1 EXHIBIT 10.2 ALL SECTIONS MARKED WITH TWO ASTERISKS ("**") REFLECT PORTIONS WHICH HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION BY TEKELEC AS PART OF A REQUEST FOR CONFIDENTIAL TREATMENT.

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EXHIBIT 10.2

ALL SECTIONS MARKED WITH TWO ASTERISKS ("**") REFLECT PORTIONS WHICH HAVE
BEEN REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
BY TEKELEC AS PART OF A REQUEST FOR CONFIDENTIAL TREATMENT.

DISTRIBUTION AND OEM AGREEMENT BETWEEN TEKELEC AND
DAEWOOD TELECOM, LTD.

This INTERNATIONAL DISTRIBUTION AND OEM AGREEMENT is entered into as of
this first day of June, 1997, by and between TEKELEC, a California corporation
with a place of business at Enterprise Center 0000 XxXxxxxxx Xxxxxxx, Xxxxx
#000, Xxxxxxxxxxx, XX 00000 ("Tekelec"), and Daewoo Telecom, Ltd. a company
doing business at Daewoo Center Xxxx., 000, 0 Xx Xxxxxxxxx-Xx, Xxxxx-Xx, Xxxxx,
Xxxxx ("Distributor").

IN CONSIDERATION of the premises and mutual covenants contained herein,
and other valuable consideration, the parties agree as follows:

1. DEFINITIONS

For purposes of this Agreement, the following terms shall have the
meanings set forth:

1.1 "Products". The term "Products" shall mean the Tekelec
Products listed in Exhibit "A" attached hereto and incorporated herein, as it
may be amended and any additional products as may be added from time to time by
Tekelec in its sole discretion, including Spare Parts (as defined below).

1.2 "Software". The term "Software" shall mean any General Purpose
Computer or Embedded System software incorporated into or otherwise
accompanying any Product, and any replacement software therefor, in object code
form only.

1.3 "Spare Parts". The term "Spare Parts" shall mean the standard
repair and replacement parts for the Products made available by Tekelec from
time to time.

1.4 "Territory". The term "Territory" shall mean the geographic
area or areas set forth in Exhibit "B" attached hereto and incorporated herein.
Such Territory shall be amended from time to time as mutually agreed in writing.

1.5 "User Documentation". The term "User Documentation" shall mean
the documentation accompanying a Product for the purpose of instructing end
users in the use and operation of such Product.

1.6. "Translated Version". The term "Translated Version" shall mean
a local language translation of the Products and the User Documentation.

1.7. "Effective Date". The term "Effective Date" shall mean the
date first set forth above which, upon execution of this Agreement by both
parties, shall be the effective date of this Agreement.

1.8. "Termination Date". The term "Termination Date" shall mean the
date upon which any termination of this Agreement, for any reason whatsoever
(including expiration), becomes effective.

1.9 "includes": "including". Except where followed directly by the
word "only", the terms "includes" or "including" shall mean "includes, but is
not limited to" and "including, but not limited to" respectively.

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2. TERM

2.1. Term. The initial term of this Agreement shall commence upon the
Effective Date and shall continue for a period of three (3) years, unless
terminated earlier as provided herein (the "Term"). Except as expressly set
forth, this Agreement may not be terminated by either party except in accordance
with Section 12.

Should both parties mutually agree to renew this Agreement, then such agreement
shall be indicated in writing no later than sixty (60) days prior to the
expiration of the original term.

2.2. Renewal. In the event of any renewal of this Agreement, the "Term"
shall include the period of such renewal. Neither party shall be under any
obligation to renew or extend the operation of this Agreement or to enter into
any new agreement with the other party following the expiration of the Term
(including any previous renewals or extensions); and neither party shall be
under any obligation of any kind whatsoever to the other party by reason of any
failure or refusal to renew or extend the operation of this Agreement or to
enter into any new agreement with the other party, following expiration of the
Term.

3. APPOINTMENT AS DISTRIBUTOR AND OEM BUYER

3.1. Appointment As Distributor. Tekelec hereby appoints Distributor,
and Distributor hereby accepts such appointment, as an independent distributor
of Products in the Territory during the Term and agrees to comply with the other
provisions of this Agreement. Tekelec agrees to provide to Distributor, and
Distributor agrees to order, to pay for and to accept delivery of, Products on
the terms and conditions set forth in this Agreement.

3.2. Exclusivity. Distributor's appointment hereunder shall be Exclusive
for the Products identified in Exhibit "A" and "Exclusive Market Rights"
Territories identified in Exhibit "B". After the termination or non-renewal of
this Agreement has been made, Tekelec may appoint a new distributor in the
Territory which shall thereupon be entitled to begin distribution of the
Products in the Territory. In addition, Tekelec shall not be required to act, or
to refrain from acting if such act or refrainment may subject Tekelec to
liability under any federal or state antitrust, competition or other law.

3.3. Appointment of Subdistributors. Distributor shall have the right to
appoint one or more subdistributors in the Territory, provided that each such
appointment is subject to a written agreement containing terms and conditions at
least as restrictive as to the subdistributor as this Agreement is to
Distributor. Distributor shall be solely responsible for assuring that any such
subdistributor does not act or omit to act in any manner which conflicts with
any term or condition of this Agreement.

3.4. Rights to OEM, Manufacture, Produce or Jointly Develop. Both
parties will negotiate in good faith to establish such rights, including but not
limited to Technology Transfer. The terms associated with such rights shall be
amended to this Agreement. Until the above terms are negotiated and amended to
this agreement, Tekelec shall provide the Product identified in Exhibit "A" to
Distributor as OEM buyer's brand as per request. Distributor shall be
responsible for all of Tekelec's expenses in preparing product branding.

Should Distributor exercise its rights to Manufacture, Produce or Jointly
Develop Product, specifically for the purpose of providing Product enhancements
or localization. Tekelec shall provide interim technical support to Distributor
until an Amendment which explicitly describes the terms and conditions for such
support is concluded.

3.5. No Right to Reproduce, Modify or Reverse Engineer. Unless modified
by subsequent agreement, nothing in this Agreement shall be construed as giving
Distributor any right to manufacture or modify any Product or to otherwise make
copies of any Software or any User Documentation, except as expressly and
clearly permitted by this Agreement or by Tekelec's Software License Agreement
identified in Exhibit "D" (the

"Software License Agreement") or by applicable law. Distributor agrees that it
will not, and will not permit or assist any other party to, reverse engineer
all or any part of any of the Products (including the Software).

3.6 System Integrator. Tekelec acknowledges Distributor's role as System
Integrator and Tekelec's obligation to provide Distributor with such
documentation as is required to fulfill its role as System Integrator.

3.7 Violation of Exclusivity by Tekelec. Should Tekelec limit or dilute
the exclusivity of the Agreement as not otherwise provided in this Agreement,
both parties agree that the financial compensation due to the Distributor, if
any, shall be decided under the provisions of Section 20.11.

4. ADAPTATION FOR LOCAL MARKET

4.1 Adaptation of Products for Local Market. Until such time as both
parties have negotiated an Agreement permitting the Distributor to modify,
enhance, adapt or manufacture Product for use in Local Markets. Tekelec shall
provide such adaptation, on a timely basis, at its prevailing rates of [**] per
engineering hour. Distributor shall be responsible for translating the service
and instruction manuals and Tekelec advertising and promotional materials
relating to such Products into the language of the Territory.

4.2 Translation of Software License Agreement. Not later than twenty (20)
days after the Effective Date, Distributor shall, at its sole expense, prepare
and deliver to Tekelec a translation from English into the local language
version of the Software License Agreement.

5. CONTINUING OBLIGATIONS OF DISTRIBUTOR

5.1 Distributor Efforts. Distributor will use best efforts to promote,
vigorously and aggressively, the marketing and distribution of the Products to
customers through a concerted effort in the Territory.

5.2 All Products. As a material condition of Distributor's Exclusive
distribution appointment hereunder, Distributor shall vigorously promote,
market and distribute all of the Products identified in Exhibit "A" in the
Territory identified in Exhibit "B".

5.3 Sufficient Facilities and Personnel. Distributor shall maintain in
the Territory the capacity, facilities and personnel necessary (a) to serve the
needs of customers and potential customers with respect to the Products, and
(b) to carry out Distributor's obligations under this Agreement.

5.4 Notification. Distributor will notify Tekelec in writing of any claim
or proceeding involving Products no later than ten (10) days after Distributor
learns of such claim or proceeding. Distributor will also report promptly to
Tekelec all claimed or suspected Product defects. Distributor will notify
Tekelec in writing not more than thirty (30) days after any change in the
management or control of Distributor or any transfer of more than twenty-five
percent (25%) of the voting control of Distributor or of all or substantially
all of Distributor's assets.

5.5 Tekelec Packaging. Except as provided in Section 3.4 above
Distributor will distribute the Products with all warranties, disclaimers and
software license agreements intact as shipped by Tekelec, or modified per
mutual agreement, and will instruct each of its customers as to the nature and
terms of the license agreements applicable to such Products. Distributor will
make available to its customers copies of the current Software License
Agreement.

5.6 Product Expertise. Distributor and its staff will be conversant with
the Products and similar Telecommunications Products in general, and will
develop sufficient knowledge of the industry, of the Products

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and of Products competitive with the Products (including specifications,
features and benefits) so as to be able to explain the Products in detail to
customers. Tekelec will assist Distributor to conduct or provide for any
training of its personnel that may be necessary to impart such knowledge,
including "train-the-trainer" training at no charge, at Tekelec's facility.
Except as indicated in Section entitled "Promotional Material; Technical And
Sales Support," such assistance shall be provided to Distributor in
Distributor's facility at the rate of [**] per hour and the Distributor shall
be responsible for Tekelec's travel and living expenses.

Tekelec shall, in its facility, provide initial training in English to End Users
for each Eagle STP pair purchased, consisting of [**] days of training, to
chosen from but not limited to hardware/software/overview, operations,
administrations, and maintenance for each of [**] End Users for [**]. Should End
User desire additional training from Tekelec, such training shall be provided at
Tekelec's prevailing rate. Tekelec shall not be responsible for travel and
living expenses of such End Users and Distributor shall be responsible for all
Tekelec travel and living expenses when such training is provided at End User's
facility.

5.7. Market Information and Planning. Distributor shall advise
Tekelec promptly concerning any market information that may come to
Distributor's attention respecting Tekelec, the Products, Tekelec's market
position, or the continued competitiveness of Tekelec's Products in the
marketplace, including, but not limited to, charges, complaints, or claims by
customers, or other persons, about Tekelec or the Products. Distributors shall
confer with Tekelec from time to time, at the request of Tekelec, on matters
relating to market conditions, sales forecasting, and Product planning.

5.8. Distributor Covenants with Respect to Marketing Practices.
Distributor will (i) conduct business in a manner that reflects favorably at
all times on the Products and the good name, goodwill and reputation of
Tekelec; (ii) avoid deceptive, misleading or unethical practices that are or
might be detrimental to Tekelec, the Products, or the public, including but not
limited to disparagement of Tekelec or the Products; (iii) make no false or
misleading representations with regard to Tekelec or the Products; (iv) not
publish or employ or cooperate in the publication or employment of any
misleading or deceptive advertising material; (v) make no representations,
warranties or guaranties to anyone with respect to the specifications, features
or capabilities of the Products that are inconsistent with the literature
distributed by Tekelec, including all warranties and disclaimers contained in
such literature; and (vi) not engage in illegal or deceptive trade practices
such as bait and switch techniques or any other practices proscribed under this
subparagraph.

5.9. Compliance with Laws. Distributor shall comply with all
applicable international, national, state, regional and local laws and
regulations, including, without limitation, the United States Foreign Corrupt
Practices Act of 1997 as amended from time to time, in performing its duties
hereunder and in any of its dealings with respect to the Products, and shall
take reasonable steps to ensure that each of its remarketers (if any) comply
with all applicable international, national, state, regional and local laws and
regulations, including, without limitation, the United States Foreign Corrupt
Practices Act, in any of its dealings with respect to the Products.

5.10. Notification of Actual or Potential Violation of Law.
Distributor shall promptly notify Tekelec in the event that Distributor knows
or has reason to believe that any act or refrainment from acting required by or
contemplated under this Agreement violates any law, rule or regulation (whether
criminal or non-criminal) of the Territory.

5.11. Compliance With U.S. Export Laws. Distributor understands and
acknowledges that the Products may be subject to restrictions upon export from
the United States and upon resale after export. Distributor agrees that it will
not act or omit to act in any way which will violate any of the import and/or
export control laws or regulations of the Territory or of the United States,
and no party shall be required hereunder to act or omit to act in any way which
it believes in good faith will violate any such laws or regulations.

5.12. Government Approval. If any approval with respect to this
Agreement, or the registration thereof, shall be required at any time during
the term of this Agreement, with respect to giving legal effect to the
Agreement in any Territory or portion thereof, or with respect to compliance
with exchange regulations or other requirements so as to assure the right of
remittance in U.S. Dollars, Distributor shall immediately take whatever

steps may be necessary in this respect, and any and all charges or expenses
incurred in connection therewith shall be borne solely by the party responsible
for taking such steps in the particular instance. Distributor shall keep
Tekelec currently informed of its efforts in this connection. Tekelec shall not
be under any obligation to ship Products to Distributor hereunder until
Distributor has provided Tekelec with satisfactory evidence that such approval
or registration is not required or that it has been obtained.

5.13. NO INCONSISTENT GOVERNMENT CONTRACT TERMS. Without limiting the
generality of anything contained in this Agreement, Distributor shall not enter
into any contract, indirectly or directly, with any government, or any agency
or division thereof, where such contract contains any terms, including terms
relating to proprietary rights, which are inconsistent with the rights of
Tekelec (including Tekelec's proprietary rights) or the obligations of
Distributor under this Agreement. Tekelec shall be notified and reserves the
right, in its sole discretion, to approve any such Agreement which may include
Tekelec Products prior to its execution.

5.14. NO COMPETITIVE PRODUCTS. Distributor agrees that it shall not,
during the term of this Agreement, directly or indirectly market, sell,
license, promote or solicit orders for any Products which are competitive with
the Products unless Tekelec consents in writing in advance based upon full
disclosure of the material facts by Distributor or, when acting as Systems
Integrator, End User directs Distributor to procure such Product.

5.15. ORDER REPORTS. Distributor agrees to provide Tekelec with a
written report stating system size and customer for each pair of Products sold
to End User(s). Such reports shall be provided within ninety (90) days after
receipt of order from End User by Distributor.

6. PRICES; PAYMENT

6.1. PRICES OF PRODUCTS. The prices of Products and the license fees
for Software shall be as set forth in Exhibit "C" attached hereto.

6.2. PAYMENT FORMS. All payments due to Tekelec hereunder shall be
made by wire transfer.

6.3. PAYMENT. Until such time as [**] pairs of Eagle STPs have been
Accepted by End User(s), payment for Ordered Products shall be [**] upon
shipment of Product, due net thirty (30) days, and [**] upon contracted
Acceptance by End User, due net thirty (30) days. After [**] pairs of Eagle STPs
have been Accepted by End User(s), payment terms shall be [**] upon shipment,
due net thirty (30) days and [**] upon contracted Acceptance, due net thirty
(30) days.

The final payment shall be due at the End User's contracted Acceptance date. In
the event that such date has been delayed for reasons not attributable to
Tekelec, then such final payment shall be due ninety (90) days from contracted
Acceptance date.

Payment for Services such as training and sales and marketing support shall be
upon completion of such Services, due net thirty (30) days. Payment for Custom
Development or Product Adaptation shall be [**] upon completion of
Specifications and Requirements, due net thirty (30) days and [**] upon delivery
and Acceptance of such Adaptation, due net thirty (30) days.

6.4. INVOICE. Tekelec shall invoice Distributor for Purchases at the
time of shipment for all Products shipped. Distributor shall pay to Tekelec the
invoiced amount according the Schedule set forth in the Section entitled
"Payment." All payments to Tekelec shall be made in United States dollars.
Amounts outstanding over ninety (90) days may be assessed interest at a rate
equal to the Prime Rate at the time of the assessment plus one percentage
point, amortized monthly, per month.

6.5 Acceleration for Default. Tekelec reserves the right, upon written
notice to Distributor, to declare all sums on open account immediately due and
payable in the event of a breach by Distributor of any of its obligations to
Tekelec. Acceleration by Tekelec, pursuant to this Section, shall not be deemed
to be a breach of this Agreement.

6.6 Distributor To Determine Its Own Resale Prices. Distributor is free
to determine its own resale prices for the Products unilaterally. Although
Tekelec may publish suggested retail prices, these are suggestions only and
Distributor will be entirely free to determine the actual prices at which the
Product will be sold to its customers. Each party understands that neither
Tekelec nor any employee or representative of Tekelec may give any special
treatment (favorable or unfavorable) to Distributor as a result of its
selection of prices. No employee or representative of Tekelec nor anyone else
associated or affiliated with Tekelec has any authority to tell Distributor
what its prices for the Product must be or to inhibit in any way Distributor's
pricing discretion with respect to such Products.

6.7 Price Increases or Decreases. Tekelec's prices to Distributor shall
not increase and may be adjusted if prices for the products or similar products
are decreased during the term of the Agreement.

6.8 Taxes. Distributor shall bear all taxes, imposts, duties tariffs,
custom duties incurred only in the territory in connection with the importation
and sale of the products excepts as otherwise provided herein. Distributor
shall be responsible for providing Tekelec with copies of resale certificates
or other documents evidencing to Tekelec's reasonable satisfaction any
exemption which Distributor claims from any sales, use, value added or other
tax, tariff, duty or assessment which Tekelec reasonably determines it would
have to pay or collect arising out of or related to any of the transactions
contemplated under this Agreement in the absence of such an exemption. If
a withholding tax is required by the government identified in Exhibit "B" on
payments made by the Distributor to Tekelec, the Distributor will subtract that
amount from applicable payments made to Tekelec and forward the balance to
Tekelec will all necessary receipts. It shall be the sole responsibility of
Tekelec to recover this amount.

7. PROMOTIONAL MATERIALS; TECHNICAL AND SALES SUPPORT

Promotional Materials; Technical and Sales Support. During the Term,
Tekelec shall provide in-country sales and marketing support visits, at least
twice per year for at least one week each, at no charge. During the Term
Tekelec shall provide Distributor, at no charge, reasonable quantities of
promotional and marketing materials in English which Tekelec customarily
provides to distributors and remarketers. In addition, Tekelec shall provide
Distributor with additional technical sales and marketing support as
Distributor reasonably requests. Such in-country support shall be provided at
Tekelec's prevailing rate of [**] per hour, thereafter, including the
development of responses for RFPs, RFQs and RFIs. Distributor shall be
responsible for Tekelec travel and living expenses while providing such support
in the Territories.

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8. PRODUCT ORDERS

8.1. Product Orders. Distributor shall, during the term hereof, order
Products or Spare Parts in accordance with all of the terms and conditions of
this Agreement. Each order placed by Distributor for any Products or Spare
Parts (a "Product Order") shall be deemed to incorporate all of the terms
and conditions of this Agreement, and any terms and conditions of such Product
Order which are in addition to or inconsistent with the terms and conditions of
this Agreement shall be deemed stricken from such order. Distributor shall
place all Product Orders in writing for Products with Tekelec at its address
written above. In addition, each Product Order shall specify the Products
which Distributor desires to purchase and a requested shipment date for each
Product (the "Requested Shipment Date"). Requested Shipment Date shall be
during the term hereof, except that Tekelec may, in its sole discretion, accept
a Product Order during the term hereof which has a Requested Ship Date after
the expiration or termination of this Agreement, in which event all terms and
conditions of this Agreement shall apply to such shipment, but under no
circumstances will such shipment be deemed to be, or be construed as being, a
renewal or extension of this Agreement.

8.2. Confirmation; Shipment Dates. All Product Orders submitted by
Distributor shall be subject to acceptance by Tekelec in writing and shall not
be binding until the earlier of such acceptance or shipment, and any acceptance
by shipment shall be binding only as to the portion of the Product Order
actual shipped. Tekelec shall accept or reasonably reject any Product Order
submitted by Distributor in accordance with this Agreement within ten (10) days
from actual receipt by Tekelec of such Product Order, provided that Tekelec
shall not be obligated to accept any Requested Shipment Date which is less than
three (3) months from the date of the relevant Product Order (an "Expedited
Shipment Date"). If Tekelec will not accept or reject any product order within
said ten (10) days, Tekelec shall be deemed to have accepted it. In the event
that Tekelec does desire to accept any Expedited Shipment Date specified in a
Product Order, Tekelec shall so indicate in writing, but may specify therein an
alternative shipment date. Such alternative shipment date shall be deemed the
Requested Shipment Date for purposes of a Product Order unless Distributor
rejects such alternative shipment date by written notice to Tekelec within ten
(10) days from receipt of the written notice containing such alternative
shipment date. In the event that Distributor rejects any alternative shipment
date for any Products specified in such written notice within such ten (10)-day
period, such Products shall be deemed stricken from the Product Order in which
such Products were initially ordered by Distributor, unless Tekelec and
Distributor agree on a new shipment date.

8.3. Shipment. Tekelec shall ship to Distributor each Product ordered from
Tekelec pursuant hereto on or before the Requested Shipment Date for such
Product. In the event that Tekelec is unable to ship any Product, as described
in Section 8.2 of this agreement, from the Requested Shipment Date for such
Product, Distributor shall have the right to terminate that portion of the
Product Order relating to such Product by written notice to Tekelec, which
termination shall only be effective if such notice is received by Tekelec prior
to the date on which such Product is shipped by Tekelec or identified to the
Product Order by marking, description or otherwise. Upon termination of any
portion of a Product Order by Distributor with respect to a particular Product
in accordance with this Section 8, Tekelec shall promptly return to Distributor
all amounts, if any, paid by Distributor with respect to such Product. In this
instance, the Distributor will be relieved from all terms and conditions
described in Section 8.5 and Tekelec will reimburse to the Distributor the
lessor of (i) [**] of the purchase price of that portion of the product which is
canceled under the provisions of this Section 8.3 and which has not been
accepted by Distributor and (ii) the actual penalties assessed the Distributor
by the end user for such cancellation. In the event that Distributor does not
exercise its cancellation rights with respect to any Product pursuant to this
Section 8, Tekelec shall remain obligated to ship such Product to Distributor in
accordance with all of the applicable provisions of this Agreement.

The shipping and delivery dates applicable to each Product Order will be agreed
upon by Tekelec and Distributor and set forth in such Product Order. In the
event that Tekelec exceeds the agreed upon delivery date by twenty (20) business
days, through no fault of Distributor and for reasons other than those covered
in the Section entitled Force Majeure and for reasons other than Tekelec's
Right to Delay, Cancel or Allocate as defined in Section 8.4, then in addition
to all other rights and remedies at law or in equity or otherwise,
Distributor may have Tekelec

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apply to that portion of Product Order which has not been delivered the
following discounts off the purchased price for such delayed portion:

Number of Weeks
Beyond agreed to Delivery Date Amount of Discount
------------------------------ ------------------

1 [**]
2 [**]
3 [**]
4 [**]
5 [**]

In no event shall such discount(s) exceed [**] of the purchase price of the
Product Order.

Should Distributor be encumbered by Project Cancellation fees higher than those
in this Section 8, Tekelec shall use best efforts to secure a bond covering the
difference between the contracted cancellation fee obligated by Distributor
and the schedule in this Section 8.

DISTRIBUTOR'S RIGHT TO COLLECT DISCOUNTS AND PENALTIES FOR DELAYED SHIPMENTS OR
CANCEL ANY PORTION OF A PRODUCT ORDER WITH RESPECT TO UNSHIPPED OR UNIDENTIFIED
PRODUCTS PURSUANT TO THE SECTION 8 SHALL CONSTITUTE DISTRIBUTOR'S SOLE AND
EXCLUSIVE REMEDIES ARISING OUT OF OR RELATED TO TEKELEC'S FAILURE TO SHIP OR
MAKE DELIVERY WITHIN ANY SPECIFIC TIME FROM THE REQUESTED SHIPMENT DATE FOR
SUCH PRODUCTS.

8.4 Tekelec's Right to Delay, Cancel or Allocate. Notwithstanding
Tekelec's obligations under Section 8 hereof, Tekelec reserves the right to
cancel any orders placed by Distributor and accepted by Tekelec as set forth
above, and shall have the right to refuse, cancel or delay shipment to
Distributor when Distributor is delinquent in payments, when payment for a
shipment has not been arranged to Tekelec's reasonable satisfaction, or when
Distributor has failed to perform its obligations under this Agreement. Should
orders for Products exceed Tekelec's available inventory, Tekelec will
allocate its available inventory on a basis Tekelec deems equitable, in its
sole discretion, and without liability to Distributor on account of the method
of allocation chosen or its implementation. Tekelec also reserves the right to
cancel any orders for any Products of discontinued or changed Products (as set
forth in Section 9 below) without liability of any kind to Distributor or to
any other person. No delay, refusal or cancellation under this Section 8 will
be deemed a termination (unless Tekelec so advises Distributor) or breach of
this Agreement by Tekelec.

8.5 Distributor's right to Cancel. Distributor shall have the right,
during the term hereof, upon written notice to Tekelec given prior to any
Requested Shipment Date, to cancel shipment or to delay shipment to a later
date within the Delivery Term of all or a specified portion of the Product
Order to be shipped by Tekelec to Distributor on such Requested shipment Date.
Cancellation or rescheduling within sixty (60) days of the Requested Shipment
Date shall subject Distributor to cancellation or rescheduling charges based on
the total dollar value of the canceled or rescheduled Products and the number of
days prior to the Requested Shipment Date that written notice of cancellation
or rescheduling is received. Cancellation or rescheduling charges will be
calculated in accordance with the following schedule:

Cancellation Period Charge (% of Value)

31 - 60 days [**]
15 - 31 days [**]
Less than 15 days [**]

8.6 Partial Shipments. If stated on a Product Order and as mutually
agreed between Distributor and Tekelec, Tekelec shall be entitled to make
partial shipments of Products covered by a Product Order as such Products
become available for shipment and may invoice Distributor separately for each
such partial shipment,

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provided, however, that at the time of such partial shipment or before Tekelec
shall notify Distributor of the date(s) when Tekelec anticipates making
additional partial shipments or shipping the balance of the Product Order.
Partial shipment of Products covered by a Product Order shall not relieve
Distributor from its obligation hereunder to accept future shipments of
Products by Tekelec in satisfaction of such Product Order, except to the
limited extent that Distributor has properly canceled the portion of such
Product Order relating to such future shipment as set forth in Section 8 above.

8.7 Shipment: Risk of Loss. Delivery of the Products to Distributor
shall be F.O.B. Tekelec's point of shipment. Title (except as to Software) and
risk of loss or damage with respect to any of the Products to be delivered to
Distributor shall pass from Tekelec to Distributor upon delivery of such
Products to the carrier for shipment to Distributor, subject to Tekelec's right
to stop delivery of Products in transit. Unless otherwise specified by
Distributor by written notice given at least thirty (30) days prior to the
Requested Shipment Date, all Products ordered by Distributor shall be shipped
by Tekelec to Distributor's principal place of business specified above. Upon
proper notice, Distributor may have Tekelec ship some or all of the Products to
destinations other than Distributor's principal place of business. Unless
specified in Distributor's Product Order, Tekelec will select the mode of
shipment and the carrier. All transportation, handling and insurance charges
for any of the Products from Tekelec's point of shipment to destination shall be
borne by Tekelec. Such insurance shall be reasonably acceptable to Distributor.

8.8 Entry Into Territory. Distributor shall have sole responsibility for
arranging any permits, notices, bonds, inspections or other requirements for
entry of Products into the Territory. Distributor shall be solely responsible
as described in Section 6.8 of this agreement.

8.9 Acceptance by Distributor. Distributor shall have thirty (30)
business days following receipt of the Products in which to notify Tekelec of
any discrepancy in the shipment. Tekelec will use best efforts to correct such
discrepancy by delivering any discrepant components to Distributor's designated
Point of Importation within a five (5) business days after being notified
thereof. After this five (5) day period, all rights and penalties as set forth
in Section 8.3 shall apply.

9. SPARE PARTS

Tekelec shall use its best efforts to make and shall maintain sufficient
spare parts for each Product so that such spare parts will be readily available
to Distributor and to any third parties until at least ten (10) years after the
date of the last shipment of such Product under this Agreement.

10. NO OTHER DISTRIBUTOR OBLIGATIONS

Distributor shall have no obligations which are not expressly set forth
in this Agreement.

11. NO OTHER TEKELEC OBLIGATIONS

Tekelec shall have no obligations which are not expressly set forth in
this Agreement.

12. TERM AND TERMINATION

12.1 Termination Without Cause. Distributor may terminate this Agreement
without cause, at any time, upon giving Tekelec one hundred, eighty (180) days
written notice, unless an earlier termination is agreed upon by both parties.
Provided that Distributor has not undertaken Product or Service commitments
(including but not limited to Warranty Obligations) or obligations (a
"Contract" for Product) to End User(s) as permitted

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under this Agreement, which remain outstanding at that time, Tekelec may
terminate this Agreement without cause, upon giving Distributor one hundred,
eighty (180) days written notice, unless an earlier termination is agreed upon
by both parties. In no event shall either party terminate this Agreement within
one year from Effective Date.

12.2. Termination For Cause. Either party may terminate this
Agreement at any time prior to the expiration of its stated term effective upon
written notice of termination to the other party in the event that (i) such
other party materially fails to perform any of its material obligations
hereunder and such failure continues unremedied for a period of thirty (30)
days after written notice of such failure from the party alleging such failure,
or (ii) such other party is merged, consolidated, sells all or substantially
all of its assets or implements or experiences any substantial change in
management or control. In the event of such merger, consolidation, sale or
change in management control, Tekelec will utilize its best efforts to insure
continuation or renewal of this Agreement with the controlling interest.

If Distributor shall terminate this Agreement for cause, Tekelec shall promptly
reimburse any accumulated unused and unreimbursed earned credit as defined in
Exhibit "C".

12.3. Automatic Termination. This Agreement shall terminate
automatically, with no further act or action of either party, if a receiver is
appointed for either party or its property, either party makes an assignment
for the benefit of its creditors, any proceedings are commenced by, for or
against either party under any bankruptcy, insolvency for debtor's relief law,
or either party is liquidated or dissolved.

12.4. Orders After Termination Notice. In the event that any notice
of termination of this Agreement is given by either party, Tekelec will be
entitled to reject all or part of any orders received from Distributor after
such notice but prior to the Termination Date if availability of Products is
insufficient at that time to meet the needs of Tekelec and its customers fully.
In any case, Tekelec may limit monthly shipments to Distributor during said
period to Distributor's average monthly shipments from Tekelec during the three
(3) months prior to the date of notice of termination. In addition, Tekelec
shall have the right to require that all or any part of any such orders be
prepaid.

12.5. Effects of Termination. Upon the Termination Date,
distributor's right to distribute Products, and to represent itself as a
distributor of Products, shall immediately terminate.

12.6. Distributor's Inventory. Upon any termination or expiration of
this Agreement for any reason whatsoever, Tekelec may reacquire any or all
Products then in Distributor's possession at license fees or prices not greater
than the license fees or prices paid by Distributor for such Products. Upon
receipt of any Products so re-acquired from Distributor, Tekelec shall issue an
appropriate credit to Distributor's account. Distributor shall have the
continuing right to market and distribute Products in its inventory until such
inventory is exhausted, subject to the terms and conditions of this Agreement.
In the event that Tekelec elects not to reacquire any or all of the Products,
Distributor may continue to market the Products then in Distributor's inventory
until such time as such inventory is exhausted, provided that Distributor shall
comply fully with all of the terms and conditions of this Agreement applicable
to the marketing of Products. If at any time Distributor fails to comply with
such terms and conditions, it shall cease all marketing of Products immediately
upon notice from Tekelec.

12.7. No Liability For Termination. Except as expressly and clearly
stated or permitted by this Agreement, neither party to this Agreement shall be
liable to the other by reason of termination of this Agreement for
compensation, reimbursement or damages on account of any loss of prospective
profits on anticipated sales or on account of expenditures, investments,
leases or other commitments relating to the business or goodwill of either
party, notwithstanding any law to the contrary. No termination of this
Agreement shall release either party from its obligation to pay the other party
any royalties or other amounts which accrued prior to the Termination Date or
which shall accrue to the other party after the Termination Date.

12.8. Return of Confidential Information. Upon expiration or
termination of this Agreement for any reason, Distributor shall promptly
deliver to Tekelec all materials furnished to Distributor by Tekelec.

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12.9. Survival. The rights and obligations set forth in Sections 5.4
(first sentence), 5.8, 6.8, 9, 12.6 (as defined in Exhibit A) 12.8, 14, 15, 16,
17, and 20.7 shall survive any termination of this Agreement for any reason
whatsoever.

13. PROPRIETARY RIGHTS; SOFTWARE

13.1. Proprietary Rights. Tekelec retains all copyright, patent, trade
secret, trademark and trade name rights in the Products and Distributor shall
not acquire any right, title, or interest therein. Distributor agrees that it
will not at any time during or after the term of this Agreement assert or claim
any interest in, or do anything which may adversely affect the validity or
enforceability of, any trademark, trade name, copyright or logo belonging to or
licensed to Tekelec (including any act, or assistance to any act, which may
infringe or lead to the infringement of any proprietary right in the Products).
Distributor will not remove or obscure any proprietary rights notice contained
on or incorporated in any Product or the packaging of any Product. In the event
that Distributor prepares any materials concerning any of the Products,
Distributor shall include customary and proper notices of Tekelec's proprietary
rights on such materials.

13.2. Distributor Acquires No Rights in Trademarks or Copyrights.
Distributor has not paid consideration for the use of Tekelec's trademarks,
logos, copyrights, trade names or designations, and nothing contained in this
Agreement shall give Distributor any interest in or right to any of them.
Distributor acknowledges that Tekelec owns and retains all copyrights and other
proprietary rights in the Products and agrees that it will not at any time
during or after this Agreement assert or claim any interest in or right to, or
do anything which may adversely affect the validity or enforceability of, any
trademark, trade name, copyright or logo belonging to or licensed to Tekelec
(including any act, or assistance to any act, which may infringe or lead to the
infringement of any copyright in the Products). Without limiting the generality
of the foregoing, Distributor agrees that it will not attempt to register, or
assist any other party (other than Tekelec or its designee) in attempting to
register, any trademark, trade name or other proprietary right with any public
or private authority without the express and unambiguous prior written consent
of Tekelec. Unless otherwise mutually agreed in writing, Distributor will not
attach any additional trademarks, logos or trade designations to the Products.
Distributor will not affix any Tekelec trademark, logo or trade name to any
non-Tekelec Product. Not foregoing Sections 13.1 and 13.2, upon mutual agreement
and payment of mutually agreed consideration, Distributor may affix its
trademark, logo or trade name to Product covered under this Agreement.

13.3. Distributor's Use of Tekelec's Trademarks. During the term of this
Agreement, Distributor is authorized by Tekelec to make such use of Tekelec's
trademarks in connection with the marketing, advertisement and promotion of the
Products in the Territory. Tekelec shall have the right to reasonably
disapprove any materials which make use of the Tekelec trademarks that
Distributor uses or proposes to use. Upon expiration or termination of this
Agreement, Distributor will: (i) cease all display, advertising and use of all
of Tekelec's names, marks, logos and designations; (ii) return or destroy, at
Tekelec's sole discretion, all materials where Tekelec's name appears; and
(iii) will not thereafter use, advertise or display any name, xxxx or logo
which is, or any part of which is, similar to or confusing with any such
designation associated with Tekelec.

13.4. Nature of Software Distribution. With respect to any Product that
is a software Product, and to the extent any other Product contains software,
this Agreement only grants to Distributor a license to transfer such Products
to Distributor's customers, and does not transfer any right, title, or interest
in or to any such software to Distributor. Notwithstanding any "purchase" or
"sale" or similar language contained herein, Distributor acknowledges that such
software is licensed as indicated in this Section 13.

14. CONFIDENTIALITY

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14.1. Confidential Information. For purposes of this Agreement,
"Confidential Information" shall mean any information or material which is
proprietary to the disclosing party or designated as Confidential Information
by the disclosing party and not generally known to the public. Confidential
Information also includes any information which the disclosing party obtains
from any third party which the disclosing party treats as proprietary or
designates as Confidential Information, whether or not owned by the disclosing
party. "Confidential Information" does not include the following:

(i) information which is known by the receiving party at the time
or receipt from the disclosing party which is not subject to any other
non-disclosure agreement between the parties;

(ii) information which is now, or which hereafter becomes,
generally known to the industry through no fault of the receiving party, or
which is later published or generally disclosed to the public by the disclosing
party;

(iii) information which is otherwise lawfully developed by the
receiving party, or lawfully acquired from a third party without any obligation
of confidentiality or

(iv) information required to be disclosed under applicable law,
rule or regulation, or by governmental authority

(v) information which is disclosed to the receiving party without
any xxxx or notification of confidentiality.

14.2. No Disclosure. The receiving party agrees to hold in confidence
and not to disclose or reveal to any person or entity any Confidential
Information disclosed hereunder without the clear and express prior written
consent of a duly authorized representative of the disclosing party. The
receiving party further agrees not to use or disclose any of the Confidential
Information for any purpose at any time, other than for the limited purpose(s)
of this confidence. In the event that either party is directed to disclose any
portion of any Confidential Information of the other party or any other
materials proprietary to the other party in conjunction with a judicial
proceeding or arbitration, the party so directed shall immediately notify the
other party both orally and in writing. Each party agrees to provide the other
with reasonable cooperation and assistance in obtaining a suitable protective
order and in taking any other steps to preserve confidentiality.

14.3. Published Reports. Without limiting the generality of the
foregoing, the parties specifically agree that any reports concerning
Confidential Information which are not made or authorized by the disclosing
party and which appear in any publication prior to the disclosing party's
official disclosure of such Confidential Information shall not release the
receiving party from its obligations hereunder with respect to such
Confidential Information.

14.4. No Confidential Information of Other Parties. Each party
represents and warrants that it will not use in the course of its performance
hereunder, and will not disclose to the other party, any confidential
information of any third party (including competitors of Tekelec or
Distributor) unless such party is expressly authorized in writing by such third
party to do so.

15. WARRANTIES ON PRODUCTS

15.1. Proprietary Rights. Tekelec represents and warrants to Distributor
that Tekelec is or will be the owner or licensee of the proprietary rights in
the Products, and that no part of the Products violates or infringes upon any
common law or statutory rights of any person or entity, including, but not
limited to, rights relating to copyrights, patents, trade secrets, contractual
rights or trade secret rights.

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15.2. Warranty Limited to Tekelec's Limited Warranty. Tekelec makes
no warranties or representations as to the performance of the Products or as to
service to Distributor or to any other person, except as set forth in Tekelec's
Eagle STP Warranty to Daewoo Telecom, Ltd. accompanying the Products, a copy of
which is attached hereto as Exhibit "D" and incorporated herein by this
reference.

15.3. Customer Warranty. Tekelec agrees to provide a twenty four (24)
month warranty against defects in materials and workmanship in the Products to
each of its customers beginning at the earlier of (i) the contracted acceptance
date completion of Customer Acceptance Testing (ii) the equipment is placed in
service. The implementation of this warranty and the cost thereof shall be the
responsibility of Tekelec.

15.4. Disclaimer of Warranties: Limited Liability. EXCEPT AS
EXPRESSLY AND CLEARLY STATED OR PERMITTED BY THIS AGREEMENT, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, THE LIMITED WARRANTY REFERRED TO IN SECTION 15
HEREOF IS THE ONLY WARRANTY, EXPRESS, IMPLIED OR STATUTORY, THAT TEKELEC MAKES
WITH RESPECT TO THE PRODUCTS, AND ALL IMPLIED WARRANTIES, INCLUDING, BUT NOT
LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE ARE HEREBY DISCLAIMED. THE LIABILITY OF TEKELEC, IF ANY, FOR
DAMAGES RELATING TO ANY OF THE PRODUCTS SHALL BE LIMITED TO ACTUAL AMOUNTS PAID
BY DISTRIBUTOR FOR SUCH PRODUCTS AND SHALL IN NO EVENT INCLUDE LOST PROFITS OR
INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND EVEN IF TEKELEC HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

15.5. No Pass Through of Warranty Obligations. EXCEPT AS REFERRED TO
IN SECTION 15 ABOVE, TEKELEC DOES NO MAKE BY VIRTUE OF THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREIN, AND TEKELEC HEREBY EXPRESSLY DISCLAIMS ANY
REPRESENTATION OR WARRANTY TO ANY END-USER, DEALER, SUB-DISTRIBUTOR OR THIRD
PARTY (INCLUDING, BUT NOT LIMITED TO, CUSTOMERS OF DISTRIBUTOR), WITH RESPECT
TO ANY PRODUCT PURCHASED OR ACQUIRED BY DISTRIBUTOR PURSUANT TO THIS AGREEMENT,
INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE. DISTRIBUTOR SHALL NOT HAVE THE RIGHT TO MAKE
OR PASS ON, AND SHALL TAKE ALL MEASURES NECESSARY TO INSURE THAT NEITHER IT NOR
ANY OF ITS EMPLOYEES OR AGENTS MAKES OR PASSES ON, OR ATTEMPTS TO MAKE OR PASS
ON, ANY SUCH REPRESENTATION OR WARRANTY ON BEHALF OF TEKELEC TO ANY END-USER,
DEALER, SUB-DISTRIBUTOR OR THIRD PARTY (INCLUDING, WITHOUT LIMITATION,
CUSTOMERS OF THE OTHER PARTY).

15.6. Repair and Return. Tekelec shall repair and return the Product
or replace it to the distributor or End User as defined in Exhibit "E".

16. INDEMNITY

16.1. Tekelec Indemnity. Tekelec will defend, at its sole expense,
any suit or proceeding brought against Distributor insofar as such suit or
proceeding shall be based upon a claim that any Product infringes or
constitutes wrongful use of any US and the territories identified in Exhibit
"B" patent, US and the territories identified in Exhibit "B" copyright, trade
secret or other US and the territories identified in Exhibit "B" proprietary
right of any third party, provided Distributor gives Tekelec prompt written
notice of any such claim and provides Tekelec such reasonable cooperation and
assistance as Tekelec may request from time to time in the defense thereof.
Tekelec shall pay any damages and costs assessed against Distributor (or paid
or payable by Distributor pursuant to a settlement agreement) in connection
with such a suit or proceeding. Tekelec agrees to indemnify and hold
Distributor harmless from and with respect to any such loss or damage
(including, but not limited to, reasonable attorneys' fees and costs). The
foregoing shall not apply, and Tekelec shall have no obligations to Distributor
with respect to: (i) any use of any Product in combination with any Product,
equipment,

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software, data or telephone network not manufactured or marketed by Tekelec or
not identified by Tekelec as being compatible with the Products; or (ii) any
alteration or modification of any Product without prior written consent from
Tekelec.

16.2 Cessation of Distribution of Allegedly Infringing Product. In the
event that either party ceases to distribute any Product as a result of any
legal action or threatened legal action (other than by reason of a temporary
restraining order), Tekelec shall have a reasonable time to do any one or more
of the following: (i) modify such Product so that it ceases to be infringing or
wrongful; (ii) procure the right for the parties to continue distributing such
Product; or (iii) prepare a non-infringing substitute Product. If, after
reasonable efforts, Tekelec is unable to achieve any of (i), (ii) or (iii)
above, Distributor may seek a third party Product to substitute for the
allegedly infringing Product and, after return such allegedly infringing,
Product to Tekelec, Tekelec shall refund the amount paid by distributor for such
Product.

16.3 Indemnification By Distributor. Distributor will defend and indemnify
Tekelec (including reasonable attorneys' fees and costs of litigation) against
and hold Tekelec harmless from, any and all claims by any third party (including
a subdistributor or dealer) arising out of or relating to or from Distributor's
acts (other than the mere marketing of the Products), omissions or
misrepresentations, regardless of the form of action.

16.4 Indemnification By Distributor of Claims Made By Subdistributor or
Dealer. Without limiting the generality of Section 16, Distributor will defend
and indemnify Tekelec against, and hold Tekelec harmless from, any claim by a
subdistributor or dealer of Distributor: (i) arising out of or relating to the
termination or modification of any arrangement between Distributor and such
subdistributor or dealer (including where such termination or modification
arises out of or results from the termination or modification of this Agreement;
(ii) alleging any act or omission to act of Distributor which, if proved, would
be a breach of or otherwise inconsistent with any term of this Agreement; or
(iii) arising out of or relating to any provision of any agreement between
Distributor and such subdistributor or dealer which is inconsistent with any
term or condition of this Agreement (including provisions relating to
warranties). In addition, Distributor will defend and indemnify Tekelec against,
and hold Tekelec harmless from, any liability of Tekelec to a subdistributor or
dealer to the extent such liability exceeds the limitations of Tekelec's
liability set forth in this Agreement.

16.5 Product Liability Insurance. Tekelec shall obtain product liability
insurance covering the Products in an amount of one (1) million dollars.
Distributor shall be named as an additional insured under such insurance.

17. LIMITATIONS OF LIABILITY

17.1 Tekelec Liability. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED
HEREIN, TEKELEC SHALL NOT, UNDER ANY CIRCUMSTANCES, BE LIABLE TO DISTRIBUTOR FOR
CONSEQUENTIAL, INCIDENTAL, OR SPECIAL DAMAGES, INCLUDING BUT NOT LIMITED TO LOST
PROFITS, EVEN IF TEKELEC HAS BEEN APPRISED OF THE LIKELIHOOD OF SUCH DAMAGES
OCCURRING.

17.2 Distributor Liability. NOTWITHSTANDING ANYTHING TO THE CONTRARY
CONTAINED HEREIN, DISTRIBUTOR SHALL NOT, UNDER ANY CIRCUMSTANCES, BE LIABLE TO
TEKELEC FOR CONSEQUENTIAL, INCIDENTAL, OR SPECIAL DAMAGES, INCLUDING BUT NOT
LIMITED TO LOST PROFITS, EVEN IF DISTRIBUTOR HAS BEEN APPRISED OF THE LIKELIHOOD
OF SUCH DAMAGES OCCURRING.

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18. ACTIONS

Infringement of Tekelec's Proprietary Rights By Third Party. In the event
that neither party learns of any actual or imminently threatened infringement of
any of Tekelec's proprietary rights in the Products, such party shall promptly
notify the other party. Tekelec may, in its sole discretion, bring an
infringement action. In the event that Tekelec declines to institute legal
proceedings, or if Tekelec does not institute legal proceedings within sixty
(60) days after receipt of notice from Distributor, Distributor may institute
legal proceedings against the infringing party. In the event that either
party initiates an infringement action hereunder, that party shall bear all
expenses incurred in the prosecution of, and shall keep all recoveries from,
such action, except that non-initiating party may elect to participate in the
recovery by contributing to the costs of such action. The proceeds of any
recovery shall be divided pro rata according to the contributions of the
parties, except that neither party shall receive amounts in excess of its
contribution until both parties have recovered their actual contributions.
Notwithstanding the foregoing, no election will be deemed effective as to any
judgment entered or settlement agreement executed within forty-five (45) days
after the election is communicated to the initiating party, except to the
extent of reimbursing the elector's actual contribution. As used herein,
"contribution" only includes amounts paid to third parties, but does not
include internal costs of the parties.

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19. NOTICES

Except as specifically provided herein, all notices required hereunder
shall be in writing and shall be given by personal delivery, international
courier service of recognized reputation (e.g., DHL), or by airmail, certified
or registered, postage prepaid, return receipt requested, to the parties at
their respective addresses first set forth above, or to any party at such other
addresses as shall be specified in writing by such party to the other parties
in accordance with the terms and conditions of this Section 19. All notices
shall be deemed effective upon personal delivery, or seven (7) days following
deposit in the mail in accordance with this Section 19, or three (3) business
days following deposit with any international courier service of recognized
reputation (e.g., DHL) in accordance with this Section 19.

20. MISCELLANEOUS

20.1. Entire Agreement. This Agreement constitutes the entire
understanding and agreement between the parties hereto and supersedes any and
all prior or contemporaneous representations, understandings and agreements
between Tekelec and Distributor with respect to the subject matter hereof, all
of which are merged herein. Notwithstanding the foregoing, the parties
understand and agree that any confidentiality agreements between the parties
are separate from this Agreement, and, except as may be expressly stated
herein, nothing contained in this Agreement shall be construed as affecting the
rights or obligations of either party set forth in any such agreement. It is
expressly understood and agreed that no employee, agent or other representative
of Tekelec has any authority to bind Tekelec with regard to any statement,
representation, warranty, or other expression unless the same is specifically
set forth or incorporated by reference herein. It is expressly understood and
agreed that, there being no expectation of the contrary between the parties
hereto, no usage of trade or custom and practice within the industry, and no
regular practice or method of dealing between the parties hereto, shall be used
to modify, interpret, supplement or alter in any manner the express terms of
this Agreement or any part hereof. This Agreement shall not be modified,
amended or in any way altered except by an instrument in writing signed by
Distributor and an officer of Tekelec.

20.2. Independent Parties. Nothing contained herein shall be deemed to
create or construed as creating a joint venture or partnership between Tekelec
and Distributor. Neither party is, by virtue of this Agreement or otherwise,
authorized as an agent or legal representative of the other party. Neither
party is granted any right or authority to assume or to create any obligation or
responsibility, express or implied, on behalf of or in the name of the other
party or to bind such other party in any manner. Further, it is not the
intention of this Agreement or of the parties hereto to confer a third party
beneficiary right of action upon any third party or entity whatsoever, and
nothing hereinbefore or hereinafter set forth shall be construed so as to
confer upon any third party or entity other than the parties hereto a right of
action under this Agreement or in any manner whatsoever.

20.3. Waiver. No waiver of any provision of this Agreement or any
rights or obligations of either party hereunder shall be effective, except
pursuant to a written instrument signed by the party or parties waiving
compliance, and any such waiver shall be effective only in the specific
instance and for the specific purpose stated in such writing.

20.4. Amendments. All amendments or modifications of this Agreement
shall be binding upon the parties despite any lack of considerations so long as
the same shall be in writing and executed by the parties hereto in accordance
with the other terms of this Agreement regarding modifications.

20.5. Severability of Provisions. In the event that any provision
hereof is found invalid or unenforceable pursuant to judicial decree or
decisions, the remainder of this Agreement shall remain valid and enforceable
according to its terms.

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20.6. Assignment.

20.6.1. Consent. This Agreement or any rights hereunder shall
not be assigned or transferred, in whole or in part, by either party without
the prior written consent of the other party, and any assignment without such
consent shall be invalid.

20.6.2. Binding. This Agreement shall be binding upon and inure
to the benefit of each of the parties hereto and their respective legal
successors and permitted assigns.

20.7 Governing Law

20.7.1. Forum and Jurisdiction. This Agreement was entered into
in the State of New York, and its validity, construction, interpretation and
legal effect shall be governed by the laws and judicial decisions of the State
of New York applicable to contracts entered into and performed entirely within
the State of New York. Tekelec and Distributor expressly agree that any action
at law or in equity arising under this Agreement shall be filed only in the
Federal Court in Manhattan, New York. The parties hereby consent and submit to
the personal jurisdiction of such courts for the purposes of litigating any
such action.

20.7.2. Consent to Jurisdiction. THIS AGREEMENT MAY BE ENFORCED
IN ANY FEDERAL COURT OR STATE COURT SITTING IN THE CITY OF NEW YORK, STATE OF
NEW YORK, AND THE PARTIES HERETO CONSENT TO THE JURISDICTION AND VENUE OF ANY
SUCH COURT AND WAIVE ANY ARGUMENT THAT VENUE IN SUCH FORUMS IS NOT CONVENIENT.
THE PARTIES HERETO AGREE THAT SERVICE OF PROCESS IN RESPECT OF ANY ACTION OR
PROCEEDINGS COMMENCED IN ANY SUCH COURT MAY BE MADE PERSONALLY ON THEM OUTSIDE
THE STATE OF NEW YORK, THAT SUCH SERVICE OF PROCESS SHALL BE AS FULLY EFFECTIVE
FOR ALL PURPOSES AS IF MADE WITHIN THE STATE OF NEW YORK AND THAT HE OR IT WILL
NOT RAISE ANY OBJECTION TO THE JURISDICTION OF ANY COURT BASED ON SERVICE OF
PROCESS SO MADE, OR IF SUCH TRANSFER CANNOT BE ACCOMPLISHED UNDER THE APPLICABLE
LAW, TO HAVE SUCH DISMISSED WITHOUT PREJUDICE.

20.7.3. Waiver of Jury Trial. EACH OF THE PARTIES HERETO, BY ITS
ACCEPTANCE OF THIS AGREEMENT, IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY.

20.8 Attorneys' Fees. In the event any litigation or other proceeding
is brought by either party in connection with this Agreement, the prevailing
party in such litigation or other proceeding shall be entitled to recover from
the other party all costs, attorneys' fees and other expenses incurred by such
prevailing party in this litigation.

20.9 Force Majeure. Neither Tekelec nor Distributor shall be deemed
in default if its performance or obligations hereunder are delayed or become
impossible or impractical by reason of any act of God, war, fire, earthquake,
labor dispute such as strike and lockouts, civil commotion, epidemic, act of
government or government agency or officers, or any other cause beyond such
party's control. Notwithstanding the foregoing, a change in economic conditions
or technology shall not be deemed a force majeure event.

20.10 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.

20.11 Arbitration. Notwithstanding Section 20.7, in the event a
dispute arises in connection with the interpretation or implementation of this
Agreement, the parties shall attempt in the first instance to resolve such
dispute through friendly consultation. At the option of Distributor, if the
dispute cannot be resolved in this manner within sixty (60) days after the
commencement of discussions, either party may submit the dispute to arbitration.

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The dispute shall be submitted to the Court of Arbitration of the International
Chamber of Commerce in Stockholm, Sweden in accordance with the rules and
regulations of the International Chamber of Commerce. There shall be three (3)
arbitrators: one selected by Tekelec, one selected by the Distributor, and the
third selected by the Court of Arbitration of the International Chamber of
Commerce who shall concurrently serve as chairman of the arbitration panel. The
decision of the arbitration panel shall be final and binding upon both parties.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.

TEKELEC Daewoo Telecom Ltd. (DISTRIBUTOR)

By: /s/ Xxxxx Xxxxxx By: /s/ Jin-Xxxx Xxx
---------------------------------- ----------------------------------

Name: Xxxxx Xxxxxx Name: Jin-Xxxx Xxx
---------------------------------- ----------------------------------

Title: President Title: Executive Vice President
---------------------------------- ----------------------------------

EXHIBIT "A"

PRODUCTS

Tekelec Eagle STP Products

NOTES:

o [**] Link capacity can be accomplished as an upgrade pricing to be
estimated if scheduled.

o [**] Interface is a less than [**] program with development charges
-- interim customer must use [**].

o Tekelec Eagle STP Products can support [**] simultaneously with less than
[**] program. This is a chargeable feature not included in base price
system. Interim customer may use [**]. Tekelec will provide [**] to Daewoo
during the interim at no charge and additional [**], if any, at list
prices. Daewoo will negotiate with the End User to establish trial
conditions which do not exceed this amount.

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EXHIBIT "B"

TERRITORY

EXCLUSIVE MARKET RIGHTS:
Republic of Korea

o Exclusivity shall be defined as the right to exclusively sell, market &
promote product in the "Exclusive Market Right Countries" to those companies
headquartered or doing business in the "Exclusive Market Right" countries.
Tekelec shall not deliver any Product to any supplier other than Distributor
for installation in the "Exclusive Market Rights" countries.

RIGHTS TO SELL, AS MUTUALLY AGREED, WITH PRIOR NOTIFICATION:
Countries Where Daewoo Has Market Presence

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EXHIBIT "C"

Daewoo Prices as a Distributor

Prices and credits in this Section are contingent upon Daewoo's placement of an
initial order within ninety (90) days of execution of this Agreement for no less
than [**], for delivery during the initial Agreement term.

Tekelec shall provide the products in Exhibit "A" at the following Price Plan.

Link Shipment Volume Hurdles Hurdle Price per Link
----------------------------------- ---------------------
First [**] Links Shipped [**]
Next [**] Links Shipped [**]
Next [**] Links Shipped [**]
[**] Link Shipped and Thereafter [**]

A start-up fee of [**], less a Startup Credit of [**], per link purchased and
equipped shall be applied to each node. Such Startup Credit shall not exceed
[**] per node.

The price of all other Tekelec-manufactured optional items will be invoiced at
[**] of Tekelec's List Price, attached. All Tekelec-provided OEM equipment
(printers, modems, third party software, etc.) and Tekelec "Services" are
provided at [**].

Daewoo reserves the right to set end user pricing at its discretion. In
consideration for the preferred pricing offered to Daewoo by Tekelec, Daewoo
agrees that any amount paid to Daewoo by the end user in excess of an [**]
markup of the Net Pricing granted by Tekelec to Daewoo shall be evenly divided
between Daewoo and Tekelec (Excess Profit). Net Pricing shall mean prices per
the Price Plan above as reduced by Earned Credits as defined below.

In the event that Daewoo's Earned Credits are greater than or equal to Tekelec's
portion of such Excess Profit Tekelec shall debit the Earned Credits by an
amount equal to Tekelec's portion of such Excess Profit, otherwise Daewoo shall
remit to Tekelec its portion of such Excess Profit within thirty (30) days of
Daewoo's paid receipt of such excess amount from the end user. On a quarterly
basis, Daewoo shall provide to Tekelec a summary report of all sales during the
report period, including the prices paid by the end user.

Daewoo acknowledges that this Agreement incorporates a "Minimum Sale
Requirement" and an invoiced purchase commitment of [**] to be attained on or
before December 31, 1998. In no event shall this commitment be less than [**],
unless mutually agreed.

Tekelec shall provide Daewoo Shipment Volume Hurdle credits against future
purchases according to the schedule below:

EARNED CREDITS AGAINST FUTURE PURCHASES

Upon Delivery to Daewoo Of The [**] Link [**]
Upon Delivery to Daewoo Of The [**] Link [**]
Upon Delivery to Daewoo Of The [**] Link [**]
----------
[**]

For purpose of determining the Hurdle Price Per Link and the "Minimum Sale
Requirement," any Link ordered for which Daewoo exercises its right to cancel
for non-delivery shall be deemed shipped by Tekelec. In no event shall any Link
deemed shipped under this provision earn any credits as outlined in this
Exhibit "C."

21
22

Qty. Part Num. Description Unit Price
---- --------- ----------- ----------

[**]

22
23
[**]

23
24
EXHIBIT "D"

Tekelec's Limited Warranty & Software License Agreement
-------------------------------------------------------

Warranty & Software License Agreement will be provided under separate cover.

24
25
EAGLE (R) Marketing
--------------------------------------------------------------------------------

EAGLE STP Warranty to
Daewoo Telecom, Ltd.

25
26

TEKELEC STANDARD WARRANTY

The Standard Warranty for Daewoo Telecom, Ltd. provides:

1. Hardware repair and return,

2. Software problem resolution,

3. Unlimited telephone access to the Technical Services Center (24 hrs. per
day, 7 days per week),

4. All Generic Software Loads (provisioned with features as purchased on
initial or subsequent purchase orders) released during the coverage period,

5. Guarantee of interoperability with all signaling networks which conform to
pertinent standards for Signaling System #7 and

6. Minimum [**] discount on all hardware prerequisites required (if any) for
required software upgrades.

The Standard Warranty expires [**] calendar months after the completion of
Customer Acceptance Testing or [**] calendar months after the equipment is
placed in service, whichever occurs first.

In no event shall such warranty not exceed [**] calendar months after the
contracted acceptance date.

Under the Standard Warranty, Tekelec will repair or return defective equipment
or assemblies with functionally equivalent equipment or assemblies, during the
coverage period. Repaired or replaced equipment is warranted for ninety (90)
days or the balance of any remaining warranty coverage, whichever is longer.

Provided that the software delivered and maintained by Tekelec has not been
altered by the user, without authorization, Tekelec warrants that (i) the
software shall be readable and executable for the Eagle system for which it was
designated and (ii) the software will, upon proper configuration, conform the
applicable specifications as set forth in associated Tekelec Technical
Publications, which describe the functionality and performance of said software.

The Standard Warranty is included, at no charge, with each system purchase.

Hardware repair and return and software problem resolution is provided for
extensions and new features purchased after the initial system purchase for a
period of [**] from date of shipment or the balance of the initial system
warranty, whichever is longer.

26
27

Tekelec's Custom Extended Warranty

To meet each customer's individual needs, Tekelec offers a custom warranty
service called Custom Extended Warranty Service (CEWS), providing continued
coverage after the expiration of the Standard Warranty. All of the features of
the Standard Warranty are available, in tiered levels of coverage.

Any revenues, received from the End User under this Extended Warranty program
shall be distributed [**] to Daewoo Telecom, Ltd. and [**] to Tekelec.

Customers may select one of the three optional Custom Extended Warranty plans.

Tier 1: Technical Services Center (TSC) Access & Software Problem Resolution

Tier 1 coverage provides a continuation of telephone access to the
Technical Services Center and software problem resolution, as per the
Standard Warranty.

Tier 2: Hardware Repair and Return, Plus TSC Access & Software Problem
Resolution.

Tier 2 coverage provides all of the coverage available in Tier 1 coverage,
plus hardware repair and return.

Tier 3: Hardware and Software Upgrade Options, Plus Hardware Repair & Return,
TSC Access & Software Problem Resolution.

Tier 3 coverage provides all of the coverage available in Tier 2 coverage,
plus all Generic Software Loads (provisioned with all features as
purchased on initial plus subsequent purchase orders) released during the
coverage period and hardware/software upgrade options.

Hardware/software upgrade options include:

- at least a [**] discount from the then-current list price on any
hardware prerequisites required (if any) to upgrade the existing
system to meet required software upgrades.

- at least a [**] discount from the then-current list price on any
software required to upgrade the existing system to meet hardware
prerequisites (if any).

28
GENERAL CUSTOM EXTENDED WARRANTY PROVISIONS

Invoicing for Custom Extended Warranties will occur in three annual
installments. Each invoice will be issued at the expiration of the prior year's
coverage. The basis of each annual installment will be adjusted to reflect
then-current list value of the system and the appropriate percentage will be
calculated from the new basis.

If Custom Extended Warranty coverage is desired, any time after initial system
purchase, Tekelec reserves the right to audit said system for minimum levels of
maintainability and suitability for coverage under the Custom Extended Warranty
plan. Pricing for each tier will be adjusted to reflect the general system
condition.

GENERIC VINTAGE REQUIREMENTS

Under both the Standard and Custom Warranties, Tekelec will support the current
generic release and two previous releases.

PRICING OF GENERIC SOFTWARE RELEASES, OUT-OF-WARRANTY

When not covered by either the Standard Warranty or the Custom Extended
Warranty, pricing for subsequent software generic releases is based upon a
percentage of the system's list price value, as audited at the time of generic
purchase.

28
29
BY ACCEPTING THE INSTALLATION OF NETWORK PRODUCT EQUIPMENT AND SOFTWARE YOU
DEMONSTRATE AGREEMENT WITH THE TERMS OF THIS LICENSE.

DEFINITIONS
The term "Software" as used in this agreement means the computer programs in
object form either in diskettes, transferred to the Equipment by various File
Transfer Protocols, or recorded on semiconductor chips that are part of the
TEKELEC equipment, together with any upgrades, update or modifications
subsequently supplied by TEKELEC. The term "Software Copies" means the actual
copies of all or any portion of the Software, including back-ups, upgrades,
updates, merged or partial copies permitted hereunder or subsequently supplied
by TEKELEC.

The term "Related Materials" means all of the printed materials provided
in this package or later supplied by TEKELEC for use with the Software.

PERMITTED USES
You may:

o Load onto and use the Software on a single (1) TEKELEC system or those
logical units which constitute a single (1) logical system.

o Install the Software onto a permanent storage device (a hard disk
drive).

o Make and maintain back-up copies provided they are used only for
back-up purposes, and you keep possession of the back-ups. In
addition, all information appearing on the original disk labels
(including the copyright notice) must be copied onto the back-up
labels.

o This license gives you certain limited rights to use the Software,
Software Copies and Related Materials. You do not become the owner of,
and TEKELEC retains title to, all the Software, Software Copies and
Related Materials. In addition, you agree to use reasonable efforts to
protect the Software from unauthorized use, reproduction,
distribution, or publication. All rights not specifically granted in
this license are reserved by TEKELEC.

USES NOT PERMITTED
You may not:

o Make copies of the Software, except as permitted above.

o Make copies of the Related Materials, except as permitted above.

o Rent, lease, sub-license, time-share, lend, or transfer the Software,
Software Copies, Related Materials or your rights under this license
except that transfers may be made with TEKELEC's prior written
authorization.

o Alter, decompile or disassemble the Software, or make attempts to
unlock or bypass initialization used on initialized disks, except as
directed by Technical Services Center staff.

o Remove or obscure the TEKELEC copyright notices.

DURATION

This agreement is effective from the day you accept the Equipment or Software.
The license continues for twenty years, end of copyright protection, or until
you return to TEKELEC the original disks and any back-up copies, whichever
comes first. If you breach this agreement, we can terminate this license upon
notifying you in writing. You will be required to return all Software Copies
and Related Materials. We can also enforce our other legal rights.

GENERAL

This agreement represents our entire understanding and agreement regarding the
Software, Software Copies and Related Materials and supersedes any prior
purchase order, communications, advertising, or representations. This license
may only be modified in a written amendment signed by an authorized TEKELEC
officer. If any provision of this Agreement shall be unlawful, void, or for any
reason unenforceable, it shall be deemed severable from, and shall in no way
affect the validity or enforceability of, the remaining provisions of this
agreement. This Agreement will be governed by the laws of the State of New
York. Without limiting the generality of the foregoing, this Agreement is
intended to follow, be governed by and not to supersede United States patent
and copyright laws.

29
30
EXHIBIT "E"

Repair and Return Agreement
---------------------------

Repair and Return Agreement will be provided under separate cover.

30
31
[TEKELEC LOGO] 00000 Xxxx Xxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxx 00000

Tel 000.000.0000
Fax 000.000.0000

-------------------------------------------------------------------------------
THIS DOCUMENT AND THE DATA DISCLOSED HEREIN OR HEREWITH IS PROPRIETARY AND IS
NOT TO BE REPRODUCED, USED OR DISCLOSED IN WHOLE OR IN PART TO ANYONE WITHOUT
THE WRITTEN PERMISSION OF TEKELEC. COPYRIGHT. (C) TEKELEC 1996
-------------------------------------------------------------------------------
Title: Procedure, Return Materials Authorization (RMA), NSD
-------------------------------------------------------------------------------
Part Number: 000-0000-00 Revision: C ECN: 6066
-------------------------------------------------------------------------------

EAGLE(R)
-------------------------------------------------------------------------------
Network Switching Division

PROCEDURE, RETURN MATERIALS
AUTHORIZATION (RMA), NSD

CHANGE HISTORY
--------------------------------------------------------------------------------
Date ECN # Author Revision Description
================================================================================
11/10/95 5844 B. Long Initial release
================================================================================
02/20/96 5984 B. Long Minor changes/fix typing errors
================================================================================
05/22/96 6066 B. Long Minor changes/fix typing errors
--------------------------------------------------------------------------------

31
32
1. PURPOSE:
To describe the Network Switching Division's (NSD) processes for Return
and Repair of hardware identified as non-fictional for installation and
in-service sites.

2. SCOPE:
NSD hardware returned for repair by customers or NSD personnel

3. REFERENCES:
3.1. ISO9001 Section 4.13
ISO9001 Section 4.19
3.2. Internal Reference
o Technical Services Manual 000-0000-00
o Procedure, NSD Advance Hardware Replacement 000-0000-00
o Procedure, Customer Service Request (CSR) 000-0000-00

4. PROCEDURE:
4.1. Responsibilities
4.1.1. NSD Technical Services:
o Only organization authorized to initiate NSD hardware
return or replacement via the RMA process.

o Receives all requests for hardware replacements from
in-service sites

o Initiates Customer Service Request (CSR) in MADIC system

o In consultation with requester, assesses symptoms &
troubleshooting to confirm that hardware return/repair is
required

o Initiates RMA in MADIC system

o In consultation with requester, determines if advance
replacement is required

o Coordinates delivery of advance replacement hardware (as
required)

o Coordinates return of hardware to be repaired

o Monitor's RMA through process and confirms customer
satisfaction

o Closes RMA in MADIC system

o Closes CSR in MADIC system

o Maintains North Carolina Spare Parts Inventory (NCSPI)
stockroom controls

o Update Site files with any new board P/Ns, S/Ns, and/or
Rev levels (as required)

4.1.2. NSD Manufacturing:

o Responsible for processes, procedures and control for:
- receiving
- Engineering Change Notice (ECN) update
- test
- troubleshoot
- repair & retest
- repair stamping
- ship to customer
debit/credit to customer as required
As documented in TEKELEC Calabasas Quality Manual with
the following additional requirements for NSD hardware:
- ECN upgrades will be implemented per Bellcore
TR-OPT-000209
- Testing will satisfy Section 3.2.5 of Bellcore
TR-NWT-000284
- Marking of repaired hardware will satisfy Bellcore
TR-TSY-000078
- Maintain Eagle Spare Parts Inventory/Calabasas
(EAGSPI) stock and controls
- Replenish NCSPI shipped items -- next business day
after request
- Provide off-hour on-call coverage

4.1.3. NSD Hardware Engineering:

33
o Provides fault isolation & analysis on RMA hardware
that tests with "NO-Trouble-Found" (NTF) as received
from customer

4.1.4. NSD Quality:
o Conducts routine process audits on RMA procedure
o Monitors the overall RMA performance

4.1.5. TEKELEC Stockroom (Calabasas):
o Ensures Spare Parts Inventories (SPIs) are kept
upgraded based on ECN activity
o Enters NCSPI stock movement transactions in MADIC
system
o Directs and monitors NCSPI cycle count activities

4.1.6. TEKELEC Materials Team (Productions Control, Stock room,
Manufacturing & Technical Services):
o Determines which items will be carried in SPI (EAGSPI
& NCSPI) and stocking levels
o As required, develops fulfillment/replenishment plans

4.2. Inputs
Technical Service Engineer (TSE) and customer complete analysis
and troubleshooting and agree that hardware return/repair is
required.

4.3. Steps
o TSE opens CSR in MADIC system
o TSE initiates RMA in MADIC and provides shipping
instructions to customer
o TSE and customer agree if Advance Replacement &/or
Emergency Replacement is required, ref: Advance
replacement procedure
o Customer ships hardware to TEKELEC attention:
RMA ####
o RMA hardware is received, verified to MADIC records,
and routed to "incoming RMA"
o RMA Traveler is initiated
o Test, Update with appropriate ECNs, Troubleshoot,
repair & retest per RMA traveler
o Items which pass test as received (NTF) are processed
through a sequence of heat testing and fault isolation
& analysis
o Repaired items are stamped, MADIC is updated from
repair data base & from Traveler
o Quality Control audits RMA hardware, documents, and
MADIC for completeness
o RMA hardware is returned to customer (or SPI stock if
Advance replacement provided)
o TSE confirms that customer is satisfied
o TSE closes RMA in MADIC system
o TSE closes CSR in MADIC system

4.4. Deliverables
o Repaired hardware shipped to customer (custromer
satisfaction confirmed by TSE) or, if advance
replacement hardware provided, delivered to SPI.
o Records and reports for tracking, analysis and
process improvement

5. Flow Diagram of the process:

REPAIR & RETURN FLOW

[PROCESS FLOW CHART]

34
35
[TEKELEC LETTERHEAD]

THIS DOCUMENT AND THE DATA DISCLOSED HEREIN OR HEREWITH IS PROPRIETARY AND IS
NOT BE REPRODUCED, USED OR DISCLOSED IN WHOLE OR IN PART TO ANYONE WITHOUT THE
WRITTEN PERMISSION OF TEKELEC. COPYRIGHT, (R)TEKELEC 1996

Title: Procedure, Customer Service Request (CSR), NSD
Part Number: 000-0000-00 Revision: B ECN: 6066

EAGLE(R)
-------------------------------------------------------------------------------
Network Switching Division

Procedure, Customer Service Request
(CSR), NSD

CHANGE HISTORY

Date ECN# Author Revision Description

11/10/95 5844 B. Long Initial release
5/22/96 6066 B. Long Minor changes, typo errors

35
36
1. PURPOSE:

Describe how the Network Switching Division (NSD) will document, record, and
track Customer requests for product support.

2. SCOPE:

Documentation and tracking will be available at all stages of a product's life
cycle (while the product is deployed in a customer's network). All Network
Services Division's (NSD) deployed products will be covered by technical
support coverage.

3. REFERENCES

3.1 ISO 9001 4.14
ISO 9001 4.19

3.2 Internal References:
Return Materials Authorization Procedure 000-0000-00
Advance Hardware Replacement Procedure 000-0000-00

4. OPERATING CRITERIA:

4.1. Product problems are categorized to reflect the initial impact or
potential impact on the customer application.

Priority Classification Responsive Objective* Description
----------------------------------------------------------------------
Priority Critical Continuous around Critical problems severely
1 the clock until affect service, traffic,
pre-incident con- billing, and maintenance
dition exists capabilities and require
immediate corrective
action, regardless of time
of day or day of week
----------------------------------------------------------------------
Priority Major 30 days from Major problems cause condi-
2 receiving the tions that seriously affect
fault report to system operation, mainten-
fix delivery to ance and administration,
site etc. and require immediate
attention. The urgency is
less than in critical
situations because of a
lesser immediate or impend-
ing effect on system per-
formance, customers, and
company operations and
revenue
----------------------------------------------------------------------
Priority Minor 6 months from Minor problems do not sig-
3 receiving the nificantly impair the
fault report to functioning of the system
fix delivery to and do not seriously affect
site service to the customer
----------------------------------------------------------------------

* Response objective interval is time between report of problem and
delivery of fix

4.2 NSD will maintain a Customer Service Request (CSR) database to record
and track customer problems (a MADIC Module). This database is updated
to reflect the current status of each problem or request.

36
37
4.3 NSD's Technical Services group is responsible for recording customer's
requests for assistance; tracking and managing a problem or request
through resolution; and implementing corrective actions if necessary.

4.4 Telephone Consultation is performed to confirm warranty and the severity
of the problem or issues. During the initial trouble shooting phase, the
symptoms of the reported problem are confirmed for accuracy.

4.5 If during the consultation with the customer the problem is deemed a
Critical or a Major problem the escalation procedure is implemented. The
NSD management will help facilitate acquiring any resource needed to
resolve the problem.

4.6 If during the trouble shooting phase it is determined that a unit, part,
board, etc., is needed to resolve the problem, the Technical Services
Representative issues the customer a Return Material Authorization (RMA)
number to allow for the unit, part, or board to be returned for repair,
replacement, upgrade, etc.

4.7 A System Problem Report (SPR) is opened when problem resolution requires
Design Engineering support. Engineering classifies the SPR as either a
Critical, Major, Minor, or Enhancement SPR.

4.8 If the remote troubleshooting does not resolve the problem, NSD may
request to send a Field Service Engineer to the customer's site to assist
with troubleshooting.

4.9 A Technical Services Representative will continue to monitor and track the
problem until the situation is resolved. If an RMA and/or SPR was
generated from the CSR the CSR remains open until the associated RMA
and/or SPR is closed. The CSR database is routinely updated with
information concerning the resolution of the issue.

4.10 CSR closure requires a description of the problem resolution as part of
the CSR record, and the customer's concurrence of that description. Both
the resolution description and the name and date of customer
representative agreeing to the solution should be recorded in the action
field of the CSR. Statistical data on problem occurrences and maintenance
activities is maintained in the database.

37
38
CSR FLOW

[PROCESS FLOW CHART]

38
39
[TEKELEC LETTERHEAD]

Title: Procedure, Escalation, NSD
Part Number: 000-0000-00 Revision: B ECN: 6066

EAGLE(R)
-------------------------------------------------------------------------------
Network Switching Division

Procedure, Escalation, NSD

CHANGE HISTORY

Date ECN# Author Revision Description

11/10/95 5844 B. Long Initial release
5/22/96 6066 B. Long Correct typo errors

40
1. PURPOSE:

To establish the criteria and method under which Network Switching Division
(NSD) will provide management notification and involvement in problem
resolution activities. Use of this procedure is intended to minimize
time and confusion during service affecting situations.

2. SCOPE:

This escalation procedure cover all customer service affecting problem
situations on deployed NSD products 24 hours a day, 7 days a week.

3. REFERENCES

3.1 ISO 9001 4.14
ISO 9001 4.19

4. OPERATING CRITERIA:
4.1 Priority Classifications and Response Objectives:

Priority Classification Responsive Objective Description
-------- -------------- -------------------- -----------

Priority 1 Critical Continuous around the Critical problems severely affect
clock until preincident service, traffic, billing, and
condition exists maintenance capabilities and require
immediate corrective action, regardless
of time of day or day of week

Priority 2 Major 30 days from receiving Major problems cause conditions that
the fault report to fix seriously affect system operation,
delivery to size maintenance and administration, etc. and
require immediate attention. The urgency
is less than in critical situations
because of a lesser immediate or impending
effect on system performance, customers,
and company operations and revenue

Priority 3 Minor 6 months from receiving Minor problems do not significantly impair
the fault report to fix the functioning of the system and do not
delivery to site 1 seriously affect service to the customer

*Response objective interval is between the report of the problem and
the delivery of the fix.

4.2 Emergency Definition

o An emergency situation always exists when a "Critical" problem is
encountered. Note: a "Major" problem may be classified as an
emergency situation, at the discretion of the Technical Services
Manager (TSM)

- A total system failure that results in loss of all transaction
processing capability

- Significant reduction in system capacity or traffic handling
capability

- Loss of the system's ability to perform automatic system
reconfiguration

41
- Inability to restart a processor or the system

- Loss of access for maintenance or recovery operations

- Loss of the system's ability to provide any required "Critical" or
"Major" trouble notification

- Other problems severely affecting service, capacity/traffic, billing
and maintenance capabilities may be defined as critical by the
customer upon prior discussion and agreement with NSD

4.3 Emergency Notification Sequence

o Notification sequence during normal business hours:

- Normal business hours - 8:00 AM to 8:00 PM eastern time Monday
through Friday except Tekelec holidays

- The first level of problem resolution will be the Technical Services
Engineer (TSE)

- The TSE receiving the customer request will determine if the issue
is Major or Critical

- The Technical Services Manager (TSM) will be contacted for service
affecting issues

- The Director of Customer Service (DCS) will be notified for any
Emergency situations

- The NSD General Manager (NSD GM) should be notified for any
Emergency situations

o Notification sequence during all other hours:

- Outside of normal business hours Technical Service's 800 number will
be answered by an answering service

- The answering service xxxx xxxx the on call primary TSE

- If no response within 10 minutes the answer service xxxx xxxx the
secondary TSE

- If no response within 10 minutes the answer service xxxx xxxx the
TSM

- If no response within 10 minutes the answer service xxxx xxxx the
DCS

- If no response within 10 minutes the answer service xxxx xxxx NSD GM

o A listing of specific individuals, pager numbers, and phone numbers
will be published and posted in the Technical Service's area

o Each TSE will have access to the escalation listing at all times

4.4 Emergency Escalation Sequence

o Escalation steps are identified by expired time intervals upon
notification of a 'Critical' or "Major" customer problem

- TIME(0): 0 TO 20 MINUTE INTERVAL

o TSE determined if customer issue severity is Major or Critical

o Notify TSM of the situation

o Open Customer Service Request (CSR) in MADIC system

o Work the issue to resolution

- TIME(1): 20 TO 45 MINUTE INTERVAL

o If issue is resolved, TSE closes CSR to log incident and
report to TSM

o If issue is not resolved at 20 minutes, provide the TSM with
situation update

o Escalate to Subject Matter Experts (SME) as required

o TSM establishes resolution plans

- TIME(2): 45 TO 60 MINUTE INTERVAL

o At 45 minutes, Director of Customer Services is notified for
unresolved Critical issues (Unresolved Major issues will be
escalated at the discretion of the TSM)

o Make arrangement to send TSE to site, as required

o Resolution plan reviewed by Management Team and corrections
implemented if required

41
42
-TIME(3): >60 minutes
o At 60 minutes, Senior Vice President and General Manager is
notified for unresolved Critical issues (Unresolved Major issues
will be escalated at the discretion of the Management Team)

o Resolution plan is reviewed by Management Team and corrections
implemented if required

o Resolution actions proceed continuously 24 hours per day until
Critical issues are resolved (The Management Team determines
resolution plan for Major issues)

4.5 Emergency Debriefing
o When the emergency situation is resolved, a debriefing session
is held to explain the problem cause, actions to take to avoid
further reoccurrence and follow-up activities to occur by NSD
and customer

4.6 Emergency Analysis
o Each emergency situation will be analyzed to determine the root
cause of the incident so future occurrences can be avoided

o A formal service failure analysis will be conducted following
any instance of a reportable system outrage of two (2) minutes
or greater, (or multiple transients of less than two (2)
minutes)

o A Service Failure Analysis Report (SFAR) should be issued to the
affected customer within two weeks following the first instance
of a reportable outrage

Document Metadata

Table of Contents

1 EXHIBIT 10.2 ALL SECTIONS MARKED WITH TWO ASTERISKS ("**") REFLECT PORTIONS WHICH HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION BY TEKELEC AS PART OF A REQUEST FOR CONFIDENTIAL TREATMENT.

Document Metadata