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\F4\←L\-R\/'7;\+R\→.\→S   Telephone:
\F1\COctober 29, 1976

Mr. Alan Montross
Naval Research Laboratory
4555 Overlook Avenue S.W.
Washington D. C.  20375

Dear Mr. Montross:
	This letter  is written  with reference  to your  contract  number
N00173-75-C-0582 covering the purchase of a Vicarm Manipulator System from
Vicarm, Inc.

	On September 9, 1976, we personally delivered our complete  system
to your  laboratory  in  Washington  per our  contract  and  the  ammended
delivery agreement.  Later  in September,  we returned to  NRL to  examine
certain electronic problems.  This last week,  we shipped to you, and  Dr.
Gerald Wilson acknowledged  receipt of  all the  corrections necessary  to
make our  system operate  satisfactorily.  You  apparantly are  still  not
satisfied with  our performance,  as Dr.  Wilson has  still indicated  his
reluctance to  pay  on the  Logic  Unit  Item until  he  recieves  certain
additional documentation.

	Our position  is the  following.   The documentation  Dr.   Wilson
requests is not a part of this  contract.  We will not deliver this  extra
documentaion as part  of this contract.   We have offered  to supply  this
requested documentation under  another contract should  he desire it.   We
are also  requesting immediate  payment  on this  current contract  as  we
consider payment  OVERDUE.   Delivery was  made  on September  9,  and  on
November 8, you will be 60 days past due.

	As he is apparantly not entirely satisfied with our product,  we
offer you the following three alternatives.

	1) Immediate payment of all that is due Vicarm.  Should payment be
made after November  8, 1976, we  will require a  late payment penalty  of
1.5% per  month starting  October 9,  1976 (30  days past  due)...prorated

	2) Immediate payment of $13,500  (contract price minus $1000)  for
our system  as delivered  minus the  software, AND  a statement  from  you
certifying that  the  delivered  software is  totally  unsuited  for  your
purposes and you  will not attempt  to use it  in any way,  other than  to
casually demonstrate our manipulator system for purposes unrelated to  the
objectives of the  NRL.  This payment  is also subject  to a late  payment
penalty of 1.5% per month as in item 1.

	3)  Immediate  return  of   the  complete  system  including   all
documentation and  software  and  a  statement  from  you  that  you  have
destroyed all copies and images  (computer or otherwise) of our  software.
Upon receipt of  the complete  system we  will refund  to you  the sum  of
$9,500 previously paid.

	The reasons  for  our actions  are  as follows.   Dr.   Wilson  is
requesting information proprietary  to Vicarm,  which we  have offered  to
supply  as  part  of  a  separate  contract  at  a  separate  price.   The
information he requests  ("Calling sequences and  argument lists") is  not
absolutely necessary to use the  Vicarm system for research or  otherwise.
Our software is far more complex than Dr. Wilson realizes.  The more  than
45 top level  instructions represent  calls to more  than 100  subroutines
plus pointers  and  references to  other  information blocks  and  special
function modules.  Dr. Wilson  also  fails to  realize  that what  he  has
already received is  more than  what anyone else  would supply  on such  a
contract.  If he doubts this,  let him try to  find someone else who  will
sell him something equivalent at anywhere  near the same price.  There  is
no way one  could give him  any useful list  on the one  page Dr.   Wilson
imagines is necessary to describe our code structure.

	Vicarm spent  time and  money to  develop monitor  routines  which
allow Dr.  Wilson to interact  with our system.  If  NRL did not want  our
monitor routines, they should  have specified so in  the contract, and  we
would have  priced  these special  requests  in our  original  quote.   We
supplied  a   system   which   meets   all   the   requirements   of   the
contract...including the implied fact that the intended use was  research.
It is a simple matter  to write a PDP-10  program to address our  software
through the monitor routines  we have supplied. We  will even do this  for
Dr. Wilson at a  fixed price of $1000.   Vicarm even supplied Dr.   Wilson
with a high  speed paper  tape reader  for one  month (free  use, and  not
specified in  our contract)  to enable  him to  bring up  his system  more
quickly.  Even now, nearly two months  after delivery Dr. Wilson has  been
unable to successfully load our software any other way...and yet he  wants
our proprietary details now, when it will be months, maybe years before he
will be fully able to make use of what he thinks he wants now.  Dr. Wilson
is complaining because he  is having difficulty  modifying our system  and
can't simultaneously use our system for purposes other than that for which
it was intended.  We feel that the NRL has recieved good value, and should
accept the system as delivered.

	With respect to these  special requests of  Dr. Wilson, Vicarm  is
willing to offer the following proposal.  We will deliver one copy of  our
documented  manipulator  program  source  code  (not  to  be   duplicated,
distributed, or released) for use with this manipulator system only.   The
price  under  alternative  1  above  will  be  $6,000.   The  price  under
alternative 2 above will  be $7,500.  This option  is not available  under
item 3 above.  This offer also  expires on November 30, 1976, after  which
time we  reserve the  right to  retract it  entirely.  The  list of  entry
points and arguments which he has specifically requested will be contained
in this source code package.  Should  he desire this list separately,  the
list price will be $4000 as part of alternative 1 above and $5500 as  part
of alternative 2 above.   Also subject to withdrawl  after Nov. 30,  1976.
Upon receipt of payment per items 1 or 2 above, we will also be willing to
quote to you delivery of specific load modules or development of  specific
routines per your detailed written specifications.

	Our current price list is also enclosed for your reference.  We now charge
$38,000 for approximately what you contracted for at $24,000.

	This letter represents our  final offer on  this matter.  We  look
forward to hearing from you, IN WRITING, within the next few days.\.

Yours sincerely,

Victor Scheinman