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<br />ment Date of such Extension by an amoul dch is derived by
<br />multiplying slIch initial Monthly LeasH Charye by tho Upper Limit
<br />Percent specified in the Supplement, unless such Upper Limit
<br />Percent is modified by written notice for the ensuing Extension, in
<br />which event such modified Upper Limit Percent will apply.
<br />For a machine which is installed under an Extension, IBM may
<br />increase the Monthly Lease Charge upon three months' prior
<br />written notice. Such increased Monthly Lease Charge will be the
<br />lowest of 1) the Monthly Rental Charge generally in effect for sllch
<br />machine on the effective date specified in the notice, 2) the
<br />Monthly Lease Charge generally in effect for such machine on the
<br />effective date specified in the notice for Customers commencing a
<br />new Lease Contract Period with the same Base Term or 3) the
<br />Upper Limit in effect for the Extension.
<br />The Monthly Lease Charge for a model upgradeorfeatureaddi-
<br />tion may be increased by IBM in the same manner and in
<br />accordance with the same Upper Limit calculations as for ma-
<br />chines and pursuant to the provisions set forth in the Section
<br />entitled "Machine Modifications."
<br />The Monthly Use Charge Rate(s) for each Plan C machine may
<br />be increased by IBM in the same manner and in accordance with
<br />the same Upper Limit calculations as Monthly Lease Charges.
<br />IBM may increase the Additional Monthly Maintenance Charge
<br />Rate or the Percentages for Optional Periods of Maintenance Ser-
<br />vice, or IBM may change the Machine Group designation or the
<br />Optional Periods of Maintenance Service, at any time upon three
<br />months' prior written notice to the Customer. Upon 15 days' prior
<br />written notice to IBM, ttle Customer may discontinue any Op-
<br />tional Periods of Maintenance Service affected by such notice on
<br />the effective date of the increase or change. Otherwise, the new
<br />Rate, Percentages, Machine Group designation and Optional
<br />Periods of Maintenance Service will become effective as specified.
<br />The one-year Extension Period for each machine will com-
<br />mence automatically unless the Customer notifies IBM in writing
<br />on or before the Expiration Date of the Lease Contract Period or
<br />current one-year Extension that the Customer elects one of the
<br />following choices, as available:
<br />a) to extend for a period of less than one year at the end of
<br />which time the machine will be placed under a Rental Con-
<br />tract Period, if available, unless otherwise agreed;
<br />b) to commence a new Lease Contract Period;
<br />c) to place the machine under a Rental Contract Period; or
<br />d) to purchase the machine.
<br />In addition, the Customer may discontinue a machine or feature
<br />or request a mode! downgrade effective on the Expiration Date of
<br />a Lease Contract Period or Extension upon one month's prior
<br />written notice.
<br />
<br />MACHINE MODIFICATIONS
<br />Upon the Customer's written request, IBM will make field
<br />installable model conversions or feature changes to a machine
<br />installed under this Agreement.
<br />
<br />Model Upgrades and Feature Additions
<br />
<br />A model upgrade is defined as a model conversion which results
<br />in an increase in the Monthly Lease Charqp or Monthly Rental
<br />Charge.
<br />Each model upgrade or feature addition to a madline installed
<br />under a Lease Contract Period or Extension may bE~ placed eithp-r
<br />lmder that Lease Contract Period or Extpllsion or, If ;wadable,
<br />under a Rental Contract Period.
<br />a) If placed under that Lease Contract PerIOd or [xtension, ttle
<br />model upgrade or feature addition will be installed at 18M's
<br />applicable Monthly Lease Charge and Montllly Use Cllarge
<br />Rate(s), if any, then generally in effect for new orders for
<br />such model upgrade or feature having the same Base Term
<br />as the installed machine. When a model upgmde is installed
<br />under that Lease Contract Period or Extension. ~~uch Lease
<br />Contract Period or Extension will be lengthened to provide a
<br />common Expiration Date for the machine and the model up-
<br />grade. When a feature addition is installed under that Lease
<br />Contract Period or Extension, such Lease Contract Period
<br />or Extension will not be lengthened.
<br />The model upgrade or feature addition will assume the
<br />same Anniversary Date (but not Hw SRm€ Commencement
<br />Date) and Upper Limit Percent as the installed machine for
<br />purposes of determining future increases in the Monthly
<br />Lease Charge and any applicable Monthly Use Charge
<br />Rate(s).
<br />b) If placed under a Rf.mtal Contract F\!r!od. U1(:' model upgrnde
<br />or feature addition to a machine: wlllch IS under a Lease
<br />Contract Period or Extension will be installed at IBM's
<br />Monthly Rental Charge then generally in effect For a model
<br />upgrade or feature addition to a Plan A machine, an addi-
<br />tional charge, as specified by IBM, will apply in lieu of any
<br />
<br />Add.it.ional U~; .it. Fo~.. d ijiiJ(j~; igrade,
<br />addItIon to a Plan C machme, IBM S ci )ptiMbI( _ J'I
<br />Use Charge Rate(s) then generally in eff~1(l/j!Mpply. "le
<br />Expiration Date of the Lease Contract Pe,;oQ, Qr Extension
<br />will not be adjusted.
<br />Each model upgrade or feature addition to a machine installed
<br />under a Rental Contract Period may only be placed under a Rental
<br />Contract Period and will be installed at IBM's Monthly Rental
<br />Charge, and Additional Use Charge Rate or Monthly Use Charge
<br />Rate(s), as applicable, then generally in effect.
<br />A model upgrade or feature addition to a Plan 0 machine for
<br />which the Customer has elected Optional Periods of Maintenance
<br />Service will be installed at IBM's applicable Additional Monthly
<br />Maintenance Charges, as provided in this Agreement, based on
<br />the Additional Monthly Maintenance Charge Rate. if any, then
<br />generally in effect for new orders.
<br />The Commencement Date for a model upgrade or feature addi-
<br />tion will be the day (Monday through Friday) following the day
<br />that the model upgrade or feature addition is installed, as specified
<br />in the Section entitled "Installation," provided IBM has received
<br />the written order specifying lease or rental of the model upgrade
<br />or feature addition by such Date.
<br />
<br />Model Downgrades and Feature Discontinuances
<br />A model downgrade is defined as a model conversion which
<br />results in a decrease in the Monthly Lease Charge or Monthly
<br />Rental Charge.
<br />The downgrade of a model or discontinuance of a feature prior
<br />to the Expiration Date of its Lease Contract Period or Extension
<br />will be subject to the provisions of the Section entitled, "Termi-
<br />nation Charges."
<br />The downgrade of a model or discontinuance of a feature in-
<br />stalled under a Rental Contract Period will not result in a Termina-
<br />tion Charge.
<br />
<br />DISCONTINUANCE NOTICE
<br />Subject to the Sections entitled "Increases in Rental Contract
<br />Period Monthly Charges," "Lease Contract Period Extension,"
<br />"Limitation of Remedies" and "Termination Charges," the Custo-
<br />mer may, at any time after installation, discontinue a processor
<br />complex unit upon three months' prior written notice, or discon-
<br />tinue any other machine or any fleld removable feature or request
<br />a field removable model downgrade upon one month's prior
<br />written notice.
<br />
<br />TERMINATION CHARGES
<br />The Customer will pay IBM as a Termination Charge, upon
<br />termination of a Lease Contract Period or one-year Extension, for
<br />a machine discontinuance or model downgrade prior to the
<br />Expiration Date of such Lease Contract Period or Extension, the
<br />lesser of:
<br />a) The Termination Charge Percent specified in the Supple-
<br />ment multiplied by the Remaining Contract Value; or
<br />b) the Termination Charge Months specified in the Supplement
<br />multiplied by the applicable Monthly Lease Charge Value as
<br />of the date of termination.
<br />The Remaining Contract Value of a machine or model down-
<br />grade is determined by multiplying its applicable Monthly Lease
<br />Charge Value as of the date of termination by the number of
<br />months remaining in its Lease Contract Period or Extension. The
<br />discontinuance of a feature will not result in a Termination
<br />CtlClfge. except that the Monthly Lease Charge of any feature
<br />which is on a machine at any time within three monttls prior to the
<br />date of termination of the Lease Contract Period or Extension for
<br />such machine will be included in the Monthly Lease Charge Value
<br />of such machine.
<br />For a machine not yet installed, if the Customer's written orrer
<br />for the machine has been received by 18M, IBM may not increc.se
<br />the Termination Charge Percent or the Termination Charge
<br />Months unless written notice shall have been given to the
<br />Customer at least three months before the date of shipment. For a
<br />machine which is installed, IBM may not increase such Percent or
<br />Months during a Lease Contract Period.
<br />Return of a machine to IBM upon the Customer's request during
<br />a Lease Contract Period or Extension for any reason. including
<br />machine replacement for model conversion or feature changes
<br />which are not field installable, or due to the Customer's failure to
<br />comply with any of the terms and conditions of this Agreement.
<br />shall be a termination for purposes of this Section.
<br />The purchase of a machine under the provisions of the Section
<br />entitled "Purchase Option" will not result in a Termination Charge
<br />
<br />PURCHASE OPTION ~
<br />The Customer may elect to purchase a machine installed under'
<br />a Lease Contract Period or Extension by executing a Supplement
<br />to Agreement for Purchase of IBM Machines. Upon request from
<br />
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