1997 in monthly payments
equal to the greater of (i)one-twelfth (1/12) of the
Transferred Total or (ii)the actual value of
transferred vacation balances taken by Target
Employees in the prior month. MAI agrees to
indemnify ONA against any claims arising from this
provision on transferring vacation balances in
accordance with the provisions of Section 13(a) of
this Agreement.
c. ONA's current field engineers in metropolitan New York and in
New Jersey are unionized and MAI has indicated that it is not
willing to have its ex-employees incorporated into the union
unless it is sure that they would not be the first to be laid
off should layoffs occur. MAI is concerned about having a
trained work force in place to do the work being subcontracted
to ONA pursuant to this Agreement. ONA is currently working
with its union to try to modify the existing collective
bargaining agreement to address this problem. However, if
that effort is ultimately unsuccessful, ONA will then be
forced to take some other action to resolve this situation,
including possibly subcontracting the work from MAI in this
area to another company with qualified personnel. MAI hereby
consents to such subcontracting.
d. The provisions of this section are intended solely for the
benefit of MAI and ONA and are not intended to create or
expand any rights, as third party beneficiaries or otherwise,
of any other person, including without limitation any of MAI's
employees. Nothing in this section shall be construed as
requiring ONA to pay severance to any employee.
5. SOFTWARE LICENSE
MAI either owns or has the right to license certain software
(including diagnostic programs) which is either necessary or desirable
to use in providing Equipment Support (the "Software"). Subject to
the terms and conditions of this Agreement, MAI hereby grants to ONA a
non-exclusive license to access and use the Software as ONA determines
appropriate
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in performing its responsibilities under this Agreement and only under
this Agreement. ONA shall be permitted to make copies of the Software
as it deems appropriate for use in performing its obligations under
this Agreement.
ONA acknowledges that the Software is licensed, not sold, to it solely
for the purpose of performing its obligations under this Agreement.
ONA further acknowledges that the Software is "Confidential" and
subject to the provisions of Section 16, Non-Disclosure, of this
Agreement. ONA acknowledges that it is not permitted, nor shall it
permit anyone else, under any circumstances, to decode, reverse
engineer, decompile, or disassemble the Software.
6. ONA RESPONSIBILITIES
During the term of this Agreement, ONA will:
a. provide Equipment Support in the United States in the manner
identified in Schedules A & F;
b. maintain sufficient fully trained, competent and qualified
maintenance personnel to perform the Equipment Support
required by this Agreement;
c. perform the obligations imposed on it with respect to Parts in
Schedules C & F; and
d. except as permitted by this Agreement, not enter into direct
Contract Service or Equipment Support agreements with any MAI
End Users pertaining to equipment which is the subject of a
service agreement with MAI.
7. CUSTOMER RESPONSIBILITIES
During the term of this Agreement, MAI will:
a. order Equipment Support from ONA in the manner identified in
Schedules A & F;
b. pay for Equipment Support rendered by ONA in the manner
identified in Schedules B & F;
c. perform the obligations imposed on it with respect to Parts in
Schedule F; and
d. provide ONA with the Technical Support necessary to permit it
it provide Equipment Support as identified in Schedule D.
8. DEFINITIONS
For the purposes of this Agreement the following terms shall have the
following meanings:
a. "Contract Service" means performing Maintenance Service
pursuant to a contract with the End User in which the End User
pays MAI for its agreement to provide such service.
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b. "Equipment Support" means performing any one or more of the
following types of service on the Equipment:
(1) Maintenance Service, (which includes both Contract
Service and Warranty Service)
(2) Installation Service, or
(3) Time and Materials Service
as those terms are defined in the Schedules to this Agreement.
c. "Existing Customer Agreement" means a contract between MAI and
its customer which is in effect on the Effective Date of this
Agreement and also means any subsequent renewal of such an
Agreement on substantially the same terms and conditions as
are in effect on the Effective Date of this Agreement.
d. "Location" means a site where Equipment is installed.
e. "New Customer Agreement" means
(1) a contract between MAI and its customer which was not
in effect on the Effective Date of this Agreement, or
(2) an Existing Customer Agreement which is renewed after
the Effective Date of this Agreement on terms and
conditions substantially different than those in
effect on the Effective Date of this Agreement.
MAI and ONA may agree in writing to continue to treat an
Existing Customer Agreement which is renewed after the
Effective Date of this Agreement on terms and conditions
different than those in effect on the Effective Date of this
Agreement as an Existing Customer Agreement despite the
changes in terms and conditions.
f. "Parts" means any modules, subassemblies, boards, components
and related materials of an item or unit of the Equipment.
g. "Service City" means those cities in which ONA maintains a
service office. Schedule E lists ONA's present Service Cities.
h. "Warranty Service" means performing Maintenance Service in
fulfillment of a warranty given to the End User in connection
with the purchase of the Equipment.
In addition, capitalized terms not defined in this section shall have
the meanings stated in the text of this Agreement.
9. TERM
This Agreement shall take effect on the Effective Date, regardless of
when it is signed. Unless sooner terminated in accordance with the
terms of this Agreement, this Agreement shall have an initial term of
five (5) years ("Initial Term") and shall automatically be extended
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for successive one (1) year periods thereafter. Either party may
terminate this Agreement at the end of the Initial Term or at the end
of any subsequent annual renewal upon not less than one hundred eighty
(180) days prior written notice.
10. INTERNATIONAL SERVICE
MAI has indicated that in the future it may need Equipment Support in
countries other than the United States. ONA agrees that, upon request
by MAI, it will attempt to provide such service through Ing. C.
Olivetti & C., S.p.A. and its affiliates on terms and conditions to be
agreed upon with MAI.
11. WARRANTY
ONA warrants that all Equipment Support provided by it pursuant to
this Agreement will be performed in a competent and workmanlike
manner. This warranty is in lieu of all warranties, express or
implied, which may be deemed applicable to the subject matter of this
agreement, including, but not limited to, any implied warranties of
merchantability and fitness for a particular purpose.
12. LIMITATION OF LIABILITY
NEITHER PARTY SHALL BE ENTITLED TO RECOVER ANY OF THE FOLLOWING TYPES
OF DAMAGES FROM THE OTHER IN CONNECTION WITH ANY CLAIM RELATED TO THIS
AGREEMENT, REGARDLESS OF WHETHER THAT CLAIM IS BASED IN TORT, CONTRACT
OR OTHERWISE:
(1) THE LOSS OF OR THE COST OF RECONSTRUCTING DATA STORED ON DISK
FILES, TAPES, OR MEMORIES, EXCEPT AS PART OF A CLAIM FOR
INDEMNIFICATION PURSUANT TO SECTION 13, BELOW(1),
(2) LOSS OF GOODWILL,
(3) INCIDENTAL DAMAGES
(4) CONSEQUENTIAL DAMAGES,
(5) PUNITIVE DAMAGES,
(6) ANY FORM OF INDIRECT DAMAGES OF ANY NATURE, OR
(7) DAMAGES FOR PERSONAL INJURY OR PROPERTY DAMAGE EXCEPT TO THE
EXTENT CAUSED BY THE NEGLIGENCE OF THAT PARTY OR ITS EMPLOYEE.
__________________________________
(1) MAI agrees to continue to include a limitation of liability
provision substantially similar to Section 13 of its current Services
Agreement form contract (see Appendix F-2) in future services
agreements with Customers.
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13. INDEMNIFICATION
a. MAI agrees to defend, indemnify and save ONA harmless from and against
any and all claims, suits, or proceedings brought against it and in any
way relating to either the allegedly negligent or wrongful acts or
omissions of MAI, or the products sold by MAI covered by this
Agreement, and from the costs, expenses and damages incurred by ONA in
connection with such claims, suits and proceedings. ONA agrees to
promptly notify MAI of any claim as to which indemnification is sought,
cooperate fully in the defense of such claim, and permit MAI or its
insurance carrier to control the defense and settlement of such claim.
b. ONA agrees to defend, indemnify and save MAI harmless from and against
any and all claims, suits, or proceedings brought against it and in any
way relating to allegedly negligent or wrongful acts or omissions of
ONA, and from the costs, expenses and damages incurred by MAI in
connection with such claims, suits and proceedings. MAI agrees to
promptly notify ONA of any claim as to which indemnification is sought,
cooperate fully in the defense of such claim, and permit ONA or its
insurance carrier to control the defense and settlement of such claim.
14. INSURANCE
Each party represents and warrants to the other that it has and will
maintain liability insurance coverage throughout the Term of this
Agreement, in an amount appropriate in light of the potential liability
created by this Agreement.
15. NON-SOLICITATION OF EMPLOYEES
From the Effective Date until six (6) months after the termination of this
Agreement, MAI shall not, directly or indirectly, hire or solicit for hire
any ONA employee connected with performance under this Agreement, without
ONA's prior written approval. This section shall not prevent MAI from
soliciting or hiring any ONA employee after such employee's employment with
ONA has been ended through no involvement by MAI. It is further agreed
that the damages as a result of a breach of this provision would be
difficult to measure and that the amount of One Hundred Thousand
($100,000.00) Dollars is a good approximation of the damages that would be
caused by one violation of this provision and should be payable as
liquidated damages in the event of a breach of this provision.
This paragraph shall not apply to prevent MAI from hiring or attempting to
hire the Target Employees following a full or partial termination of this
Agreement by MAI pursuant to the terms of this Agreement.
16. NON-DISCLOSURE
a. Both parties agree that any information disclosed to it by the other
party in connection with this Agreement which has been designated in
writing as "Confidential" (including information disclosed orally and
identified in writing as "Confidential"
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within ten (10) days after the initial oral disclosure) shall be
treated as such. Additionally, all information provided by MAI to ONA
in connection with requests for bids or proposals for Equipment
Support, including the identity of MAI's customers and their service
requirements, shall be deemed "Confidential" whether or not it is so
identified. Each agrees that with respect to such information it will:
(1) not disclose such information to third parties without the written
consent of the other,
(2) use such information solely for the purposes of this Agreement,
(3) treat such information of the other with a degree of care which is
reasonably calculated to protect such information from disclosure
(but in any event with at least the same degree of care as it
treats its own confidential information),
(4) inform its employees, agents or authorized representatives of the
confidential or proprietary nature of such information, and
(5) direct such persons to comply with the terms of this Agreement.
Either party may bring an action in equity to foreclose violations of
this section through injunctive relief.
b. The following types of information shall not be considered
"Confidential" information subject to the restrictions of this
provision:
(1) Information in the possession of or known to the receiving party
on the date of receipt,
(2) Information in the public domain at the time of its disclosure or
which enters the public domain after such disclosure through no
fault of the receiving party,
(3) Information independently developed by the receiving party, its
employees, agents or representatives without reference to the
other party's confidential information,
(4) Information made available to the receiving party, its employees,
agents or representatives by a third party having a right to do
so, or
(5) Information ordered disclosed pursuant to judicial or other lawful
governmental action, provided, that the party receiving such
request gives prompt written notice of the request to the other
party.
▇. ▇▇▇ acknowledges that ONA's business includes the design, development,
and servicing of products for the computer-based industry, and nothing
in this Agreement shall preclude or in any way impair ONA's engaging or
continuing to engage in that business.
d. The non-disclosure obligations imposed by this Agreement shall continue
in force for so long as the information is maintained as confidential
by the disclosing party and for
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a minimum period of three (3) years from the date of first
disclosure, regardless of any termination of this Agreement.
17. RELATIONSHIP BETWEEN PARTIES
ONA shall perform its duties under this Agreement as an independent
contractor, and not as an agent or affiliate of MAI. In particular:
a. nothing contained in this Agreement shall be construed to constitute
ONA as a partner, employee or agent of MAI, nor shall either have any
authority to bind the other in any respect, it being intended that each
shall remain an independent contractor responsible for its own actions,
▇. ▇▇▇ shall exercise no control over the activities and operations of
ONA, each being recognized hereunder as an independent contractor,
c. The relationship between ONA and MAI's customers shall be that of a
subcontractor; ONA is not assuming any of the Customer Agreements and
shall have no direct obligation to MAI's customers.
18. ASSIGNMENT
Neither party may assign any of its rights, interests or duties under this
Agreement without the prior written consent of the other party, which
consent shall not be unreasonably withheld. In the event one party seeks
consent to an assignment and the other party withholds its consent to that
proposed assignment, the party seeking consent may terminate this Agreement
upon sixty (60) days notice to the other party.
19. AUTHORIZED REPRESENTATIVES AND NOTICES
a. Each party shall at all times designate one representative who shall be
authorized to take any and all action and/or grant any approvals
required in the course of performance of this Agreement. Such
representative shall be fully authorized to act for and bind such party
including the approval of amendments to this Agreement. Until written
notice to the contrary, the authorized representatives of the parties
are as follows:
FOR ONA: FOR MAI:
Vice President, Customer Service Vice President, Customer Service
Olivetti North America, Inc. MAI Systems Corporation
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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b. Any notice or other communication required or permitted under this
Agreement shall be in writing and shall be delivered in person or sent
by overnight commercial courier service with receipt, addressed as set
forth below:
IN THE CASE OF ONA: WITH A COPY TO:
Vice President General Counsel
Customer Service Legal Department
Olivetti North America, Inc. Olivetti North America, Inc.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
IN THE CASE OF MAI: WITH A COPY TO:
Vice President General Counsel
Customer Service Legal Department
MAI Systems Corporation MAI Systems Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Notice shall be deemed given when received.
c. Either party may change the name or address to which notices or other
communications are to be sent by giving written notice of such change
to the other party.
20. EXCUSED NON-PERFORMANCE
A delay in or failure of performance under this Agreement caused by
circumstances beyond the reasonable control of the party affected shall be
excused to the extent necessary, provided that the party affected shall
make reasonable efforts to remove or circumvent such circumstances. Such
excusing circumstances shall include (without limitation): shortages of
materials; acts of God; fire; flood; war; embargo; labor trouble; failure
or delay by suppliers; riots; and laws, rules, regulations and orders of
any governmental authority. If any delay or inability to perform continues
for more than sixty (60) days, the non-affected party shall have the right
to terminate the affected portion of this Agreement upon seven (7) days
Notice to the affected party, or to suspend its obligations under the
Agreement until such time as the delay or inability to perform is
corrected.
If any delay or inability to perform on the part of ONA continues for a
period greater than the period of excused non-performance permitted in
MAI's contract with one of more of its Customers, MAI shall have the right
to terminate the affected portion of this Agreement upon twenty-four (24)
hours Notice to ONA. MAI agrees to continue to include an excused
non-performance provision substantially similar to the first two sentences
of Section 15 of its
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current Services Agreement form contract (see Appendix F-2) in future
services agreements with Customers.
21. DEFAULT AND TERMINATION
a. If either party defaults in performance of any material obligation
under this Agreement, and such default is not cured within sixty (60)
days after receipt of Notice from the non-defaulting party, the
non-defaulting party shall have the right to immediately terminate this
Agreement by Notice to the defaulting party.
▇. ▇▇▇ may terminate this Agreement for default by ONA on less than sixty
days notice as follows:
(1) If ONA is in default under this Agreement, MAI shall escalate that
problem within ONA's service organization as necessary in order to
have the problem addressed. This escalation shall include, when
necessary, bringing the problem to the attention of ONA's vice
president of customer service.
(2) If, after ONA has been given a reasonable opportunity under the
circumstances to resolve the problem, MAI believes that ONA is
still in default under this Agreement, MAI will give ONA Notice of
the alleged default.
(3) If ONA has not cured the default within forty-eight (48) hours of
its receipt of Notice, MAI may terminate this Agreement as to the
MAI Customer to whom the default relates.
c. Should MAI become more than forty-five (45) days delinquent in its
obligation to pay, ONA may suspend its performance hereunder until
MAI's account is brought current. If MAI's account remains delinquent
for a total period of sixty (60) days, ONA shall have the option to
terminate this Agreement immediately by Notice to MAI.
d. Termination of this Agreement shall not affect any rights existing as
of the effective date of termination.
e. The rights and remedies provided in this Agreement are cumulative and
in addition to any other rights or remedies available at law or in
equity.
f. The provisions of Section 16 shall survive termination of this
Agreement.
22. CONFLICT RESOLUTION
MAI and ONA agree to meet and work together to find acceptable solutions to
any disputes between them related to this Agreement. If, after thirty (30)
days, they are unable to so resolve the dispute, the dispute will be referred to
MAI's President and the President or CEO of ONA, or their designated
representatives, who shall meet or talk within fifteen (15) business days after
Notice is received to resolve such dispute. Notice of the invocation of this
procedure shall be directed to such officers and shall include a reference to
this Section 16. If the dispute is not resolved by this meeting, then it shall
be resolved by arbitration in
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accordance with Section 17. If a party fails to meet with the other party
upon request, the requesting party may either obtain an order of a court of
competent jurisdiction requiring the non-complying party to meet and confer
or proceed to arbitration in accordance with Section 17.
23. ARBITRATION
All disputes relating to this Agreement shall be submitted to arbitration
in accordance with the commercial rules of the American Arbitration
Association then in effect. Such arbitration shall take place in the
county where the national headquarters of the defending party are located
and shall be conducted by three (3) arbitrators, one selected by each party
and the third selected by the other two. The decision of the arbitrators
shall be final, binding, and without appeal and may be enforced in any
court having jurisdiction over the relevant parties or their assets.
24. GENERAL
a. This Agreement shall be governed by the laws of the State of
Washington.
b. This Agreement, together with the attached Schedules, constitutes the
complete and final agreement between the parties with respect to the
subject matter of this Agreement. This Agreement supersedes all prior
discussions, agreements and writings with respect thereto. No
agreement purporting to modify, add to, terminate, waive or change any
term or condition of this Agreement shall be binding unless it is in
writing and signed by authorized representatives of both parties.
c. The organization of this Agreement and section headings are for
convenience only and shall not be used to construe or interpret this
Agreement.
d. No delay or failure of either party in exercising any right hereunder,
and no partial or single exercise thereof, shall be deemed to
constitute a waiver of such right or any other rights hereunder.
e. If any provision or term of this Agreement shall be deemed or construed
to be invalid, illegal or unenforceable by a court of competent
jurisdiction, such determination shall in no way affect the validity,
legality, or enforceability of the remaining portions of this
Agreement.
f. Should legal action be required to enforce or interpret any of the
provisions of this agreement, the prevailing party shall be entitled to
all costs incurred in connection with that action, including a
reasonable attorney's fee.
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"ONA" "MAI"
OLIVETTI NORTH AMERICA, INC. MAI SYSTEMS CORPORATION
By: By:
---------------------------------- -------------------------------
Its: Its:
--------------------------------- ------------------------------
Dated: Dated:
------------------------------- ----------------------------
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SCHEDULE A
NEW CUSTOMER AGREEMENTS EQUIPMENT SUPPORT
This Schedule sets out a beginning framework to define the manner in which
service will be ordered by MAI and provided by ONA for New Customer Agreements.
The parties anticipate that ONA will be submitting bids to MAI with respect to
most New Customer Agreements and that the provisions of this schedule may be
modified by the specific provisions of a bid provided by ONA. However, in the
absence of such changes specified in the ONA bid documents, ONA will be making
its bids on the basis of the provisions of this schedule. The parties also
anticipate that as they refine their relationship and the manner in which they
do business, they may decide to modify the provisions of this schedule and each
agrees to negotiate in good faith about any requests for changes made by the
other. Any agreed changes resulting from such negotiations will be reflected
in an amendment to this Agreement signed by both parties.
1. PLACING EQUIPMENT UNDER SERVICE
a. In order to initiate Equipment Support for a particular item of
Equipment, MAI must prepare and submit a completed ONA Maintenance
Service Order ("MSO") to ONA and that MSO must be accepted by ONA. The
MSO must include such information about the Equipment as is reasonably
requested by ONA, including:
(1) the model, age and configuration of the Equipment,
(2) the Equipment Location,
(3) the name, address, and telephone number of the End User,
(4) the identity of the End User contact person, and
(5) any applicable uplifts for Extended Maintenance Service which
apply to the Equipment, such as zone uplifts, extended coverage
hours uplifts and/or response time uplifts.
b. Equipment Support will not begin for a particular item of Equipment
until ONA has received and accepted an MSO for that item of Equipment.
Following acceptance of an MSO, ONA will label the Equipment with an ID
tag. This ID number must be used to identify the Equipment in all
communications with ONA about the Equipment.
c. All changes to the information provided to ONA about Equipment under
maintenance, such as a change in Equipment location, must be documented
by submission of a revised MSO.
d. An MSO placing Equipment under service shall be valid until
discontinued in accordance with paragraph A7. Until ONA receives an
MSO discontinuing service the Equipment will be kept under service and
ONA will ▇▇▇▇ ▇▇▇ for that service.
Schedule A-1 11/25/96
MAI Systems Corp.
15
Requests for service received when no valid MSO is in force will be
treated as requests for Time & Materials Service.
2. REQUESTS FOR SERVICE
a. MAI, or its designated representative, will receive all End User
requests for service or repair.
▇. ▇▇▇, or its designated representative, will, obtain as much information
as reasonably possible about the End User's problem during its
communications with the End User.
▇. ▇▇▇, or its designated representative, will obtain from the End User
the information necessary to determine whether the Equipment is
eligible for Maintenance Service and to permit ONA to properly perform
Equipment Support. This shall include, without limitation, the model
and age of the Equipment and the configuration in which it is
installed.
▇. ▇▇▇, or its designated representative, will contact ONA and request
Equipment Support for the End User's Equipment. This request shall
include all pertinent information MAI has about the End User's
Equipment and the problem being experienced, at a minimum:
(1) the ID number for the Equipment, and
(2) the nature of the problem being experienced by the End User,
3. MAINTENANCE SERVICE
a. Maintenance Service means service performed to correct improper
functioning of Equipment which occurs from normal use, including making
any necessary adjustments and/or replacing defective assemblies or
subassemblies.
b. Maintenance Service does not include:
(1) Service of equipment not specifically identified on the MSO
ordering the Maintenance Service, including devices peripheral or
connected to Equipment.
(2) Electrical work external to the Equipment.
(3) Repair of damage or loss resulting from accident, transportation,
neglect, misuse or abuse, operator error, failure of electrical
power or air conditioning or humidity control, or use for which
Equipment was not designed.
(4) Supplies or accessories, painting or refinishing Equipment,
furnishing material for Equipment, making specification or field
engineering changes, performing services connected with relocation
of Equipment, or adding or moving accessories, attachments or
other devices.
(5) Software programming and software program maintenance.
Schedule A - 2 11/25/96
MAI Systems Corp.
16
(6) Service which is impractical for ONA to render or required because
of any adjustment, repair, maintenance, alteration, attachment,
addition, or connection to another machine or device.
(7) Service calls required as the result of modification, work or
service of the Equipment by non-ONA personnel.
(8) Service of Equipment which, because of a safety hazard, exposes
ONA personnel to a risk of injury.
(9) Service in connection with the installation, discontinuance or
removal of Equipment.
(10) Installation of engineering changes, feature changes, or safety
changes.
c. Equipment shall be kept in or shall be restored to good working order.
d. Maintenance Service will be performed in a prompt, courteous, efficient
and workmanlike manner.
e. Unless otherwise specified, Preventive Maintenance will be performed on
equipment only during a Maintenance Service call. Preventive
Maintenance includes general cleaning and inspection, and any
adjustments and/or lubrication as specified by the Equipment
manufacturer.
4. STANDARD MAINTENANCE SERVICE.
a. After receiving a Request for Service from MAI or its designated
representative, ONA will dispatch a properly trained Customer Service
Engineer (CSE) to the Equipment Location along with such tools, parts
and manuals as the CSE reasonably believes will be required to repair
the Equipment based on the information provided to ONA by MAI. Upon
arrival the CSE will diagnose the problem, if any, and perform the
Maintenance Service.
b. ONA will use all reasonable efforts to arrive at the Equipment Location
ready to complete the Maintenance Service within the agreed upon
response time for that Equipment.
c. Maintenance Service will be performed during the agreed upon hours of
service(2) and at the location agreed upon for that Equipment.
5. INSTALLATION SERVICE
a. Installation Service shall consist of:
__________________________________
(2) Normal Service Hours are Monday through Friday, 8 a.m. to 5 p.m.
local time, excluding ONA observed holidays. Service started during
Normal Service Hours and completed within 1 hour after Normal Service
Hours will be deemed performed within Normal Service Hours.
Schedule A - 3 11/25/96
MAI Systems Corp.
17
(1) Any necessary unpacking of the Equipment;
(2) Connection of Equipment;
(3) Physical inspection of Equipment in place;
(4) Functional testing of Equipment according to prescribed procedures
for such Equipment;
(5) Resolution of normal installation problems; and
(6) notification to MAI and End User of unusual installation problems
(e.g., design or engineering problems, transit damage, etc.).
These problems must be corrected before ONA will perform
Maintenance Service on this Equipment.
b. Installation Service does not include uncrating or major movement of
the Equipment.
c. ONA will use all reasonable efforts to provide Installation Service in
a timely manner, subject to the availability of personnel and
equipment, necessary travel time and other factors affecting ONA's
ability to provide this service.
6. TIME AND MATERIALS SERVICE
a. ONA may, at its option and in its discretion, elect to accept requests
from MAI for service on a time and materials basis ("Time and Materials
Service"). Such Service shall be on a "best efforts" basis consistent
with the availability and location of trained personnel and Parts.
b. ONA will use all reasonable efforts to provide Time & Materials Service
in a timely manner, subject to the availability of personnel and
equipment, necessary travel time and other factors affecting ONA's
ability to provide this service.
7. DISCONTINUANCE
MAI may discontinue Maintenance Service for any Equipment by sending ONA a
fully completed and properly signed MSO acceptable to ONA identifying the
Equipment to be discontinued. Such discontinuance shall become effective
thirty (30) days after it is received by ONA. Such discontinuance shall be
ineffective if any part of its purpose is to allow the Maintenance Service
to be performed by MAI or a third party.
Schedule A - 4 11/25/96
MAI Systems Corp.
18
SCHEDULE B
PRICES FOR NEW CUSTOMER AGREEMENTS
This Schedule sets out what will eventually become the standard pricing scheme
to be used by the parties when no other pricing arrangements are agreed upon
for a specific order. However, both parties recognize that the market for
Equipment Support services is very competitive and changes frequently.
Accordingly, ONA agrees that upon request by MAI it will re-evaluate the prices
and pricing methodology identified in this schedule to respond to competitive
pressures or to reflect appropriate volume discounts upon request by MAI. In
addition, ONA will provide bids for major projects in accordance with Section 3
of this Agreement. Any agreed changes resulting from this re-evaluation and/or
bidding process will be reflected in a document signed by both parties which
identifies the Equipment to which such modified prices apply.
1. STANDARD MAINTENANCE SERVICE
MAI will pay ONA an Annual Maintenance Charge ("AMC") for each unit of
Equipment placed under Maintenance Service as payment for ONA's agreement
to provide Standard Maintenance Service for each such unit of Equipment.
The AMC for each model of Equipment shall be as identified in any service
order accepted by ONA or flat rate pricing schedule subsequently provided
to MAI by ONA.
Schedule B - 1 11/25/96
MAI Systems Corp.
19
[**CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN PORTIONS OF THIS
DOCUMENT AND THE CONFIDENTIAL PORTIONS OF EXHIBIT 10.1 HAVE BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]
2. TIME AND MATERIALS/INSTALLATION SERVICE
a. ONA will ▇▇▇▇ [**] for each hour of labor incurred during Normal
Service Hours and [**] for each hour of labor incurred outside Normal
Service Hours by a CSE in performing the service.
b. Labor charges commence upon dispatch of the CSE to the End-User
location and include travel to and from the site.
c. There is a minimum 1 hour charge per call and additional time will be
charged in increments of one-quarter (1/4) hour.
d. ONA will, upon request by MAI, provide flat rate installation prices
for items of Equipment identified by MAI.
3. COMMERCIAL TRAVEL
a. When Commercial Travel is required to perform Time and Materials and/or
Installation Service and has been approved in advance by MAI, MAI will
be charged the actual, reasonable cost of such travel. Commercial
travel includes, but is not limited to, such items as airfare, ferry
and rental vehicles.
4. LODGING EXPENSES
a. If ONA determines that it is in the best interests of ONA and MAI to
have a CSE remain overnight at or near the Equipment Location in
connection with Time and Materials and/or Installation Service and MAI
has approved such expenses in advance, MAI will be charged the actual,
reasonable lodging and meal expenses incurred.
5. INVOICING/PAYMENT
a. ONA will invoice MAI monthly for Equipment for which Contract or
Warranty Service has been ordered. These invoices will be issued on
approximately the fifteenth (15th) of the month for which the invoice
is being issued. For example, ONA will invoice MAI on approximately
October 15th for the October Contract Service being provided by ONA.
ONA will invoice MAI monthly, in arrears, for all other Equipment
Support.
b. Invoices are due and payable upon receipt and will begin to accrue
interest at 1.25% per month from the date of the invoice if not paid in
full within 45 days of the date of the invoice.
Schedule B - 2 11/25/96
MAI Systems Corp.
20
▇. ▇▇▇ will pay or reimburse ONA for any and all sales, use and excise
taxes, and other fees or charges levied or imposed by any governmental
agency or authority on or in connection with or measured by the value
of the Services provided by ONA under this Agreement.
6. AMENDMENT
a. This Schedule may be amended by ONA upon Notice to MAI.
b. The Amended Schedule shall become effective on the Effective Date
stated in the Amended Schedule, but no sooner than 30 days after Notice
is given to MAI.
c. Price changes included in any Amended Schedule shall apply only to
Equipment Support requested after the Effective Date of the Amended
Schedule.
Schedule B - 3 11/25/96
MAI Systems Corp.
21
SCHEDULE C
SPARE PARTS
1. ONA'S OBLIGATIONS
a. ONA shall, at its expense, establish and maintain an inventory of a
sufficient quantity of all the Parts necessary to perform the Equipment
Service called for by this Agreement in each Service City open for
Equipment Service.
b. At its option, ONA may elect to maintain an inventory of certain Parts
in a centralized depot or depots for distribution within ONA as
required.
c. ONA shall keep records of its receipt, disbursement and use of such
Parts.
d. ONA shall take all steps necessary to ensure the availability of
sufficient Parts to satisfy its commitments with respect to all
Equipment Service to be performed by it under this Agreement;
Schedule C - 1 11/25/96
MAI Systems Corp.
22
SCHEDULE D
TECHNICAL SUPPORT
1. TRAINING
a. Because ONA will be hiring many of MAI's former service engineers, the
parties do not anticipate that any initial training of ONA personnel
will be required. Should training subsequently be required as a result
of adding new Equipment to the Schedules to this Agreement, the parties
will at that time determine who is required to provide such training.
If no agreement is reached on this issue, ONA shall not be required to
provide Equipment Support for such newly added Equipment.
▇. ▇▇▇ will, upon request from ONA and at no charge, provide ONA with such
technical consultation and assistance as is appropriate to enable ONA to
provide its service representatives with such training as its deems
appropriate. This shall include, without limitation, providing ONA with
a copy of MAI's educational materials pertaining to the Equipment and
permitting ONA to make such use of those materials as it deems
appropriate for its internal use in satisfying its commitment to provide
Equipment Support under this Agreement.
2. DOCUMENTATION
a. As soon as practicable after execution of this Agreement, MAI will
provide ONA, at no charge, with one complete set of documentation and
diagnostics for each model of Equipment.
b. As soon as practicable after any Equipment is added to the Appendix to
Schedule A, MAI will provide ONA, at no charge, with one complete set of
documentation and diagnostics for such additional Equipment.
c. As soon as practicable after updates or changes to the documentation and
diagnostics provided to ONA become available, MAI will provide ONA with
those updates and changes at no charge.
d. ONA may copy, modify, and use any or all of the documentation and
diagnostics provided to it by MAI as it deems necessary for its internal
use, while retaining all MAI trademarks and copyrights.
3. SECOND LEVEL SUPPORT
a. MAI will provide ONA with telephone technical support for ONA's service
representatives during MAI's normal technical support hours at no charge
to ONA.
Schedule D - 1 11/25/96
MAI Systems Corp.
23
SCHEDULE E
SERVICE CITIES
Schedule E - 1 11/25/96
MAI Systems Corp.
24
I. AMENDMENT
A. Service Cities may be deleted at ONA's discretion. ONA will
give Notice to MAI of the effective date of the Service City
deletion.
B. ONA will continue Equipment Support in locations previously
serviced by the closed Service City from an alternative
Service City of ONA's choice, at the rate in effect at the
time of closing, for a period of ninety (90) days. At the end
of the ninety (90) day period, MAI may continue Equipment
Support with ONA with a revised AMC or discontinue Equipment
Support with ONA in those cities.
Schedule E - 2 11/25/96
MAI Systems Corp.
25
SCHEDULE F
EXISTING CUSTOMER AGREEMENTS
Schedule F - 1 11/25/96
MAI Systems Corp.
26
[**CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN PORTIONS OF THIS
DOCUMENT AND THE CONFIDENTIAL PORTIONS OF EXHIBIT 10.1 HAVE BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]
1. STATEMENT OF INTENT
The general intent of the parties is to have ONA perform the service which
MAI is currently required to provide to MAI's customers under the Existing
Customer Agreements in return for [**] of the amounts MAI's customers are
paying MAI for that work. MAI is consigning its current inventory of spare
parts to ONA to permit it to perform that service and MAI will be providing
technical hardware and software support to ONA as required to assist it in
providing this service. Initially, MAI will be handling the incoming call
reception for all Existing Customer Agreements, however the parties intend
to begin working to transfer this function for certain of the Existing
Customer Agreements (the "Legacy Agreements") to ONA as soon as this
agreement has been executed. Eventually, MAI may also like to transfer the
billing and collection functions for the Legacy Agreements to ONA if it is
practical and economical to do so. The remainder of this schedule is
intended to define the precise terms and conditions pursuant to which this
general intent will be carried out.
2. IDENTIFICATION OF CUSTOMERS
Attached as Appendix F-1 is a list of those MAI customers for whom MAI will
retain the call reception, billing and collection functions throughout the
term of this Agreement (the "Open Customers"). All MAI customers with
Existing Customer Agreements who are not listed on Appendix F-1 are "Legacy
Customers" for purposes of this Agreement.
3. EQUIPMENT SUPPORT
a. Generally. With the exceptions listed below, ONA will perform MAI's
Equipment Support obligations under the Existing Customer Agreements
under the same terms and conditions as are required of MAI under those
agreements. This shall include Contract Service, Installation Service,
and Time and Materials Service to the extent such types of service are
covered by the Existing Customer Agreements. Provision of a particular
type of service for an Existing MAI Customer which is not covered by the
Existing Customer Agreement for that customer shall be considered the
provision of service under a New Customer Agreement for purposes of this
Agreement.
Prior to execution of this Agreement, MAI provided ONA with the form
customer agreements and sample customer agreements which are attached as
Appendix F-2. MAI represents and warrants to ONA that its Equipment
Support obligations under the
Schedule F - 2 11/25/96
MAI Systems Corp.
27
Existing Customer Agreements are not materially different than those
required under these form customer agreements and sample customer
agreements.
b. EXCEPTIONS. MAI shall continue to perform the following Equipment
Support Obligations under the Existing Customer Agreements:
(1) MAI shall continue to receive incoming trouble calls from its
customers. MAI will screen these calls to determine whether the
problem is hardware or software related. With respect to calls
which MAI determines are hardware related, MAI shall notify ONA's
dispatch center and provide it with the information MAI has about
the problem so that ONA may dispatch a service technician to the
customer site to resolve the problem. Upon resolution of the
problem, ONA shall notify MAI of its resolution of the problem and
provide it with the information necessary to permit MAI to close
the call in its records. The parties agree to work together to link
their computer systems so that this entire process may ordinarily
be done via computer without the need for telephone or other
alternate means of communication.
Immediately following execution of this Agreement, the parties
agree to begin working together to transfer responsibility for
incoming trouble calls from Legacy Customers to ONA. ONA will
provide Legacy Customers with a toll free phone number to use to
call ONA with trouble calls to place requests for service. The
parties agree to cooperate to make this transition as smooth and as
customer friendly as reasonably possible. Upon completion of this
process, ONA shall be completely responsible for the call tracking
process and shall cease providing MAI with call closure information
for the Legacy Customers. At that time, ONA will begin to provide
MAI with mutually defined reports summarizing its handling of
Legacy Customer calls.
(2) MAI shall continue to invoice its customers pursuant to the
Existing Customer Agreements and be responsible for the collection
of those invoices from its customers. As part of this function,
MAI will retain the authority to determine if and when service to a
particular customer should be terminated and it will notify ONA of
any such termination of service. Until receipt of such
notification from MAI, ONA shall continue to provide service to
customers as required by that customer's Existing Customer
Agreement and shall be entitled to be paid by MAI for such service
as provided by this Agreement.
Following execution of this Agreement, the parties agree to begin
working together to determine if it is practical and economical to
transfer responsibility for the billing of and collection from
Legacy Customers to ONA. Part of this process will be negotiation
of the amount MAI will pay ONA to assume these functions if the
parties decide to proceed with a transfer of these functions to
ONA.
Schedule F - 3 11/25/96
MAI Systems Corp.
28
[**CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN PORTIONS OF THIS
DOCUMENT AND THE CONFIDENTIAL PORTIONS OF EXHIBIT 10.1 HAVE BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]
4. TRANSITION
The parties agree to work together to make the transfer of the service work
for Existing Customers from MAI to ONA as smooth as possible. As part of
this transition, MAI will provide ONA with access to its customer service
database and work with ONA to transfer the information in that database
into ONA's customer service database so that it will be in place and useable
by ONA on the Effective Date of this Agreement.
5. PAYMENT
a. For ONA's provision of Equipment Support under an Existing Customer
Agreement MAI will pay [**] The parties recognize that MAI may ▇▇▇▇ its
customers in advance for the Equipment Support being provided by ONA and
that it may recognize revenue incrementally as the support is provided.
Further, the parties recognize that MAI may establish a reserve for
non-payment which reserve shall be consistent with GAAP accounting
principles and shall be consistent with MAI's past collection experience
of its Existing Customer Agreements.
▇. ▇▇▇ will pay ONA the payment required pursuant to subparagraph (a),
above, monthly in arrears on or before the fifteenth day of each
month.ONA will not invoice MAI for these amounts.
c. ONA will provide MAI with such information as is necessary for MAI to
▇▇▇▇ its customers for non-recurring Equipment Support provided by ONA,
such as Installation, Time and Materials, and Warranty Service.
d. Both parties shall have the right to audit the billing and collection
being done by the other related to this Agreement and each shall provide
the other with full access to its pertinent financial records for the
purpose of such audits. Such access shall be at a reasonable time
agreed upon in advance and shall include the right to make copies of
material records upon confirmation of materiality by the audited party.
All records produced and/or copied by the auditing party are deemed
Confidential and protected by the confidentiality provisions of this
Agreement. Any variations from previously reported figures disclosed by
such audits shall be settled between the parties by payment within
thirty (30) days of the discovery of such variation.
Schedule F - 4 11/25/96
MAI Systems Corp.
29
[**CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN PORTIONS OF THIS
DOCUMENT AND THE CONFIDENTIAL PORTIONS OF EXHIBIT 10.1 HAVE BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]
6. REVENUE BASED PAYMENT ADJUSTMENT
a. Adjustment. MAI has represented to ONA that, as of the Effective Date,
the Existing Customer Agreements are generating approximately [**] The
parties agree that if, during calendar years 1997, 1998, and 1999, the
actual revenue generated by the Existing Customer Agreements (the
"Actual Revenue") during a calendar quarter is less than the Target
Revenue, ONA's percentage of the revenue from the Existing Customer
Agreements shall be increased by [**] that the Actual Revenue is less
than the Target Revenue.
For example, if the Actual Revenue during the first full calendar
quarter of this Agreement is [**] MAI will at that time pay ONA the
difference between the amount MAI has paid ONA on Existing Customer
Agreement revenue during that calendar quarter at the [**] rate and what
it would have paid at the [**] rate.
Implementation. These changes in the revenue percentage, if any, will
be implemented by reviewing the Actual Revenue at the end of each full
calendar quarter during the contract term and adjusting the percentage
rate accordingly. This adjustment will be retroactive to the beginning
of that calendar quarter and any payments required to effectuate that
adjustment for the calendar quarter just ended will be made within ten
(10) business days. ONA's percentage of revenue during the following
calendar quarter will be based on the adjusted percentage rate, which
will then be re-evaluated and adjusted as necessary at the end of the
following calendar quarter.
b. Remanco. Revenue from MAI's agreement with Remanco International, Inc.
which has been assigned to ONA pursuant to a separate document has not
been included in the Target Revenue and shall not be considered for the
purposes of this Section of this Agreement.
7. PARTS
a. MAI will consign to ONA its current inventory of Parts being used by it
to perform Equipment Support pursuant to Existing Customer Agreements
(the "Consigned Parts"). MAI represents and warrants to ONA that this
inventory of Consigned Parts is adequate in size and mix to properly
perform the Equipment Support ONA will be providing for Existing
Customers as of the Effective Date of this Agreement.
Schedule F - 5 11/25/96
MAI Systems Corp.
30
b. ONA will be responsible for the physical transfer of the Consigned Parts
from MAI to ONA. MAI agrees to cooperate fully with ONA in order to
enable the smooth transfer of the Consigned Parts. Within 90 days of
the Effective Date, ONA will perform a physical inventory of the
Consigned Parts and provide MAI with a written list of the Consigned
Parts.
c. ONA will be responsible for maintaining the Consigned Parts in the
general condition and quantities as they were received from MAI. ONA
shall keep the Consigned Parts in such a manner so that they are
separately identifiable from ONA owned Parts. As the Consigned Parts
are used by ONA to perform Equipment Support, ONA shall replace them
with the exchanged part from the customer equipment, after first making
any necessary repairs to the exchanged part. Exchanged parts which are
not repairable shall be replaced by ONA. ONA will be subcontracting the
actual repair of the Consigned Parts to a third party and MAI hereby
consents to that subcontracting.
Amounts or types of Parts added to the Consigned Parts by ONA shall be
the property of ONA and shall not be delivered to MAI upon termination
of this Agreement.
Should it become impractical for ONA to obtain replacement parts (either
because they are not reasonably available or not reasonably affordable)
ONA shall not be required to replace unrepairable portions of the
Consigned Inventory and shall be relieved of its obligation to provide
Equipment Support to the extent it is prevented from doing so by this
inability to obtain replacement parts.
d. Upon termination of this Agreement, ONA will return the Consigned Parts
to MAI in the quantities and condition it received them from MAI,
ordinary wear and tear excepted.
e. ONA agrees that MAI may search all pertinent public records, file
financing statements, and take other necessary steps to protect MAI's
ownership of the Consigned Parts against claims of creditors and carry
out the purposes of this Agreement. ONA agrees to promptly execute and
deliver to MAI all financing statements and other documents necessary to
permit MAI to carry out such steps and otherwise cooperate with MAI's
efforts to protect its ownership of the Consigned Parts.
8. TOOLS
a. MAI will loan to ONA its current inventory of tools (including laptop
computers and diagnostic software) being used by its field engineer work
force or repair center to perform Equipment Support pursuant to Existing
Customer Agreements (the "Consigned Tools"). MAI represents and
warrants to ONA that this inventory of Consigned Tools is adequate in
size and mix to properly perform the Equipment Support ONA will be
providing for Existing Customers as of the Effective Date of this
Agreement. The Consigned Tools shall remain the property of MAI. ONA
will be
Schedule F - 6 11/25/96
MAI Systems Corp.
31
responsible for maintaining the Consigned Tools in the general condition
as they were received from MAI, ordinary wear and tear excepted.
b. ONA will be responsible for the physical transfer of the Consigned Tools
from MAI to ONA. MAI agrees to cooperate fully with ONA in order to
enable the smooth transfer of the Consigned Tools. Within 90 days of the
Effective Date, ONA will perform a physical inventory of the Consigned
Tools and provide MAI with a written list of the Consigned Tools.
c. ONA shall keep the Consigned Tools in such a manner so that they are
separately identifiable from ONA owned tools. Upon termination of this
Agreement, ONA will return the Consigned Tools to MAI in the condition
it received them from MAI, ordinary wear and tear excepted.
d. ONA agrees that MAI may search all pertinent public records, file
financing statements, and take other necessary steps to protect MAI's
ownership of the Consigned Tools against claims of creditors and carry
out the purposes of this Agreement. ONA agrees to promptly execute and
deliver to MAI all financing statements and other documents necessary to
permit MAI to carry out such steps and otherwise cooperate with MAI's
efforts to protect its ownership of the Consigned Tools.
Schedule F - 7 11/25/96
MAI Systems Corp.
32
[**CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN PORTIONS OF THIS
DOCUMENT AND THE CONFIDENTIAL PORTIONS OF EXHIBIT 10.1 HAVE BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]
9. WARRANTY SERVICE
a. ONA will provide Warranty Service under warranty obligations in place on
the Effective Date of this Agreement in accordance with those warranties
and will seek reimbursement from the warranty provider in accordance
with its usual terms. Where the warranty provider is MAI, MAI will
reimburse ONA on a Time and Materials basis at the reduced rates of [**]
during Normal Service Hours and eighty-five dollars per hour [**]
outside Normal Service Hours
10. NEW BUSINESS DEVELOPMENT
a. EXISTING CUSTOMERS. Except for those Existing Customers with whom ONA
or its corporate affiliates has a pre-existing relationship as of the
Effective Date of this Agreement, ONA shall not solicit or contract
with Existing Customers for any products or services without MAI's
express written consent. Except as expressly prohibited by this
provision, ONA shall not be limited in its ability to conduct it
business as if it had not entered into this Agreement with MAI.
MAI agrees not to unreasonably withhold or delay its consent to
requests from ONA to solicit or contract with Existing Customers for
the sale of products or services which are not competitive with a
product or service sold by MAI. In granting its consent, MAI shall be
entitled to place reasonable restrictions on the manner in which ONA
interacts with the Existing Customers, for example by precluding the
involvement of the ONA employees who provide Equipment Support for that
Existing Customer pursuant to this Agreement. In the event MAI
withholds its consent to a request by ONA to solicit or contract with
an Existing Customer, ONA shall be entitled to terminate this Agreement
upon one hundred eighty (180) days prior written notice to MAI without
further liability or obligation to MAI. ONA's failure to exercise this
right to terminate on one or more occasions when it has the opportunity
to do so shall not be deemed to constitute a waiver of such right or
any other rights hereunder
▇. ▇▇▇ NON-SERVICE CUSTOMERS. There are persons using MAI hardware and
software who, as of the Effective Date, do not have an existing
agreement with MAI for Equipment Support ("MAI Non-Service Customers").
ONA is free to solicit contracts with MAI Non-Service Customers for any
types of products or services, including contracts for all types of
Equipment Support. Contracts for Equipment Support with MAI Non-
Service Customers shall be entered into between the customer and MAI,
on terms negotiated by ONA, and shall be treated as Existing Customer
Agreements for purposes of this Agreement.
Schedule F-32
11/25/96
MAI SYSTEMS CORP.
33
MAI agrees to reimburse ONA for thirty percent (30%) of the sales costs
(including the sales commission) it incurs in connection with obtaining
a Contract for Equipment Support with an MAI Non-Service Customer.
Schedule F - 9 11/25/96
MAI Systems Corp.
34
ASSIGNMENT OF SERVICES AGREEMENT
AGREEMENT MADE this __________________________ day of December, 1996 by and
between MAI Systems Corporation, a Delaware corporation, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("MAI") and Olivetti North America, Inc., a Washington
corporation, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇-▇▇▇▇ ("ONA")
with reference to the following facts:
A. On or about October 1, 1995, MAI entered into a Services Agreement (the
"Services Agreement") with Remanco International, Inc. ("Remanco")
pursuant to which Remanco engaged MAI as the exclusive provider of
support services to certain Remanco customers.
B. Concurrent with the effective date of this Assignment, MAI will
discontinue providing support services of the type described in the
Service Agreement. MAI has engaged ONA to provide support services on
its behalf to its customer base.
C. Remanco has agreed to permit ONA to be the exclusive provider of
support services to its customers on the same terms and conditions that
MAI has provided such services that ONA agree to assume MAI's
obligations set forth in the Services Agreement.
▇. ▇▇▇ has agreed to assign to ONA all of its rights under the Services
Agreement, except as specifically provided herein.
NOW THEREFORE, INC CONSIDERATION OF THE COVENANTS PROVIDED HEREUNDER, the
parties agree as follows:
1. EFFECTIVE DATE
The Effective Date shall be the effective date set forth in the Equipment
Support Subcontract between ONA and MAI which the parties contemplate
executing concurrently with this Assignment.
2. ASSIGNMENT
MAI transfers and assigns all of its rights under the Services Agreement to
ONA subject to the following:
(a) MAI shall cosign the Service Assets described in Section 2.3 of the
Services Agreement to ONA. ONA shall keep the Service Assets in such a
manner that they are separately identifiable from ONA-owned tools. Upon
termination of the Services Agreement, ONA will return the cosigned
Service Assets to MAI in the condition it received them from MAO,
ordinary wear and tear expected. ONA agrees that MAI may search all
pertinent public records, file financing statements and take other
necessary steps to protect MAI's interest in the Service Assets against
claims of creditors and carry out the purposes of this Assignment. ONA
agrees to promptly execute and deliver to MAI all financing statements
and other documents necessary to permit MAI to carry out such steps and
otherwise cooperate with MAI's efforts to protect its interests in the
Service Assets.
(b) Nothing herein shall be deemed to entitle ONA to any fee which accrued
in favor of MAI on or before the Effective Date.
(c) Nothing herein shall be deemed to grant to ONA any interest in the loan
which is described in Section 8.3 of the Services Agreement.
(d) Section 11.2 of the Service Agreement shall be amended in its entirety
as follows:
"Remanco and ONA compete in the sale of POS equipment in North America. The
parties agree that if their competitive relationship interferes with the
services that ONA is obligated to provide hereunder, either party may, upon
ninety (90) days notice to the other, terminate this Agreement without penalty.
In the event of such termination, nothing in this Agreement shall be construed
to prevent Remanco from hiring or attempting to hire any former Remanco
employee then working for ONA."
3. ACCEPTANCE OF ASSIGNMENT
ONA accepts the assignment of the Service Agreement on the terms and
conditions herein provided.
IN WITNESS WHEREOF the parties have executed this Assignment of Services
Agreement on the day and year first written above.
MAI Systems Corporation Olivetti North America, Inc.
By: /s/ ▇▇▇▇▇ DUPLEX By:
------------------------------- -------------------------
▇▇▇▇▇ Duplex
Vice President
Schedule G - 1 11/25/96
MAI Systems Corp.
35
Remanco International, Inc. hereby consents to the above assignment and
assumption and represents and warrants that MAI Corporation is in full
compliance with the terms and conditions of the Services Agreement and to the
best of its knowledge is not in default of any obligation thereunder.
Remanco International, Inc.
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇ ▇. ▇▇▇▇▇▇▇
Chief Operating Officer
Schedule G - 2 11/25/96
MAI Systems Corp.