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1985-007-RES WHEREAS, the City Council of the City of Paris, did heretofore at a Regular Council Meeting on the 12th RESOLUTION NO. 85-007 WHEREAS, the City Council of the City of Paris, did heretofore at a Regular Council Meeting on the 12th day of November, 1984, authorize the purchase of IBM machines and the contracting for maintenance of the same; the procurement of IBM licensed programs; the lease of IBM machines and the procurement of IBM hourly machine service, all of which are described in Agreement Nos. G6D0890, G6D089l and G6D0892 with International Business Machines Corporation; and, WHEREAS, such agreements are in keeping with the proposals accepted upon recommendation of the consultant, LWFW, and should be approved; and, WHEREAS, the form of agreements and attached hereto as Exhibits A, approved; NOW, THEREFORE, heretofore enumerated Band C, should be BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PARIS, That the agreements attached hereto as Exhibits A, B and C with International Business Machines Corporation, be, and the same are hereby approved; and, BE IT FURTHER RESOLVED, that the Mayor of the City of Paris, Joe Graham, be, and he is hereby authorized and directed to execute on behalf of the City of Paris such agreements in the form of Exhibits A, Band C attached hereto, with International Business Machines Corporation. Passed and adopted this 11th day of February, 1985. q~ Jo ~al!l, Mayor ATTEST: ~t\~~'" ~\)""""'~~) Mattie Cunningham, Assis ant City Clerk Attorney . 1 . Armonk. New York 10504 International Business Machines Corporation Composite Signature Agreement Agreement No. G6D0890 Name and Address of Cusfomer: IBM Branch Office No.: G6D CITY OF PARIS City Hall 135 First St SE Paris, TX 75460 IBM Branch Office Address: 1015 ESE Loop 323 Tyler, TX 75703 Customer No.: 6906183 International Business Machines Corporation (IBM) and the Customer agree that IBM Will provide and the Customer will accept the products and services ordered by the Customer In accordance with the terms and conditions stated in the ap- plicable Agreements. designated below by the Custome(s initials, which the Customer agrees to include herein. The Included Agreements are attached hereto and are incorporated in thiS Agreement. This Composite Signature Agreement, when signed by IBM and the Customer, has the same effect as signing each of the Agreements designated by the Custome(s initials, and IS effective upon acceptance by IBM Initials o o o o o o Title of Agreement or Amendment All of the following, unless selectively designated by initialing below for individual documents Agreement for Purchase of iBM Machines IBM Mamtenance Agreement Agreement for IBM Licensed Programs Agreement for Lease or Rental of IBM Machines Agreement tor IBM Hourly Machine Service IBM Form Number Z120-2892-01 Z125-3275-00 Z 125-3358-00 Z125-3320-00 Z 120- 2826-00 THE CUSTOMER ACKNOWLEDGES THAT THE CUSTOMER HAS READ EACH OF THE AGREEMENTS DESIG- NATED BY THE CUSTOMER'S INITIALS, UNDERSTANDS THEM. AND AGREES TO BE BOUND BY THEIR TERMS AND CONDITIONS, CITY OF PARIS Accepted by: International Business Machines Corporation By NClme (Type or Print) Customor By Authorized Signature Auttlorized Signature Oil!!' N8me (Type or Print) Date Agreement for Purchase of IBM Machines (Z120-2892-01 ) International Business Machines Corpl In (IBM) and the Customer agree that the follow.. _ .erms and conditions will apply to any Cus- tomer order accepted by IBM for the purchase under this Agreement ot IBM machines, features, modei conversions, machine elements or accessories or of non-IBM equipment. IBM wiil1) sell machines to the Customer, 2) furnish, as available, programming and programming service, 3) sell features and model conversions to the Customer for installation or reinstallation on an IBM machine designated by type and serial number, 4) sell machine elements, accessories and non.1BM equipment to the Customer, and 5) provide warranty service, as applicable. The term "Machines" refers to IBM machines and/or their features, model conversions, machine elements and accessories unless the context requires individual reference. The term "Machines" also applies to non-IBM equipment except as otherwise provided in the Section entitled --Purchase of Non-IBM Equipment.-- Machines are those on-order to be Installed. or which are installed under an IBM lease or rental agreement with the Customer. Features include additions and removals. Model converSions include upgrades and downgrades between models and between machine types. The term "programming" shall mean such programming as IBM may make generally available, without separate charge, for machines of the types ordered by the Customer under this Agreement. The term "programming service" shall mean such service as IBM may make generally available, without separate charge, In connection with programming. iBM Will furnish such program- ming, as requested by the Customer, and wilf determine the programming services available and their duration. The Customer agrees to accept Machines, programming, programming service and warranty service under the terms and conditions of this Agreement. The Customer further agrees, with respect to Machines and programming, to accept responsibility for 1) their selection to achieve the Customer's intended results, 2) their use, and 3) the results obtained therefrom. The Customer also has the responsibility for the selection and use of, and results obtained from, any other equipment, programs or services, acquired outside this Agreement, used with the Machines and programming. Individual Machines become subject to this Agreement when either the Customer's written order for their pllrchase, or the Customer's order for their purchase under another ordering procedure designated by 18M, is acsepted by 18M. Such order to purchase an on-order Machine must be received by IBM on or before its Date of Installation. IBM will accept an order by providing to the Customer a Supplement to this Agreement (Supplement), or other documentation designated by IBM, confirming the terms applicable to the Machine. Installation of an on-order Machine, as defined in the Section entitled "Installation," or payment of the Purchase Price of an on-order or installed Machine (or payment of the down payment or the first installment if subject to an IBM installment agreement), whichever first occurs follow- ing the Customer's receipt of the Supplement. will constitute the Customer's acceptance of such terms. PRICES AND PAYMENT IBM and its insurers, if any, relieve the Customer of responsibility for all risk of loss of or damage to the Machines except for loss or The Purchase Price for each Machine will be stated in the Sup- damage caused by nuclear reaction, nuclear radiation or radioac- plement and does not include any applicable taxes or destination tive contamination for which the Customer is legally liable. There- charges. Payment in full for each on-order Machine will be due on after, al\ risk of loss of or damage to such Machines shall be on its Date of Installation and, for each installed Machine, on its Effec- the Customer. tive Date of Purchase, unless otherwise provided in an IBM install- All risk of loss of or damage to installed Machines shall be on ment agreement. the Customer after the Effective Date of Purchase. TAXES In addition to the prices stated in the Supplement, the Customer agrees to pay amounts equal to any taxes resulting from this Agreement, or any activities hereunder, exclusive of taxes based on IBM'S net income. The Customer shall bear any personal prop- erty taxes assessable on on-order Machines on and after delivery to the carrier or, for installed Machines, on and after the Effective Date of Purchase. DESTINATION CHARGES Destination charges for each on-order Machine from a desig- nated IBM location, and any rigging charges, will be paid by the Cus- tomer In accordance with IBM'S then current shipping and billing practices. TITLE Title passes to the Customer for each on-order Machine on its date of shipment from IBM or on the date IBM receives the Custom- er's order for its purchase, whichever is later, and, for each instal- led Machine, on its Effective Date of Purchase. SECURITY INTEREST IBM reserves a purchase money security interest in each Machine. This Interest will be satisfied by payment in full hereunder or under an IBM installment agreement and, in addition, when appli- cabie, by the return to IBM by the Customer of parts in respect to f( ature additions or model conversions that involve the removal of parts which become the property of IBM. The Customer agrees to sign appropriate documents to permit IBM to perfect IBM'S security interest. SHIPMENT IBM will confirm, and amend as necessary, the Estimated Ship- ment Date of each on.order Machine. Prior to shipment, IBM will make reasonable accommodation to a Customer requested delay, and, if agreed to by IBM and the Customer, changes may be made in the configuration of Machines. RISK OF LOSS OR DAMAGE During the period on.order Machines are in transit or in posses. sian of the Customer, up to and includ:ng the Date of Installation, PRICE PROTECTION PERIOD The Purchase Price for each on-order Machine shall be IBM'S generally available single unit price and shall be subject to all price increases, except that increases effective during the three-month period immediately prior to the date of Machine shipment shall not apply If the Customer's order was received by IBM prior to the date of announcement of the price increase. If a price increase applies to any such Machine, the Customer may cancel the order upon written notice to IBM within one month of notification of the price in- crease; otherwise, the higher price shall be effective. If IBM'S generally available single unit price for anyon-order Machine upon its Date of Installation shall be lower than the Pur- chase Price for such Machine stated in the Suppiement, the Cus- tomer shall have the benefit of such lower price. The term "IBM'S generally available single unit price" does not in- clude prices for sales of Machines under terms and conditions other than those in this Agreement. The Purchase Price for each installed Machine stated in the Supplement is subject to change up to and including its Effective Date of Purchase, subject to any limitations described in any other applicable IBM lease or rental agreement. INSTALLATION Each Machine will be installed as specified by IBM. The Customer agrees to provide a suitable environment for the Machines as specified by IBM, and, except as otherwise specified by IBM, to fur- nish all labor required for unpacking and placing each on-order Machine in the desired location. Packaging materials, if any, shall become the property of the Customer. Features and model conversions will be installed on the serlal- numbered machine designated in the Supplement. The Customer represents that the Customer is the owner of the machine on which any feature or model conversion will be installed or, if not the owner, has the authority from the owner to order the feature or model conversion and to have it installed on the owner's machine. Installation by IBM IBM will install machines, features and model conversions which arc not identified as Customer Set-Up. The Date of Installation for a machine will be the day (Monday through Friday) following the day that 1) the machine is installed under this Agreement or under the applicable IBM lease or rental Page 2 of 17 i1j];,",!.JttJl..,~""",-_..<<, ].... 4"""""""'_._.J_,,.... ~~:il'Jii:.iIlMIU,~,\~'~~u~...iM;;.o~~~~;;mr&'.;&""''''''''''': - --......~ agreement, or 2) an on-order machine I' dvailable for delivery ?r delivellld to the Customer and the Customer falls to provide a SUit- able installation environment or delays installation. The Date of Installation for a feature or model conversion will be the day (Monday through Friday) following the day that the feature or model conversion is installed under this Agreement or under the applicable IBM lease or rental agreement. The installation of some features and model conversions invol- ves the removal of parts which become the property of IBM. IBM will specify in the Supplement if removed parts become the property of IBM. The Customer will provide IBM access to the machine to com- mence installing each such feature or model conversion as soon as possible after its shipment from IBM but in no event more than one month following the later of its Estimated Shipment Date or ac- tual date of shipment, unless a shorter period is specified in the Supplement In the event of failure by the Customer to provide IBM access to the machine within the specified period, the Customer shatl return the feature or model conversion to IBM with shipping charges prepaid, unless otherwise agreed to by IBM. It the Customer delays instailation of a feature or model conver- sion (other than one which involves the removal of parts which be- come the property of IBM) more than one month trom the later of its Estimated Shipment Date or actual date of shipment from IBM, its Date of Installation will be considered to be the day (Monday through Friday) one month following such date of shipment IBM will notify the Customer of the Date of Installation of each on-order machine, feature or model conversion. Customer Set-Up Each machine, feature or model conversion identified by IBM as Customer Set-Up (CSU), and all machine elements and acces- sories, will be set up by the Customer in accordance with the in- structions furnished by IBM. The Date of Installation will be the day (Monday through Friday) following the day the machine, feature, model conversion, machine element or accessory is considered to be installed under this Agreement or under the applicable IBM lease or rental agree- ment. An on-order CSU machine will be considered to be installed on the last day of the CSU allowance period specified by IBM for such machine. The CSU allowance penod, which does not Include Saturdays or Sundays, commences on the day (Monday through Friday) following the date of receipt of the machine at the Custom- er's premises. However, when a CSU machine IS delivered In con- junction with, and for attachment to, a non-CSU machine delivered from IBM, such CSU machine will be considered to be installed as determined in this paragraph or on the date such non-CSU machine is installed, whichever is later. An on-order CSU feature or model conversion, machine ele- ment or accessory will be considered to be installed one month fol. lowing the later of its Estimated Shipment Date or its actual date of shipment from IBM. PURCHASE OF INSTALLED MACHINES The Purchase Price stated in the Suppiement is exclusive of any charges which are due or may become due under the applicable IBM lease or rental agreement. The Effective Date of Purchase for installed Machines shall be the later of the first day of the Quotation Month or the day on which tile payment required under the Section entitied "Prices and Payment" is received by IBM at its IBM Branch Office or Remit to Address shown in the Supplement, provided such receipt is not later than the last day of the Quotation Month. The Machines will be terminated under the applicable IBM lease or rental agreement as of the day immediately preceding the Effec- tive Date of Purchase. WARRANTIES Machines purchased under this Agreement will be 1) newly manufactured by or for IBM from new and serviceable used parts which are equivalent to new in performance in these Machine~, 2) assembled by or for IBM from serviceable used parts, 3) Machines which have been previously installed, or 4) Machines which are presently installed with the Customer. IBM warrants that on the Date of Installation each on-order Machine will be in good working order and will conform to IBM'S offi- cial published specifications which are available upon request. The Warranty Period for each Machine. specified in the Supple. ment, commences on its Date of Installation as defined in the Sec- tion entitled "Installation." INSTALLED MAo.;HINES PURCHASED AFTER THEIR WARRANTY PERIOD HAS EXPIRED ARE SOLD ON AN "AS IS" BASIS. Service and Parts Warranty Commencing on the Date of Instaliation of each on-order machine, model upgrade and feature addition, or on the Effective Date of Purchase of each installed machine. model upgrade and feature addition, and continuing for the duration or remainder, if any. of the Warranty Period, IBM agrees to provide the availability of warranty service, at no additional charge except as set forth in thiS Section or in the Section entitled "Travel Expense," to keep the machines, model upgrades and feature additions in, or restore them to. good working order. This warranty service includes pre- ventive maintenance based upon the speCIfic needs of indIVIdual machines, model upgrades and feature additions as determin.ed by IBM and on-call remedial maintenance. Such warranty service will include lubrication, adjustments and replacement of parts deemed necessary by IBM. Parts, which may be used parts, will be furnished on an exchange basis, and the replaced parts become the property of IBM. . Warranty service will be available at no additional charge dUring the hours specified in the Supplement. Outside such ,hours, war- ranty service, if requested by the Customer and proVided by IBM, will be subject to charge for travel expense plus travel, wailing and service time at IBM'S then applicable hourly servIce rates and mini- mum charges; however, there will be no additional charge for parts. . . Warranty service under thiS. Agreement does ':lot as~ure uninter- rupted operation of the Machines. IBM may, at ItS option, store on the Customer's premises maintenance equipment and/or parts that IBM deems necessary to fulfill this warranty. During the Warranty Period, engineering changes determined applicable by IBM will be controlled ar:'d. instal!ed by .IBM on t~e Machines. The Customer may, by providing notice subject to Writ- ten confirmation by IBM, elect to have only mandatory changes, as determined by IBM, installed on the Machines. IBM shall have full, free and safe access to the Machines to pro- vide service thereon. The Customer shall promptly inform IBM of any change in the Machines' location during the Warranty Period. If the Warranty Period expires on a Friday or Saturday, it will be extended so that the last day of such Warranty Period will be on the following Sunday. Programming IBM warrants that, when shipped to the Customer, programming designated by IBM for use with a Machine and for which pro~ram- ming services are available will conform to IBM'S offiCial published specifications which are available upon request. IBM does not warrant that functions contained in programming wiil operate in the combinations which may be selected for use by the Customer or will meet the Customer's requirements. ALL OTHER PROGRAMMING IS DISTRIBUTED ON AN "AS IS" BASIS. Additional Provisions for Features and Model Conversions IBM's warranty for each feature addition or model upgrade re- quires that the machine on which it is installed is atthe then cur- rent engineering-change level, IS the speCifiC senal-n.~mbered machine for which it was ordered and has been modIfied only with changes obtained from IBM specifically for that s~rial-num- bered machine. If these conditions are not met, IBM Will attempt to install non-CSU feature additions and model upgrades on the machine, and, if such attempt results in an inc~rrectly funct~oning machine, upon Customer request and at IBM S then apphca~le hourly service rates and minimum charges, parts and matenal prices and travel expense, IBM will remove the features and/or model upgrades and restore the machine to its prior condition. If such features and model upgrades did not involve the removal of parts which became the property of IBM, such features and model upgrades remain the property of the Customer. It such features and model upgrades involved the removal of parts which be- came the property of IBM, such features and model upgrades be- come the property of IBM and the restored parts become the property of the Customer. For a feature removal, model downgrade or reinstallation of a previously purchased feature or mod.e.l conversio,:, a three- month parts warranty will apply to additional parts, If any, sup- plied by IBM. Page 3_~f17 Additional Provisions for Machine Elements and Accessories Machine elements and accessories hav "hree-month War- ranty Period unless otherwise specified by ,I. During the War- ranty Period, the Customer will remove any defective or failing machine element or accessory and ship it prepaid to the desig- nated IBM location. IBM, at its option, will repair or replace such machine element or accessory and ship it to the Customer with- out charge. Additional Provisions for Machines Containing Funds The Customer is responsible for removing, controlling and re- piacing or reioading funds contained in the Machines. IBM will service Machines containing funds only when the cash container cannot be opened prior to repair by IBM, in which case the Cus- tomer will remove the funds as soon as the container has been opened. Services for Additional Charge During the Warranty Period Th~ services described in this Section are not warranty ser- vices. However, unless such services are provided under another written agreement between the Customer and IBM, dur- ing the Warranty Period the following services, if available, wi Ii be provided by IBM under this Agreement at IBM'S then applicable hourly service rates and minimum charges. including travel and waiting time, parts and material prices and travel expense: 1) Repair of Machine damage, replacement of maintenance parts or increase in service time caused by - a) failure to continually provide a suitable environment pre- scribed by IBM including adequate space, electrical power, air conditioning and humidity control; b) neglect; misuse, including use of the Machines for pur- poses other than for which designed; c) accident; disaster, including water, wind and lightning; transportation; vandalism or burglary; d) alterations, including any deviation from IBM'S Machine de- sign; e) attachments, including any interconnection to the Machine of non-IBM equipment and devices not under an IBM maints. nance agreement; f) Machines, except those owned by IBM, under warranty from IBM, or under an IBM maintenance agreement; and g) model conversions or installation or removal of IBM features pertormed by other than IBM except that this subsection (g) will apply only during the three months subsequent to such Machine modification; 2) Repair of Machine damage, replacement of maintenance parts (due to other than normal wear) or repetitive service calls caused by the use of supplies; 3) Inspection of altered Machines and inspection of machines converted from one IBM model or machine type to another or on which an IBM feature is installed or removed when such ac~ tivity was pertormed by other than IBM; 4} Replacement or addition of parts and increase in service time, associated with the installation by IBM of an engineering change, required due to model conversions or installation or removal of IBM features pertormed by other than IBM; 5) Rearrangement or relocation of Machines and provision of necessary materials; 6) Replacement of a part not furnished for the Machine by IBM with a directly interchangeable IBM maintenance part, and any increase in service time associated with such activity, except that IBM will not replace any part which is included in an altera- tion; and 7) Repair of a Machine caused by non-IBM representatives per- forming maintenance or repair of such Machine. Exclusions The warranties under this Agreement are in lieu of any conflict- ing statement of warranty contained in a Machine shipment. The warranties under this Agreement do not include 1) furnishing supplies, painting or refinishing the Machines or furnishing mate- rial therefor, 2) electrical work external to the Machines, 3) instal- lation, maintenance or removal of alterations or attachments to the Machines. and 4) any service which is impractical for IBM to render because of alterations in, or attachments to, the Machines. IBM does not warrant that the operation of Machines or prog- ramming will be uninterrupted or error free or that all program- ming errors will be corrected. TtlE FOREGOING WARRANTIES 'Q,\\ER W ARI'IANIIES EXPRESS (' ~ rr ~' ("'...... \ ..IN.ITEO TO. TH f ~ Ak .... ^ "E IN LIEU OF ALL 'LIED, INCLUDING. WARRANTIES OF .~~,,_"_4l..a~...J MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. OTHER PRODUC- \ND SERVICES Following the Warr~."y Period, IBM will provide, upon request and at IBM'S charges and terms then generally in eHect, mainte- nance service and maintenance parts for the Machines and programming services for programming as long as such services and parts are generally available. Unless such activities are pro- vided under another written agreement between the Customer and IBM, they shall be subject to the applicable terms and condi- tions of this Agreement. In addition, IBM oHers other products and services at separate charges under applicable written agreements. The Customer may contract with IBM for such other products and services, as available, but only under a written agreement between the par- ties. TRAVEL EXPENSE Except as provided in the Section entitled "Warranties," there will be no charge for travel expense associated with warranty service or programming service except that actual travel ex- pense will be charged when the site at which the Machine is located is normally inaccessible by both private automobile and scheduled public transportation. ENGINEERING CHANGES IBM wiU furnish, upon request, and at IBM'S prices then gener- ally in effect, such engineering changes as IBM shall have avail- able for sale and which may be suitable for use on or with the Machines. Any replaced parts become the property of IBM. IBM makes no representation that engineering changes announced in the future will be suitable for use on or with the Machines. PATENTS AND COPYRIGHTS IBM wiil. at its expense, defend the Customer agains1 any claim that any Machinos or programming supplied hereunder in- fringe a palent or copyright in the United States or Puerto Rico, and will pay all costs, damages and attorney's fees that a court finally awards as, a result of such claim. To quality for such de~ fense and payment, the Customer must: 1) give tBM prompt written notice of any such claim; and 2) allow IBM to control, and fully cooperate with IBM in, the de- fense and all related settlement negotlations. IBM's obligation under tll:S Section is conditioned on the Cus- tomer's agreement thaI if the operation of the Machines or prog- ramming become, or in IBM'S opinion are likely to become, the subject of such a claHn, the Customer will permit IBM, at its option and expense, either to procure the right for tho Customer to con- tinue using the Machines or programming or to replace or modify them so that they become noninfringing; and, if neither of the foregoing alternatives is available on terms which are reasonable in IBM'S judgment, the Customer will return the Machines or prog- ramming on written request by IBM. IBM agrees to grant the Cus- tomer a credit for returned Machines as depreciated. The depre- ciation shall be an equal amount per year over the lifa of tho Machines as established by IBM. IBM shall have no obligation with respect to any such claim based upon the Customer's modification of the Machines or programming or their combination, operation or use with ap- paratus, data or programs not furnished by IBM. This Section states IBM'S entire obligation to the Customer re- garding infringement or the like. LIMITATION OF REMEDIES IBM's entire liability and the Customer's exclusive remedy shall be as follows: In all situations involving performance or nonperformance of Machines or programming furnished under this Agreement, the Customer's remedy is 1) the adjustment or repair of the Machine or replacement of its parts by IBM, or, at IBM'S option, replacement of the Machine, or correction of programming errors, or 2) if, after repeated efforts, IBM is unable to install the Machine or a replace~ ment Machine in good working order, or to restore it to good working order, or to make programming operate, all as war- ranted, the Customer shail be entitled to recover actual damages to the limits set forth in this Section. For any other claim concern- ing performance or nonperformance by IBM pursuant to, or in any other way related to the subject matter of, this Agreement or any order under this Agreement, the Customer shall be entitled to re- cover actual damages to the limits set forth in this Section. IBM's liability for damages to the Customer tor any cause whatsoever, except as otherwise stated in this Section, and re~ gard\ess of the form of action, whether in contract or in tort in- P;lge'1 of Ii "_~""'J111llllrm_!'f~!liltlA'_,~"..i~cW,!i'~:";,r:m~:m'?f?''1:11~~~rrl'1;yrT"'C'w<, ..,", eluding negligence, shall be limited to th, ater 01 $100,000 or the Purchase Price stated in the applicau,,, Supplement for the specific-Machines that caused the damages or that are the sub- ject matter of, or are directly related to, the cause of action. The foregoing limitation of liability will not apply to the payment of costs, damagos and attorney's fees re1erred to in the Section en- titled "Patents and Copyrights," or to claims for personal injury or damage to real property or tangible personal property caused by IBM'S negligence. In no event will IBM be liable for any damages caused by the Customer's failure to periorm the Customer's responsibilities, or for any lost profits, lost savings or other consequential damages, even if IBM has been advised of the possibility of such damages, or for any claim by the Customer based on any third party claim except as provided In the Section entitled "Patents and Copyrights," or for any damages caused by performance or non- performance 01 Machines or programming located outside the United States or Puerto Rico, nor will IBM be liable for loss of funds contained in, dispensed by, or associated with any Machine under this Agreement. PURCHASE OF NON-IBM EQUIPMENT As previously stated, the term "Machines" in this Agreement also applies to non-IBM equipment. However, the Sections of this Agreement entitled "Installation," "Warranties," "Other Products and Services" and "Patents and Copyrights" are replaced in their entirety by the following in respect to non-IBM equipment. Installation The Customer shall provide a suitable installation environment with facilities as prescribed by the manufacturer. Arrangements for installation will be the responsibility of the Customer. IBM has no responsibility for installation under this Agreement nor for any installation performed by the manufacturer. Warranties NON-IBM EQUIPMENT IS NOT WARRANTED BY IBM AND IS SOLD BY IBM TO THE CUSTOMER ON AN "AS IS" BASIS. THERE ARE NO IBM WARRANTIES EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. HOWEVER, THE MANUFAC- TURER'S WARRANTY, IF ANY, APPLIES, AND THE CUS- TOMER MUST DEAL WITH THE MANUFACTURER ON SUCH MATTERS. Other Products and Services The Customer is responsible for arranging for maintenance sefVics for non~IBM equipment. Patents and Copyrights IBM shall have no liability to the Customer regarding patent or copyright infringement for non~IBM equipment. "', GENERAL This Agreement and anyon-order Machines are not assigna- ble to other than an IBM affiliate without the prior written consent of IBM. Any attempt to assign any of the rights, duties or obiiga- tions of this Agreement without such consent is void. The Customer agrees to comply with the provisions of any End User Certification contained in any Supplement to this Agree- ment, or in any volume procurement or single shipment quantity discount amendment to this Agreement. IBM may, upon written notice, modify the terms and conditions 01 this Agreement. Any such modification will apply on the effec- tive date specified in the notice to all orders for purchase which are accepted by IBM on or after the date of notice. In addition, IBM may modify this Agreement by setting forth such modification in a Supplement which is subsequently accepted by the Customer as provided herein. Otherwise, this Agreement can only be mod- ified by a written agreement duly signed by persons authorized to sign agreements on behalf of the Customer and ot IBM, and variance from or addition to the terms and conditions of this Agreement in any order or other written notification from the Cus- tomer will be of no effect. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. IBM is not responsible for failure to fulfill its obligations under this Agreement due to causes beyond its control or to provide any sefVices hereunder for Machines or programming located outside the United States or Puerto Rico. No action, regardless of lorm, arising out of this Agreement may be brought by either party more than two years after the cause of action has arisen, or, in the case of an action for non~ payment, more than two years from the date the last payment was due. If the Customer tails to pay the Purchase Price due hereunder and IBM repossesses a Machine as provided by law, the Custom- er agrees to pay al\ costs and expenses of repossession, includ- ing reasonable attorney's fees. This Agreement is governed by the laws of the State of New York. THE CUSTOMER ACKNOWLEDGES THAT THE CUSTOMER HAS READ THIS AGREEMENT, UNDERSTANDS IT, AND AGREES TO BE BOUND BY ITS TERMS AND CONDITIONS. FURTHER, THE CUSTOMER AGREES THAT THIS AGREE- MENT AND ANY OTHER APPLICABLE IBM AGREEMENTS, AMENDMENTS, SUPPLEMENTS AND CERTIFICATIONS. INCLUDING THOSE ACCEPTED IN THE FUTURE, REFER- ENCING THIS AGREEMENT OR EXPRESSLY MADE A PART HEREOF, WILL BE THE COMPLETE ANO EXCLUSIVE STATE- MENT OF THE AGREEMENT BETWEEN THE PARTiES, SUPERSEDING ALL PROPOSALS OR PRIOR AGREEMENTS, ORAL OR WRITTEN, AND ALL OTHER COMMUNICATIONS BETWEEN THE PARTIES RELATING TO THE SUBJECT MATTER HEREIN. IBM Maintenance Agreement (Z125-3275-00) International Business Machines Corporation (IBM) and the Customer agree that the following terms and conditions will apply to any Customer order accepted by IBM to proVide maintenance service for IBM Machines located within the United States and Puerto RICO "Machine(s)" as used herein refers to machines and/or their features, model converSions and machine elements unles~ the context requires individual reference. ThiS Agreement is effective from the date on whl.ch It IS accepted by IBM an.d shall remal.n In force until terminated by the Customer or IBM. Specific Machines become subject to thiS Agreement on the Effective Date deSIgnated by the Customer, if agreed to by IBM, and such information will be shown in a Supplement to IBM Maintpnance Agreement (Supplement) signed by IBM MAINTENANCE SERVICE IBM agrees to provide the availability of maintenance service to keep the Machines In, or restore the Machines to. good working order. Maintenance service includes preventive maintenance based on tile specific needs 01 indiVidual Machines as determined by IBM and on-call remedial maintenance. Maintenance service also includes lubrication, adjustments and replacement of main- tenance parts all as deemed necessary by IBM. Maintenance parts, which may be used parts, will be furnislled on an exchange basis, and the replaced parts become the property of IBM IBM may, at its option, store maintenance equipment and/or parts on the Customer's premises. The Customer agrees to proVide a suitable environment lor the Machines as specified by IBM. and to proVide IBM full. frce (lno safe access to tile Machines to prav:" 'naintenance service, The Customer is responsible to implement appropriate safeguards for Customer's data. The Customer is responsible for removing, controlling and replacing or reloading funds contained in the Mactlint':s, IBM will service Machines containing funds only when tlle cash contlllnel. cannot he opened prior to repair by IBM. in which case the Customer wdl remove the funds as soon as the container ~ as been opened. PERIODS OF MAINTENANCE SERVICE Ttle Ba.se Period of Maintenance Service is from 7 a.m, t06 p.m., Mond;w through Friday. unless otherwise designated by IBM in the SlIpplcll1nnt. The Customer may selcct Optional PCrlods of fv1cllntenance Service sllown in the Supplement. The Optional Period for Monday thmuqh Friday must includp the Base Period p~jqe 5 of 17 of Maintenance Service and must be the same consecutive hours each day. The Optional Period on Saturda' lunday must be the same consecutive hours on all Satura or Sundays. The Customer may select or change Optional Periods of Maintenance Service upon 15 days' written notice to IBM. ENGINEERING CHANGES Engineering changes. determined applicable by IBM, will be controlled and installed by 18M. The Customer may, by providing notice subject to written confirmation by 18M, elect to have only mandatory changes, as determined by IBM, installed on Machines so designated. CHARGES The Customer agrees to pay maintenance charges, com- mencing on the Effective Date, consisting of 1) a Minimum Maintenance Charge, and 2) Additional Maintenance Charges. if applicable. AdditIonal Maintenance Charges will be for a) Op- tional Periods of Maintenance Service selected by the Customer. )ased on the Machine Group and determined by multiplying the Minimum Maintenance Charge for the Machine by the applicable Percentages for the Optional Periods of Maintenance Service shown in the Supplement, and/or b) the amount of processing performed by Usage Plan Machines, as measured by an IBM meter, multiplied by the Additional Maintenance Charge Rate(s) shown in the Supplement. The Customer agrees to promptly submit to IBM the meter re' ding for each Usage Plan Machine as of the close of the last work day of the period to which the Minimum Maintenance Charge applies. The Customer agrees not to interfere with the proper operation of the meter. There will be no additional charge for travel expense associated with maintenance service provided during the Periods of Main- tenance Service, except that actual travel expense will be charged when the site at which the machine is located is 1) within the contiguous States and is normally inaccessible by both private automobile and scheduled public transportation, or 2) outside the contiguous States and is normally inaccessible by private auto- mobile. The Customer agrees to pay for maintenance service, including travel and waiting time, provided by IBM outSide the Periods at Maintenance Service at IBM's then applicable hourly service rates and minimum ctlarges, and travel expense; however, there wilt be no additional charge for maintenance parts. Changes in a Machine's specifications may result in adjust- ments to the maintenance charges. Minimum and Additional Maintenance Charges are subject to change by I BM upon three montlls' written notice to the Customer and will become effective on the date specified in the notice unless the Customer withdraws the affected Machine from this Agree- ment as provided in the Section entitled "Withdrawal/Termina- tion," except that Charges invoiced quarterly or annually are subject to change by IBM upon commencement of service and on the first day of each quarterly or annual invoice period, upon three months' written notice to the Customer. IBM's hourly service rates and minimum charges are subject to change by IBM without notice. SERVICES FOR ADDITIONAL CHARGE The services, including travel and waiting time, described in this Section, if available, will be provided by IBM under this Agreement at IBM's then applicable hourly service rates and minimum ctlarges, parts and material prices and travel expense, unless such services are provided under another written agreement signed by the Customer and IBM. The following services are not considered maintenance service as described in the Section entitled "Main- tenance Service": 1) Repair of Machine damage. replacement of maintenance parts or increase in service time caused by-- a) failure to continually provide a suitable environment pre- scribed by IBM including adequate space, electrical power, air conditioning and humidity control; b) neglect; misuse, including use of the Machines for pur- poses other than for which designed; c) accident; disaster, including water, wind and lightning; transportation; vandalism or burglary of Machines de- signed to contain funds; d) alterations, including any deviation from IBM's Machine design; e) attachments, including any interconnection to the Mach- ine of non-IBM equipment and devices not supplied by IBM; f) IBM Machines, except those IBM Machines which are owned by IBM_ under warranty from IBM, or under an IBM mainten;: agreement; and g) conversion ff(... ,ne IBM model to another or the instal- lation or removal of an IBM feature whenever any of these activities was performed by other than IBM except that this subsection (g) will apply only during the first three months of service under this Agreement subsequent to the date of such Machine modificiation; 2) Repair of Machine damage, replacement of maintenance parts (due to other than normal wear) or repetitive service calls caused by the use of supplies; 3) Service for accessories; 4) Inspection of altered Machines; 5) Replacement or addition of parts and increase in service time associated with the installation by IBM of an engi- neering change when such parts and service are required due to the conversion from one IBM model to another or the installation or removal of an IBM feature whenever any of these activities was performed by other than IBM; 6) Rearrangement or relocation of Machines and provision of necessary materials; 7) Replacement of a part not furnished for the Machine by IBM (except wtlen such part is in an alteration) with a directly interchangeable IBM maintenance part, and any increase in service time associated with such activity; and 8) Repair of a Machine caused by non-IBM representatives per- forming maintenance or repair of such Machine. EXCLUSIONS Services provided by IBM under this Agreement do not include 1) furnishing supplies, painting or refinishing the Machines or furnishing material therefor, 2) electrical work external to the Machines or installation, maintenance or removal of alterations. attachments or other devices not furnished by IBM and 3) such service which is impractical for IBM to render because of alterations in, or attachments to, the Machines_ TAXES In addition to the charges due under this Agreement, the Customer agrees to pay amounts equal to any taxes resulting from this Agreement, or any activities hereunder, except for taxes based upon IBM's net income. INVOICING The Minimum Maintenance Charge Clnd thp- Additional M<lin- t~nanGe Charnc lor Optional Periods will be invoiced in advance, monthly, quarterly or annually as shown in the Supplement. Monthly charges will be invoiced as of the first of each month and will be prorated on the ba~is of a 3Q.-day month. The Additional Maintenance Charge for usage will be invoiced following the period in which it is incurred. All other charges will be invoiced when or after they are incurred. PAYMENT The Customer will remit payment to IElM within 30 days a!terthe date of invoice. The Customer will receive a partial credit of maintenance charges invoiced upon the withdrawal of Machines or termination of this Agreement prim to the expiration of the period for which the invoice applies. WITHDRA WALlTERMINA TION The Customer may withdraw a Machine from this Agreement upon one month's written notice to IBM a) after the Machine has been under this Agreement for at least six months, b) after the Mactlinc tlas been undl"'!r this Agref,ment for at leClst one month, provided it Ins been removed from the Cu;-,!omer's location or c) on the effective date of an inCreaSE! in tho Minimum Mainten3nce Charge or Additional Maintenance Charges. IBM may withdmw a Machine from this Agreement upon three months' written notice to the Customer one year or more after maintenance service for each such Machine has commenced but not prior to the end of the period for which IBM has submitted an invoice to the Customer for service under this Agreementforsuch Machines. IBM may withdraw a Machine from this Agreement upon one month's written notice to the Customer following any repetition of the need for additional repairof such Machine caused by non-IBM maintenance activity, as described in item (8) of the Section entitled "Services for Additional Charge." Either party may withdraw Machines or terminate this Agree- ment at any time by written notice for failure of the other to comply with any of its terms and conditions. This Agreement may be terminated by either party, upon one month's written notice, following withdrawal of all Machines and fulfillment of all obligations hereunder. Page 6 of 17 DISCLAIMER AND LIMITATION OF L1A TY IBM will in no event be liable for lost proh,..>, lost savings or other conse'luential damages even if IBM has been advised of the possibility 01 such damages, or for any claim against the Custo- mer by any other party. IBM is relieved of responsibility for all loss of funds contained in, dispensed by or associated with any Machine. IBM's liability to the Customer for damages, from any cause whatsoever, and regardless of the form of action, whether in contract or in tort including negligence, shall be limited to actual damages up to the greater of $50,000 or 12 months' maintenance charges for the specific Machines under this Agreement that caused the damages or that are the subject matter of or are directly related to the cause of action. Such charges will be those in effect for the specific Machines when the cause of action arose. The foregoing limitation of liability will not apply to claims for personal injUry or damage to real property or tangible personal property caused by IBM's negligence. GENERAL Service provided under this Agreement does not assure unin- terrupted operation of the Machines and IBM is not responsible for failure to render service due to causes beyond its control. This Agreement is not assignable without the prior written consent of IBM. Any attempt to assign any of the rights, duties or obligations of this Agreement without such consent is void. IBM may, upon 12 months' written notice to the Customer, modify the terms and conditions of this Agreement, except that IBM may, upon three months' written notice to the Customer, modify the terms and ( itions of the Sections entitled "Periods of Maintenance Service, .Charges" and "Services for Additional Charge." Otherwise, this Agreement can only be modified by a written agreement duly signed by persons authorized to sign agreements on behalf of the Customer and IBM. Variance from the terms and conditions of this Agreement in any Customer order or other written notification will be of no effect. The Customer represents that the Customer is either the owner of the Machines under this Agreement, or authorized by the owner to include such Machines under this Agreement. No action, regardless of its form, arising out of this Agreement, may be brought by either party more than two years after the cause of action has arisen, or, in the case of an action for nonpayment, more than two years from the date the last payment was due. This Agreement will be governed by the laws of the State of New York. THE CUSTOMER ACKNOWLEDGES THAT THE CUSTOMER HAS READ THIS AGREEMENT. UNDERSTANDS IT. AND AGREES TO BE BOUND BY ITS TERMS AND CONDITIONS. FURTHER, THE CUSTOMER AGREES THAT THIS AGREE- MENT. AND SUPPLEMENTS REFERENCING THIS AGREE- MENT, WILL BE THE COMPLETE AND EXCLUSIVE STATE- MENT OF THE AGREEMENT BETWEEN THE PARTIES SUPERSEDING ALL PROPOSALS OR PRIOR AGREEMENTS: ORAL OR WRITTEN, AND ALL OTHER COMMUNICATIONS BETWEEN THE PARTIES RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT. Agreemenllor IBM Licensed Programs (Z125-3358-00) International Business Machines Corporation (IBM) and the Customer agree that, when this Agreement is signed by the Customer and accepted by 18M, the fOllowing terms and conditions will apply to any IBM licensed program materials offered under this Agreement when ordered by the Customer and the order is accepted as provided herein. Under these terms and conditions, IBM will 1) furnish licensed programs to the Customer, 2) furnIsh licensed optional materials in support of such licensed programs, 3) grant the Customer a nontransferable and nonexclusive license in the United States and Puerto Rico to use the licensed program materials, and 4) provide program services, all as described herein. The Customer agrees with respect tothe licensed programs to accept the responsibility for 1) their selection to achieve the Customer's intended results, 2) their installation, 3) their use, and 4) the results obtained therefrom. The Customer also has the responsibility for the selection and use of, and results obtained from, any other programs, programming, equipment or services used with the licensed programs. SpecifiC licensed program materials may be ordered under this Agreement by 1) a Supplement to this Agreement (Supplement) signed by the Customer, 2) a written order, speCifying the licensed program materials and the designated machine, signed by the Customer, or 3) such other ordering procedure as shall be designated by IBM for the specifiC licensed program materials. IBM will accept any such order under ttlis Agreement by providing the Customer a Supplement specifying the supplemental terms applicable to such licensed program materrals. Upon receipt of the Supplement by tllC Customer, IBM shall thereby grant a nontransferable and nonexclusive license in the United States and Puerto Rrco for Ircensed program materials subject to the terms and conditions of thrs Agreement. Use of the licensed program materials or the first payment of charges due hereunder, whichever first occurs following receipt of the Supplement, will constItute the Customer's ~lcceptance of the supplemental terms specified in the Supplement. Any terms which this Agreement states are to be specified by IBM for a licensed program and/or related licensed optional materials will be stated in the Supplement for that licensed program. DEFINITIONS The term "licensed program" in this Agreement shall mean a licensed data processing program consisting of a series of instructions or statements in machine readable form, and/or any licensed data base consisting of a systematized collection of data in machine readable form, and any related licensed materials such as, but not limited to, flow charts, logic diagrams and listings provided for use in connection with the licensed data processrng program. The term "licensed optional materials" in this Agreement shall mean any machine readable or printed material not included in the licensed program and which is designated by IBM as available under license to Customers who have licensed the program to which such optional materials relate. The term "licensed program materials" in this Agreement shall mean both the licensed program and the licensed optional materials as defined above. The term "restricted materials" in this Agreement shall mean 8'1Y licensed program materials which are labeled "Restricted ~ laterials of IBM." The term "use" in this Agreement shall mean copying any portion of the licensed program materials into a machine <lnd/of transmitting them to a machine for processing of the machine instrudions, statements or data contai' 'j in such materials. Z125-9029-01 TERM This Agreement is effective from the date on which it is accepted by IBM and will remain in effect until terminated by the Customer upon one month's written notice, or by IBM as set forth in this section. This Agreement may be terminated by the Customer only when all licensed program materials licensed hereunder are discontinued and all licensed program materials have been returned or destroyed. Licenses granted under this Agreement may be discontinued by the Customer upon one month's written notice, except that, during the testing period, the Customer may discontinue any license at any time upon written notice effective immediately. IBM may discontinue any license or terminate this Agreement upon written notice effective immediately if the Customer fails to comply with any of the terms and conditions of this Agreement. Notice of discontinuance of any or all licenses shall not be considered notice of termination of this Agreement unless speCifically stated. Notice of discontinuance of any licensed program shall be notice of discontinuance of the license and of all licensed program materials obtained in connection therewith. LICENSE Each license granted under this Agreement authorizes the Customer to: P<lqr: 7 01 17 a) use the licensed program materials ir :hine readable form on the machine or machines (herL ..fter referred to as "machine") designated in an applicable Supplement for such licensed program materials and in conjunction therewith to store the licensed program materials in, transmit them through, or display them on, units associated with such desig- nated machine; b) utilize the licensed program materials in printed form in sup- port of the use of the I,icensed program; and/or c) copy or translate the licensed program materials in machine readable form into any machine readable or printed form to provide sufficient copies to support the Customer's use of the licensed program as authorized under this Agreement. Licensed program materials provided by IBM In printed form, microfiche or other non-machine readable form may not be copied. Additional copies may be obtained under license from I BM at the charges then In effect With respect to restricted materials, the authorizations granted under the preceding paragraphs of thiS section are limited solely to the following purposes: a) making modifications to the Customer's products and/or pro- grams so that they will functIon With the licensed progrmns to which the restricted materials apply: b) making modifications, subject to the provisions of the section entitled "Permission to Modify," to the licensed programs to which the restricted materials apply; and/or c) assisting the Customer in problem determination, problem source identification and/or problem resolution activities associated with the use of the licensed programs to which the restricted materials apply. A separate license is required for each machine on which any licensed program materials will be used, except as provided in the subsections entitled "Temporary license Transfer," "Installation License" and "Location License," For any licensed program that is a data base, the license granted in this section is further limited to permit access to such data base exclusively by the Customer, Except as provided in the section entitled --Protection and Security of Licensed Program Materials,-- the Customer shall not make or permit any manner of access to any form of such data base, or part thereof, for the purpose of making available to any other person any data contallled in such data base. The Customer shall not use, print, copy, translate or display the licensed program materials, in whole or in part, unless ex- pressly authorized in this Agreement. The Customer shall not reverse Cl55emble or reverse compile the licensed programs in whole or in part Temporary License Transfer The Customer is authorized to transfer the license to and use the licensed program materials on: 1) a backup machine when the designated machine or an asso~ ciated unit required for use of the licensed program is tempo- rarily inoperable until operable status is restored and process- ing on the backup machine is completed; or 2) another machine for assembly or compilation of the licensed program materials jf the designated machine and its asso- ciated units do not provide the configuration required for as- sembly or compilation. Installation License When IBM speCifies "Installation License Applies" the Customer is also authorized to use the licensed program materials on any other machine in the same installation as the designated machine. For purposes of this Agreement, "same installation" shall mean a single room or contiguous rooms unless otherwise agreed to in writmg by IBM. Location License When IBM specifies "Location License Applies" the Customer is also authorized to use the licensed program materials on any other machine in the same location as the designated machine. For purposes of this Agreement, "same location" shall mean a single physical Customer location designated by a single mailing address and contained within a single building unless otherwise agreed to in writing by IBM. Change in Designated Machine The Customer may notify IBM of the Customer's intention to change the designation of the machine on which licensed program materials are to be used. The change of designation will be effective upon the date set forth in the form entitled n Designated Machine" furnished to the "Confirmation of Cha Customer by IBM. Additional Licenses Each additional license for licensed program materials already licensed by the Customer under this Agreement must be ordered as described herein For additional licenses, in lieu of distribution from IBM, the Customer may elect to copy those licensed program materials previously distributed to that Customer by IBM in machine readable form. The Customer may make such copy upon receipt of a Supplement issued by IBM which designates the Effective Date for Additional License requested by the Customer. The testing period, if any, for such additional license will commence on the Effective D<1t(~ for Additional License. Pemllssion to copy granted In this subsectlon does not apply to licensed program materials provided by IBM in printed form For certain licensed programs, IBM may offer the Distributed Systems License Option (OSLO) under which licenses in addition to the inItial license (F1asic LicPllsE:) may be obtained for a OSLO ch,nge, When ordenng additional licenses for such a licensed program, the Customer must designate whether an additional Basic or OSLO License is requested. For e8ch OSLO License, the Customer will: 1) copy thuse licensed program materials previously distributed in machine readable form to the Customer by IBM under the Basic License and use such copies on the machine designated in the Supplement; 2) provide problem documentation to IBM through the location of the Basic License: 3) at IBM's request, recreate any problems at the location of the Basic License, if Local Service or Local Assistance as speci- fied by IBM is available for the Basic License; and 4) distribute to, install and test on the OSLO designated machine any new releClse, correction or bypass prOVIded by IBM to the Basic License deSignated machine Program services and the warranty, if any, for the licensed program will be prOVided for OSLO Licenses only through the Basic License location and there will be no testing period for the OSLO Licenses. Unless the CLlstomer destgnates another Basic License, notice of discontinuance of a Basic License shall be notice of discontinuance of all OSLO licenses for lhat Bastc License. CHARGES The ch,lr~Jf:s npplicilble to eactl IICCflSf)d program Will be specified by IBM and will consist of a one-time charge, an upgrade charge, periodic charges, and any initial charge and/or any process charge. Periodic charges. whIch may be monthly, quarterly, semi- annual or annual, will continue until the licensed program is discontinued. However, for certain licensed programs, IBM may specify a consecutive number of payments after which further periOdic charges will be waived For certain licensed programs, IBM may designate one or more replacement licensed programs. When a licensed program is discontinued and replaced by the Customer with an IBM designated replacement licensed program an upgrade charge as specified by IBM will apply. Licensed optional materials may be subject to a charge as speCified by IBM. Any additional charges for program services for licensed programs will be at IBM's then applicable hourly service rates and minimum charges and such services will be provided under the terms and conditions of this Agreement unless provided under separate written agreement signed by the Customer and IBM Commencement and Invoicing of Charges Periodic charges will commence on the day, Monday through Friday, following the end of the testing period, or 10 days after shipment of the licensed program by IBM if there is no testing period, except as set forth below in this subsection. Monthly charges for a partial month's use will be prorated based on a thirty- day month. Other periodic charges will not be prorated and are not refundable in whole or in part. Periodic charges will be invoiced in advance. Unless otherwise specified by IBM, one-time charges, initial charges, upgrade charges and licensed optional materials charges will be due on the day, Monday through Friday, following tl18 end of the testing period, or 10 days after shipment of thE) licensed program rnill()f1als by 10M if t11ere IS no testing period or if Page 8 01 17 such jl'eriod has expired, except as set forth below in this subsection. For additional licenses for which the Customer has made copies pursuant to the subsection entitled "Additional Licenses" and for which there is no testing period. periodic charges will commence and other charges will be due upon the Effective Date for Additional License designated in the Supplement. Process charges will be due upon receipt by the Customer of the licensed program materials to which such charges apply and are not refundable even if the Customer discontinues the licensed program prior to or during the testing period. Payment will be made as stated in the invoice Applicable Taxes In addition to the charges due under this Agreement. the Customer agrees to pay amounts equal to any taxes resulting from this Agreement. or any activities hereunder, exclusive of taxes based on IBM's net income. Price Changes Periodic charges are subject to change by IBM upon three months' written notice to the Customer. Any changes in periodic charges become eHective on the first day of the Period which commences on or after the effective date specified in the notice. Initial charges, one-time charges, process or upgrade charges, and charges for licensed optional materials are subject to change without prior notice except that such charges shall not be increased if, prior to the date of the notice, 1) the licensed program materials had been shipped by IBM, or 2) the Customer had copied licensed program materials pursuant to the subsection entitled "Additional Licenses" In addition, if the Customer's written order was received by IBM prior to the announcement of such increase in charges, such charges shall not be increased if, within one month after the date of notice, shipment of the licensed program materials occurs or the Customer copies licensed program materials pursuant to the subsection entitled "Additional Licenses." If charges are increased for any licensed program materials, the Customer may discontinue them in accordance with the provisions of this Agreement: otherwise, the new charges will become effective. SHIPMENT The Estimated Shipment Date for licensed programs will be specified by IBM. However, IBM does not represent or warrant that such shipment date will be met. IBM will notify the Customer of the type of program storage media required for shipment. Unless returnable or disposable media are used, the program storage media must be provided by the Customer or ordered from IBM at the applicable charge. Except when otherwise specified by IBM, licensed program ma- terials will be shipped to the Customer without shipping charge. Any special shipment requested by the Customer will be at Customer expense LICENSED PROGRAM TESTING For each licensed program IBM will specify the testing period, if any, during which the licensed program will be made available for nonproductive use. The purpose of the testing period is to permit the Customer to determine whether the licensed program f 'Jnctions selected by the Customer operate together and to assist the Customer in determining whether the licensed program meets the Customer's requirements. The testing period will begin 10 days after shipment of the licensed program by IBM or on the Effective Date for Additional License, unless otherwise specified. The Customer may discontinue the licensed program, upon written notice effective immediately, at any time during the testing period, in which event periodic charges, one-time charges, initial charges, upgrade charges and licensed optional materials charges will not be due. However, process charges will be payable. Unless such notice of dIscontinuance is given, the Customer will be deemed. at the end of the testing period, to have decided to retain the licensed program under the provisions of this Agreement. In the event that the licensed program is used for productive purposes during the testing period, the Customer will notify IBM and the testing period will be deemed to have ended as of the date upon which the Customer commences productive use. Subsequent releases. if any, of a licensed program which have the same program number will be made available to the Customer 2125-9029-01 for productive use and/or test on the deSignated machine while the Customer continues productive use of a previous release on that machine and pays applicable charges therefor. The Customer has the right to decide whether to intall any such releases or continuc use of a previolls rolci'lsc heIYing given due regard to the provisions of the section entitled "Program Services." In the event of discontinuance of a licensed program and subsequent reordering of the same licensed program for the same installation (or location, when IBM has specified "Location License Applies"), there will be no testing period for the subsequent license. RISK OF LOSS If licensed program materials are lost or damaged during shipment from IBM. IBM will replace such licensed program materials and progr<lm storage media at no additional charge to the Customer If licensed program materials are lost or damaged while in the possession of the Customer, IBM will replace such licensed program materials at the applicable charges, if any, lor processing, distribution, and/or program storage media. EARLY SHIPMENT OF LICENSED PRINTED MATERIALS When the Customer has received a Supplement issued by IBM for a generally available licensed program, licensed program materials which are proVided by IBM in printed form will, upon Customer request be shipped to the Customer up to six months prior to shipment of the machine readable portion of the licensed program materials. The licensed printed materials, thus provided, may not be copied in any form for any purpose. If the Customer does not request that the machine readable portion of the licensed program materials be shipped within six months following the date of shipment of the licensed printed materials, the Customer will discontinue the license and return or destroy the printed materials The charge for early shipment of licensed printed materials will consist of any applicable process charges. Program serVices, if any, will not be provided prior to shipment of the machine readable portion of the licensed program materials. PROGRAM SERVICES For each licensed program, IBM will specify the types and durations of program services, if any, to be provided without additional charge for a current release of the licensed program. Program services will commence at the beginning of the licensed program testing period or, if there is no testing period for that license, when periodic charges commence or other charges are due. Program services will be subject to the provisions of the section entitled "SpeCIfied Operating Environment" Types of Service Central Service - When Central Service is specified one or more service locations will be designated which will accept documentation, in a format prescribed by IBM, indicating that a problem is caused by a defect in the licensed program. Central Service will respond to a defect in the unaltered portion of a current release of the licensed program by issuing: defect correction information such as correction documentation, cor~ rected code, or notice of availability of corrected code; or a restriction or a bypass. Unless Local Service is also specified for the licensed program, the Customer will be responsible for the preparation and submission of documentation to Central Service. IBM may also establish a center (Support Center) to provide the Customer with telephone assistance in problem diagnosis and resolution. When a Support Center is established for a licensed program and a problem occurs which the Customer believes is related to the use of a licensed program, the Customer will contact the Support Center and will perform appropriate problem definition activities and remedial actions, as prescribed by the Support Center, prior to any dispatch of an IBM representative. IBM also offers other services through Support Centers with or Without charge, as (lpplicable. Local Service-When Local Service is specified and a problem occurs which the Customer determmes is caused by the use of a licensed program and the diagnosis of the IBM representative indicates the problem is caused by a defect in the unaltered portion of a current release of the licensed program, the IBM representative will perform the following problem resolution activities. Page 9 of 17 ':\ 1) attempt to correct or bypass the defet. ,providing the Cus- tomer with correction information issued by Central Service, if a~ilable; or 2) submit documentation to Central Service, if specified as aV;-III- able; and, in any event 3) if the licensed program is inoperable, make a reasonable attempt to resolve the problem by applYing a local lix or providing a bypass. Local Assistance-When Local Assistance is specified and the Customer encounters a problem, which the Customer's diagnosis Indicates is caused by a defect In the unaltered portion of a current release of the licensed program, the Customer may request IBM assistance in resolving the problem. Such assistance, If requested, will be provided by an IBM representative and may be subject to the availability of personnel. This assistance may include, but not extend beyond, the following problem resolution activities 1) attempting to correct or bypass the defect by providing the Customer with correction information issued by Central Ser~ vice, if available; or 2) assisting the Customer with preparing documentation for submission to Central Service, if specified as available: and, in any event 3) if the licensed program is inoperable. making a reasonable attempt to resolve the problem by applying a 10callIX or prOVid- ing a bypass. Program Services Duration For each licensed program the types of progr'am service pmvided will be specified as available: 1) until discontinued by IBM wiHl a minimulll of SIX rnonttls' \-wit- ten notice; or 2) until a designated calendar date; or 3) during the testing period, or 4) for a designated number of months for each license. In the event the Customer discontinues a licensed program and sub- sequently reorders it for the same installation (or location, when IBM has specified 'Location License Applies'), the service duration then in effect will be reduced by the number of months for which such service was previously provided When a subsequent release of a licensed program which has the same program number becomes available, IBM may discontinue program services for any or all prior releases by notice effective on the date stated therein. For any licensed program, IBM shall have the right to charge for any of the foregoing program services to the extent they are not specified as provided without additional charge. Other types of program services may be speCIfied by 18M. IBM shall also have the right to charge for any additional effort which results from providing program services for an altered licensed program or for a release which is not current. IBM does not guarantee service results or represent or warrant that all errors or program defects will be corrected. PERMISSION TO MODIFY The Customer may modify any licensed program materials in machine readable form and/or merge such materials into other program material to form an updated work for the Customer's own use; provided that, upon discontinuance of the lIcensed program, the licensed program materials will be completely removed from the updated work and dealt with under this Agreement as if permission to modify or merge had never been granted. Any portion of the lIcensed program materials Included In such an updated work will continue to be subject to all terms of this Agreement. PROTECTION AND SECURITY OF LICENSED PROGRAM MATERIALS The Customer will take appropriate action, by instruction, agreement or otherwise, with any persons permitted access to licensed program materials so as to enable the Customer to satisfy the Customer's obligation under this Agreement. All copies of licensed program materials provided by IBM or made by the Customer including translations or compilations or partial copies within modifications, derivative works, and updated works are the property of IBM and may not be distributed by the Customer to any other persons, including other licensees of the licensed program, without IBM's prior written consent. The Customer will reproduce and Include the copyngllt notiu: on any such copies made by tIle Customer in accordance with the copyright instructions provided by i8M. The Cllstorner will n, ,lain records of the number i-lnd location of all caples of licensed program materials and Will notify IBM in wrifing if the onginal or any copy of the licensed program matcri"ls will be kert;:\t an installation (or location, when IBM has specified "Location License Applies") other than that of the machine designaterl in the applicable Supplement. The Customer will insure, prior to disposing of any media, thai any licensed program materials contained thereon have been erased or otherwise destroyed. The Customer Will not provide or otherwise make available any licensed program materials in any form without IBM's prior written consent except to Customer employees or IBM employees, or to other persons during the period such other persons are on the Customer's premises, for purposes specifically related to the Customer's authorized use of the licensed program LICENSED PROGRAM SPECIFICATIONS For each licensed program which is warranted, IBM will publish, at the time that licensed program becomes generally available, a document entitled "Licensed Program Specifications." Such Licensed Program Specifications may be updated by IBM from time to lime and such updates may constitute a change in specifications WARRANTY Each licensed program which is specified in ttle Supplement as warranted will conform, whpn shipped to the Customer, to thE; Licensed Program Specifications whicn m(~ In eficct for that licensed program at th8t time. provided the licensed program IS properly w;C'd in ;1 Specdied OperatillCj Environment. If the Customer believes there is a defect U1 a licl.__-:nsed program such that it does not meet its Licensed Program Specifications, the Customer Illust notify IBM whil{~ program services are available for the program. IBM does not warrant that the functions con- tained in a licensed program will meet the Customer's requirenwnts or will operate in the combinations whicrl may be; selected for use by th(~ Customer, or that ttle operation of the licensed program will be uninterrupted or error free or that all program defects will be corrected All other licensed programs will be distributed on an "As Is" basis withollt warranty of any kind either express or irnpliE..'d. THE FOREGOING WARRANTIES ARE IN LIEU OF ALL OTHER WARRANTIES. EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. SPECIFIED OPERATING ENVIRONMENT Each licensed program is designed to operate on one or more IBM machine types and, in most Instances, in conjunction with other IBM equipment and programs. The Licensed Program Specifications for each warranted licensed program will state the environment in which the licensed program is designed to operate. For licensed programs distributed on an "As Is" basis, the Specified Operating Environment will be stated in a notice of availability of the licensed program. Program services for a licensed program used in other than a Specified Operating Environment ~lre subject to limitations occasioned by the differences between the Specified Operating Environment and the Customer's operatlflg environment and by the extent of Hw local IBM representiltive's knowledge of the Customer's equipment and programs. Such program services Will be subject to Ole follOWing conditions' 1} When performing Local Service or Local Assistance. 18M's ob- ligation is limited to having the local IBM representative apply a reasonable effort to provide program services as described in the applicable portion of the section entitled "Program Ser- vices" Furthermore, the local IBM representative will only be expected to operate a machine designated in the Supplement If it was marketed or manufactured by IBM. IBM will have the right to charge for any additional effort required to perform these program services. 2) Central Service will only respond to defects whicll will occur when Central Service operates the licensed program in a Specified Operating Environment RETURN OR DESTRUCTION OF LICENSED PROGRAM MATERIALS Within one month <liter the dah: of dlscontinlJallC(~ of (lny license granted hereunder, unless the rcqlJirement is waived by IBM, the Customer wil! furnish to IBM a completed form entitled Pilge 100117 "IBM Licensed Program Certificate of Return or Destruction' certifying that through the Customer's bp~t effort, and to the best of the Customer's knowledge, the orig and all copies of the iicensed program materials received fror. ,M ormade in connec- tion with such license have been returned to IBM or destroyed. This requirement will apply to all copies in any form including translations or compilations or partial copies within modifications, derivative works, and updated works. whether partial or complete. and whether or not modified or merged into other program materials as authorized herein. However, upon prior written authorization from IBM, the Customer may retain a copy for archival purposes only. The requirement to return or destroy will apply to a licensed data base; it will not apply to individual pieces of data obtained by the Customer from such data base and which constitute a minor portion of such data base. When the Customer has licensed a new version of a licensed program. which carries a different program number, and discontinues the prior version, the Customer may retain the prior version of the licensed program for a period not to exceed three months following its date of discontinuance, to be used only if a defect in the new version prevents its use. During this period, the Customer will pay only the applicable charges for the new version of the licensed program. Within one month following this three- month period, unless the requirement IS waived by IBM, the Customer will furnish IBM a completed form entitled --IBM Licensed Program Certificate of Return or Destruction" for the prior version as set forth above. PATENTS AND COPYRIGHTS IBM will, at its expense, defend the Customer against any claim that licensed program materials supplied hereunder infringe a patent or copyright in the United States or Puerto Rico and subject to the limitation of liability set forth in the section entitled "limitation of Remedies," IBM will pay all costs, damages and attorney's fees that a court finally awards as a result of such claim. To qualify for such defense and payment. the Customer must 1) give IBM prompt written notice of any such claim; and 2) allow IBM to control, and fully cooperate with IBM in, the defense and all related settlement negotiations. However, if the damages attributable to a claim of infringement of a patent in the United States or Puerto Rico may exceed such limitation of liability, the Customer may elect to defend against the claim provided that IBM may fully participate in the defense and/or agrees to any scttl(~lllcnt nf SUCll cl;\l111 The Customer agrees to allow 18M. at IBM's option and expense, if such claim has occurred or in 18M's judgment is likely to occur, to procure the right for the Customer to continue using the licensed program materi?lls or to replace or to modify them so that they become non-infringing; and, If neither of the foregoing alternatives is available on terms which are reasonable In IBM's judgment, upon written request the Customer will return tile licensed program materials to 18M; and, for licensed programs whose total charges are fully paid, the Customer may receive a credit as established by IBM IBM shall have no obligation with respect to any such claim based upon the Customer's modification of the licensed program materials or their combination, operation or use with data or programs not furnished by IBM or in other than the Specified Operating Environment. This section states IBM's entire obligation to the Customer regarding infringement or the like. LIMITATION OF REMEDIES IBM's entire liability and the Customer's exclusive remedy shall be as follows: In all situations involving performance or nonperformance of licensed programs furnished under this Agreement. the Customer's remedy is 1) the correction by IBM of licensed program defects, or 2) if, after repeated efforts, IBM is unable to make the licensed program operate as warranted, the Customer shall be entitled to recover actual damages to the limits set forth in this section. For any other claim concerning performance or nonper- formance by IBM pursuant to, or in any other way related to, ttle subject matter of thiS Agreement and any Supplement hereto, the Customer shall be entitled to recover actual damages to the limits set forth in this section. IBMs liability for damages to the Customer for any cause whatsoever, and regardless of the form of action, whether in contract or in tort including negligence, shall be limited to the greater of $25,000 or the one-time charge paid for, or any charges Z125-9029-01 which would be due for twelve months' use of, the licensed program that caused the damages or that is the subject matter of, or is directly related' 'e cause of action. Such charges shall be those in effect when cause of action arose and shall include any initial or process charges paid to IBM. This limitation of liability will not apply to claims for copyright infnngement or for personal injury or damage to real or tangible personal properly caused by lAM's negligence. In no event will IBM be liable for any damages arising from performance or nonperformance of the licensed program during the licensed program testing period or for any damages caused by the Customer's failure to perform the Customer's responsibilities, or for any lost profits, lost savings or other consequential damages, even If IBM has been adVIsed of the possibility of such damages, or for any claIm against the Customer by any other party, except as provided in the section entitled "Patents and Copyrights." IBM EDUCATION COURSES The Customer agrees that all of the terms and conditions applicable to restricted materials contained in this Agreement shall be incorporated into the Agreement between the Customer and IBM pntltled "Terms and Conditions for IBM Classes and Education Materials" and apply to materials, regardless of form, labeled --Restncted Matenals of IBM-- when distributed to the Customer in conjunction with an IBM Education Course. ADDITIONAL PRODUCTS AND SERVICES In addition to the licensed program materials and program services provided under thiS Agreement, IBM offers other products and services at separate charges under applicable written IBM agreements. IBM and the Customer agree that such products and services cannot be the subject of an oral agreement. GENERAL This Agreement is not assignable; none of the licenses granted hereunder nor any of the licensed program materials or COplOS thereof may be sublicensed, assigned or transferred by the Customer without the prior written consent of IBM. Any attempt to sublicense, assign or transfer any of the rights, duties or obligations under this Agreement is void. Licensed program materiCl.ls furnished under this Agreement (lr(~ 10 l)(~ w;(~d only on m;ldlirws IOc;lted in thc~ lJnl\r,c1 Slilh)s ;Ull! I-luettn Hieo. The terms of this Agreement may be modified by IBM upon three months' written notice to the Customer, except that any modifications of the terms and conditions which relate specifically to termination of this Agreernent or discontinuance of licenses granted under this Agreement as provided in the section entitled "Term" shall be effective only as to licensed program materials deSignated in a Supplement issued by IBM after the date of such notice. Modifications shall become effective unless the Customer terminates this Agreement or discontinues any applicable licenses before the effective date thereof. Otherwise, the Agreement or any Supplement can only be modified by a written agreement duly signed by persons authorized to sign agreements on behalf of the Customer and IBM, and variance from or addition to the terms and conditions of this Agreement and any Supplement in any Customer purchase order or other written notification will be of no effect. IBM is not responsible for failure to fulfill its obligations under this Agreement due to causes beyond its control. No action, regardless of form, arising out of thiS Agreement may be brought by either party 1) in the case of an action arising out of breach of the provisions of the section entitled "Protection and Security of Licensed Program Materials" more than six years after such cause of action has arisen, 2} in the case of an action for nonpayment, more than two years from the date the last payment was due. or 3) in the case of any other action, more than two years after the cause of action has arisen. The Agreement will be governed by the laws of the State of New York. THE CUS' OMER ACKNOWLEDGES THAT THE CUSTOMER HAS READ THIS AGREEMENT, UNDERSTANOS IT, AND AGREES TO BE BOUND BY ITS TERMS AND CONDITIONS. FURTHER, THE CUSTOMER AGREES THAT THIS AGREE- MENT AND ITS APPLICABLE SUPPLEMENTS ARE THE COM- PLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT Page 11 of 17 BETWEEN THE PARTIES, EXCEPT AS PROVIDED IN THE SECTION ENTITLED "IBM EDUCATION COURSES," SUPER- SEDING ALL PROPOSALS OR PRIOR AGREEMENTS, ORAL ..._~- "l'~. OR WRITTEN, AND ALL OTHER COMMUNICATIONS BE- TWEEN THE PARTIES RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT. Agreement for Lease or Rental of IBM Machines (Z125-3320-00) International Business Machines Corporation (18M) and the Customer agree that the following terms and conditions will apply to any Customer order for lease or rental of IBM machines that is accepted by IBM under this Agreement. Under these terms and conditions, IBM will 1) lease or rent machines to the Customer, 2) provide maintenance service for machines and 3) as available, furnish programming and programming services, all as described herein. The Customer agrees to accept the machines, maintenance service, programming and programming services under the terms and conditions of this Agreement. The Customer further agrees with respect to the machines and programming to accept the responsibility for 1) their selection to achieve the Customer's intended results, 2) their use and 3) the results obtained therefrom. The Customer also has the responsibility for the selection and use of, and results obtained from, any other equipment, programs or services used with the machines and programming. The term "machines" as used in this Agreement refers to machines and/or their model conversions and features unless the context mquires individual reference. Specific machines, model conversions and features become subject to this Agreement when either a written orderto lease or a written order to rent is signed by the Customer and accepted by IBM. For each order to lease a machine, IBM will provide the Customer a Supplement to this Agreement (Supplement) confirming the specific terms applicable to the machine. Installation of the machine or payment of the first invoice for Monthly Lease Charges, whichever first occurs following receipt of the Supplement, will constitute the Customer's acceptance of such specific terms. INSTALLATION The Customer agrees to provide a suitable environment for the machines as specified by IBM and, except as otherwise specified by IBM, to furnish all labor required for unpacking and placing each machine in the desired location. Each machine will be installed as specified by IBM Installation By IBM IBM will install machines which are not identified by IBM as Customer Set-Up. IBM will install features and model conversions on the serial-numbered machine for which they are ordered. The first day of charge for such machine, feature or model conversion will be the day (Monday through Friday) following the day the machine, feature or model conversion IS installed by IBM. Customer Set-Up Each machine, feature and model conversion identified by IBM as Customer Set-Up (CSU) will be set up by the Customer in accordance with the instructions furnished by IBM. A CSU machine will be considered to be installed on the last day (Monday through Friday) of the CSU allowance period specified by IBM for such machine. The CSU allowance period commences on the day (Monday through Friday) following the date of receipt of the machine at the Customer's premises. However, when a CSU machine is delivered in conjunction with, and for attachment to, a non-CSU machine delivered from IBM, such CSU machine will be considered to be installed on the later of 1) the installation date of such non-CSU machine or 2) the installation date of the CSU machine as determined above. A CSU feature or model conversion will be considered to be in- stalled one month following the later of its estimated date of shipment or its actual date of shipment from IBM. CSU features and model conversions will be installed on the serial-numbered machine for which they are ordered. The first day of charge for such machine, feature or model conversion will be the day (Monday through Friday) following the day the machine, feature or model conversion is considered to be installed. CONTRACT PERIOD IBM will determine the Lease or Rental Contract Period or Periods for which each machine is eligible. The Customer may select the Lease or Rental Contract Period for each machine from the alternatives available. Lease Contract Period A Lease Contract Period has a Commencement Date, a Base Term and an Expiration Date each of which will be specified in the Supplement. The Commencement Date for an eligible machine being installed will be the day (Monday through Friday) following the day that the machine is installed, as specified in the Section entitled "Installation," provided the written order to lease the machine is received by IBM on or before such Commencement Date. The Commencement Date for an eligible machine already installed under a Rental Contract Period will be the day the written order to lease the machine is received by 18M. The Commence- ment Date of a new Lease Contract Period for a machine already installed under a Lease Contract Period or Extension will be the day immediately following the Expiration Date of such Lease Contract Period or Extension, provided that the written order for a new Lease Contract Period for the machine is received by IBM on or before such Commencement Date. The Expiration Date of a Lease Contract Period is determiner, initially by adding the Base Term to the Commencement Date, and thereafter may be adjusted as described in the Section entitled "Machine Modifications." A Lease Contract Period may be extended as described in the Section entitled "Lease Contract Period Extension." Rental Contract Period A Rental Contract Period has a Commencement Date and is of indefinite duration. The Commencement Date for an eligible machine being installed will be the day (Monday through Friday) following the day that the machine is installed, as specified in the Section entitled "Installation." The Commencement Date for an eligible machine already installed will be the day following the Expiration Date of its Lease Contract Period or Extension. CHARGES The Customer agrees to pay all charges as described in this Section. IBM reserves the right to offer machines for lease or rental on longer than a monthly charge basis and, if so, this Section would be construed accordingly. IBM will determine the Monthly Lease Charge or Monthly Rental Charge appl icable to the Lease or Rental Contract Period or Periods for which each machine is eligible. In addition, IBM will specify the Plan Offering for each machine as: Plan A: Each Plan A machine which is installed under a Rent- al Contract Period is subject to an Additional Use Charge for billable time in excess of 176 hours in any calendar month, as measured by an IBM meter, at an hourly rate which is equal to 1/176th of the Monthly Rental Charge multiplied by IBM's applicable Additional Use Charge Percent then generally in effect. There is no Additional Use Charge for a Plan A machine which is installed under a Lease Contract Period or Extension. Plan B: For each Plan B machine, the Monthly Lease Charge or Monthly Rental Charge provides the Customer with unlimited use in any calendar month. Plan C: Each Plan C machine is subject to a Monthly Use Charge which is determined by multiplying the amount of pro- cessing performed by the machine, as measured by.an IBM meter, by IBM's applicable Monthly Use Charge Rate(s) then generally in effect. Plan 0: For each Plan 0 machine, model upgrade and feature, there will be an Initial Period of Maintenance Service, as .. described in this Section, during which will provide, at no additional charge, the availability of m<... cnance service 24 hours .>Jer day, seven days per week and unlimited use of the machine in any calendar month. Thereafter, the Monthly Lease Charge or Monthly Rental Charge provides the Customer with the availability of maintenance service during the period from 7 a.m. to 6 p.m., Monday through Friday, (8ase Period of Main- tenance Service) and unlimited use of the machine in any calendar month. The Customer may select Optional Periods of Maintenance Service as designated by IBM in the IBM Plan 0 Optional Periods of Maintenance Service Exhibit (Exhibit). The Custo- mer may select or change Optional Periods of Maintenance Ser- vice upon 15 days' prior written notice to IBM. Optional Periods of Maintenance Service are subject to an Additional Monthly Maintenance Charge based on the Ma- chine Group and determined by multiplying the Additional Monthly Maintenance Charge Rate for the machine by the applicable Percentages for the Optional Periods of MaiRtenance Service shown in the Exhibit. Additional Monthly Maintenance Charges will commence upon the expiration of the Initial Period of Maintenance Service or on the effective date of the Optional Periods of Maintenance Service, whichever is later. The Initial Period of Maintenance Service commences on the day (Monday through Friday) following the day that the Plan o machine is installed, as specified in the Section entitled "Installation," and has a duration as established in writing by 18M. If the Initial Period of Maintenance Service expires on a Friday or Saturday, it will be extended by two days or one day, respectively, so that the last day of such Initial Period of Maintenance Service will be on a Sunday. If the Customer requests maintenance service for a Plan 0 machine to be performed at a time outside the Periods of Maintenance Service, the service will be provided for additional charge as described in the Section entitled "Maintenance Service. " Monthly charges for each machine will begin on the Com- mencement Date of its Lease Contract Period or Extension or Rental Contract Period, unless otherwise specified in this Section. Meter Readings IBM will install and maintain its meters for Plan A and Plan C machines. For each Plan A machine, where required, and for each Plan C machine, the Customer agrees to furnish a monthly report to IBM showing the meter reading as of the close of the last work day of each calendar month. The Customer agrees not to interfere with the proper operation of the meters. Increases in Lease Contract Period Monthly Charges For each year of a Lease Contract Period for a machine, begin- ning with the Commencement Date designated in the Supple- ment, and thereafter with each Anniversary Date, there will be a maximum Monthly Lease Charge (Upper Limit) for that year. The Upper Limit for the first year of the Lease Contract Period is calculated by increasing the initial Monthly Lease Charge in effect for a machine on the Commencement Date specified in the Sup- plement by an amount which is derived by multiplying the initial Monthly Lease Charge by the Upper limit Percent specified in the Supplement. The Upper Limit for each succeeding year is calculated by increasing the Upper Limitforthe preceding year by an amount which is derived by multiplying the initial Monthly Lease Charge by the Upper Limit Percent specified in the Supple- ment. For these calculations, when a machine becomes subject to the provisions of a Lease Contract Period on or after announce- ment, but before the effective date, of an increase in the Monthly Lease Charge, such increased Charge will be used as the initial Monthly Lease Charge. For a machine not yet installed, if the Customer's written order for a machine has been received by IBM, IBM may not increase the Monthly Lease Charge or Upper Limit Percent unless written notice shall have been given to the Customer at least three months before the date of shipment. In the event of such increase, the Customer may elect to void the order for the affected machine within one month of notification of such increase by IBM. For a machine which is installed, IBM may increase the Monthly Lease Charge upon three months' prior written notice. Such increased Monthly Lease Charge will be the lowest of 1) the Monthly Rental Charge generally in effect for such machine on the effective date specified in the notice, 2) the Monthly Lease Charge generally in effect for such machine on the effective date specified in the notice for Customers commencing a new Lease Contract Period witll the same Base Term or 3) the Upper Limit in effect for that year, and, to the extent that any increase exceeds the applicable Upper Limit, the excess will a\' ;-natically be effective on ensuing Anniversary Dates. tl~S-902t-O' 1=';19"" I;;: ,)1 II The Upper Limit Pen ,pecified in the Supplement will not be increased during the Lt.. .: Contract Period. The Monthly Lease Charge for a model upgrade orfeature addi- tion may be increased by IBM in the same manner and in accordance with the same Upper Limit calculations as for ma- chines and pursuant to the provisions set forth in the Section entitled "Machine Modifications." The Monthly Use Charge Rate(s) for each Plan C machine may be increased by IBM in the same manner nnd in accordance With the same Upper Limit calculations as Monthly Lease Charges. IBM may increase the Additional Monthly Maintenance Charge Rate or the pprcentages for Optional Periods of Maintenance Service, or IBM rnay change the Machine Group designation or the Optional Periods of Maintenance Service. at any time upon three months' prior written notice to the Customer. Upon 15 days' prior written notice to IBM, the Customer may discontinue any Optional Periods of Maintenance Service affected by such notice on the effective date of the Increase or change. Otherwise, the new Rate, Percentages, Machine Group designation and Optional Periods of Maintenance Service will become effective as specified. Except as provided in this Section and in the Section entitled "Lease Contract Period Extension," all increases in the Monthly Lease Charge. Monthly Use Charge Rate(s) and Upper limit Per- cent Will become effective on the date specified in the notice of such increase. Increases in Rental Contract Period Monthly Charges For a machine under a Rental Contract Period, IBM may in- crease the Monthly Rental Charge, Additional Use Charge Rate or Monthly Use Charge Rate(s) upon three months' prior written notice. The Customer may discontinue any machine included in such notice on the effective date of the increase upon one month's prior written notice. Otherwise, the new Charge and Rates will become effective as specified. IBM may increase the Additional Monthly Maintenance Charge Rate or the Percentages for Optional Periods of Maintenance Service, or IBM may change the Machine Group designation or the Optional Periods of Maintenance Service, at any time upon three months' prior written notice to the Customer. Upon 15 days' prior written notice'to IBM, the Customer may discontinue any Optional Periods of Maintenance Service affected by such notice on the effective date of the increae or change. Otherwise. the new Rate. Percent;:!ges, Machine Group designation and Optional Periods of Maintenance Service will become effective as specified Hourly Service Charges IBM's hourly service rates and minimum charges are subject to change by IBM without notice. Destination Charges All destination charges for each machine, model conversion or feature, both from and to designated IBM locations, and any rigging charges will be paid by the Customer in accordance with 18M's then current shipping and billing practices. The cost of labor for crating and uncrating is a Customer expense except when performed at an IBM location. Applicable Taxes In addition to the charges due under this Agreement, the Custo- mer agrees to pay amounts equal to any taxes resulting from this Agreement, or any activities hereunder, exclusive of property taxes and taxes based on IBM's net income. LEASE CONTRACT PERIOD EXTENSION Unless otherwise specified in the Supplement, the Customer may extend a Lease Contract Period for a machine any number of times for one year and one time for a period of less than one year. The Commencement Date of an Extension will be the day follow- ing the Expiration Date of the Lease Contract Period or Extension then in effect The charges and terms and conditions for the ensuing Extension may be changed by 18M, but will not be changed by IBM from the date three months pnorto the Commencement Date of such Extension through its Expiration Date, except as de- scribed in thiS Sectiorl and except thaI il such Expiration Dale is adjusted as deSCribed in the Section entitled "Machine Modifica- tions," the charges during the adjustment period may be Increased by IBM in accordance with the Upper Limit provisions described in the Sections entitled "Increases In Lease Contract Period Monthly Charges" and "Purchase Option" Prior to the Expiri'ltion Date of a Lease Contract Period or one-year Extension, IBM will provide the Customer with written notice of all such charges and terms and conditions for the ensuing Extension During the Extension there will be an Upper Limit. The Upper Limit for the Extension IS calculated by increasing the initial Monthly Lease Charge in effect for a machine on the Commence- Page 130117 ment Date of such Extension by an amoul dch is derived by multiplying slIch initial Monthly LeasH Charye by tho Upper Limit Percent specified in the Supplement, unless such Upper Limit Percent is modified by written notice for the ensuing Extension, in which event such modified Upper Limit Percent will apply. For a machine which is installed under an Extension, IBM may increase the Monthly Lease Charge upon three months' prior written notice. Such increased Monthly Lease Charge will be the lowest of 1) the Monthly Rental Charge generally in effect for sllch machine on the effective date specified in the notice, 2) the Monthly Lease Charge generally in effect for such machine on the effective date specified in the notice for Customers commencing a new Lease Contract Period with the same Base Term or 3) the Upper Limit in effect for the Extension. The Monthly Lease Charge for a model upgradeorfeatureaddi- tion may be increased by IBM in the same manner and in accordance with the same Upper Limit calculations as for ma- chines and pursuant to the provisions set forth in the Section entitled "Machine Modifications." The Monthly Use Charge Rate(s) for each Plan C machine may be increased by IBM in the same manner and in accordance with the same Upper Limit calculations as Monthly Lease Charges. IBM may increase the Additional Monthly Maintenance Charge Rate or the Percentages for Optional Periods of Maintenance Ser- vice, or IBM may change the Machine Group designation or the Optional Periods of Maintenance Service, at any time upon three months' prior written notice to the Customer. Upon 15 days' prior written notice to IBM, ttle Customer may discontinue any Op- tional Periods of Maintenance Service affected by such notice on the effective date of the increase or change. Otherwise, the new Rate, Percentages, Machine Group designation and Optional Periods of Maintenance Service will become effective as specified. The one-year Extension Period for each machine will com- mence automatically unless the Customer notifies IBM in writing on or before the Expiration Date of the Lease Contract Period or current one-year Extension that the Customer elects one of the following choices, as available: a) to extend for a period of less than one year at the end of which time the machine will be placed under a Rental Con- tract Period, if available, unless otherwise agreed; b) to commence a new Lease Contract Period; c) to place the machine under a Rental Contract Period; or d) to purchase the machine. In addition, the Customer may discontinue a machine or feature or request a mode! downgrade effective on the Expiration Date of a Lease Contract Period or Extension upon one month's prior written notice. MACHINE MODIFICATIONS Upon the Customer's written request, IBM will make field installable model conversions or feature changes to a machine installed under this Agreement. Model Upgrades and Feature Additions A model upgrade is defined as a model conversion which results in an increase in the Monthly Lease Charqp or Monthly Rental Charge. Each model upgrade or feature addition to a madline installed under a Lease Contract Period or Extension may bE~ placed eithp-r lmder that Lease Contract Period or Extpllsion or, If ;wadable, under a Rental Contract Period. a) If placed under that Lease Contract PerIOd or [xtension, ttle model upgrade or feature addition will be installed at 18M's applicable Monthly Lease Charge and Montllly Use Cllarge Rate(s), if any, then generally in effect for new orders for such model upgrade or feature having the same Base Term as the installed machine. When a model upgmde is installed under that Lease Contract Period or Extension. ~~uch Lease Contract Period or Extension will be lengthened to provide a common Expiration Date for the machine and the model up- grade. When a feature addition is installed under that Lease Contract Period or Extension, such Lease Contract Period or Extension will not be lengthened. The model upgrade or feature addition will assume the same Anniversary Date (but not Hw SRm€ Commencement Date) and Upper Limit Percent as the installed machine for purposes of determining future increases in the Monthly Lease Charge and any applicable Monthly Use Charge Rate(s). b) If placed under a Rf.mtal Contract F\!r!od. U1(:' model upgrnde or feature addition to a machine: wlllch IS under a Lease Contract Period or Extension will be installed at IBM's Monthly Rental Charge then generally in effect For a model upgrade or feature addition to a Plan A machine, an addi- tional charge, as specified by IBM, will apply in lieu of any Add.it.ional U~; .it. Fo~.. d ijiiJ(j~; igrade, addItIon to a Plan C machme, IBM S ci )ptiMbI( _ J'I Use Charge Rate(s) then generally in eff~1(l/j!Mpply. "le Expiration Date of the Lease Contract Pe,;oQ, Qr Extension will not be adjusted. Each model upgrade or feature addition to a machine installed under a Rental Contract Period may only be placed under a Rental Contract Period and will be installed at IBM's Monthly Rental Charge, and Additional Use Charge Rate or Monthly Use Charge Rate(s), as applicable, then generally in effect. A model upgrade or feature addition to a Plan 0 machine for which the Customer has elected Optional Periods of Maintenance Service will be installed at IBM's applicable Additional Monthly Maintenance Charges, as provided in this Agreement, based on the Additional Monthly Maintenance Charge Rate. if any, then generally in effect for new orders. The Commencement Date for a model upgrade or feature addi- tion will be the day (Monday through Friday) following the day that the model upgrade or feature addition is installed, as specified in the Section entitled "Installation," provided IBM has received the written order specifying lease or rental of the model upgrade or feature addition by such Date. Model Downgrades and Feature Discontinuances A model downgrade is defined as a model conversion which results in a decrease in the Monthly Lease Charge or Monthly Rental Charge. The downgrade of a model or discontinuance of a feature prior to the Expiration Date of its Lease Contract Period or Extension will be subject to the provisions of the Section entitled, "Termi- nation Charges." The downgrade of a model or discontinuance of a feature in- stalled under a Rental Contract Period will not result in a Termina- tion Charge. DISCONTINUANCE NOTICE Subject to the Sections entitled "Increases in Rental Contract Period Monthly Charges," "Lease Contract Period Extension," "Limitation of Remedies" and "Termination Charges," the Custo- mer may, at any time after installation, discontinue a processor complex unit upon three months' prior written notice, or discon- tinue any other machine or any fleld removable feature or request a field removable model downgrade upon one month's prior written notice. TERMINATION CHARGES The Customer will pay IBM as a Termination Charge, upon termination of a Lease Contract Period or one-year Extension, for a machine discontinuance or model downgrade prior to the Expiration Date of such Lease Contract Period or Extension, the lesser of: a) The Termination Charge Percent specified in the Supple- ment multiplied by the Remaining Contract Value; or b) the Termination Charge Months specified in the Supplement multiplied by the applicable Monthly Lease Charge Value as of the date of termination. The Remaining Contract Value of a machine or model down- grade is determined by multiplying its applicable Monthly Lease Charge Value as of the date of termination by the number of months remaining in its Lease Contract Period or Extension. The discontinuance of a feature will not result in a Termination CtlClfge. except that the Monthly Lease Charge of any feature which is on a machine at any time within three monttls prior to the date of termination of the Lease Contract Period or Extension for such machine will be included in the Monthly Lease Charge Value of such machine. For a machine not yet installed, if the Customer's written orrer for the machine has been received by 18M, IBM may not increc.se the Termination Charge Percent or the Termination Charge Months unless written notice shall have been given to the Customer at least three months before the date of shipment. For a machine which is installed, IBM may not increase such Percent or Months during a Lease Contract Period. Return of a machine to IBM upon the Customer's request during a Lease Contract Period or Extension for any reason. including machine replacement for model conversion or feature changes which are not field installable, or due to the Customer's failure to comply with any of the terms and conditions of this Agreement. shall be a termination for purposes of this Section. The purchase of a machine under the provisions of the Section entitled "Purchase Option" will not result in a Termination Charge PURCHASE OPTION ~ The Customer may elect to purchase a machine installed under' a Lease Contract Period or Extension by executing a Supplement to Agreement for Purchase of IBM Machines. Upon request from Page 14 of 17 the Customer, IBM will quote a net purcha_. Jptlon price for such machine, inciuding its model upgrades and features, as of a specific'month that is not more than three months from the date of the request. The net purchase option price, as calculated for each machine, will be the lower of 1) the Purchase Price stated in the Supple- ment for the machine, including its model upgrades and features. as modified in accordance with this Section, less any applicable purchase option credits not to exceed an amount determined by multiplying such modified Purchase Price by the Maximum Purchase Accrual Percent, or 2) rBM's purchase price then generally in effect for the machine, including its model upgrades and features, less any applicable purchase option credits not to exceed an amount determined by multiplying such purchase price by the Maximum Purchase Accrual Percent. The Maximum Purchase Accrual Percent will be specified in the Supplement. The purchase option credits are determined by multiplying: a) the applicable Monthly Lease Charges paid under this Agreement by the Purchase Option Percent specified in the applicable Supplement; and b) applicable charges, if any, paid under other IBM agree- ments by the purchase option percents applicable under those agreements. For purposes of this calculation, the period during which monthly charges are eligible for purchase option credits is the period during which the machine has been continuously installed. Eligible monthly charges will be applied in the order in which they are first incurred and do not include Additional Use Charges, Monthly Use Charges or Additional Monthly Maintenance Charges. When a machine ceases to be installed under this Agreement, all purchase option credits accrued hereunder with regard to that machine shall expire. Purchase option credits accrue individually for each machine, model upgrade and feature. Purchase option credits are not trans- ferable to other Customers or between machines, or among a machine, its models and features. For a machine not yet installed, if the Customer's written order for the machine has been received by IBM prior to the announce- ment of a Purchase Price increase or a decrease in Purchase Option Percent or Maximum Purchase Accrual Percent, IBM may not increase such Price nor decrease such Percents unless writ- ten notice shall have been given to the Customer at least three months before the date of shipment. For a machine which is installed, IBM may increase the Purchase Price stated in the Supplement immediately upon written notice, subject to Upper Limits determined in the same manner as for Monthly Lease Charges as described in the Sections entitled "Increase in Lease Contract Period Monthly Charges" and "Lease Contract Period Extension." The Purchase Option Percent and Maximum Pl!rchase Accrual Percent fqr a ma- chine will not be decreased dunng a Lease Contract Penod. The Customer may elect to purchase a machine installed under a Rental Contract Period by executing a Supplement to Agree- ment for Purchase of IBM Machines. Upon request from the Customer, IBM will quote the then applicable purchase price for such machine, including its model upgrades and features, as of a specifiC month that is not more than three months from the date of the request. <;HIPMENT IBM agrees to schedule each machine for shipment in accord- ance with IBM's applicable shipment sequence and will confirm in writing, and amend as necessary, the Customer's schedule. Prior to shipment, IBM will make reasonable accommodation to a delay requested by the Customer. PROGRAMMING The term "programming" as used in this Agreement shall mean SU( h programming as IBM may make generally available, from time to time, without separate cllarge, for machines of the types ordered by the Customer under this Agreement. IBM will furnish such programming as may be requested by the Customer. The term "programming services" shall mean such services as IBM may generally make available without separate charge in connection with programming. IBM Will determine the program- ming services available and their duration. The terms "programming" and "programming services" do not include IBM programs and services that are available for a separate charge or which are offered under separate written agreements. ALTERATIONS ,AND ATTACHMENTS An alteration 'is defined as any change to an which deviates from 18M's physical, mechanic' 2125-9021-01 I!J,M machine ~ electrical machine design whetlld or not additional devices or parts are required. An attachment is defined as the mechanical, electrical or electronic interconnection to an IBM machine of non-IBM equipment and devices not supplied by IBM. An alteration to a machine may be made upon prior written notice to IBM. An attachment to a machine may be made without notice to IBM. The Customer agrees to accept the responSibility for making any such alteration or attachment, its use and the results obtained therefrom, and to pay all charges related to the alteration or attachment as described in the Section entitled "Services for Additional Charge." The Customer further agrees to remove any alteration or attachment and to restore the machine to its normal, unaltered condition prior to its return to IBM, or upon notice from IBM that the alteration or attachment creates a safety hazard or renders maintenance of the machine impractical. MAINTENANCE SERVICE IBM will provide maintenance service to keep each machine in, or restore it to, good working order and will make all necessary adjustments, repairs and parts replacements. The Customer agrees to provide IBM full, free and safe access to the machines to provide maintenance service. The Customer is responsible to implement appropriate safeguards for Customer's data. The Customer is responSible for removing, controlling and replacing or reloading funds contained in the machines. IBM will service machines containing funds only when the cash container cannot be opened prior to repair by IBM, in which case the Customer will remove the funds as soon as the container has been opened. The Optional Periods of Maintenance Service for a Plan 0 machine on Monday through Friday must include the Base Period of Maintenance Service and must be the same consecutive hours each day, and the Optional Period on Saturday or Sunday must be the same consecutive hours on all Saturdays or Sundays. If the Customer request maintenance service for a Plan 0 machine to be performed at a time outside the Periods of Maintenance Service, the service, including travel and waiting time, will be furnished under this Agreement at IBM's then applicable hourly service rates and minimum charges, and travel expense; however, there will be no additional charge for main- tenance parts. TRAVEL EXPENSE Except as provided for Plan 0 machines in the Section entitled "Maintenance Service," there will be no charge for travel ex- pense associated with maintenance service or programming service under this Agreement except that actual travel expense will be charged when Hie site at which the machine is located 1) is within the contiguous States and is normally inaccessible by both private automobile and scheduled public transportation, or 2) is outside the contiguous States and is normally inaccessible by private automobile. SERVICES FOR ADDITIONAL CHARGE The Customer agrees to pay, at IBM's then applicable hourly service rates and minimum charges, parts and material prices and travel expense, all charges for services and to pay for loss of or damage to a machine, caused by 1) use of the machine for purposes other than for which designed, 2) alterations and attachments, or 3) vandalism or burglary of machines designed to contain funds. The Customer also agrees to pay, at IBM's then applicable hourly service rates and minimum charges, parts and material prices and travel expense, all charges for service for accessories, and for repair of damage, replacement of parts (due to other than normal wear) or repetitive service calls caused by the use of supplies. All services (including but not limited to services refating to pre-installation planning, inspections, relocation of machines, engineering changes and altered programming) which may be made available by IBM to the Customer, with or without separate charge, in connection with any machines or programming supplied under this Agreement shall be subject to the terms and conditions of this Agreement unless such services are provided under another written agreement signed by the Customer and IBM. ADDITIONAL PRODUCTS AND SERVICES In addition to the machines, programming and services provided under this Agreement, IBM offers other products and services at separate charges under applicable written IBM agreements. IBM and the Customer agree that such products and services cannot be the subject of an oral agreement. The Customer may contract with IBM for any such products or services as available, but only under the terms and conditions of a written agreement signed by the Customer and IBM. Page 15 of 17 RISK OF lOSS OR DAMAGE During the period a machine, model conve, .1 or feature is in transit or in the possession of the Customer, IBM and its insurers, if any, relieve the Customer of responsibility for all risks of loss of or damage to the macl"line, model conversion or feature except for loss or damage 1) caused by nuclear radIation or radioactive contamination for which the Customer is legally liable, and 2) as set forth in the Section entitled "Services for Additional Charge." IBM is relieved of responsibility for all loss of funds contained in, dispensed by or associated with any machine. INVOICING Monthly Lease Charges, Monthly Rental Charges and Additional Monthly Maintenance Charges will be invoiced in advance as of the first of each month or at greater intervals in accordance with 18M's then current billing practices. Additional Use Charges and Monthly Use Charges will be invoiced in the month following the month in which they are incurred or at greater intervals in accordance with 18M's then current billing practices. Charges for maintenance service and other services furnished at 18M's hourly service rates will be invoiced when or after the service is performed. When a machine, model conver- sion or feature is installed, or an Optional Period of Maintenance Service is in effect, for a part of a calendar month, the Monthly Lease Charge, Monthly Rental Charge or any applicable Addi- tional Monthly Maintenance Charge will be prorated on the basis of a 30-day month. Additional Use Charges will be prorated in accordance with 18M's established practices. Payment will be made within 30 days after the date of invoice. All other charges due hereunder are payable as specified in the invoice, WARRANTIES IBM warrants that each machine, model upgrade or feature addition will be in good working order on the day that it is installed and that it will conform to IBM's official published specifications. Thereafter, IBM will make all adjustments, repairs and parts replacements necessary to maintain the machine, subject to the provisions stated in the Sections entitled "Maintenance Service," "Services for Additional Charge" and "Risk of Loss or Damage." IBM further warrants that programming designated by IBM for use with a machine and for which programming services are available will conform to IBM's official published specifications when shipped to the Customer if properly used on such machine. Thereafter, IBM will provide programming service, subject to the provisions stated in the Section entitled "Programming." IBM does not warrant that the functions contained in the programming will operate in the combinations which may be selected for use by the Customer, or will meet the Customer's requirements. ALL PROGRAMMING FOR WHICH NO PROGRAMMING SERVtCES ARE AVAilABLE IS DISTRIBUTED ON AN "AS IS" BASIS WITHOUT WARRANTY. IBM does not warrant that the operation of the machine or programming will be uninterrupted or error free, or that all programming errors will be corrected. THE FOREGOING WARRANTIES ARE IN liEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. PATENT AND COPYRIGHT INDEMNITY IBM will defend the Customer against a claim that machines or programming supplied hereunder infringes a U.S. patent or copyright, or that the machine's operation pursuant to a current release and modification level of any programming supplied by IBM infringes a U.S. patent. IBM will pay resulting costs, damages and attorney's fees finally awarded provided that: a) the Customer promptly notifies IBM in writing of the claim: and b) IBM has sole control of the defense and all related settle- ment negotiations. If such claim has occurred, or in IBM's opinion is likely to occur, the Customer agrees to permit IBM, at its option and expense, either to procure for the Customer the right to continue using the machines or programming or to replace or modify the same so that they become non-infringing. If neither of the foregoing alternatives is reasonably available, the Customer agrees to return the machines or programming on written request by IBM. No Termination Charges will be payable on such returned machines, and the Customer will pay only those charges which were payable prior to the date of such return. IBM has no liability for any claim based upon the combination, operation or use of any machines or programming supplied hereunder with cquiprlH' ,l not supplied by IF any program other ti: '0 addition to programmi: . .,d by IBM if such cL"!I, would have been avoided by llse of another program whethu or not capable of achieving the same results, or based upon alteration of the machines or modification of any programming supplied hereunder. The foregoing states the entire obligation of IBM with respect to infringement of patents and copyrights. LIMITATIONS OF REMEDIES IBMs entire liability and the Customer's exclusive remedy shall be as follows: In all situations involving performance or non-performance of machines, model upgrades. features or programming furnished under this Agreement, the Customer's remedy is 1) the adjustment or repair of the machine, model upgrade or feature, or replacement of its parts by IBM, or, at IBM's option, replacement of the machine, model upgrade or feature, or correction of programming errors, or 2) if, after repeated efforts, IBM is unable to install the machine, model upgrade or feature or a replacement machine, model upgrade or feature in good working order, or to restore it to good working order, or to make programming operate, all as warranted, the Customer shall be entitled to recover actual damages to the limits set forth in this Section. For any other claim concerning performance or non- performance by IBM pursuant to, or in any way related to the subject matter of, this Agreement and any Supplement or other order under this Agreement, the Customer shall be entitled to recover actual damages to the limits set forth in this Section. IBM's liability for damages to the Customer for any cause whatsoever, and regardless of the form of action, whether in contract or in tort including negligence, shall be limited to the greater of $100,000 or twelve Monthly Lease Charges or Monthly Rental Charges for the specific machines that caused the damages or that are the subject matter of or are directly related to the cause of action. Such Charges shall be those in effect for the specific machines when the cause of action arose. The foregoing limitation of liability will not apply to the payment of cost and damage awards referred to in the Section entitled "Patent and Copyright Indemnity:' or to claims for personal injury or damage to real property or tangible personal property caused by IBM's negligence. In no event will IBM be liable for any damages caused by the Customer's failure to perform the Customer's responsibilities, or for any lost profits, lost savings or other consequential damages, even if IBM has been advised of the possibility of such damages, or for any claim against the Customer by any other party, except as provided in the Section entitled "Patent and Copyright Indemnity." The Customer may discontinue a machine forthwith without Termination Charges for failure of IBM to comply with any of the terms and conditions of this Agreement applicable to such machine. GENERAL This Agreement is not assignable; none of the machines may be sublet, assigned or transferred by the Customer without the prior written consent of IBM. Any attempt to sublet, assign or transfer any of the rights, duties or obligations of this Agreement without such consent is void. Machines under this Agreement are to be located only in the United States and Puerto Rico. The Customer agrees to keep IBM informed of the location of each machine. Each machine remains IBMs property and may l'e removed by IBM at any time after discontinuance of the machine. IBM shall have full, free and safe access to each machine for this purpose. IBM may, upon three months' prior written notice tt> the Customer, discontinue a machine or feature or downgrade a model under a Rental Contract Period at any time or under a Lease Contract Period or Extension on its Expiration Date. IBM may discontinue a machine forthwith for failure of the Customer to comply with any of the terms and conditions of this Agreement applicable to such machine. The Agreement may be terminated by either party, upon one month's prior written notice, following the discontinuance of all machines and fulfillment of all obligations hereunder. Subject to the terms of the following paragraph. IBM may, upon twelve months' prior written notice, modify the terms and conditions of this Agreement. except that IBM may, upon three months' prior written notice, modify the terms and conditions of the Sections entitled "Contract Period," "Charges," "Termination Charges," "Purchase Option," "Lease Contract Period Extension" and "Machine Modifications." .... Any such modification will apply on the effective date specified' in the notice to all Rental Contract Periods and to new Lease Page 16 0'. 17 "' Contract Periods or Extensions which r a Commencement Date on or after the date of the notice. SUCI ,dification will apply to current Lease Contract Periods or Extensions upon their Expiration Dates, provided such occur on or after the effective date. For a lease machine which was on order prior to the date of the notice and is shipped within three months following the date of the notice, and for an Extension which will commence within three months following the date of the notice, the effective date of such modification will be the Expiration Date of the initial Lease Contract Period or the ensuing Extension, respectively. Other- wise, the Agreement or any Supplements can only be modified by a written agreement duly signed by persons authorized to sign agreements on behalf of the Customer and 18M, and variance from the terms and conditions of this Agreement and any Supple- ments in any Customer order or other written notification will be of no effect. IBM is not responsible for failure to fulfill its obligations under this Agreement due to causes beyond its control. No action, regard Ie' form, arising out of this Agreement mny be brought by 81" ., party more than two years after the cause of action has arisen, or, in the case of an action for nonpay- ment, more than two years from the date the last payment was due This Agreement will be governed by the laws of the State of New York. THE CUSTOMER ACKNOWLEDGES THAT THE CUSTOMER HAS READ THIS AGREEMENT, UNDERSTANDS IT AND AGREES TO BE BOUND BY ITS TERMS AND CONDITIONS. FURTHER. THE CUSTOMER AGREES THAT THIS AGREE- MENT AND ITS APPLICABLE SUPPLEMENTS AND EXHIBITS ARE THE COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN THE PARTIES, SUPERSEDING ALL PROPOSALS OR PRIOR AGREEMENTS, ORAL OR WRITTEN, AND ALL OTHER COMMUNICATIONS BETWEEN THE PARTIES RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT. Agreement for Hourly IBM Machine Service (Z120-2826-00) International Business Machines Corporation (IBM) by its acceptance of this Agreement agrees to furnish and the Customer agrees to accept on the following terms and conditions Hourly IBM Machine Service at an IBM Facility for program testing and other activities, including conversion, directly related to program testing. Hourly IBM Machine Service IS compnsed of the availability and use of machines and programs (applicable System Control Programming and certain Licensed Program Products) as mutually agreed upon by the Customer and IBM at the IBM Facilily. TERM This Agreement is effective from the date it is accepted by IBM and shall remain in force until terminated by the Customer upon one month's prior written notice, or by IBM upon three months' prior written notice. The availability of machines and programs may be modified or terminated by IBM upon one month's notice. USE The service furnished under this Agreement shall be used exclusively by the Customer for program testing and other activities, Including conversion, directly related to program testing. This includes testing activities associated with either IBM furnished or Customer furnished programs. The Customer represents to IBM that he is currently or prospectively () user of IBM products, and will not use the service being furnished under this Agreement except in conjunction with the Customer's use or prospective use of such IBM products. CHARGES The Customer agrees to pay charges for Hourly IBM Machine Service in accordance with 18M's established rates in effect when the service is rendered, All charges are subject to change upon three months' notice. Charges accrue when the service is available for the Customer's use, as agreed upon by the Customer and IBM at the IBM Facility. Charges will be invoiced monthly for services rendered and are payable on receipt of invoice. There shall be added to any charges under this Agreement amounts equal to any applicable taxes however designated, levied or based on such charges or on this Agreement or the services rendered hereunder, or on the machines and progrilms or their use, including state and tocal privilege or excise l.::Ixes based on gross revenue, and any taxes or amounts in lieu thereof paid or payable by IBM in respect of the foregoing, exclusive of personal property taxes assessed on the machines or programs and taxes based on net income. STORAGE MEDIA AND SUPPLIES Except for storage media necessary for the availability and use of IBM furnished programs and incidental consumption of paper forms and cards utilized, all supplies, materials and other storage media required by the Customer to use the machines must be furnished by the Customer and must meet IBM specifications, MAINTENANCE IBM shall have full and free access to the machines and programs for maintenance purposes. Charges for any Z125.9029-oi adjustments, component replacements or repairs due to the negligence of the Customer will be borne by the Customer. When machines or programs are unavailable during the Customer's scheduled hours due to required maintenance, such time will be rescheduled as mutually agreed upon by the Customer and IBM. GENERAL The Customer is solely responsible for the accuracy and adequacy of all programming used in connection with the machines, the operation of the machines when the machines are scheduled for the Customer's exclusive use, and the resultant out- put thereof. IBM assumes no responsibility for loss or security of Customer data or records. Programs furnished by IBM are provided for the Customer's use at the IBM Facility. The Customer agrees not to copy any such programs for use outside of the IBM Facility or remove any such programs from IBM's premises. IBM MAKES NO WARRANTIES EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO, THE IMPLIED WAR- RANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. IBM will not be liable for lost profits, for any claim against the Customer by any other party, or for consequential damages even if IBM has been advised of the possibility of such damages. IBM shall not be liable for failure to make Hourly IBM Machine Service available due to causes beyond IBM's control. No action, regardless of form, arising out of the transactions under this Agreement, may be brought by either party more than one year after the cause of action has ;lccru(;d, except th<1t .::In <1ctlon for nonp<1ymen! may be brought Within one year after H1C date of last payment. The terms of this Agreement may be modified by IBM upon three months' written notice to the Customer, The Customer may exercise the Customer's right to terminate; otherwise, such modification shall become effective. This Agreement shall be governed by the laws of the State of New York and constitutes the entire agreement between the Customer and IBM with respect to Hourly IBM Machine Service. The foregoing terms and conditions shall prevail notwithstanding the terms of any order submitted by the Customer with respect to Hourly IBM Machine Service. THE CUSTOMER ACKNOWLEDGES THAT HE HAS READ THIS AGREEMENT. UNDERSTANDS IT AND AGREES TO ALL TERMS AND CONDITIONS STATED HEREIN. Paq(; 1/ of 17 . ~ International Business Machines "",rporation Composite Signature Agreement Armonk. New York 10504 Name and Address of Customer: Agreement No.: G6D0891 City of Paris Paris Police Department 811 Bonham Paris, TX 75460 IBM Branch Office Address: IBM Branch Office No.: G6D Customer No.: 1788414 101~ ESE Loop 323 Tyler, TX 75701 International Business Machines Corporation (IBM) and the Customer agree that IBM will provide and the Customer will accept the products and services ordered by the Customer in accordance with the terms and conditions stated in the ap- plicable Agreements, designated below by the Customer's initials, which the Customer agrees to include herein. The included Agreements are attached hereto and are incorporated in this Agreement. This Composite Signature Agreement, when signed by IBM and the Customer, has the same effect as signing each of the Agreements designated by the Customer's initials, and is effective upon acceptance by IBM. Initials D D D D D D Title of Agreement or Amendment All of the fallowing, unless selectively designated by initialing below for Individual documents Agreement for Purchase of IBM Machines IBM Maintenance Agreement Agreement for IBM Licensed Programs Agreement for Lease or Rental of IBM Machines Agreement for IBM Hourly Machine Service IBM Form Number Z120-2892-01 Z125-3275-00 Z125-3358-00 Z125-3320-00 Z120-2826-00 THE CUSTOMER ACKNOWLEDGES THAT THE CUSTOMER HAS READ EACH OF THE AGREEMENTS DESIG- NATED BY THE CUSTOMER'S INITIALS, UNDERSTANDS THEM. AND AGREES TO BE BOUND BY THEIR TERMS AND CONDITIONS. Accepted by: International Business Machines Corporation By Name (Type or Print) "25.9029:0', (07/84) U, M 025 CITY OF PARIS Customer By Authorized Signature Authorized Signature Dale Date Name (Type or Print) PRESS FIRMLY WITH BALL POINT PEN ON A HARO SURFACE FOR MAXIMUM LEGIBILITY. Page 1 of 17 ~ Agreement for Purchase of IBM Machine. (Z120-2892-01) International Business Machines Corporation (18M) and the Customer agree that the tollowlng terms and conditions will apply to any Cus- tomer order accepted by IBM for the purchase under this Agreement of IBM machines. features, model conversions, machine elements or accessories or of non-IBM equipment. IBM will 1 ) sell machines to the Customer, 2) furnish, as available, programming and programming service, 3) sell features and model conversions to the Customer for installation or reinstallation on an IBM machine designated by type and serial number, 4) sell machine elements, accessories and non. IBM equipment to the Customer, and 5) provide warranty service, as applicable. The term "Machines" refers to IBM machines and/or their features, model conversions, machine elements and accessories unless the context requires individual reference. The term "Machines" also applies to non-IBM equipment except as otherwise provided in the Section entitled "Purchase of Non-IBM Equipment." Machines are those on-order to be installed, or which are installed under an IBM lease or rental agreement with the Customer. Features include additions and removals. Model conversions include upgrades and downgrades between models and between machine types. The term --programming-- shall mean such programming as IBM may make generally available, without separate charge, for machines of the types ordered by the Customer under this Agreement. The term "programming service" shall mean such service as IBM may make generally available, without separate charge, in connection with programming. IBM will furnish such program- ming, as requested by the Customer, and will determine the programming services available and their duration. The Customer agrees to accept Machines, programming, programming service and warranty service under the terms and conditions of this Agreement. The Customer further agrees, with respect to Machines and programming, to accept responsibility for 1) their selection to achieve the Customer's intended results, 2) their use, and 3) the results obtained therefrom. The Customer also has the responsibility for the selection and use of, and results obtained from, any other equipment, programs or services, acquired outside this Agreement, used with the Machines and programming. Individual Machines become subject to this Agreement when either the Customer's written order for their purchase, or the Customer's order for their purchase under another ordering procedure designated by IBM, is accepted by IBM. Such order to purchase an on-order Machine must be received by IBM on or before its Date of Installation. iBM witt accept an order by providing to the Customer a Supplement to this Agreement (Supplement). or other documentation designated by IBM, confirming the terms applicable to the Machine. Installation of an on-order Machine, as defined in the Section entitled "Installation," or payment of the Purchase Price of an on-order or installed Machine (or payment of the down payment or the first installment if subject to an IBM installment agreement), whichever first occurs follow- ing the Customer's receipt of the Supplement, will constitute the Customer's acceptance of such terms. PRICES AND PAYMENT IBM and its insurers, if any, relieve the Customer of responsibility for all risk of loss of or damage to the Machines except for loss or The Purchase Price for each Machine will be stated in the Sup- damage caused by nuclear reaction, nuclear radiation or radioac- plement and does not include any applicable taxes or destination tive contamination for which the Customer is legally liable. There- charges. Payment in full for each on.order Machine will be due on after, all risk of loss of or damage to such Machines shall be on its Date of Installation and, for each installed Machine, on its Effec- the Customer. tive Date of Purchase, unless otherwise provided in an IBM install- All risk of loss of or damage to installed Machines shall be on ment agreement. the Customer after the Effective Date of Purchase. TAXES In addition to the prices stated in the Supplement, the Customer agrees to pay amounts equal to any taxes resulting from this Agreement, or any activities hereunder, exclusive of taxes based on IBM'S net income. The Customer shall bear any personal prop- erty taxes assessable on on-order Machines on and after delivery to the carrier or, for installed Machines, on and after the Effective Date of Purchase. DESTINATION CHARGES Destination charges for each on-order Machine from a desig- nated IBM iocation, and any rigging charges, will be paid by the Cus- tomer in accordance with IBM'S then current shipping and billing practices. TITLE Title passes to the Customer for each on-order Machine on its date of shipment from IBM or on the date IBM receives the Custom- er's order for its purchase, whichever is later, and, for each instal- led Machine, on its Effective Date of Purchase. SECURITY INTEREST IBM reserves a purchase money security interest in each Machine. This interest will be satisfied by payment in full hereunder or under an IBM installment agreement and, in addition, when appli- cable, by the return to IBM by the Customer of parts in respect to feature additions or model conversions that involve the removal of parts which become the property of 19M. The Customer agrees to sign appropriate documents to permit IBM to perfect IBM'S security interest. SHIPMENT IBM will confirm, and amend as necessary, the Estimated Ship- ment Date of each on-order Machine. Prior to shipment, IBM will make reasonable accommodation to a Customer requested delay, and, if agreed to by IBM and the Customer, changes may be made in the configuration of Machines. RISK OF l0$'$OR DAMAGE During ttWr~;od on-order Machines are in transit or in posses- sion of the'eiillWtner, up to and including the j>!1te of Installation, r ...... -...m _.,- ~-,..,...... PRICE PROTECTION PERIOD The Purchase Price for each on-order Machine shall be 18M'S generally available single unit price and shall be subject to all price increases, except that increases effective during the three-month period immediately prior to the date of Machine shipment shall not apply it the Customer's order was received by IBM prior to the date of announcement of the price increase. If a price increase applies to any such Machine, the Customer may cancel the order upon written notice to IBM within one month of notification of the price in- crease; otherwise, the higher price shall be effective. If IBM'S generally available single unit price for anyon-order Machine upon its Date of Installation shall be lower than the Pur- chase Price for such Machine stated in the Supplement, the Cus- tomer shall have the benefit of such lower price. The term "IBM'S generally available single unit price" does not in- clude prices for sales of Machines under terms and conditions other than those in this Agreement. The Purchase Price for each installed Machine stated in the Supplement is subject to change up to and including its Effective Date of Purchase, subject to any limitations described in any other applicable IBM lease or rental agreement. INSTAllATION Each Machine will be installed as specified by IBM. The Customer agrees to provide a suitable environment for the Machines as specified by IBM, and, except as otherwise specified by IBM, to fur- nish all labor required for unpacking and placing each on-order Machine in the desired location. Packaging materials, if any, shall become the property of the Customer. Features and model conversions will be installed on the serial- numbered machine designated in the Supplement. The Customer represents that the Customer is the owner of the machine on which any feature or model conversion will be installed or, if not the owner, has the authority from the owner to order the feature or model conversion and to have it installed on the owner's machine. Installation by IBM IBM will instali machines, features and model conversions which are not identified as Customer Set-Up. The Date ot Installation for a machine will be the day (Monday through Friday) following the day that 1) the machine is installed under this Agreement or under the applicable IBM lease or rental Page 2 of 17 ~ agreement, or 2) an on-order machine is available for delivery or delivered to the Customer and the Cust - fa.ls to provide a SUit- able installation environment or delays il ..ration. The Date of Installation for a feature or model conversion will be the da'9 (Monday through Friday) following the day that the feature or model conversion is installed under this Agreement or under the applicable IBM lease or rental agreement. The installation of some teatures and model conversions invol- ves the removal at parts which become the property of IBM. IBM will specify in the Supplement if removed parts become the property of IBM. The Customer will provide IBM access to the machine to com- mence installing each such feature or model conversion as soon as possible after its shipment from IBM but in no event more than one month following the later of its Estimated Shipment Date or ac- tual date of shipment, unless a shorter period is specified in the Supplement. In the event of failure by the Customer to provide IBM access to the machine within the specified period, the Customer shall return the feature or model conversion to IBM with shipping charges prepaid, unless otherwise agreed to by IBM. If the Customer delays Installation of a feature or model CDnver- sioIT'(other than one which involves the removal of parts which be- CDme the property of IBM) more than one month from the later .of i's Estimated Shipment Date or actual date of shipment from IBM, Its Date of Installation will be considered to be the day (Monday through Friday) one month following such date of shipment. IBM will notify the Customer of the Date.of Installation of each on-order machine, feature or model converSion. Customer Set-Up Each machine, feature or modei conversion identified by IBM as Customer Set-Up (CSU), and all machine elements and acces- sories. will be set up by the Customer in accordance with the in- structions furnished by IBM. . The Date of Installation will be the day (Monday through Friday) following the day the machine, feature, model conversion, machine element or accessory is considered to be installed under this Agreement or under the applicable IBM lease or rental agree- ment. An on-order CSU machine will be considered to be installed on the last day of the CSU allowance period specified by IBM for such machine. The CSU allowance period, which does not include Saturdays or Sundays, commences on the day (Monday through Friday) following the date of receipt of the machine at the Custom- er's premises. However, when a CSU machine IS dell~ered Ir' con- junction with, and for attachment to, a non-CSU machine delivered from IBM. such CSU machine will be considered to be installed as determined in this paragraph or on the date such non-CSU machine is installed, whichever is later. An on-order CSU feature or model conversion, machine ele- ment or accessory will be considered to be installed one month fol- lowing the later of its Estimated Shipment Date or its actual date of shipment from IBM. PURCHASE OF INSTALLED MACHINES The Purchase Price stated in the Supplement is exclusive of any charges which are due or may become due under the applicable IBM lease or rental agreement. The Effective Date of Purchase for installed Machines shall be the later of the first day of the Quotation Month or the day on which the payment required under the Section entitled "Prices and Payment" is received by IBM at its IBM Branch Office or Remit to Address shown In the Supplement, proVided such receipt is not later than the last day of the Quotation Month. The Machines will be terminated under the applicable IBM lease or rental agreement as of the day immediately preceding the Effec- tive Date of Purchase. WARRANTIES Machines purchased under this Agreement will be 1) newly manufactured by or for IBM from new and serviceable used parts which are equivalent to new in performance in these Machines, 2) assembled by or for IBM from serviceable used parts, 3) Machines which have been previously installed, or 4) Machines which are presently installed with the Customer. IBM warrants that on the Date of Installation each on-order Machine will be in good working order and will conform to IBM'S offi- cial published specifications which are available upon request. The Warranty Period for each Machine, specified in the Supple- ment commences on its Date of Installation as defined in the Sec. tion e'ntitled "Installation." Z125-9029-01 INSTALLED M"'-:HINES PURCHASED AFTER THEIR WARRANTY PEF HAS EXPIRED ARE SOLD ON AN "AS IS" BASIS. Service and Parts Warranty Commencing on the Date of Installation of each on-order machine, modei upgrade and feature addition. or on the Effective Date of Purchase of each installed machine, model upgrade and feature addition, and continuing for the duration or remainder, if any, of the Warranty Period, IBM agrees to provide the availabHity of warranty service, at no additional charge except as set forth In thiS Section or in the Section entitled "Travel Expense," to keep the machines, model upgrades and feature additions in, or restore them to, good working order. This warran~ ,service incl~d~s. pre- ventive maintenance based upon the speCifiC needs of indiVidual machines, model upgrades and feature additions as determined by IBM and on-call remedial maintenance. Such warranty service will include lubrication, adjustments and replacement of ~arts deemed necessary by IBM. Parts, which may be used parts, Will be furnished on an exchange basis, and the replaced parts become the property at IBM. . Warranty service will be available at no additional charge dunng the hours specified in the Supplement. Outside such hours, war- ranty service, if requested by the Customer and provided. by IBM, will be subject to charge for travel expense plus .travel, wattlng ~n~ service time at IBM'S then applicable hourly service rates and mini- mum charges; however. there will be no additional charge for ~- . Warranty service under this Agreement does not assure uninter- rupted operation of the Machines. IBM may, at its option, store on the Customer's premises maintenance equipment and/or parts that IBM deems necessary to tulfill this warranty. . During the Warranty Period, engineering changes determined applicable by IBM will be controlled and installed by IBM on the Machines. The Customer may, by providing notice subject to writ- ten confirmation by IBM, elect to have only mandatory changes, as determined by IBM, installed on the Machines. IBM shall have full, free and safe access to the Machines to pro- vide service thereon. The Customer shall promptly inform IBM of any change in the Machines' location during the Warranty Period. If the Warranty Period expires on a Friday or Saturday, It Will be extended so that the last day of such Warranty Period will be on the following Sunday. Programming IBM warrants that, when shipped to the Customer, programming designated by IBM for use with a Machine and for which program- ming services are available will conform to IBM'S official published specifications which are available upon request. IBM does not warrant that functions contained in programming will operate in the combinations which may be selected for use by the Customer or will meet the Customer's requirements. ALL OTHER PROGRAMMING IS DISTRIBUTED ON AN "AS IS" BASIS. Additional Provisions for Features and Model Conversions IBM's warranty for each feature addition or model upgrade re- quires that the machine on which it is installed is at the then cur- rent engineering-change level, is the specific serial-numbered machine for which it was ordered and has been modified only with changes obtained from IBM specifically for that serial.num- bered machine. If these conditions are not met, IBM will attempt to install non-CSU feature additions and model upgrades on the machine, and, if such attempt results in an incorrectly funct!oning machine, upon Customer request and at IBM'S then applicable hourly service rates and minimum charges, parts and matenal prices and travel expense, IBM will remove the features and/or model upgrades and restore the machine to its prior condition. If such features and model upgrades did not involve the removal of parts which became the property of IBM, such features and model upgrades remain the property of the Customer. If such features and model upgrades involved the removal of parts which be- came the property of IBM, such features and model upgrades be- come the property of IBM and the restored parts become the property of the Customer. For a feature removal, model downgrade or reinstallation of a previously purchased feature or model conversion, a three- month parts warranty will apply to additional parts, if any, sup- plied by IBM. Page 3 of 17 Additional Provisions for Machine Elements and Accessories Machine elements and accessories h 3 three-month War- ranty Period unless otherwise specified v, IBM. During the War- ranty Aeriod, the Customer will remove any defective or failing machine element or accessory and ship it prepaid to the desig- nated IBM location. IBM, at its option, will repair or repiace such machine element or accessory and ship it to the Customer with- out charge. Additional Provisions for Machines Containing Funds The Customer is responsible for removing, controlling and re- placing or reloading funds contained in the Machines. IBM will service Machines containing funds only when the cash container cannot be opened prior to repair by IBM, in which case the Cus- tomer will remove the funds as soon as the container has been opened. Services for Additional Charge During the Warranty Period The services described in this Section are not warranty ser- vices~ However, unless such services are provided under another written agreement between the Customer and IBM, dur- ing the Warranty Period the following services, if available, will be provided by IBM under this Agreement at IBM'S then applicable hourly service rates and minimum charges, including travel and waiting time, parts and material prices and travel expense: 1) Repair of Machine damage, repiacement of maintenance parts or increase in service time caused by - a) failure to continually provide a suitable environment pre- scribed by IBM including adequate space, electrical power, air conditioning and humidity control; b) neglect; misuse, including use of the Machines for pur- poses other than for which designed; c) accident; disaster, including water, wind and lightning; transportation; vandalism or burglary; d) alterations, including any deviation from IBM'S Machine de- sign; e) attachments, including any interconnection to the Machine of non-IBM equipment and devices not under an IBM mainte- nance agreement; f) Machines, except those owned by IBM, under warranty from IBM, or under an IBM maintenance agreement; and g) model conversions or installation or removal of IBM features pertormed by other than IBM except that this subsection (g) will apply only during the three months subsequent to such Machine modification; 2) Repair of Machine damage, replacement of maintenance parts (due to other than normal wear) or repetitive service calls caused by the use of supplies; 3) Inspection of altered Machines and inspection of machines converted from one IBM model or machine type to another or on which an IBM feature is installed or removed when such ac- tivity was pertormed by other than IBM; 4) Replacement or addition of parts and increase in service time, associated with the installation by IBM of an engineering change, required due to model conversions or installation or removal of IBM features pertormed by other than IBM; 5) Rearrangement or relocation of Machines and provision of necessary materials; 6) Replacement of a part not furnished for the Machine by IBM with a directly interchangeable IBM maintenance part, and any increase in service time associated with such activity, except that IBM will not replace any part which is included in an altera- tion; and 7) Repair of a Machine caused by non~IBM representatives per- forming maintenance or repair 01 such Machine. Exclusions The warranties under this Agreement are in lieu of any conflict- ing statement of warranty contained in a Machine shipment. The warranties under this Agreement do not include 1) furnishing supplies, painting or refinishing the Machines or furnishing mate- rial therefor, 2) electrical work external to the Machines, 3) instal- lation, maintenance or removal 01 aiterations or attachments to the Machines, and 4) any service which is impractical for IBM to render because of alterations in, or attachments to the Machines. ' IBM does not warrant that the operation of Machines or prog- ramming will be uninterrupted or error free or that a[1 program. ming errors will be corrected. THE FOREGOING WARRANTIES ARE IN LIEU OF ALL OTHER WARRANTIES EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. OTHER PRODU ; AND SERVICES Following the Warranty Period, IBM will provide, upon request and at IBM'S charges and terms then generally in effect, mainte- nance service and maintenance parts for the Machines and programming services for programming as long as such services and parts are generally available, Unless such activities are pro- vided under another written agreement between the Customer and IBM, they shall be subject to the applicable terms and condi- tions of this Agreement. In addition, IBM offers other products and services at separate charges under applicable written agreements. The Customer may contract with IBM for such other products and services, as available, but only under a written agreement between the par- ties. TRAVEL EXPENSE Except as provided in the Section entitled "Warranties," there will be no charge for travel expense associated with warranty service or programming service except that actual travel ex~ pense will be charged when the site at which the Machine is located is normally inaccessible by both private automobile and scheduled public transportation. ENGINEERING CHANGES IBM wiii furnish, upon request, and at IBM'S prices then gener- ally in effect, such engineering changes as IBM shall have avail. able for sale and which may be suitable for use on or with the Machines. Any replaced parts become the property of IBM. IBM makes no representation that engineering changes announced in the future will be suitable for use on or with the Machines, PATENTS AND COPYRIGHTS IBM wiil, at its expense, defend the Customer against any claim that any Machines or programming supplied hereunder in- fringe a patent or copyright in the United States or Puerto Rico, and will pay all costs, damages and attorney's fees that a court finally awards as a result 01 such claim. To qualify for such de- fense and payment, the Customer must: 1) give IBM prompt written notice of any such claim; and 2) allow IBM to control, and fully cooperate with IBM in, the de.. tense and all related settlement negotiations. IBM's obligation under this Section is conditioned on trw Cus- tomer's agreement that if the operatJon of the Machines or prog- ramming become, or in IBM'S opInion are likoly to become, trle subject of such a claim, the Customer will permit IBM, at its option and expense, either to procure the right for the Customer to con- tinue using the Machines or programming or to replace or modIfy them so that they become noninfringing; and, if neither of the foregoing alternatives is available on terms which are reasonable in IBM'S judgment, the Customer will return the Machines or prog- ramming on written request by IBM. IBM agrees to grant the Cus- tomer a credit for returned Machines as depreciated. The depre- ciation shall be an equal amount per year over the Iifa of the Machines as established by IBM. IBM shall have no obligation with respect to any such claim based upon the Customer's modification of the Machines or programming or their combination, operation or use with ap- paratus, data or programs not furnished by IBM, This Section states IBM'S entire oblIgation to the Customer rev garding infringement or the like. LIMITATION OF REMEDIES IBM's entire liability and the Customer's exclusive remedy shall be as follows: In all situations involving pertormance or nonpertormance of Machines or programming furnished under Ihis Agreement, the Customer's remedy is 1) the adjustment or repair of the Machine or replacement of its parts by IBM, or, at 18M'S option, replacement of the Machine, or correction of programming errors, or 2) if, after repeated efforts, IBM is unable to install the Machine or a replace- ment MaChine in good working order.. or to restore it to good working order or to make programming operate, all as war- ranted the Cu~tomer shall be entitled to recover actu~.1 damages to the iimits set forth in this Section. For any other claim co~cern- jng performance or nonperformance by IBM pursuant to, or In any other way related to the subject matter of, this Agreement or any order under this Agreement, the Customer shall be entitled to re- cover actual damages to the limits set forth in this Section. IBM's liability for damages to the Customer for any cause whatsoever, except as otherwise stated in this Section, and re~ gardless of the form of action, whether in contract or in tort in- Page40f 17 eluding negligence, shall be limited to thf' ~~ater of $100,000 or te a Purchase Price stated in the applic. Supplement for the s~ecific Machines that caused the dama9~" or that are the sub- ject malter of. or are directly related to. the cause of action. The foregoing limitation of liability will not apply to the payment of costs, damages and attorney s fees referred to in the Section en- titled "Patents and Copyrights:' or to claims for personal injury or damage to real property or tangible personal property caused by IBM'S negligence. In no event will IBM be liable for any damages caused by the Customer's failure to periorm the Customer's responsibilities, or for any lost profits, lost savings or other consequential damages, even if IBM has been advised of the possibility of such damages, or for any claim by the Customer based on any third party claim except as provided In the Section entitled "Patents and Copyrights," or for any damages caused by periormance or non- periormance of Machines or programming located outside the United States or Puerto Rico, nor will IBM be liable for loss of funds contained in, dispensed by, or associated with any Mact:)ine under this Agreement. PURCHASE OF NON-IBM EQUIPMENT As previously stated, the term "Machines" in this Agreement also applies to non-IBM equipment. However, the Sections of this Agreement entitled "Installation," ''Warranties,'' "Other Products and Services" and "Patents and Copyrights" are replaced in their entirety by the following in respect to non-IBM equipment. Installation The Customer shall provide a suitable installation environment with facilities as prescribed by the manufacturer. Arrangements for installation will be the responsibility of the Customer. IBM has no responsibility for installation under this Agreement nor for any installation periormed by the manufacturer. Warranties NON-IBM EQUIPMENT IS NOT WARRANTED BY IBM AND IS SOLD BY IBM TO THE CUSTOMER DN AN "AS IS" BASIS. THERE ARE NO IBM WARRANTIES EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. HOWEVER, THE MANUFAC- TURER'S WARRANTY, IF ANY, APPLIES, AND THE CUS- TOMER MUST DEAL WITH THE MANUFACTURER ON SUCH MATTERS. Other Products and Services The Customer is responsible for arranging for maintenance service for non-IBM equipment. Patents and Copyrights IBM shall have no liability to the Customer regarding patent or copyright infringement for non-IBM equipment. GENERAL This Agreement ana anyon-order Machines are not assigna- ble to other than an IBM affiliate without the prior written consent of IBM. Any attempt to assign any of the rights. duties or obliga- tions of this Agreement without such consent is void. The Customer agrees to comply with the provisions of any End User Certification contained in any Supplement to this Agree- ment, or in any volume procurement or single shipment quantity discount amendment to this Agreement. iBM may, upon written notice, modify the terms and conditions of this Agreement. Any such modification will appiy on the effec- tive date specified in the notice to all orders for purchase which are accepted by IBM on or after the date of notice. In addition, IBM may modify this Agreement by setting forth such modification in a Supplement which is subsequently accepted by the Customer as provided herein. Otherwise, this Agreement can only be mod- ified by a written agreement duly signed by persons authorized to sign agreements on behalf of the Customer and of IBM, and variance from or addition to the terms and conditions of this Agreement in any order or other written notification from the Cus~ tomer will be of no effect. If any provision or provisions of this Agreement shall be heid to be invalid, illegal or unenforceable, the validity, legalify and enforceability of the remaining provisions shalf not in any way be affected or impaired thereby. IBM is not responSible for failure to fulfill its obligations under this Agreement due to causes beyond its control or to provide any services hereunder for Machines or programming located outside the United States or Puerto Rico. No action, regardless of form, arising out of this Agreement may be brought by either party more than two years alter the cause of action has arisen, or, in the case of an action for non- payment, more than two years from the date the last payment was due. I! the Customer fails to pay the Purchase Price due hereunder and IBM repossesses a Machine as provided by law, the Custom- er agrees to pay all costs and expenses of repossession, includ- ing reasonable .attorney's fees. This Agreement is governed by the laws of the State of New York. THE CUSTOMER ACKNOWLEDGES THAT THE CUSTOMER HAS READ THIS AGREEMENT. UNDERSTANDS IT, AND AGREES TO BE BOUND BY ITS TERMS AND CONDITIONS. FURTHER. THE CUSTOMER AGREES THAT THIS AGREE- MENT AND ANY OTHER APPLICABLE IBM AGREEMENTS, AMENDMENTS, SUPPLEMENTS AND CERTIFICATIONS, INCLUDING THOSE ACCEPTED IN THE FUTURE, REFER- ENCING THIS AGREEMENT OR EXPRESSLY MADE A PART HEREOF. WILL BE THE COMPLETE AND EXCLUSIVE STATE- MENT OF THE AGREEMENT BETWEEN THE PARTIES, SUPERSEDING ALL PROPOSALS OR PRIOR AGREEMENTS. ORAL OR WRITTEN. AND ALL OTHER COMMUNICATIONS BETWEEN THE PARTIES RELATING TO THE SUBJECT MATTER HEREIN, IBM Maintenance Agreement (Z125-3275-00) International Business Machines Corporation (IBM) and the Customer agree that the following terms and conditions will apply to any Customer order accepted by IBM to provide maintenance service for IBM Machines located within the United States and Puerto Rico. "Machine(s)" as used herein refers to machines and/or their features, model conversions and machine elements unless the context requires individual reference. This Agreement is effective from the date on which it is accepted by IBM and shall remain in force until terminated by the Customer or IBM. Specific Machines become subject to thiS Agreement on the Effective Date designated by the Customer, if agreed to by IBM, and such information will be shown in a Supplement to IBM Maintenance Agreement (Supplement} signed by IBM. MAINTENANCE SERVICE IBM agrees to provide the availability of maintenance service to keep the Machines in, or restore the Machines to, good working order. Maintenance service includes preventive maintenance based on the specific needs of individual Machines as determined by IBM and on~call remedial maintenance. Maintenance service also includes lubrication, adjustments and replacement of main- tenance parts all as deemed necessary by IBM Maintenance parts, which may be used parts, will be furnished on an exchange basis, and the replaced parts become the property of 18M. IBM may, at its option, store maintenance equipment and/or parts on the Customer's premises. The Customer agrees to provide a suitable environment for the Machines as speCified by IBM, and to proVide IBM full, free and safe access to the Machines to provide rlaintenance service. The Customer is responsible to implement appropriate safeguards for Customer's data. The Customer is responsible for removing, contrOlling and replacing or reloading funds contained in the Machines. IBM will service Machines containing funds only when the cash container CClnnot be opened prior to repair by IBM, in which case the Customer will remove the funds as soon as the container has been opened. PERIODS OF MAINTENANCE SERVICE The Base Period of Maintenance Service is from 7 a.m. to 6 p.m., Monday through Friday, unless otherwise designated by IBM in the Supplement. The Customer nl.1Y select Optional Periods of Maintenance Service shown in the Supplement. The Optional Period for Monday through Friday must include the Base Period PClqe 5 of 17 of Maintenance Service and must be the sam 'lsecutive hours each day. The Optional Period on Saturday 01 .day must bethe same consecutive hours on all Saturdays or Sundays. The Customer may select or change Optional Periods of Maintenance Service upon 15 days' written notice to IBM. ENGINEERING CHANGES Engineering changes, determined applicable by IBM, will be controlled and installed by IBM. The Customer may, by providing notice subject to written confirmation by IBM, elect to have only mandatory changes, as determined by IBM, installed on Machines so designated. CHARGES The Customer agrees to pay maintenance charges, com- mencing on the Effective Date, consisting of 1) a Minimum Maintenance Charge, and 2) Additional Maintenance Charges, It applicable. Additional Maintenance Charges will be for a) Op- tional Periods of Maintenance Service selected by the Customer, based on the Machine Group and determined by multiplying the Minimum Maintenance Charge for the Machine by the applicable Percentages for the Optional Periods of Maintenance Service shown in the Supplement, and/or b) the amount of processing performed by Usage Plan Machines, as measured by an IBM meter, multiplied by the Additional Maintenance Charge Rate(s) shown in the Supplement. The Customer agrees to promptly submit to IBM the meter reading for each Usage Plan Machine as of the close of the last work day of the period to which the Minimum Maintenance Charge applies. The Customer agrees not to interfere with the proper operation of the meter. There will be no additional charge for travel expense associated with maintenance service provided during the Periods of Main- tenance Service, except that actual travel expense will be charged when the site at which the machine is located is 1) within the contiguous States and is normally inaccessible by both private automobile and scheduled public transportation, or 2) outside the contiguous States and is normally inaccessible by private auto- mobile. The Customer agrees to pay for maintenance service, including travel and waiting time, provided by IBM outside the Periods of Maintenance Service at IBM's then applicable hourly service rates and minimum charges, and travel expense; however, there will be no additional charge for maintenance parts. Changes in a Machine's specifications may result in adjust- ments to the maintenance charges. Minimum and Additional Maintenance Charges an::! subject to change by IBM upon tllree months' written notice to thE:::! Customer and will become effective on the date specified in the notice unless the Customer withdraws the affected Machine from ttlis t~gree- ment as provided in the Section entitled "W!thdrawal/Termina- tion," except that Charges invoiced quarterly or annually are subject to change by IBM upon commencement of service and on the first day of each quarterly or annual invoice period, upon three months' written notice to the Customer. IBM's hourly service rates and minimum charges are subject to change hy IBM without notice. SERVICES FOR ADDITIONAL CHARGE The services, including travel and waiting time, described in this Section, if available, will be provided by IBM under tlli;; Agreement at IBM's then applicable hourly service rates and minimum charges, parts and material prices and travel expense, unless such services are provided under another written agreement signed by the Customer and IBM. The following services are not considered maintenance service as described in the Section entltled "Main. tenance Service": 1) Repair of Machine damage, replacement of maintenance parts or increase in service time caused by- a) failure to continually provide a suitable environment pre- scribed by IBM including adequate space, electrical power, air conditioning and humidity control; b) neglect; misuse, including use of the Machines for pur- poses other than for which designed; c) accident; disaster, including water, wind and lightning; transportation; vandalism or burglary of Machines de- signed to contain funds; d) alterations, including any deviation from IBM's Machine design; e) attachments, including any interconrwction to the Mach- ine of non-IBM equipment and devices not supplied by IBM; f) IBM Machines, except those IBM Machines which are owned b.. i....'" I '''!r warranty from IBM" or under an IBM main\.'-:lanc .-eement; and g) conversion from 0118 IBM model to another or the instal- iation or removal of an IBM feature whenever any ofthese activities was performed by other than IBM except that this subsection (g) will apply only during the first three months of service under this Agreement subsequent to the date of such Machine modificiation; 2) Repair of Machine damage, replacement of maintenance parts (due to other than normal wear) or repetitive service calls caused by the use of supplies; 3) Service for accessories; 4) Inspection of altered Machines; 5) Replacement or addition of parts and increase in service time associated with the installation by IBM of an engi- neering change when such parts and service are required due to the conversion from one IBM model to another or the installation or removal of an IBM feature whenever any of these activities was performed by other than IBM; 6) Rearrangement or relocation of Machines and provision of necessary materials; 7) Replacement of a part not furnished for the Machine by IBM (except when such parl is in an alteration) with a directly interchangeable IBM maintenance part. and any increase in service time associated with such activity; and 8) Repair of a Machine caused by non-IBM representatives per- forming maintenance or repair of such Machine. EXCLUSIONS Services provided by IBM under this Agreement do not include 1) furnishing supplies, painting or refinishing the Machines 0 furnishing material therefor, 2) electrical work external to the Machines or installation, maintenance or removal of alterations, attachments or other devices not furnished by IBM and 3) such service which is impractical for IBM to render because of alterations in, or attachments to, the Machines. TAXES In addition to the charges due under this Agreement, the Customer agrees to pay amounts equal to any taxes resulting from this Agreement, or any activities hereunder, except for taxes based upon IBM's net income. INVOICING The Minimum Maintenance Charge and the Additional Main- tenance Charge for Optional Periods will be invoiced in advance, monthly, quarterly or annually as shown in the Supplement. Monthly charges will be invoiced as of the first of each month and will be prorated on the basis of a 3D-day month. The Additional Maintenance Charge for usage will be invoiced following the period in which it is incurred. All other charges will be invoiced when or after they are incurred. PAYMENT The Cu.stomer will remit payment to IBM within 30 days after the date of invoice. The Customer will receive a partial credit of rnaintanance charges invoiced upon the withdrawal of Machines or termination of this Agreement prior to the expiration of the period for which the invoice applies. WITHDRAWALlTERMINA TION The Customer may withdraw a Machine from this Agreement IJpon one month's written notice to IBM a) after the Machine has been under tt1is Agreement for at least six months, b) after the Machine has been under this Agreement for at least one month. provided it has been removed from the Customer's location or c) on the effective date of an increase in the Minimum Maintenance Charge or Additional Maintenance Charges. ~ IBM may withdraw a Machine from this Agreement upon three months' written notice to the Customer one year or more after maintenance service for each such Machine has commenced, but not prior to the end of the period for which I BM has submitted an invoice to the Customer for service under this Agreementforsuch Machines. IBM may withdraw a Machine from this Agreement upon one month's written notice to the Customer following any repetition of the need for additional repair of such Machine caused by non-IBM maintenance activity, as described in item (8) of the Section entitled "Services for Additional Charge:' Either party may withdraw Machines or terminate this Agree- ment at any time by written notice fortailure 01 the other to comply with any of its terms and conditions. This Agreement may be terminated by either party, upon one month's written notice, following withdrawal of all Machines and fulfillment of all obligations hereunder. Page 6 of 17 .Ii.. DISCLAIMER AND LIMITATION OF LIABILITY IBM will in no event be liable for lost preJfits, lost savings or other consequential damages even if IBM' 'Jean advised of the possibility of such damages, or for any ..Im against the Custo- mer b'i, any other party. IBM is relieved of responsibility for all loss of funds contained in. dispensed by or associated with any Machine. IBM's liability to the Customer for damages, from any cause whatsoever, and regardless of the form of action, whether in contract or in tort including negligence, shall be limited to actual damages up to the greater of $50.000 or 12 months' maintenance charges for the specific Machines under this Agreement that caused the damages or that are the subject matter of or are directly related to the cause of action. Such charges will be those in effect for the specific Machines when the cause of action arose. The foregoing limitation of liability will not apply to claims for personal injury or damage to real property or tangible personal property caused by IBM's negligence. GENERAL Service provided under this Agreement does not assure unin- terrLJPted operation of the Machines and IBM is not responsible for failure to render service due to causes beyond its control. This Agreement is not assignable without the prior written consent of IBM. Any attempt to assign any of the rights, duties or obligations of this Agreement without such consent is void. IBM may. upon 12 months' written notice to the Customer. modify the terms and conditions of this Agreement, except that IBM may, upon three months' written notice to the Customer, modify the torms and conditions ot the Sections entitled "Periods of Maintenance Serv;cp." "Charges" and "Services for Additional Charge." Otherwise, Agreement can only be modified by a written agreement (." signed by persons authorized to sign agreements on behalf of the Customer and IBM. Variance from the terms and conditions of this Agreement in any Customer order or other written notification will be of no effect. The Customer represents that the Customer is either the owner of the Machines under this Agreement, or authorized by the owner to include such Machines under this Agreement. No action, regardless of its form, arising out of this Agreement, may be brought by either party more than two years alter the cause of action has arisen, or, in the case of an action for nonpayment, more than two years from the date the last payment was due. This Agreement Will be governed by the laws of the State of New York. THE CUSTOMER ACKNOWLEDGES THAT THE CUSTOMER HAS READ THIS AGREEMENT, UNDERSTANDS IT, AND AGREES TO BE BOUND BY ITS TERMS AND CONDITIONS, FURTHER, THE CUSTOMER AGREES THAT THIS AGREE- MENT, AND SUPPLEMENTS REFERENCING THIS AGREE- MENT, WILL BE THE COMPLETE AND EXCLUSIVE STATE- MENT OF THE AGREEMENT BETWEEN THE PARTIES, SUPERSEDING ALL PROPOSALS OR PRIOR AGREEMENTS. ORAL OR WRITTEN, AND ALL OTHER COMMUNICATIONS BETWEEN THE PARTIES RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT. Agreement for IBM Licensed Programs (Z125-3358-00) International Business Machines Corporation (IBM) and the Customer agree that, when this Agreement is signed by the Customer and accepted by IBM, the following terms and conditions will apply to any IBM licensed program materials offered under this Agreement when ordered by the Customer and the order is accepted as provided herein. Unger these terms and conditions, IBM wlll1) furnish licensed programs to the Customer, 2) furnish licensed optional materials in support of such licensed programs, 3) grant the Customer a nontransferable and nonexclusive license in the United States and Puerto Rico to use the licensed program materials, and 4) provide program services, all as described herein. The Customer agrees with respect tothe licensed programs to accept the responsibility for 1) their selection to achieve the Customer's intended results, 2) their installation, 3) their use, and 4) the results obtained therefrom. The Customer also has the responsibility for the selection and use of, and results obtained from, any other programs, programming, equipment or services used with the licensed programs. Specific licensed program materials may be ordered under this Agreement by 1) a Supplement to this Agreement (Supplement) signed by the Customer. 2) a written order. specifying the licensed program materials and the designated machine. signed by the Customer, or 3) such other ordering procedure as shall be designated by IBM for the specifiC licensed program materials. IBM will accept any such order under this Agreement by providing the Customer a Supplement specifying the supplemental terms applicable to such licensed program materials. Upon receipt of the Supplement by the Customer, IBM shall thereby grant a nontransferable and nonexclusive license in the United States and Puerto Rico for licensed program materials subject to the terms and conditions of this Agreement. Use of the licensed program materials or the first payment of charges due hereunder, whichever first occurs following receipt of the Supplement, will constitute the Customer's acceptance of the supplemental terms specified in the Supplement. Any terms which this Agreement states are to be specified by IBM for a licensed program and/or related licensed optional materials will be stated in the Supplement for that licensed program. DEFINITIONS The term "licensed program" in this Agreement shall mean a licensed data processing program consisting of a series of instructions or statements in machine readable form, and/or any licensed data base consisting of a systematized collection of data in machine readable form, and any related licensed materials such as, but not limited to, flow charts, logic diagrams and listings provided for use in connection with the licensed data processing program. The term "licensed optional materials" in this Agreement shall mean any machine readable or printed material not included in the licensed program and which is designated by IBM as available under license to Customers who have licensed the program to which such optional materials relate. The term "licensed program materials" in this Agreement shall mean both the licensed program and the licensed optional materials as defined above. The term "restricted materials" in this Agreement shall mean any licensed program materials which are labeled "Restricted Materials of IBM." The term "use" in this Agreement shall mean copying any portion of the licensed program materials into a machine and/or transmitting them to a machine for processing of the machine instructions, statements or data contained in such materials. Z125~9029~01 TERM This Agreement is effective from the date on which it is accepted by IBM and will remain in effect until terminated by the Customer upon one month's written notice, or by IBM as set forth in this section. This Agreement may be terminated by the Customer only when all licensed program materials licensed hereunder are discontinued and all licensed program materials have been returned or destroyed. Licenses granted under this Agreement may be discontinued by the Customer upon one month's written notice, except that, during the testing period, the Customer may discontinue any license at any time upon written notice effective immediately. IBM may discontinue any license or terminate this Agreement upon written notice effective immediately if the Customer fails to comply with any of the terms and conditions of this Agreement. Notice of discontinuance of any or all licenses shall not be considered notice of termination of this Agreement unless specifically stated. Notice of discontinuance of any licensed program shall be notice of discontinuance of the license and of all licensed program materials obtained in connection therewith. LICENSE Each license granted under this Agreement authorizes the Customer to: Paqe 7 of 17 a) use the licensed program m<lterials in machine readable form on the machine or machines (hereinafter referred to as "machine") designated in an applicable Supplement for such licensed program materials and in conjunction therewith to store the licensed program materials in, transmit them through, or display them on, units associated with such desig- nated machine; b) utilize the licensed program materials in printed form in sup- port of the use of the licensed program: and/or c) copy or translate the licensed program materials in machine readable form into any machine readable or printed form to provide sufficient copies to support the Customer's use of the licensed program as authorized under this Agreement. Licensed program materials provided by IBM in printed form, microfiche or other non-machine readable form may not be copied. Additional copies may be obtained under license from IBM at the charges then in effect. With respect to restricted materials, ttle authorizations granted under the preceding paragraphs of this section are limited solely to the following purposes a) making modifications to the Customer's products and/or pro- grams so that ttley will function with the licensed programs to which the restricted materials apply; b) making modifications, subject to the provisions of the section entitled "Permission to Modify," to the licensed programs to which the restricted materials apply: and/or c) assisting the Customer in problem determination, problem source identification and/or problem resolution activities associated with the use of the licensed programs to which Ule restricted materials apply. A separate license IS required for each machine on which any licensed program materials will be used, except as provided in the subsections entitled "Temporary License Transfer," "Installation License" and "Location License." For any licensed program that is a data base, the license granted in this section is further limited to permit access to such data base exclusively by the Customer. Except as provided in the section entitled "Protection and Security of Licensed Program Materials," the Customer shall not make or permit any manner of access to any form of such data base, or part thereof, for the purposl~ of making available to any other person any data contained in such data base. The Customer shall not use, print. copy, translate or display the licensed program materials, in whole or in part, unless ex- pressly authorized in this Agreement. The Customer shall not reverse assemble or reverse compile the licensed programs in whole or in part Temporary License Transfer The Customer is authorized to transfer the license to and use the licensed program materials on: 1) a backup machine when the designated machine or an asso- ciated unit required for use of the licensed program is tempo- rarily inoperable until operable status is restored and process- ing on the backup machine is completed: or 2) another machine for assembly or compilation of the licensed program materials if the designated machine and its asso- ciated units do not provide the configuration required for as- sembly or compilation Installation License When IBM specifies "InstallatIOn License Applies" the Customer is also authorized to use the I icensed program materials on any other machine in the same installation as the designated machine. For purposes of this Agreement, "same installation" shall mean a single room or contiguous rooms unless otherwise agreed to in writing by IBM. Location License When IBM specifies "Location License Applies" the Customer is also authorized to use the licensed program materials on any other machine in the same location as the designated machine. For purposes of this Agreement, "same location" shall mean a single physical Customer location designated by a Single mailing address and contained within a single building unless otherwise agreed to in writing by IBM. Change in Designated Machine The Customer may notify IBM of the Customer's intention to change the designation of the machine on which licensed program materials are to be used. The change of designation wlil be effective upon the date set forth in the form entitled "Conflrlnation of Change In DeSignated Machine" furnished to tile Customer by IBM. Additional Licenses Each additional license for licensed program materials already licensed by the Customer under this Agreement must be ordered .1S described herein For additional licenses, in lieu of distribution from IBM, the Customer may elect to copy those licensed program materials previously distributed to that Customer by IBM in machine readable form. The Customer may make such copy upon receipt of a Supplement Issued by IBM which designates the Effective Date for Additional license requested by the Customer. The testing period, if any, for such additional license will commence on the Effective Date for Additional License. Permission to copy granted in this subsection does not apply to licensed program materials provided by IBM in printed form. For certain licensed programs, IBM may offer the Distributed Systems License Option (DSLO) under which licenses in addition to the initial license (Basic License) may be obtained for a DSLO charge. When ordering additional licenses for such a licensed program, the Customer must designate whether an additional Basic or DSLO License is requested, For each DSLO License, the Customer will: 1) copy those licensed program materials previously distributed in machine readable form to the Customer by IBM under the Basic License and use such copies on the machine designated in the Supplement; 2) provide problem documentation to IBM through the location of the BaSIC License; 3) at IBM's request, recreate any problems at the location of the Basic License, if Local Service or Local Assistance as speci- fied by IBM IS available for the Basic License: and 4) distribute to, install and test on the OSLO designated machine any new release. correction or bypass provided by IBM to the Basic License designated machine. Program services and the warranty, if any, for the licensed program will be provided for OSLO Licenses only through the Basic License location and there will be no testing period for the OSLO Licenses. Unless the Customer designates another Basic License, n: ,tics of discontinuance of a Basic License shall be notice of discontinuance of all OSLO licenses for that Basic License. CHARGES The charges applicable to each licensed program will be specified by IBM and will consist of a one-time ctlarge, an upgrade charge, periodic charges, and any initial charge and/or any process charge. Periodic charges, which may be monthly, quarterly, semi- annual or annual, will continue until the licensed program is discontinued. However, for certain licensed programs, IBM may specify a consecutive number of payments after which further periodic charges will be waived. For certain licensed programs. IBM may designate one or more replacement licensed programs. When a licensed program is discontinued and replaced by the Customer with an IBM designated replacement licensed program an upgrade charge as specified by IBM will apply. Licensed optional materials may be subject to a charge as specified by IBM. Any additional charges for program services for licensed programs will be at IBM's then applicable hourly service rates and minimum charges and such services will be provided under the terms and conditions of this Agreement unless provided under separate written agreement signed by the Customer and IBM. Commencement and Invoicing of Charges Periodic charges will commence on the day, Monday through Friday, following the end of the testing period, or 10 days after shipment of the licensed program by IBM if there is no testing period, except as set forth below in this subsection. Monthly charges for a partial month's use will be prorated based on a thirty- day month. Other periodic charges will not be prorated and are not refundable in whole or in part. Periodic charges will be invoiced in advance. Unless otherwise specified by IBM, one-time charges, initial charges, upgrade charges and licensed optional materials charges will be due on the day. Monday through Friday..lollowing the end of the testing period, or 10 days after shipment of the licensed program materials by IBM if there is no testing period or if Page 8 of 17 -"" such Rerlod has expired, except as set forth below in this subsection. For additional licenses for which the Customer has made copies pursuant to the subsection entitled "Additional licenses" and for which there is no testing period, periodic charges will commence and Of her charges will be due upon the Effective Date for Additional License designated in the Supplement. Process charges will be due upon receipt by the Customer of the licensed program materials to which such charges apply and are not refundable even if the Customer discontinues the licensed program prior to or during the testing period. Payment will be made as stated in the invoice. Applicable Taxes In addition to the charges due under this Agreement, the Customer agrees to pay amounts equal to any taxes resulting from this Agreement, or any activities hereunder, exclusive of taxes.,based on IBM's net income. Price Changes Periodic charges are subject to change by IBM upon three months' written notice to the Customer. Any changes in periodic charges become effective on the first day of the Period which commences on or after the effective date specified in the notice. Initial charges, one-time charges, process or upgrade charges. and charges for licensed optional materials are subject to change without prior notice except that such charges shall not be increased if, prior to the date of the notice. 1) the licensed program materials had been shipped by IBM, or 2) the Customer had copied licensed program materials pursuant to the subsection entitled "Additional Licenses." In addition, if the Customer's written order was received by IBM prior to the announcement of such increase in charges. such charges shall not be increased if, within one month after the date of notice, shipment of the licensed program materials occurs or the Customer copies licensed program materials pursuant to the subsection entitled "Additional Licenses." If charges are increased for any licensed program materials, tl18 Customer may discontinue them in accordance with the provisions of this Agreement; otherwise, the new charges will become effective. SHIPMENT The Estimated Shipment Date for licensed programs will be specified by IBM. However, IBM does not represent or warrant that such shipment date will be met. IBM will notify the Customer of the type of program storage media required for shipment. Unless returnable or disposable media are used, the program storage media mus~' be provided by the Customer or ordered from IBM at the applicable charge. Except when otherwise specified by IBM. licensed program ma- terials will be shipped to the Customer without Shipping charge. Any special shipment requested by the Customer will be at Customer expense. LICENSED PROGRAM TESTING For each licensed program IBM will specify the testing period, If any, during which the licensed program will be made available for nonproductive use. The purpose of the testing period is to permit the Customer to determine whether the licensed program functions selected by the Customer operate together and to assist the Customer in determining whether the licensed program meets the Customer's requirements. The testing period will begin 10 days after shipment of the licensed program by IBM or on the Effective Date for Additional License. unless otherwise specified. The Customer may discontinue the licensed program. upon written notice effective immediately. at any time during the testing period, in which event periodic charges, one-time charges, initial charges, upgrade charges and licensed optional materials charges will not be due. However, process charges will be payable. Unless such notice of discontinuance is given, the Customer will be deemed, at the end of the testing period. to have decided to retain the licensed program under the provisions of this Agreement. In the event that the licensed program is used for productive purposes during the testing period, the Customer will notify IBM and the testing period wi II be deemed to have ended as ofthe date upon which the Customer commences productive use Subsequent releases, if any, of a licensed program which have the same program number will be made available to the Customer 2125-9029-01 for productive use and/or test on the designated machine while the Customer continues productive use of a previous release on that machine and pays applicable charges therefor. The Customer has the right to decide whether to intall any such releases or continue use of a previous release having given due regard to the provisions of the section entitled "Program Services." In the event of discontinuance of a licensed program and subsequent reordering of the same licensed program forthe same installation (or location, when IBM has specified "Location License Applies"). there will be no testing period for the subsequent license. RISK OF LOSS If licensed program materials are lost or damaged during shipment from IBM. IBM will replace such licensed program materials and program storage media at no additional charge to the Customer. If licensed program materials are lost or damaged while in the possession of the Customer. IBM will replace such licensed program materials at the applicable charges. if any. for processing, distribution. and/or program storage media. EARLY SHIPMENT OF LICENSED PRINTED MATERIALS When the Customer has received a Supplement issued by IBM for a generally available licensed program, licensed program materials which are provided by IBM in printed form will, upon Customer request, be shipped to the Customer up to six months prior to shipment of the machine readable portion of the licensed program materials. The licensed printed materials, thus provided, may not be copied in any form for any purpose. If the Customer does not request that the machine readable portion of the licensed program materials be shipped within six months following the date of shipment of the licensed printed materials, the Customer will discontinue the license and return or destroy the printed materials The charge for early shipment of licensed printed materials will consist of any applicable process charges. Program services. if any, will not be provided prior to shipment of the machine readable portion of the licensed program materials. PROGRAM SERVICES For each licensed program, IBM will specify the types and durations of program services, if any. to be provided without additional charge for a current release of the licensed program. Program services will commence at the beginning of the licensed program testing period or. if there is no testing period for that license, when periodic charges commence or other charges are due. Program services will be sUbject to the provisions of the section entitled "Specified Operating Environment." Types of Service Central Service - When Centra! Service is specified one or more service locations will be designated which will accept documentation, in a format prescribed by IBM, indicating that a problem is caused by a defect in the licensed program. Central Service will respond to a defect in the unaltered portion of a current release of the licensed program by issuing: defect correction information such as correction documentation, cor- rected code. or notice of availability of corrected code; or a restriction or a bypass. Unless Local Service is also specified for the licensed program, the Customer will be responsible for the preparation and submission of documentation to Central Service. IBM may also establish a center (Support Center) to provide the Customer with telephone assistance in problem diagnosis and resolution. When a Support Center is established for a licensed program and a problem occurs wtlich the Customer believes is related to the use of a licensed program, the Customer will contact the Support Center and will perform appropriate problem definition activities and remedial actions, as prescribed by the Support Center, prior to any dispatch of an IBM representative. IBM also offers other services through Support Centers with or without charge, as applicable Local Servlce~When Local Service is specified and a problem occurs which the Customer determines is caused by the use of a licensed program and the diagnosis of the IBM representative indicates the problem is caused by a defect in the unaltered portion of a current release of the licensed program. the IBM representative will perform the following problem resolution activities: Page90f 17 1) attempt to correct or bypass the defect by providing the Cus' tomer with correction information issued by Central Service, if available; or 2) submit documentation to Central Service, if specified as avail- able; and, in any event 3) if the licensed program is inoperable, make a reasonable attempt to resolve the problem by applying a local fix or providing a bypass. Local Assistance-When Local Assistance is specified and the Customer encounters a problem, which the Customer's diagnosis indicates is caused by a defect in the unaltered portion of a current release of the licensed program, the Customer may request IBM assistance in resolving the problem. Such assistance, if requested, will be provided by an IBM representative and may be subject to the availability of personnel. This assistance may include, but not extend beyond, the following problem resolution activities' 1) attempting to correct or bypass the defect by providing the Customer with correction information issued by Central Ser- vice, if available; or 2) assisting the Customer with preparing documentation for submission to Central Service, if specified ilS avnilablo: and, in any event 3) if the licensed program is inoperable, making a reasonable attempt to resolve the problem by applyinq a local fix or provid- ing a bypass Program Services Duration For each licensed program the types of program service provided will be specified as available: 1) until discontinued by IBM with a minimum of six months' writ- ten notice; or 2) until a designated calendar date; or 3) during the testing period; or 4) for a designated number of months for each license. In the event the Customer discontinues a licensed program and sub- sequently reorders it for the same installation (or location, when IBM has specified "Location License Applies"), tho service duration then III effect will be reduced by the number of months for whictl such service was previously provided. When a subsequent release of a licensed program which has the same program number becomes available, IBM may discontinue program services for any or all prior releases by ilOtice effective on the date stated therein For any licensed program, IBM shall Il,WP the right to ctlJrgefot any of the foregoing program services to the extent they are not specified as provided without additional charge. Other types of program services may be specified by IBM. IBM shall also have the right to charge for any additional effort Wllich results from providing program services for an altered licensed program or for a release which is not current. IBM does not guarantee service results or represent or warrant that all errors or program defects will be corrected. PERMISSION TO MODIFY The Customer may modify any licensed program materials in machine readable form and/or merge such m<ltcrials into other program material to form an updated work for ttle CU::ltorner's own use; provided that, upon discontinuance of the licensed program, the licensed program materials will be completely ['emoved from the updated work and dealt with under tllis Agreement as if permission to modify or merge had never been granted. Any portion of the licensed program materials included in such an updated work will continue to be subject to all terms of this Agreement. PROTECTION AND SECURITY OF LICENSED PROGRAM MATERIALS The Customer will take appropriate action, by instruction, agreement or otherwise, with any persons permitted access to licensed program materials so as to enable the Customer to satisfy the Customer's obligation under this Agreement. All copies of licensed program materials provided by IBM or made by the Customer including translations or compilations or partial copies within modifications, derivative works,_ and updated works are the property of IBM and may not be distributed by the Customer to any other persons, including other licensees of the licensed program, without 18M's prior written consent. The Customer will reproduce and include the copyright notice on any such copies made by the Customer in accordance with the copyright instructions provided by IBM. The Customer will maintain records of the numiJer anation of all copies of licensed program materials and will notify IBM in writing if the original or any copy of the licensed program materials will be kept at an installation (or location, when IBM has specified "Location License Applies") other than that of the machine designated in the applicable Supplement. The Customer will insure, prior to disposing of any media, that any licensed program materials contained thereon have been erased or otherwise destroyed The Customer will not provide or otherwise make available any licensed program materials in any form without IBM's priorwritten consent except to Customer employees or IBM employees, or to other persons during the period such other persons are on the Customer's premises, for purposes specifically related to the Customer's authorized use of the licensed program. liCENSED PROGRAM SPECIFICATIONS For each licensed program which is warranted, IBM will publish, at the time that licensed program becomes generally available, a document entitled "Licensed Program Specifications." Such Licensed Program Specifications may be updated by IBM from time to time and sue!l updates may constitute a change in specifications. WARRANTY Each licensed program which is specified in the Supplement as warranted will conform, when shipped to the Customer, to the Licensed Program Specifications which are in effect for that licensed program at that time, provided the licensed program is properly used In a Specified Operating Environment. If the Customer believes there is a defect in a licensed program such that it does not meet its Licensed Program Specifications, the Customer must notify IBM while program services are available for the program. IBM does not warrant that the functions con- tained in a licensed program will meet the Customer's requirements or will operate in the combinations which may be selected for use by the Customer, or that the operation of the licensed program will be uninterrupted or error free or that all program defects will be corrected. All other licensed programs will be distributed on an "As Is' basis without warranty of any kind either express or implied THE FOREGOING WARRANTIES ARE IN LIEU OF All OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO. THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, SPECIFIED OPERATING ENVIRONMENT Each licensed program is designed to operate on one or more IBM machine types and, in most instances, in conjunction with other IBM eqUipment and programs. The Licensed Program Specifications for each warranted licensed program will state the environment in which the licensed program is designed to operate, For licensed programs distributed on an "As Is" basis, the Specified Operating Environment will be stated in a notice of availability of the licensed program. Program services for a licensed program used in other than a Specified Operating Environment are subject to limitations occasioned by the dlfterences between the Specified Operating Environment and the Customer's operating environment and by the extent of the local IBM ['epresentative's knowledge oj the Customer's equipment and programs. Such program services wil! be subject to the following conditions: 1) When pertorming Local Service or Local ASSistance. IBM's ob- ligation is limited to having the local IBM representative apply a reasonable effort to provide program services as described in the applicable portion of the section entitled "Program Ser- vices." Furthermore, the local IBM representative will only bro expected to operate a machine designated in the Supplemer" if it was marketed or manufactured by 18M. IBM will have the right to charge for any additional effort required to perform these program services. 2) Central Service will only respond to defects which will occur when Central Service operates the licensed program in a Specified Operating Environment. RETURN OR DESTRUCTION OF LICENSED PROGRAM MATERIALS Within one month after the date of discontinuance of any license granted hereunder, unless the requirement is waived by IBM. the Customer will furnish to IBM a completed torm entitled Page 10 of 17 "IBM licensed Program Certificate of Return or Destruction" certifying that through the Customer's' t effort, and to the best of the Customer's knowledge. the ori. and all copies of the licensed program materials received fronllBM armade in connec- tion vrith such license have been returned to IBM or destroyed. This requirement wi," apply to all copies in any form including translations or compIlations or partial copies within modificatIons, derivative works, and updated works, whether partial or complete, and whether or not modified or merged into other program materials as authorized herein. However, upon prior written authorization from IBM, the Customer may retain a copy for archival purposes only. The requirement to return or destroy will apply to a licensed data base; it will not apply to individual pieces of data obtained by the Customer from such data base and which constitute a minor portion of such data base. When the Customer has I icensed a new version of a licensed program, which carries a different program number, and discontinues the prior version, the Customer may retain the prior version of the licensed program for a period not to exceed three months following its date of discontinuance, to be used only if a defect in the new version prevents its use. During this period. the Customer will pay only the applicable charges for the new version of the licensed program. Within one month fOI,lowing this three- month period, unless the reqUIrement IS waived by IBM, the Customer will furnish IBM a completed form entitled --IBM Licensed Program Certificate of Return or Destruction" for the prior version as set forth above. PATENTS AND COPYRIGHTS IBM will, at its expense, defend the Customer against any claim that licensed program materials supplied hereunder infringe a patent or copyright in the United States or Puerto Rico and subject to the limitation of liability set forth in the section entitled "Limitation of Remedies:' IBM will pay all costs. damages and attorney's fees that a court finally awards as a result of such claim. To qualify for such defense and payment, the Customer must: 1) give IBM prompt written notice of any such claim; and 2) allow IBM to control, and fully cooperate with IBM in, the defense and all related settlement negotiations. However, if the damages attributable to a claim of infringement of a patent in the United States or Puerto Rico may exceed such limitation of liability. the Customer may elect to defend against the claim provided that IBM may fully participate in the defense and/or agrees to any settlement of such claim. The Customer agrees to allow IBM, at IBM's option and expense, if such claim has occurred or in IBM's judgment is likely to occur, to procure the right for the Customer to continue using the licensed program materials or to replace or to modify them so that they become non-infringing; and, if neither of the foregoing alternatives is available on terms which are reasonable in IBM's judgment, upon written request. the Customer will return the licensed program materials to IBM; and, for licensed programs whose total charges are fully paid, the Customer may receive a credit as established by IBM. IBM shall have no obligation with respect to any such claim based upon the Customer's modification of the licensed program materials or their combination, operation or use with data or programs not furnished by IBM or in other than the Specified Operating Environment. This section states IBM's entire obligation to the Customer regarding infringement or the like. LIMITATION OF REMEDIES 18M's entire liability and the Customer's exclusive remedy shall be as follows: In all situations involving performance or nonperformance of licensed programs furnished under this Agreement, the Customer's remedy is 1) the correction by IBM of licensed program defects, or 2) if, after repeated efforts, IBM is unable to make the licensed program operate as warranted, the Customer shall be entitled to recover actual damages tothe limits set forth in his section. For any other claim concerning performance or nonper- formance by ISM pursuant to, or in any other way related to, the subject matter of this Agreement and any Supplement hereto. the Customer shall be entitled to recover actual damages to the limits set forth in this section. IBM's liability for damages to the Customer for any cause whatsoever, and regardless of the form of action, whether in contract or in tort including negligence, shall be limited to the greater of $25,000 or the one-time charge paid for, or any charges Z125-9029-01 which would be due for twelve months' use of, the licensed program that caUSf 'e damages or that is the subject matter of, or is directly relatee. he cause of action. Such charges shall be those in effect when Ihe cause of action arose and shall include any initial or process charges paid to IBM. This limitation of liability will not apply to claims for copyright infringement or for personal injury or damage to real or tangible personal property caused by IBM's negligence. In no event will IBM be liable for any damages arising from performance or nonperformance of the licensed program during the licensed program testing period or for any damages caused by the Customer's failure to perform the Customer's responsibilities, or for any lost profits, lost savings or other consequential damages. even if IBM has been advised of the possibility of such damages, or for any claim against the Customer by any other party, except as proVided in the section entitled "Patents and Copyrights:' IBM EDUCATION COURSES The Customer agrees that all of the terms and conditions applicable to restricted materials contained in thiS Agreement shall be incorporated into the Agreement between the Customer and IBM entitled "Terms and Conditions for IBM Classes and Education Materials" and apply to materials, regardless of forrY], labeled "Restricted Materials of IBM" when distributed to the Customer in conjunction with an IBM Education Course. ADDITIONAL PRODUCTS AND SERVICES In addition to the licensed program materials and program services provided under this Agreement, IBM offers other products and services at separate charges under applicable written IBM agreements. IBM and the Customer agree that such products and services cannot be the subject of an oral agreement. GENERAL This Agreement is not assignable; none of the licenses granted hereunder nor any of the licensed program materials or copies thereof may be sublicensed, assigned or transferred by the Customer without the prior written consent of IBM. Any attempt to sublicense, assign or transfer any of the rights, duties or obligations under this Agreement is void. Licensed program materials furnished under this Agreement are to be used only on machines located in the United States and Puerto flieD. The terms of this Agreement may be modified by IBM upon three months' written notice to the Customer, except that any modifications of the terms and conditions which relate specifically to termination of this Agreement or discontinuance of licenses granted under this Agreement as provided in the section entitled "Term" shall be effective only as to licensed program materials designated in a Supplement issued by IBM after the date of such notice. Modifications shall become effective unless the Customer terminates this Agreement or discontinues any applicable licenses before the effective date thereof. Otherwise, the Agreement or any Supplement can only be modified by a written agreement duly signed by persons authorized to sign agreements on behalf of the Customer and 18M, and variance from or addition to the terms and conditions of this Agreement and any Supplement In any Customer purchase order or other written notification will be of no effect. IBM is not responsible for failure to fulfill its obligations under this Agreement due to causes beyond its control. No action, regardless of form, arising out of this Agreement may be brought by eittler party 1) in the case of an action arising out of breach of the proviSions of the section entitled "Protection and Security of Licensed Program Materials" more than six years after such cause of action has arisen, 2) in the case of an action for nonpayment, more than two years from the date the last payment was due, or 3) in the case of any other action, more than two years after the cause of action has arisen. The Agreement will be governed by the laws of the State of New York. THE CUSTOMER ACKNOWLEDGES THAT THE CUSTOMER HAS READ THIS AGREEMENT, UNDERSTANDS IT, AND AGREES TO BE BOUND BY ITS TERMS AND CONDITIONS. FURTHER, THE CUSTOMER AGREES THAT THIS AGREE- MENT AND ITS APPLICABLE SUPPLEMENTS ARE THE COM- PLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT Page 11 of 17 BETWEEN THE PARTIES, EXCEPT AS PROVIDEO IN THE SECTION ENTITLED "IBM EOUCATION COURSES:' SUPER- SEOING ALL PROPOSALS OR PRIOR AGREEMENTS, ORAL OR WRITTEN, AND ALL OTHER COMMUI'IIOAi'IONS BE- TWEEN THE PARTIES RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT, . Agreement for Lease or Rental of IBM Machines (Z125-3320-00) International Business Machines Corporation (IBM) and the Customer agree that the following terms and conditions will apply to any Customer order for lease or rental of IBM machines that is accepted by IBM under this Agreement. Under these terms and conditions, IBM will 1) lease or rent machines to the Customer, 2) provide maintenance service for machines and 3) as available, furnish programming and programming services. all as described herein. The Customer agrees to accept the machines. maintenance service, programming and programming services under the termS and conditions of this Agreement. The Customer further agrees with respect to the machines and programming to accept the responsibility for 1) their selection to achieve the Customer's intended results, 2) their use and 3) the results obtained therefrom. The Customer also has the responsibility for the selection and use of. and results obtained from, any other equipment. programs or services u~~cd with the machines and programming The term "machlnes" as used in tIllS Agreempnt refers to rT18chlfles and/or their model conversions and features unless the context requires individual reference. Specific machines, model conversions and fcature~i become suhject to this Agreement when either a written order to lease or a written order to rent is signed by the Customer and accepted by IBM, For cacll order to lease a machine. IBM will provide the Customer a Supplement to this Agreement (Supplement) confirming the specific terms applicable to the machine. Installation of the machine or f1ayment of the first invoice for Monthly l.c(lse Ch8.rges, wtlich8ver first occurs following receipt of the Supplement, will constitute the Customer's acceptance of such specific terms INSTALLATION The Customer agr(~es to provide a suitable environment for the machines as specifipd by IBM and, except as otherwise specified by IBM, to furnish (III labor required for unpacking and placinu each machine in the desired lo(;ation. Each machine will be Installed as specified by IBM Installation By IBM IBM will install machines which are not identified by IBM as Customer Set-Up. IBM will install fr:.atures and model conversions on the serial-numbered machine for w~lich thE~y a,re ordered The first day of charqe for such machine, feature or modei conversion will be the day (Monday through Friday) following the day the machine, fea1ure or model conversion is inst,ll!ed by IBM Customer Set-Up Each machine, feature and model conversion identified by IBM as Customer Set-Up (CSU) will be set up bV Hl€ Customer In accordance with the instructions furnistled by IBM. A CSU machine will be considered to be installed on the last day (Monday through Friday) of tile CSU allowance period specified by IBM for such machine. The CSU allowance period commences on the day (Monday through Friday) following the date of receipt of the machine at the Customer's premises. However, when a CSU machin8 is delivered in conjunction with, and for attad1fTlent to. a non-CSU machine delivered frorn IBM, such CSU m.Jchinewill be considered to be installed on lhe later of 1) the installation date of such non-CSU machine or 2) the installation date of the CSU machine as determined above. A CSU ferllure or model conversion will be cotlsidmcrl to h(~ in- stalled Ofl(:~ montll followlnq the lilter 01 its ('stlrllatl'd (1C1k 01 shipment or its actual date of shipment from IHM CSU leatures and model conversions will be installed on ttle serial--numbered machine for which they are ordered. The first day of char'ge for such machine, feature or model conversion will be the day (Monday through Friday) following the day the machine, feature or model conversion is considered to be installed. CONTRACT PERIOD IBM will determine the Lease or Rental Contract Period or Periods for which each machine is eligible. The Customer may select the Lease or Rental Contract Period for each machine from the alternatives available. Lease Contract Period A Lease Contract Period has a Commencement Date, a Base Term and an Expiration Date each of which will be specified in the Supplement. The Commencement Date for an eligible machine being installed will be the day (Monday through Fllday) following the day that the machine is installed, as specified in the Section entitled "Installation," provided the written order to lease the machine is received by IBM on or before such Commencement Date. The Commencement Date for an eligible machine already installed under a Rental Contract Period will be the day the written order to lease the machine is received by IBM. The Commence- ment Date of a new Lease Contract Period 'for a machine already inst8.lled under a Lease Contract Period or Extension will be the day immediately following the Expiration Date of such Lease Contract Period or Extension, provided that the written order for a new Lease Contract Period for the machine is received by IBM on or before such Commencement Date. The Expiration Date of a Lease Contract Period IS determined initially by adding the Base Term to the Commencement Date, and thereafter may be adjusted as described in the Section entitled ;'Machine Modifications." A Least~ Contract Penod may be extended as described in the Section entitled "Lease Contract Period Extension." Rental Contract Period A Rental Contract Penod has a Commencement Date and is of indefinite duration The Commencement Date tor an eligible machine being installed will be fhe day (Monday through Friday) following the day that the machine is installed, as specified in the Section entitled "Installation..' The Commencement Date for an eligible machine already insfalled will be the day following the Expiration Date of its Lease Contract Period or Extension. CHARGES The Customer agrees to pay all charges as described in this Section. IBM reserves the riqht to offer machines for lease or rental on longer than a rnonttlly charge b<1sis and, if so, this Section would be construed accordingly. IBM will determine the Monthly Lease Charge or Monthly Rental Charge applicable to the Lease or Rental Contract Period or Periods for which each machine is eligible. In addition, IBM will specify the Plan Offering for each machine as: Plan A: Each Plan A machine which is Installed under a Rent- al Contract Period is subject to an Additional Use Charge for billable time in excess of 176 hours in any calendar month, IS measured by an IBM meter, at an hourly rate which is equal to 1/176th of the Monthly Rental Charge multiplied by IBM's applicable Additional Use Charge Percent then generally in effect. There is no Additional Use Charge for a Plan A machine which is installed under a Lease Contract Period or Extension. Plan B: For each Plan B machine, the Monthly Lease Charge or Monthly Rental Charge provides the Customer with unlimited use in any calendar month Plan C: Each Plan C machine is subject to a Monthly Use Charge which is determined by multiplying the amount of pro- cessing performed by the machine, as measured by an !8M meter. by IBM's applicable Monthly Use Charge Rat~s) then generally in effect. Plan 0: For each Plan 0 machine, model upgrade and feature, there will be an Initial Period of Maintenance Service, as Page 12 of 17 -"-. described in this Section, during which IBM will provide, at no additional charge, the availability of [T +enance service 24 hours per day, seven days per week a nlimited use of the machine in any calendar month. Thereatter. the Monthly Lease Chargtl or Monthly Rental Charge provides the Customer with the availability of maintenance service during the period from 7 a.m. to 6 p.m., Monday through Friday, (Base Period of Main- tenance Service) and unlimited use of the machine in any calendar month. The Customer may select Optional Periods of Maintenance Service as designated by IBM in the IBM Plan D Optional Periods of Maintenance Service Exhibit (Exhibit). The Custo- mer may select or change Optional Periods of Maintenance Ser- vice upon 15 days' prior written notice to 18M. Optional Periods of Maintenance Service are subject to an Additional Monthly Maintenance Charge based on the Ma- chine Group and determined by multiplying the Additional Monthly Maintenance Charge Rate for the machine by the applicable Percentages for the Optional Periods of Maintenance Service shown in the Exhibit. Additional Monthly MaiQtenance Charges will commence upon the expiration of the Initial Period of Maintenance Service or on the effective date of the Optional Periods of Maintenance Service, whichever is later. The Initial Period of Maintenance Service commences on the day (Monday through Friday) following the day that the Plan D machine is installed, as specified in the Section entitled "Installation," and has a duration as established in writing by IBM. If the Initial Period of Maintenance Service expires on a Friday or Saturday, it will be extended by two days or one day, respectively, so that the last day of such InitIal Period of Maintenance Service will be on a Sunday. If the Customer requests maintenance service for a Plan D machine to be performed at a time outside the Periods of Maintenance Service, the service will be provided for additional charge as described in the Section entitled "Maintenance Service." Monthly charges for each machine will begin on the Com- mencement Date of its Lease Contract Period or Extension or Rental Contract Period, unless otherwise specified in this Section. Meter Readings IBM will install and maintain its meters for Plan A and Plan C machines, For each Plan A machine, where required. and forcach Plan C machine, the Customer agrees to furnish a monthly report to IBM showing the meter reading as of the close of the last work day of each calendar month. The Customer agrees not to interfere with the proper operation of the meters. Increases in Lease Contract Period Monthly Charges For each year of a Lease Contract Period for a machine, begin- ning with the Commencement Date designated in the Supple- ment, and thereafter with each Anniversary Date, there will be a maximum Monthly Lease Charge (Upper Limit) for that year. The Upper Limit for the first year of the Lease Contract Period is calculated by increasing the initial Monthly Lease Charge in effect for a machine on the Commencement Date specified in the Sup~ plement by an amount which IS derived by multiplying the initial Monthly Lease Charge by the Upper Limit Percent specified in the Supplement. The Upper Limit for each succeeding year is calculated by increasing the Upper Limit forthe preceding year by an amount which is derived by multiplying the initial Monthly Lease Charge by the Upper limit Percent specified in the Supple- ment. For these calculations, when a machine becomes subject to the provisions of a Lease Contract Period on or after announce- ment, but before the effective date, of an increase in the Monthly Lease Charge, such increased Charge will be used as the initial Monthly Lease Charge. For a machine not yet installed, if the Customer's written order fa a machine has been received by IBM, IBM may not increase the Monthly Lease Charge or Upper Limit Percent unless written notice shall have been given to the Customer' at least three months before the date of shipment. In the event of such increase, the Customer may elect to void the order for the affected machine within one month of notification of such increase by IBM For a machine which is installed, IBM may increase the Monthly Lease Charge upon three months' prior written notice. Such Increased MonUlly Lease Charge will he the lowest of 1) Il1e Monthly Rental Charge generally In effect for such machine on the effective date specified in the notice, 2) the Monthly Lease Charge generally in effect for such machine on the effective date specified in the notice for Customers commencing a new Lease Contract Period with the same Base Term or 3) the Upper Limit in effect for that year, and, to the extent that any increase exceeds the applicable Upper Limit, the excess will automatically be effective on ensuing Anniversary Dates. Z125.8028-o1 The Upper Limit Percent specified in the Supplement will not be increased during the I e Contract Period. The Monthly Lease ge for a model upgrade or feature addi- tion may be increased by IBM In the same manner and in accordance With the same Upper Limit calculations as for ma- chines and pursuant to the provisions set forth in the Section entitled "Machine Modifications" The Monthly Use Charge Rate(s) for each Plan C machine may be increased by IBM in the same manner and in accordance with the same Upper Limit calculations as Monthly Lease Charges. IBM may increase the Additional Monthly Maintenance Charge Rate or the Percentages for Optional Periods of Maintenance Service, or IBM may change the Machine Group designation or the Optional Periods of Maintenance Service. at any time upon three months' prior written notice to the Customer. Upon 15 days' prior written notice to IBM, the Customer may discontinue any Optional Periods of Maintenance Service affected by such notice on the effective date of the increase or change, Otherwise, the new Rate. Percentages, Machine Group designation and Optional Periods of Maintenance Service will become effective JS specified. Except as provided in this Section and in the Section entitled "Lease Contract Period Extension," all increases In the Monthly Lease CllrJrge. Monthly Use Charge Rate(s) and Upper Limit Per- cent Will become effective on the date specified in the notice of sllch illcreilsP Increases in Rental Contract Period Monthly Charges For a machine under a Rental Contract Period, IBM may in- crease the Monthly Rental Charge, Additional Use Charge Rate or Monthly Use Charge Rate(s) upon three months' prior written notice. The Customer may discontinue any machine included in such notice on the effective date of the increase upon one month's prior written notice. Otherwise, the new Charge and Rates will become effective as specified IBM may increase the Additional Monthly Maintenance Charge Rate or the Percentages for Optional Periods of Maintenance Service, or IBM may change the Machine Group designation or the Optional Periods of Maintenance Service, at any time upon three months' prior written notice to the Customer. Upon 15 days' prior written notice to IBM, the Customer may discontinue any Optional Periods of Maintenance Service affected by such notice on the effective date of the increae or change, Otherwise, the new Rate. Percentages. Machine Group deSignation and Optional Periods of Mi'lintenance Service will become effective as specified. Hourly Service Charges IBM's hourly service rates and minimum charges are subject to change by IBM without notice. Destination Charges All destination charges for each machine, model conversion or fe<lture, both from and to designated IBM locations, and any rigging charges will be paid by the Customer in accordance with 18M's then current shipping and billing practices. The cost of labor for crating and uncrating is a Customer expense except when performed at an IBM location Applicable Taxes In addition to the charges due under this Agreement, the Custo- mer agrees to pay amounts equal to any taxes resulting from this Agreement or any activities hereunder, exclusive of property taxes and taxes based on IBM's net income. LEASE CONTRACT PERIOD EXTENSION Unless otherwise specified In the Supplement, the Customer may extend a Lease Contract Period for a machine any number of times for one year and one time for a period of less than one year. The Commencement Date of an Extension will be the day follow- ing the Expiration Date of the Lease Contract Period or Extension then in effect The charges and terms and conditions for the ensuing Extension may be changed by IBM, but will not be changed by IBM from the date three months prior to the Commencement Date of such Extension through its Expiration Date, except as de- scribed in tllis Section and except that if such Expiration Date is adjusted as described in the Section entitled "Machine Modifica- tions," th~ chJrnes durinq the adjustment periOd may be il1crcfl:;{)d by 10M in ,lccordancc with thr~ Upper Limit provisions descnbed III tile Sections entitled "Increases in Lease Contract Period Monthly Charges" and "Purchase Option," Prior to the Expiration Date of a Lease Contract Period or one-year Extension, IBM will provide the Cllstom(~r with written notice of all such charges and terms and conditions for the ensuing Extension. During the Extension there will he an Upper Limit. The Upper Llllllt for ttle Extension IS C<llculatcd by lncreasing the initial Monnlly Lease Ctlarge in effect for a machine on the Commence- Page 13 of 17 ment Date of such Extension by an amc vhich is derived by multiplying such initial Monthly Lease Ch<- ,-,'; by the Upper Limit Percent specified in the Supplement, unless such Upper Limit Percent is modified by written notice for the ensuing Extension, in which event such modified Upper Limit Percent will apply. For a machine which is installed under an Extension, IBM may increase the Monthly Lease Charge upon three months' prior written notice. Such increased Monthly Lease Charge will be the lowest of 1) the Monthly Rental Charge generally in etfect for such machine on the effective date specified in the notice, 2) the Monthly Lease Charge generally in effect for such machine on the effective date specified in the notice for Customers commencing a new Lease Contract Period with the same Base Term or 3) the Upper Limit in effect for the Extension. The Monthly Lease Charge for a model upgrade orfeature addi- tion may be increased by IBM in the same manner and in accordance with the same Upper Limit calculations as for ma- chines and pursuant to the provisions set forth in the Section entitled "Machine Modifications." The Monthly Use Charge Rate(s) for each Plan C machine may be increased by IBM in the same manner and in accordance with the same Upper Limit calculations as Monthly Lease Charges. IBM Illay increase the Additional Monthly Maintenance Charge Rate or the Percentages for Optional Periods of MaintenanceSer- vice, or IBM may change the Machine Group designation or the Optional Periods of Maintenance Service, at any time upon three months' prior written notice to the Customer. Upon 15 days' prior written notice to IBM, the Customer may discontinue any Op- tional Periods of Maintenance Smvice affected by sLlch notice on the effective date of the increase or change. Otherwise, the new Rate, Percentages, Machine Group designation and Optional Periods of Maintenance Service wi II become effective as specified. The one-year Extension Period for each machine will com- mence automatically unless the Customer notifies IBM in writing on or before the Expiration Date of the Lease Contract Period or current one-year Extension that the Customer elects one of the following choices, as available: a) to extend for a period of less than one year at the end of which time the machine will be placed under a Rental Con- tract Period, jf available, unless otherwise agreed; b) to commence a new Lease Contract Period; c) to place the machine under a Rental Contract Period; or d) to purchase the machine. In addition, the Customer may discontinue a machine or feature or request a model downgrade effective on the Expiration Date of a Lease Contract Period or Extension upon one month's prior written notice. MACHINE MODIFICATIONS Upon the Customer's written request, IBM will make field installable model conversions or feature changes to a machine installed under this Agreement. Model Upgrades and Feature Additions A model upgrade is defined as a model converSIon which results in an increase in the Monthly Lease Charge or Monthly Rental Charge. Each model upgrade or feature addition to a machine installed under a Lease Contract Period or Extension may be placed either under that Lease Contrilct Period or Exl(~n~~ion or, if availahle, under a Rental ContrJcl Period. a) If placed under that Lease Contract Period or Extension, the model upgrade or feature addition will be installed at IBM's applicahle Monthly Leflse Ctlarge and Monttlly Use Ctlargc Rate(s), if any, then generally in effect for new orders for such model upgrade or feature having the same Base Term as the installed machine. When a model upgrade is installed under that Lease Contract Period or Extension, such Lease Contract Period or Extension will be lengthened to provide 3 common Expiration Date for the machine and the model up- grade. When a feature addition is installed under that Lease Contract Period or ExtenSIon, such Lease Contract Penod or Extension will not be lengthened The mode! upgrade or feature addition will assume the same Anniversary Date (but not the same Commencement Date) and Upper Limit Percent as the installed machine for purposes of determining future increases in the Monthly Lease Charge and any applicable Monthly Use Charge Rate(s). b) If placed under a Rental Contract Period, the model upgrade or feature addition to a machine which is under a Lease Contract Period or Extension will be installed at IBM's Monthly Rental Charge then generally in effect. For a model upgrade or feature addition to a Plan A mClclline, 3n addi- tional charge, as specified by 18M, will apply in lieu of any Addlt" Use <;l€. For a model upgrade or feature addition to a Pia" C machine, IBM's applicable Monthly Use Charge Rate(s) then generally in effect will apply. The Expiration Date of the Lease Contract Period or Extension will not be adjusted. Each model upgrade or feature addition to a machine installed under a Rental Contract Period may only be placed under a Rental Contract Period and will be installed at IBM's Monthly Rental Charge. and Additional Use Charge Rate or Monthly Use Charge Rate(s), as applicable, then generally in effect. A model upgrade or feature addition to a Plan D machine for which the Customer has elected Optional Periods of Maintenance Service will be installed at IBM's applicable Additional Monthly Maintenance Charges, as provided in this Agreement, based on the Additional Monthly Maintenance Charge Rate, if any, then generally in effect for new orders. The Commencement Date for a model upgrade or feature addi- tion will be tile day (Monday through Friday) following the day that the model upgrade or feature addition is installed, as specified in the Section entitled "Installation," provided IBM has received the written order specifying lease or rental of the mode! upgrade or feature addition by such Date. Model Downgrades and Feature Discontinuances A model downgrade is defined as a model conversion which results in a decrease in the Monthly Lease Charge or Monthly Rental Charge. The downgrade of a model or discontinuance of a feature prior to the Expi ration Date of its Lease Contract Period or Extension will be subject to the provisions of the Section entitled, "Termi- nation Charges." The downgrade of a model or discontinuance of a feature in- stalled under a Rental Contract Period will not result in a Termi 18- tion Charge. DISCONTINUANCE NOTICE Subject to the Sections entitled "Increases in Rental Contract Period Monthly Charges," "Lease Contract Period Extension," "Limitation of Remedies" and "Termination Charges," the Custo- mer may, at any time after installation, discontinue a processor complex unit upon three months' prior written notice, or discon tinue any other machine or any field removable feature or request a field removable model downgrade upon one month's prior written notice. TERMINATION CHARGES The Customer will pay IBM as a Termination Charge, upon termination of a Lease Contract Period or one-year Extension, for a machine discontinuance or model downgrade prior to the Expiration Date of such Lease Contract Period or Extension, the lesser of: a) The Termination Charge Percent specified in the Supple- ment multiplied by the Remaining Contract Value; or b) the Termination Charge Months specified in the Supplement multiplied by the applicable Monthly Lease Charge Value as of the date of termination. The Remaining Contract Value of a machine or model down- grade is determined by multiplying its applicable Monthly Lease Charge Value as of the date of termination by the number of months remaining in its Lease Contract Period or Extension. The discontinuance of a feature will not result in a Termination Charge, except that the Monthly Lease Charge of any feature which is on a machine at any time within three months prior to the dClte of termination of the Lease Contmct Period or Extension for such machine will be included in tile Monthly Least:! Charge Value of such machine. For a machine not yet installed, if the Customer's written order for the machine has been received by IBM, IBM may not increase the Termination Charge Percent or the Termination Charge Months unless written notice shall have been given to the Customer at least three months before the date of shipment. For a machine which is installed, IBM may not increase such Percent or Months during a Lease Contract Period. Return of a machine to IBM upon the Customer's request during a Lease Contract Period or Extension for any reason, including machine replacement for mode! conversion or feature changes which are not field installable, or due to the Customer's failure to comply with any of the terms and conditions of this Agreement, shall be a termination for purposes of this Section. The purchase of a machine under the provisions of the Section entitled ';Purchase Option" will not result in a Termination Charge. PURCHASE OPTION _ The Customer may elect to purchase a machine installed under a Lease Contract Period or Extension by executing a Supplement to Agr-eement for Purchase of IBM Machines. Upon request from Page 14 of 17 the Customer, IBM will quote a net purchar ~tlon price for such machine, including its model upgrades features, as of a specific month that is not more than three months from the date of the request. The net purchase option price, as calculated for each machine, will be the lower of 1) the Purchase Price stated in the Supple- ment for the machine, including its model upgrades and features, as modified in accordance with this Section, less any applicable purchase option credits not to exceed an amount determined by multiplying such modified Purchase Price by the Maximum Purchase Accrual Percent, or 2) IBM's purchase price then generally in effect for the machine, including its model upgrades and features, less any applicable purchase option credits not to exceed an amount determined by multiplying such purchase price by the Maximum Purchase Accrual Percent. The Maximum Purchase Accrual Percent will be specified in the Supplement The purchase option credits are determined by multiplying: a) the applicable Monthly Lease Charges paid under this Agreement by the Purchase Option Percent specified in the applicable Supplement; and b) applicable charges, if any. paid under other IBM agree- ments by the purchase option percents applicable under those agreements. For purposes of this CalCIJlation, the period dlJring which monthly ctlarges are eligible for purchase option credits is tile pcnod during which the machine has been continuously installed. Eligible monthly charges will be applied in the order in which they are first incurred and do not include Additional Use Charges, Monthly Use Charges or Additional Monthly Maintenance Charges. When a machine ceases to be installed under ttlis Agreement, all purchase option credits accrued hereunder with regard to that machine shall expire. Purchase option credits accrue individually for each machine, model upgrade and feature. Purchase option credits are not trans- ferable to other Customers or between machines, or among a machine, its models and features. For a machine not yet installed, if the Customer's written order tor the machine has been received by IBM prior to the announce- ment of a Purchase Price increase or a decrease in Purchase Option Percent or Maximum Purchase Accrual Percent, IBM may not increase such Price nor decrease such Percents unless writ- ten notice shall have been given to the Customer at least three months before the date of shipment. For a machine which is installed, IBM may increase the Purchase Price stated in the Supplement immediately upon written notice, subject to Upper Limits determined in the same manner as for Monthly Lease Charges as described in the Sections entitled "Increase in Lease Contract Period Monthly Charges" and "Lease Contract Period Extension." The Purchase Option Percent and Maximum Purchase Accrual Percent for a ma- chine will not be decreased during a Lease Contract Period. The Customer may elect to purchase a machine installed under a Rental Contract Period by executing a Supplement to Agree- ment for Purchase of IBM Machines. Upon request from the Customer, IBM will quote the then applicable purchase price for such machine, including its model upgrades and features, as of a specific month that is not more than three months from the date of the req uest. SHIPMENT IBM agrees to schedule each machine for shipment in accord- ance with IBM's applicable shipment sequence and will confirm in writing, and amend as necessary, the Customer's schedule. Prior to shipment, IBM will make reasonable accommodation to a delay requested by the Customer. PROGRAMMING The term "programming" as used in this Agreement shall mean such programming as IBM may make generally available, from time to time, without separate charge, for machines of the types ordered by the Customer under this Agreement. IBM will furnish such programming as may be requested by the Customer. The term "programming services" shall mean such services as IBM may generally make available without separate charge in connection with programming. IBM will determine the program- ming services available and their duration. The terms "programming" and "programming services" do not include IBM programs and services that are available for a separate charge or which are offered under separate written agreements. ALTERATIONS AND ATTACHMENTS An alteration is defined as any change to an IBM machine which deviates from IBM's physical, mechanical or' .trical Z125~H2f:-'01 machine design whet' ")r not additional devices or parts are required. An attachml .J defined as the mechanical, electrical or electronic interconnection to an IBM machine of non-IBM equipment and devices not supplied by IBM. An alteration to a machine may be made upon prior written notice to IBM. An attachment to a machine may be made without notice to 18M. The Customer agrees to accept the responsibility for making any such alteration or attachment, its use and the results obtained therefrom, and to pay all charges related to the alteration or attachment as described in the Section entitled "Services for Additional Charge." The Customer further agrees to remove any alteration or attachment and to restore the machine to its normal. unaltered condition prior to its return to IBM, or upon notice from tBM that the alteration or attachment creates a safety hazard or renders maintenance of the machine impractical. MAINTENANCE SERVICE IBM will provide maintenance service to keep each machine in, or restore it to, good working order and will make all necessary adjustments, repairs and parts replacements_ The Customer agrees to provide IBM full, free and safe access to the machines to provide maintenance service. The Customer is responsible to implement ilppropriate safeguards for Customer's data. The Customer i:; I(:spon~;ible for removinq, controllinq and replacing or reloading funds contained in lhe machines. IBM Will service machines containing funds only when the cash container cannot be opened prior to repair by IBM, in which case the Customerwill remove the funds as soon as the container has been opened. The Optional Periods of Maintenance Service for a Plan 0 machine on Monday through Friday must include the Base Period of Maintenance Service and must be the same consecutive hours each day, and the Optional Period on Saturday or Sunday must be the same consecutive hours on all Saturdays or Sundays. If the Customer request maintenance service for a Plan 0 machine to be performed at a time outside the Periods of Maintenance Service, the service, including travel and waiting time, will be furnished under this Agreement at IBM's then applicable hourly service rates and minimum charges, and travel expense; howev.er, there will be no additional charge for main- tenance parts. TRAVEL EXPENSE Except as provided for Plan 0 machines In the Section entitled "Maintenance Service," there will be no charge for travel ex- pense associated with maintenance service or programming service under this Agreement except that actual travel expense will be charged when ttie site at which the machine is located 1) is within the contiguous States and is normally inaccessible by both private automobile and scheduled publiC transportation, or 2) is outside the contiguous States and is normally inaccessible by private automobile. SERVICES FOR ADDITIONAL CHARGE The Customer agrees to pay, at IBM's then applicable hourly service rates and minimum charges, parts and material prices and travel expense, all charges for services and to pay for loss of or damage to a machine, caused by 1) use of the machine for purposes other than for which designed, 2) alterations and attachments, or 3) vandalism or burglary of machines designed to contain funds. The Customer also agrees to pay, at IBM's then applicable hourly service rates and minimum charges, parts and material prices and travel expense, all charges for service for accessories, and for repair of damage, replacement of parts (due to other than normal wear) or repetitive service calls caused by the use of supplies. All services (including but not limited to services relating to pre-installation planning, inspections, relocation of machines, engineering changes and altered programming) which may be made available by IBM to the Customer, with or without separate charge, in connection with any machines or programming supplied under this Agreement shall be subject to the terms and conditions of this Agreement unless such services are provided under another written agreement signed by the Customer and IBM. ADDITfO:l:AL PRODUCTS AND SERVICES In addition to the machines, programming and services provided under this Agreement, IBM offers other products and services at separate charges under applicable written IBM agreements_ IBM and the Customer agree that such products and services C,lnnot be the sllbject of an oral agreement. The Customer may contract with IBM for any such products or services as available, but only under the terms and conditions of a written agreement signed by the Customer and 18M. Page 15 of 17 RISK OF LOSS OR OAMAGE During the period a machine, model cc rsian or feature is in transit or in the possession of the Customer, IBM and its insurers, if any, relieve the ClJstorncr of responsibility for all risks of loss of or damage to the mactline, model conversion or feature except for loss or damage 1) caused by nuclear radiation or radioactive contamination for which the Customer is legally liable. and 2) as set forth in the Section entitled "Services for Additional Charge." IBM is relieved of responsibility for all 1055 of funds contained in. dispensed by or associated with any machine. INVOICING Monthly Lease Charges, Monthly Rental Charges and Additional Monthly Maintenance Charges will be invoiced in advance as of the first of each month or at greater intervals in accordance with IBM's then current billing practices. Additional Use Charges and Monthly Use Charges will be invoiced in the month following the month in which they are incurred or at greater intervals in accordance with IBM's then current billing practices. Charges for maintenance service and other services furnished at IBM's hourly service rates will be invoiced when or after the service is performed. When a machine, model conver- sion or feature is installed, or an Optional Period of Maintenance Service is in effect, for a part of a calendar month, the Monthly Lease Charge, Monthly Rental Charge or any applicable Addi- tional Monthly Maintenance Charge will be prorated on the basis of a 30-day month. Additional Use Charges will be prorated in accordance with IBM's established practices. Payment will be made within 30 days after the date of invoice. All other charges due hereunder are payable as specified in the invoice. WARRANTIES IBM warrants that each machine, model upgrade or feature addition will be in good working order on the day that it is installed and that it will conform to IBM's official published specifications. Thereafter, IBM will make all adjustments, repairs and parts replacements necessary to maintain the machine, subject to the provisions stated in the Sections entitled "Maintenance Service," "Services for Additional Charge" and 'R isk of Loss or Damage." IBM further w"rrants that progmmming desigmted by IBM for use with a machine and for which programming services are available will conform to IBM's official published specifications when shipped to the Customer if properly lJsed on slJch machine. Thereafter, IBM will provide programming service, subject to the provisions stated in the Section entitled "Programming." IBM does not warrant that the functions contained in the programming will operate in the combinations which may be selected for use by the Customer, or will meet the Customer's requirements. ALL PROGRAMMING FOR WHICH NO PROGRAMMING SERVICES ARE AVAILABLE IS DISTRIBUTED ON AN "AS IS" BASIS WITHOUT WARRANTY. IBM does not warrant that the operation of the machine or programming will be uninterrupted or error free, or that all programming errors will be corrected. THE FOREGOING WARRANTIES ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING. BUT NOT LIMITED TO. THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTtCULAR PURPOSE. PATENT AND COPYRIGHT INDEMNITY IBM will defend the Customer against a claim that machines or programming supplied hereunder infringes a U.S. patent or copyright, or that the machine's operation pursuant to a current release and modification level of any programming supplied by IBM infringes a U.S. patent. IBM will pay resulting costs, damages and attorney's fees finally awarded provided that: a) the Customer promptly notifies IBM in writing of the claim; and b) IBM has sole control of the defense and all related settle- ment negotiations. If such claim has occurred, or in 18M's opinion is likely to occur, the Customer agrees to permit IBM, at its option and expense. either to procure for the Customer the right to continue using the machines or programming or to replace or modify the same so that they become non-infringing. If neither of the foregoing alternatives is reasonably available, the Customer agrees to return the machines or programming on written request by 18M. No Termination Charges will be payable on such returned machines, and the Customer will pay only those charges which were payable prior to the date of such return. IBM has no liability for any claim based upon the combination, operation or use of any machines or programming supplied hereunder with equi~ t or data not supplied by IBM, or with any program other tho." or in addition to programming supplied by IBM if sllch claim wOllld have been avoided by use of another program whether or not capable of achieving the same results. or based upon alteration of the machines or modification of any programming supplied hereunder. The foregoing states the entire obligation of IBM with respect to infringement of patents and copyrights. LIMITATIONS OF REMEDIES IBM's entire liability and the Customer's exclusive remedy shall be as follows: In all situations involving performance or non-performance of machines, model upgrades, features or programming furnished under this Agreement. the Customer's remedy is 1) the adjustment or repair of the machine, model upgrade or feature, or replacement of its parts by IBM, or, at 18M's option, replacement of the machine, model upgrade or feature, or correction of programming errors, or 2) if, after repeated efforts, IBM is unable to install the machine, model upgrade or feature or a replacement machine, model upgrade or feature in good working order, or to restore it to good working order, or to make programming operate, all as warranted. the Customer shall be entitled to recover actual damages to the limits set forth in this Section. For any other claim concerning performance or non- performance by IBM pursuant to. or in any way related to the subject matter of, this Agreement and any Supplement or other order under this Agreement, the Customer shaH be entitled to recover actual damages to the limits set forth in this Section. 18M's liability for damages to the Customer for any cause whatsoever, and regardless of the form of action, whether in contract or in tort including negligence, shall be limited to the greater of $100,000 or twelve Monthly Lease Charges or Monthly Rental Charges for the specific machines that caused the damages or that are the subject matter of or are directly related to the cause of action. Such Charges shall be those in effect for the specific machines when the cause of action arose. The foregoing limitation of liability will not apply to the payment of cost and damage awards referred to in the Section entitled "Patent and Copyright Indemnity," or to claims for personal injury or damage to real property or tangible personal property caused by IBM's negligence. In no evenl will IBM be liable for any damages caused by the Customer's failure to perform the Customer's responsibilities, or for any lost profits, lost sayings or other consequential damages. even if IBM has been advised of the possibility of such damages. or for any claim against the Customer by any other party, exc 'pt as provided in the Section entitled "Patent and Copyright Indemnity." The Customer may discontinue a machine forthwith without Termination Charges for failure of IBM to comply with any of the terms and conditions of this Agreement applicable to such machine. GENERAL This Agreement is not assignable; none of the machines may bL sublet, assigned or transferred by the Customer without the prior written consent of IBM. Any attempt to sublet, assign or transfer any of the rights, duties or obligations of this Agreement without such consent is void. Machines under this Agreement are to be located only in the United States and Puerto Rico. The Customer agrees to keep IBM informed of the location of each machine. Each machine remains IBM's property and may be removed by IBM at any time after discontinuance of the machine. IBM shall have full, free and safe access to each machine for this purpose. IBM may, upon three months' prior written notice to the Customer, discontinue a machine or feature or downgrade a model under a Rental Contract Period at anytime or under a Lease Contract Period or Extension on its Expiration Date. IBM may discontinue a machine forthwith for failure of the Customer to comply with any of the ferms and conditions of this Agreemenf applicable to such machine. The Agreement may be terminated by either party, upon one month's prior written notice. following the discontinuance of all macnines and fulfillment of all obligations hereunder. Subject to the terms of the following paragraph. IBM may. upon twelve months' prior written notice, modify the terms and conditions of this Agreement, except that IBM may, upon three months' prior written notice, modify the terms and conditions of the Sections entitled "Contract Period," "Charges," "Termination Charges," "Purchase Option," "Lease Contract Period E~ension" and "Machine Modifications." Any such modification will apply on the effective date specified in the notice to all Rental Contract Periods and to new lease Page 160f 17 , Contract Periods or Extensions which, .8 a Commencement Date oQ or after the date of the notice. Such modification will apply to current Lease Contract Penods or Extensions upon their Expiration Oates. provided such occur on or after the effective date. For a lease machine which was on order prior to the date of the notice and is shipped within three months following the date of the notice, and for an Extension which will commence within three months following the date of the notice, the effective date of such modification will be the Expiration Date of the initial Lease Contract Period or the ensuing Extension. respectively. Other- wise, the Agreement or any Supplements can only be modified by a written agreement duly signed by persons authorized to sign agreements on behalf of the Customer and IBM, and variance from the terms and conditions of this Agreement and any Supple- ments in any Customer order or other written notification will be of no effect. IBM is not responsible for failure to fulfill its obligations under this Agreement due to causes beyond its control. No action, regardll of form, ansing out of this Agreement may be brought by either party more than two years after the cause of action hilS arisen, or, in the case of an action for nonpay- ment. morc thm) lwo yr:ars from the date the last payment was due. This Agreement will be governed by the laws of the State of New York. THE CUSTOMER ACKNOWLEOGES THAT THE CUSTOMER HAS READ THIS AGREEMENT, UNDERSTANDS IT AND AGREES TO BE BOUND BY ITS TERMS AND CONDITIONS. FURTHER. THE CUSTOMER AGREES THAT THIS AGREE- MENT AND ITS APPLICABLE SUPPLEMENTS AND EXHIBITS ARE THE COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN THE PARTIES, SUPERSEDING ALL PROPOSALS OR PRIOR AGREEMENTS. ORAL OR WRITTEN, AND ALL OTHER COMMUNICATIONS BETWEEN THE PARTIES RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT. Agreement for Hourly IBM Machine Service (Z120-2826-00) International Business Machines Corporation (18M) by its acceptance of this Agreement agrees to furnish and the Customer agrees to accept on the fOllowing terms and conditions Hourly I~M Machine Service at .an IBM ~aci.lity for program testing ~nd ?~her activities, including conversion, directly related to program testing. Hourly IBM Machine Service IS compnsed of the availabilIty and use of machines and programs (applicable System Control Programming and certain Licensed Program Products) as mutually agreed upon by the Customer and IBM at the IBM FaCility. TERM This Agreement is effective from the date it is accepted by IBM and shall remain in force until terminated by the Customer upon one month's prior written notice, or by IBM upon three months' prior written notice. The availability of machines and programs may be modified or terminated by IBM upon one month's notice. USE The service furnished under this Agreement shall be used eXClusively by the Customer for program testing and other activities, including conversion, directly related to program testing. This includes testing activities associated with either IBM furnished or Customer furnished programs. The Customer represents to IBM that he is currently or prospectively a user of J8M products, and will not use the service being furnished under this Agreement except in conjunction with the Customer's use or prospective use of such IBM products. CHARGES The Customer agrees to pay charges for Hourly IBM Machine Service in accordance with IBM's established rates in effect when the service is rendered. All charges are SUbject to change upon three months' notice Charges accrue when the service is available for the Customer's use, as agreed upon by the Customer and IBM at the IBM Facility. Charges will be invoiced monthly for services rendered and are payable on receipt of invoice, There shall be added to any charges under this Agreement amounts equal to any applicable taxes however designated. levied or based on such charges or on this Agreement or the services rendered hereunder. or on the machines and programs or their use, including state and local privilege or excise taxes based on gross revenue, and any taxes or amounts in lieu thereof paid or payable by IBM in respect of the foregoing, exclusive of personal property taxes assessed on the machines or programs and taxes based on net income. STORAGE MEDIA AND SUPPLIES Except for storage media necessary for the availability and use of IBM furnished programs and incidental consumption of paper forms and cards utilized, all suppl!es, materials and other storage media required by the Customer to use the machines must be furnished by the Customer and must meet IBM speCifications. MAINTENANCE IBM shall have full and free access to the machines and programs for maintenance purposes. Charges for any ';'\IIir.~' adjustments, component replacements or repairs due to the negligence of the Customer will be borne by the Customer. When machines or programs are unavailable during the Customer's scheduled hours due to required maintenance, such time will be rescheduled as mutually agreed upon by the Customer and. IBM. GENERAL The Customer IS solely responsible for the accuracy and adequacy 01 all proqramming used in connection With the machines, the operation of the machInes when the machmes are scheduled for the Customer's exclusive use, and the resultant out- put thereof. IBM <iSSllmes no responsibility for loss or security of Customer dat(l m records. Programs furnished by IBM are provided for the (;ustomer's use at the IBM Facility. The Customer agrees not to copy any such programs for use outside of the IBM Facility or remove any such programs from 18M's premIses. IBM MAKES NO WARRANTIES EXPRESS OR IMPLIED. INCLUDING BUT NOT LIMITED TO, THE IMPLIED WAR- RANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. IBM will not be liable for lost profits. for any claim against the Customer by any other party, or for consequential damages even if IBM has been advised of the possibility of such damages. IBM shall not be liable for failure to make Hourly IBM Machine Service available due to causes beyond IBM'~; control. No action, regardless of form, ansing out of the tr;:Hlsilctions under tillS Agreement. may be brought by either 0<i1"ty morc than OnE! year after the cause of action has <1cclucc1, except that an action for nonpayment may be brought within one year after the date of last payment The terms of this Agreement may be modified by IBM upon three months' written notice to Ule Customer. The Customer rnay exercise the Customer's right to terminate; otherwise, such modification shall become effective. This Agreement shall be governed by the laws of the State of New York and constitutes the entire agreement between the Customer and IBM with respect to Hourly IBM Machine Service. The foregoing terms and conditions shall prevail notwithstanding the terms of any order submitted by the Customer with respect to Hourly IBM Machine Service. THE CUSTOMER ACKNOWLEDGES THAT HE HAS READ THIS AGrlEEMENT, UNDERSTANDS IT AND AGREES TO ALL TERMS AND CONDITIONS STATED HEREIN. Page 17 of 17 ~ International Business Machines ~orporation Composite Signature Agreement Name and Address of Customer: City of Paris Water Treatment Plant Lake Crook Road Paris, IX 75460 IBM Branch Office Address: Armonk, New York 10504 Agreement No. G6D0892 IBM Branch Office No.: G6D Customer No.: 6911039 10~5 ESE Loop 323 Tyler, IX 75701 International Business Machines Corporation (IBM) and the Customer agree that IBM will provide and the Customer will accept the products and services ordered by the Customer in accordance with the terms and conditions stated in the ap- plicable Agreements. designated below by the Customer's initials. which the Customer agrees to include herein. The included Agreements are attached hereto and are incorporated In this Agreement. This Composite Signature Agreement. when Signed by IBM and the Customer, has the same effect as signing each of the ,L,greements designated by the Customer's initials. and IS effective upon acceptance by IBM. Initials ;0 o o o o o Title of Agreement or Amendment All of the following. unless selectively designated by initialing below for individual documents Agreement for Purchase of IBM Machines IBM Maintenance Agreement Agreement for IBM Licensed Programs Agreement for Lease or Rental of IBM Machines Agreement for IBM Hourly Machine Service IBM Form Number Z120-2892-01 Z125-3275-00 Z125-3358-00 Z125-3320-00 Z120-2826-00 THE CUSTOMER ACKNOWLEDGES THAT THE CUSTOMER HAS READ EACH OF THE AGREEMENTS DESIG- NATED BY THE CUSTOMER'S INITIALS, UNDERSTANDS THEM, AND AGREES TO BE BOUND BY THEIR TERMS AND CONDITIONS. Accepted by: International Business Machines Corporation By Name (Type or Print) Z1:!S-9029-01 (07/84) U/M 025 CITY OF PARIS Customer Authorized Signature By Authorized Signature Dale Name (Type or Print) Date PRESS FIRMLY WITH BALL POINT PEN ON A HARD SURFACE FOR MAXIMUM LEGIBILITY. Page 1 of 17 Jreemenllor Purchase of IBM Machine, (Z120-2892-01) International Business Machines Corporation (IBMI and the Customer agree that the following terms and conditions will apply to any Cus- tomer order accepted by IBM for the purchase under this Agreement of IBM machines, features, model conversions, machine elements or accessories or of non~IBM equipment. IBM will 1) sell machines to the Customer, 2) furnish, as available, programming and programming service, 3) sell features and model conversions to the Customer for installation or reinstallation on an IBM machine designated by type and serial number, 4) sell machine elements, accessories and non-18M equipment to the Customer, and 5) provide warranty service, as applicable. The term "Machines" refers to IBM machines and/or their features, model conversions, machine elements and accessories unless the context requires individual reference. The term "Machines" also applies to non-18M equipment except as otherwise provided in the Section entitled "Purchase of Non-IBM Equipment." Machines are those on-order to be installed, or which are installed under an IBM lease or rental agreement with the Customer. Features include additions and removals. Model conversions include upgrades and downgrades betwi ~en models and between machine types. The term "programming" shall mean such programming as IBM may make generally available, without separate charge. for machines of the types ordered by the Customer under this Agreement. The term "programming service" shall mean such service as IBM may make generally available, without separate charge, in connection with programming. IBM will furnish such program- ming, as requested by the Customer, and wi!1 determine the programming services available and their duration. The Customer agrees to accept Machines, programming, programming service and warranty service under the terms and conditions of this Agreement. The Customer further agrees, with respect to Machines and programming, to accept responsibility tor 1) their selection to achieve the Customer's intended results, 2) their use, and 3) the results obtained therefrom. The Customer also has the responsibility' for the selection and use of, and results obtained from, any other equipment, programs or services. acquired outside this Agreement, use, with the Machines and programming. Individual Machines become subject to this Agreement when either the Customer's written order for their ptJrchase, or the Customer's order for their purchase under another ordering procedure designated by IBM, is accepted by IBM. Such order to purchase an on-order Machine must be received by IBM on or before its Date of Installafion. IBM will accept an order by providing to the Customer a Supplement to this Agreement (Supplement), or other documentation designated by IBM, confirming the terms applicable to the Machine. Installation of an on-order Machine, as defined in the Section entitled "Installation," or payment of the Purchase Price of an on-order or installed Machine (or payment of the down payment or the first installment if subject to an IBM installment agreement), whichever first occurs follow- ing the Customer's receipt of the Supplement. will constitute the Customer's acceptance of such terms. PRICES AND PAYMENT IBM and its insurers, if any. relieve the Customer of responsibiiity for all risk of loss of or damage to the Machines except for loss or damage caused by nuclear reaction, nuclear radiation or radioac- tive contamination for which the Customer is legally liable. There- after. all risk of loss of or damage to such Machines shall be on the Customer. All risk of loss of or damage to installed Machines shall be on the Customer after the Effective Date of Purchase. The Purchase Price for each Machine will be stated in the Supw plement and does not include any applicable taxes or destination charges. Payment in full for each on-order Machine will be due on its Date of Installation and. for each installed Machine, on its Effec- tive Date of Purchase, unless otherwise provided in an IBM install~ ment agreement. TAXES In addition to the prices stated in the Supplement, the Customer agrees to pay amounts equal to any taxes resulting from this Agreement, or any activities hereunder, exclusive of taxes based on 18M'S net income. The Customer shall bear any personal prop- erty taxes assessable on on-order Machines on and after delivery to the carrier or, for installed Machines, on and after the Effective Date of Purchase. DESTINATION CHARGES Destination charges for each on-order Machine from a desig- nated IBM location, and any rigging charges, will be paid by the Cus- tomer in accordance with IBM'S then current shipping and billing practices. TITLE Title passes to the Customer for each on-order Machine on its date of shipment from IBM or on the date IBM receives the Custom~ er's order for its purchase, whichever is later, and, for each instal- led Machine. on its Effective Date of Purchase. SECURITY INTEREST IBM reserves a purchase money security interest in each Machine. This interest will be satisfied by payment in full hereunder or under an IBM installment agreement and,;n addition, when appli- cable, by the return to IBM by the Customer of parts in respect to feature additions or model conversions that involve the removal of parts which become the property of 18M. The Customer agrees to sign appropriate documents to permit IBM to pertect 18M'S security interest. SHIPMENT IBM will confirm. and amend as necessary, the Estimated Ship- ment Date of each on-order Machine. Prior to shipment, IBM will make reasonable accommodation to a Customer requested delay, and, it agreed to by IBM and the Customer, changes may be made in the configuration ot Machines. RISK OF LOSS OR DAMAGE During the period on-order Machines are in transit or in posses- sion of the Customer, up to and including the Date of Installation, PRICE PROTECTION PERIOD The Purchase Price for each on-order Machine shall be IBM'S generally available single unit price and shall be subject to all price increases, except that increases effective during the three-month period immediately prior to the date of Machine shipment shall not apply if the Customer's order was received by IBM prior to the date of announcement of the price increase. If a price increase applies to any such Machine, the Customer may cancel the order upon written notice to IBM within one month of notification of the price in- crease; otherwise, the higher price shall be effective. If IBM'S generally available single unit price for anyon-order Machine upon its Date of Installation shall be lower than the Pur- chase Price for such Machine stated in the Supplement, the Cus- tomer shall have the benefit of such lower price. The term "IBM'S generally available single unit price" does not in- clude prices for sales of Machines under terms and conditions other than those in this Agreement. The Purchase Price for each installed Machine stated in the Supplement is subject to change up to and including its Effective Date of Purchase, subject to any limitations described in any other applicable IBM lease or rental agreement. INSTALLATION Each Machine will be installed as specified by 18M. The Customer agrees to provide a suitable environment for the Machines as specified by 18M. and, except as otherwise specified by 18M, to fur- nish all labor required for unpacking and placing each on-order Machine in the desired location. Packaging materials, jf any, shall become the property of the Customer. . Features and model conversions will be installed on the senal- numbered machine designated in the Supplement. The Customer represents that the Customer is the owner of the machine on whIch any feature or model conversion will be installed or, If not the owner, has the authority from the owner to order the feature or model conversion and to have it installed on the owner's machine. Installation by IBM IBM will install machines, features and model conversions which are not identified as Customer Set-Up. . The Date of Installation for a machine will be the day (Monday through Friday) following the day that 1) the machine is installed under this Agreement or under the applicable IBM lease or rental Page 2 of 17 agreement, or 2) an on-order machine i' ,ilable for delivery or delivered to the Customer and the Custo falls to provide a SUit- able i~tallatlon environment or delays installation. . . The Date of Installation for a feature or model converSion Will be the day (Monday through Friday) following the day that the feature or model conversion is installed under this Agreement or under the applicable IBM lease or rental agreement. The installation of some features and model conversions invol~ ves the removal of parts which become the property of IBM. IBM will specify in the Supplement if removed parts become the property of IBM. The Customer will provide IBM access to the machine to com- mence installing each such feature or model conversion as soon as possible after its shipment from IBM but in no event more than one month following the later of its Estimated Shipment Date or ac- tual date of shipment, unless a shorter period is specified In the Supplement. In the event of failure by the Customer to provide IBM access to the machine within the specified period, the Customer shall return the feature or model conversion to IBM with shipping charges prepaid, unless otherwise agreed to by IBM. lf1he Customer delays Installation of a feature or model conver- sion (other than one which involves the removal of parts which be- come the property of IBM) more than one month from the later of its Estimated Shipment Date or actual date of shipment from IBM. its Date of Installation will be considered to be the day (Monday through Friday) one month following such date of shipment. IBM will notify the Customer of the Date of Installation of each on.order machine, feature or model conversion. Customer Set-Up Each machine, feature or model conversion identified by IBM as Customer Set-Up (CSU), and all machine elements and acces- sories, will be set up by the Customer in accordance with the in- structions furnished by IBM. The Date of Installation will be the day (Monday through Friday) following the day the machine, ieature, model conversion, machine element or accessory is considered to be installed under this Agreement or under the applicable IBM lease or rental agree- ment. An on.order CSU machine will be considered to be installed on the last day of the CSU allowance period specified by IBM for such machine. The CSU allowance period, which does not include Saturdays or Sundays, commences on the day (Monday nlrough Friday) following the date of receipt of the mach.ine at the Custom- er's premises. However, when a CSU machine IS del lye red I~ con~ junction with, and for attachment to, a non-CSU machine delivered from IBM, such CSU machine will be considered to be installed as determined in this paragraph or on the date such non-CSU machine is installed, whichever is later. An on-order CSU feature or model conversion, machine ele- ment or accessory will be considered to be installed one month fol- lowing the later of its Estimated Shipment Date or its actual date of shipment from IBM. PURCHASE OF INSTALLED MACHINES The Purchase Price stated in the Supplement is exclusive of any charges which are due or may become due under the applicable IBM lease or rental agreement. The Effective Date of Purchase .tor Installed Machines shall be the later of the first day of the Quotallon Month or the day on which the payment required under the Section entitled "Prices and Payment" is received by IBM at its IBM Br~nch Office or Remit to Address shown In the Supplement, proVided such receipt is not later than the last day of the Quotation Month. The Machines will be terminated under the applicable IBM lease or rental agreement as of the day Immediately preceding the Effec- tive Date of Purchase. WARRANTIES Machines purchased under this Agreement will be 1) newly manufactured by or for IBM from new and serviceable used parts which are equivalent to new in performance in these Machine~, 2) assembled by or for IBM from serviceable used parts, 3) Machines which have been previously installed, or 4) Machines which are presently installed with the Customer. IBM warrants that on the Date of Installation each on.order Machine will be in good working order and will conform to IBM'S offi- cial published specifications which are availableupon request. The Warranty Period for each Machine. speCIfied In the Supple. ment, commences on its Date of Installation as defined in the Sec- tion entitled "Installation." Z125-9029-01 INSTALLED Mr~'iINES PURCHASED AFTER THEIR WARRANTY PERi ~AS EXPIRED ARE SOLD ON AN "AS IS" BASIS. Service and Parts Warranty Commencing on the Date of Install8:t!on of each on-or~er machine, model upgrade and feature addition, or on the Effective Date of Purchase of each installed machine, model upgrade and feature addition, and continuing for the duration or remainder, if any, of the Warranty Period, IBM agrees to provide the avaHab.ility?f warranty service, at no additional charge except as set forth In thiS Section or in the Section entitled "Travel Expense," to keep the machines, model upgrades and feature additions in, or restore them to, good working order. This warranty service includes pre- ventive maintenance based upon the specific needs of individual machines, model upgrades and feature additions as determined by IBM and on.call remedial maintenance. Such warranty service will include lubrication, adjustments and replacement of parts deemed necessary by IBM. Parts, which may be used parts, will be furnished on an exchange basis, and the replaced parts become the property of IBM. . . . Warranty service will be available at no additional charge dunng the hours specified in the Supplement. Outside such hours, war- ranty service, if requested by the Custorner and proVided. by IBM, will be subject to charge for travel expense plus travel. waiting and service time at IBM'S then applicable hourly servIce rates and mini- mum charges; however, there will be no additional charge for parts. . Warranty service under this. Agreement does ~ot as~ure uninter- rupted operation of the Machines. IBM may, at ItS option, store on the Customer's premises maintenance equipment and/or parts that IBM deems necessary to fulfill this warranty. During the War~anty Period, engineeri~g changes determined appiicable by IBM will be controlled and Installed by .IBM on the Machines. The Customer may, by providing notice subject to writ- ten confirmation by IBM, elect to have only mandatory changes, as determined by I[jM, Installed on the Machines. IBM shall have tull. tree and safe access to the Machines to pro- vide service thereon. The Customer shall promptly inform IBM ot any change in the Machines' location during the Warranty Period. If the Warranty Period expires on a Friday or Saturday, it w!1I be extended so that tlle last day of such Warranty Period will be on the following Sunday. Programming IBM warrants that, when shipped to the Customer, programming designated by IBM for use Will1 a Machine and for w.hi.ch prow am- ming services are available will conform to IBM'S offiCial published specifications which are available upon request. IBM does not warrant that functions contained in programming Will operate in the combinations which may be selected for use by the Customer or will meet the Customer's requirements. ALL OTHER PROGRAMMING IS DISTRIBUTED ON AN "AS IS" BASIS. Additional Provisions for Features and Model Conversions IBM's warranfy for each feature addition or model upgrade re- quires that the machine on which it is installed is at the then cur- rent engineering-change level, IS the speCifiC senal-n.~mbered machine for which it was ordered and has been modified only with changes obtained from IBM specifically for that serial-num~ bered machine. If these conditions are not met, IBM will attempt to install non-CSU feature additions and model upgrades on the machine, and, if such attempt results in an incorrectly functioning machine, upon Customer request and at IBM'S then applica~le hourly service rates and minimum charges, parts and matenal prices and travel expense, IBM will remove the features and/or model upgrades and restore the machine to its prior condition. It such features and model upgrades did not involve the removal of parts which became the property of IBM, such features and model upgrades remain the property 01 the Customer. If such feafures and mooel upgrades involved the removal of parts which be~ came the property of IBM, such features and model upgrades be- come the property ot IBM and the restored parts become the property of the Customer. For a feature removal, model downgrade or reinstallation of a previously purchased feature or mod.e.1 conversior:', a three- month parts warranty will apply to addItional parts, If any, sup- plied by IBM. Page 3 of 17 ~. Additional Provisions for Machine Elements and Accessorlel' Machine elements and accessories h~ 1 three-month War- ranty Period unless otherwise specified by IBM. DUring the War- ranty ~riod. the Customer will remove any defective or failing machine element or accessory and ship it prepaid to the desig- nated IBM location. IBM, at its option, will repair or replace such machine element or accessory and ship it to the Customer with- out charge. Additional Provisions for Machines Containing Funds The Customer is responsible for removing, controlling and re- placing or reloading tunds contained in the Machines. IBM wili service Machines containing funds only when the cash container cannot be opened prior to repair by IBM, in which case the Cus- tomer will remove the funds as soon as the container has been opened. Services for Additional Charge During the Warranty Period The services described in this Section are not warranty ser- vices: However, unless such services are provided under another written agreement between the Customer and IBM, dur- ing the Warranty Period the following services, if available, will be provided by IBM under this Agreement at IBM'S then applicable hourly service rates and minimum charges, including travel and waiting time, parts and material prices and travel expense: 1) Repair of Machine damage, replacement of maintenance parts or increase in service time caused by - a) failure to continually provide a suitable environment pre- scribed by IBM including adequate space, electrical power, air conditioning and humidity control; b) neglect; misuse, including use of the Machines for pur- poses other than for which designed; c) accident; disaster, including water. wind and lightning; transportation; vandalism or burglary; d) alterations, including any deviation from IBM'S Machine de- sign; e) attachments, including any interconnection to the Machine of non-IBM equipment and devices not under an IBM mainte- nance agreement; f) Machines, except those owned by IBM, under warranty from IBM, or under an IBM maintenance agreement; and g) model conversions or installation or removal of IBM features performed by other than IBM except that this subsection (g) will apply only during the three months subsequent to such Machine modification; 2) Repair of Machine damage, replacement of maintenance parts (due to other than normal wear) or repetitive service calls caused by the use of supplies; 3) Inspection of altered Machines and inspection of machines converted from one IBM model or machine type to another or on which an IBM feature is installed or removed when such ac. tivity was performed by other than IBM; 4) Replacement or addition of parts and increase in service time, associated with the installation by IBM of an engineering change, required due to model conversions or installation or removal of IBM features performed by other than IBM; 5) Rearrangement or relocation of Machines and provision of necessary materials; 6) Replacement of a part not furnished for the Machine by IBM with a directly interchangeable IBM maintenance part, and any increase in service time associated with such activity, except that IBM will not replace any part which is included in an altera- tion; and 7) Repair of a Machine caused by non-IBM representatives per- forming maintenance or repair of such Machine. Exclusions The warranties under this Agreement are in lieu 01 any conflict- ing statement of warranty contained in a Machine shipment. The warranties under this Agreement do not include 1) furnishing supplies, painting or refinishing the Machines or furnishing mate- rial therefor, 2) electrical work external to the Machines, 3) instal- lation, maintenance or removal of alterations or attachments to the Machines, and 4) any service which is impractical for IBM to render because of alterations in, or attachments to, the Machines. IBM does not warrant that the operation of Machines or prog- ramming will be uninterrupted or error free or that all program- ming errors will be corrected. THE FOREGOING WARRANTIES ARE IN LIEU OF ALL OTHER WARRANTIES EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. OTHER PRODU AND SERVICES Following the Warranty Period, IBM will provide, upon request and at IBM'S charges and terms then generally in eHect, mainte- nance service and maintenance parts for the Machines and programming services for programming as long as such services and parts are generally available. Unless such activities are pro- vided under another written agreement between the Customer and IBM, they shall be subject to the applicable terms and condi- tions of this Agreement. In addition, IBM offers other products and services at separate charges under applicable written agreements. The Customer may contract with IBM for such other products and services, as available, but only under a written agreement between the par. ties. TRAVEL EXPENSE Except as provided in the Section entitled "Warranties," there will be no charge for travel expense associated with warranty service or programming service except that actual travel ex. pense will be charged when the site at which the Machine is located is normally inaccessible by both private automobile and scheduled public transportation. ENGINEERING CHANGES IBM wili furnish, upon request, and at IBM'S prices then gener.. ally in effect, such engineering changes as IBM shall have avail. able for sale and which may be suitable for use on or with the Machines. Any replaced parts become the property of IBM. IBM makes no representation that engineering changes announced in the future will be suitable for use on or with the Machines. PATENTS AND COPYRIGHTS IBM will, at its expense, defend the Customer against any claim that any Machines or programming supplied tlereunder in- fringe a patent or copyright in the United States or Puerto Rico, and will pay all costs, damages and attorney's fees that a court finally award~ as, a result of such claim. To quality for such de. fense and payment. the Customer must: 1) give IBM prompt written notice of any such claim; and 2) allow IBM to control, and fully cooperate with IBM in, the de- fense J.nd all related settlement rlegotlations. IBM's obligation under this Section is conditioned on the Gus. tomer's agreement that if the operation of the Machines or prog- ramming become, or in IBM'S opinion are likely to become, the subject of such a claim, the Customer will permit IBM, at its option and expense, either to procure the right for the Customer to con. tinue using the Machines or programming or to replace or modify them so that they become noninfringing; and, if neither of the foregoing alternatives is available on terms which are reasonable in IBM'S judgment, the Customer will return the Machines or prog- ramming on written request by IBM. IBM agrees to grant the Cus- tomer a credit for returned Machines as depreciated. The depre. ciation shall be an equal amount per year over the lifa of the Machines as established by IBM. IBM shall have no obligation with respect to any such claim based upon the Customer's modification of the Machines or programming or their combination, operation or use with ap. paratus, data or programs not furnished by IBM. This Section states IBM'S entire obligation to the Customer re~ garding infringement or the like. LIMITATION OF REMEDIES IBM's entire liability and the Customer's exclusive remedy shall be as follows: In all situations involving performance or nonperformance of Machines or programming furnished under this Agreement, the Customer's remedy is 1) the adjustment or repair of the Machine or replacement of its parts by IBM, or, at IBM'S option, replacement of the Machine, or correction of programming errors, or 2) if, after repeated efforts, IBM is unable to install the Machine or ~ replace. ment Machine in good working order, or to restore It to good working order or to make programming operate, all as war- ranted, the cu~tomer shall be e':1titled to recover actu~l damages to the limits set forth in this SectIon. For any other claim cOr:'cern- ing periormance or nonperformance by IBM pursuant to, or In any other way related to the subject matter of, this Agreement or any order under this Agreement, the Customer shali be entitied to re- cover actual damages to the limits set forth in this Section. IBM's liability for damages to the Customer for any cause whatsoever, except as otherwise stated in this Section, and re. gardless of the form of action, whether in contract or in tort in. Page 4 of 1"1 eluding negligence, shall be limited to the greater of $100,000 or t"e Purchase Price stated in the applieec" Supplement tor the s~eci1ic Machines that caused the damt or that are the sub- ject malter of. or are directly related to, tl," cause of action, The forego;,.,g limitation of liability wiil not apply to the payment of costs, damages and attorney s lees referred to in the Section on- titled "Patents and Copyrights," or to claims for personal injury or damage to real property or tangible personal property caused by IBM'S negligence. In no event will IBM be liable for any damages caused by the Customer's failure to perform the Customer's responsibilities, or for any lost profits, lost savings or other consequential damages, even if leM has been advised of the POSSibility of such damages, or for any claim by the Customer based on any third party claim except as provided in the Section entitled "Patents and Copyrights," or for any damages caused by performance or non- performance of Machines or programming located outside the United States or Puerto Rico, nor will IBM be liable for loss of funds contained in, dispensed by, or associated with any Macb.ine under this Agreement PURCHASE OF NON-IBM EQUIPMENT As previously stated, the term "Machines" in this Agreement also applies to non-IBM equipment. However, the Sections of this Agreement entitled "Installation," "Warranties," "Other Products and Services" and "Patents and Copyrights" are replaced in their entirety by the following in respect to non-IBM equipment. Installation The Customer shall provide a suitable installation environment with facilities as prescribed by the manufacturer. Arrangements for installation will be the responsibility of the Customer. IBM has no responsibility for installation under this Agreement nor for any installation performed by the manufacturer. Warranties NON-IBM EQUIPMENT IS NOT WARRANTED BY IBM AND IS SOLD BY IBM TO THE CUSTOMER ON AN "AS IS" BASIS, THERE ARE NO IBM WARRANTIES EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. HOWEVER, THE MANUFAC. TURER'S WARRANTY, IF ANY, APPLIES, AND THE CUS- TOMER MUST DEAL WITH THE MANUFACTURER ON SUCH MATTERS. Other Products and Services The Customer is responsible for arranging for maintenance service for non-IBM equipment. Patents and Copyrights IBM shall have no liability to the Customer regarding patent or copyright infringement for non-IBM equipment. GENERAL This Agreement a~ lyon-order Machines are not assigna- ble to other than an IBM affiliate without the prior written consent of IBM. Any attempt to assign any of the rights, duties or obliga- tions of this Agreement without such consent is void. The Customer agrees to comply with the provisions of any End User Cerfification contained in any Supplement to this Agree- ment, or in any volume procurement or single shipment quantity discount amendment to this Agreement. IBM may, upon written notice, modify the terms and conditions of this Agreement. Any such modification will apply on the effec- tive date specified in the notice to all orders for purchase which are accepted by IBM on or atter tile date of notice. In addition, IBM may modify Ulis Agreement by setting forth such modification in a Supplement which is subsequently accepted by the Customer as provided herein. Otherwise, this Agreement can only be mod- ified by a written agreement duly signed by persons authorized to sign agreements on behalf of Ule Customer and of IBM, and variance from or addition to the terms and conditions of this Agreement in any order or other written notification from the Cus- tomer will be of no effect. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remnining provisions shall not in any way be affected or impaired IIlereby. IBM is not responsible for failure to fulfill its obligations under this Agreement due to causes beyond its control or to provide any services hereunder for Machines or programming located outside the United States or Puerto Rico. No action, regardless of form, arising out of this Agreement may be brought by either party more than two years after the cause of action has arisen, or, in the case of an action for non- payment, more than two years from the date the last payment was due. If the Customer fails to pay the Purchase Price due hereunder and IBM repossesses a Machine as provided by iaw, the Custom- er agrees to pay all costs and expenses of repossession, includ- ing reasonable .attorney's fees. This Agreement is governed by the laws of the State of New York. THE CUSTOMER ACKNOWLEDGES THAT THE CUSTOMER HAS READ THIS AGREEMENT, UNDERSTANDS IT, AND AGREES TO BE BOUND BY ITS TERMS AND CONDITIONS. FURTHER, THE CUSTOMER AGREES THAT THIS AGREE- MENT AND ANY OTHER APPLICABLE IBM AGREEMENTS, AMENDMENTS, SUPPLEMENTS AND CERTIFICATIONS, INCLUDING THOSE ACCEPTED IN THE FUTURE, REFER- ENCING THIS AGREEMENT OR EXPRESSLY MADE A PART HEREOF, WILL BE THE COMPLETE AND EXCLUSIVE STATE- MENT OF THE AGREEMENT BETWEEN THE PARTIES, SUPERSEDING ALL PROPOSALS OR PRIOR AGREEMENTS, ORAL OR WRITTEN, AND ALL OTHER COMMUNICATIONS BETWEEN THE PARTIES RELATING TO THE SUBJECT MATTER HEREIN. IBM Maintenance Agreement (Z125-3275-00) International Business Machines Corporation (IBM) and the Customer agree tl13t the following terms and conditions will apply to any Customer order accepted by J8M to provide maintenance service for IBM Machines located Within the United States and Puerto Rico. "Machine{s)" as used herein refers to machines and/or their features, model conversions and machine elements unles~ the contex.t requires individual reference. This Agreement is effective from the date on which illS accepted by IBM and shall remain In force until terminated by the Customer or 18M. SpeCific Machines become subject to this Agreement on the EffectIve Date deSignated by the Customer, If agreed to by IBM, and such information will be shown In a Supp\(:1l1cnl to IBM Mallltenance Aqreemcnt (Supplement) signed by IBM. MAINTENANCE SERVICE IBM agrees to provide the availability of maintenance service to keep the Machines in, or restore the Machines to, good working order. Maintenance service includes preventive maintenance based on the specific Ileeds of individual Machines asdeterrnincd by IBM and on-call remedial mamtenance. Maintenance servl.ce also includes lubrication, adjustments and I'eplacernent Ollll<llll- tenance parts all as deemed necessary by 18M. Maintenance parts, which may be used parts, will be furnislled on an exchange basis. and the replaced parts become Ihe propeliy of IBM. IBM may, at its option, store maintenance equipment and/or parts on the Customer's premises. The Customer agrees to provide a suitable environment for ttw Machines as specified by IBM. and 10 provllie IBM full. lice and safe access to the Machines to provide r' laintenance service. The Customer is responsible to implement appropriate safeguards for Customer's datn. The Customer is responsible for removing, controlling and replacing or reloading funds contained in the M<lchlneS, 10M Will service MacllltleS containing funds only when the' cash cotll<llr1cr C<HHlot be: opened prior to repair by IBM, in whicll case lilt: CllstOI11r:r will r('move ltw funds r1S soon as trH: container has bec!l) opened. PERIODS OF MAINTENANCE SERVICE The Base Period of Maintenilnce Service is from 7 a,m, to6 p.m" Mondny Hlfollqll Frid<:lY, unless otherwise designated by IBM in the S\lpp1c~nwnl Th(: Ctlslonwr rl1;lY sr~I(:cl Opliol1i11 Periods of Millntcllill1CC Service sllowfl III the Supplement Thu Optional Period for Monday throuqh Frid<1Y must include the BFlse Period Paqe~) of 17 )f Maintenance Selvice and must be the same consecutive hours 'iiich day. The Optional Period on Saturday or day must bethe ,;:,me consecutive hours on all Saturday~ Sundays. The ::ustomer rllfiY select or change Optional Periods of Maintenance Jervice upon 15 days' written notice to IBM. 'i!GINEERING CHANGES Engineering changes, determined applicable by IBM, will be ;ontrolled and installed by IBM. The Customer may, by providing lotice subject to written confirmation by IBM, elect to have only llandatory changes, as determined by IBM, installed on Machines c designated. ;HARGES Ttle Customer agrees to pay maintenance charges, com- nancing on the Effective Date, consisting of 1} a Minimum /i~ 'ntenance Charge, and 2) Additional Maintenance Charges, If lpplicable. Additional Maintenance Charges will be for a) Op- ianal Periods of Maintenance Service selected by the Customer, "iased on the Machine Group and determined by multiplying the -flinimum'Maintenance Charge tor the Machine by the applicable -)ercentages for the Optional Periods of Maintenance Service ~rlOwn in the Supplement. and/or b) the amount of processing Jorformed by Usage Plan Machines, as measured by an IBM neter multiplied by the Addilional Maintenance Charge Rate(s) ;hown in the Supplement. The Customer agrees to promptly submit to IBM the meter "eading for each Usage Plan Machine as of the close of the last "vork day of the period to which the Minimum Mi1intenance r:::'harge applies, The Customer agrees not to interfere with the proper operation of the meter. There will be no additional charge for travel expense associated with maintenance service provided during the Periods of Main- tenance Service, except ttlat actual travel expense will be charged when the site at which the machine is located is 1) within the contiguous States and is normally inaccessible by both private automobile and scheduled public transportation, or 2) outside the contiguous States and is normally inaccessible by private auto- mobile. The Customer agrees to pay for maintenance service, including (ravel and waiting time, provided by IBM outside the Periods of i\~ajntenance Service at IBM's then applicable hourly service rates Jnd minimum charges, and travel expense; however, there will be no additional charge for maintenance parts, Changes in a Machine's specifications may result in adjust- ments to the maintenance charges. Minimum and Additional Maintenance Charges are subject to change by IBM upon three months' written notice to the Customer and will become effective on the date specified in tile notice unless the Customer withdraws the affected Machine from this Agree" rnent as provided in the Section entitled "Withdrawal/Termina- tion," except that Charges invoiced quarterly or annua!ly are subject to change by IBM upon commencement of service and on the first day of each quarterly or annual invoice period, upon three months' written notice to the Customer. IBM's hourly service rates and minimum charges iJrc subject to change hy IBM without notice. SERVICES FOR ADDITIONAL CHARGE The services, including travel and waiting time, described in ttlis Section, if available, will be provided by 113M under thi~ ^gruumcflt at IBM's then applicable hourly service rates and minimum charges, parts and materilll prices Clnd travel expcnsD, t1nlc~"s such services are provided under another written agreement signed by the Customer and IBM. The following services are not considered maintenance service as described in the Section entitled "Main- tenance Service": 1) Repair of Machine damage, replacement of maintenance parts or increase in service time caused by- a} failure to continually provide a suitable environment pre- scribed by IBM including adequate space, electrical power, air conditioning and humidity control; b) neglect; misuse, including use of the Machines for pur- poses other than for which designed; c) accident; disaster, including water, wind and lightning; transportation; vandalism or burglary of Machines de- signed to contain funds; d) alterations, including any deviation from IBM's Machine design; e) attachments, including any interconrwction to the M.1ch,. ine of 0()"..1BM equipment and devices not supplied by IE!~; . f) IBM %11lc~fnes, except those 10M Machines which arc owned b. i\l\, under warranty from IBM" or under an IBM main\.':ilanCf' "'reement; and g) conversion from IBM model to another or the instal- lation or removal VI dn IBM feature whenever any of these activities was performed by other than IBM except that this subsection (9) will apply only during the first three months of service under this Agreement subsequent to the date of such Machine modificiation; 2) Repair of Machine damage. replacement of maintenance parts (due to other than normal wear) or repetitive service calls caused by the use of supplies: 3) Service for accessories: 4) Inspection of altered Machines: 5) Replacement or addition of parts and increase in service time associated with the installation by IBM 01 an engi- neering change when such parts and service are required due to the conversion from one IBM model to another or the installation or removal of an IBM feature whenever any of these activities was performed by other than 18M; 6) Remrangement or relocation of Machines and provision of necessary materials: 7) Replacement of a pan not furnished for the Machine by IBM (except when such part is in an alteration) with a directly interchangeable IBM maintemmce part, and any increase in service time associat(;d with such activity; and 8) Repair of a Machine caused by non-IBM representatives per- forming maintenance or repair of such Machine. EXCLUSIONS Servi~o~ provided. by 18~ l!nder this ~9re~ment do not includo 1) furnlshmg supplies, painting or refinishing the Machines 0 furnishing material therefor, 2) electrical work external to the Machines or installation, maintenance or removal of alterations, attachments or other devices not furnished by IBM and 3) such service which is impractical for IBM to render because of alterations in, or attachments to, the Machines. TAXES In addition to the charges due under this Agreement, the Customer agrees to pay amounts equal to any taxes resulting from this Agreement, or any activities hereunder, except for taxes based upon IBM's'nef income. INVOICING The Minimum Maintenance Charge and the Additional Main- tenance Charge for Optional Periods will be invoiced in advance, monthly, quarterly or annually as shown in the Supplement. Monthly charges will be inVOiced as of the first of each month and will be prorated on the basis of a 30-day month. The Additional Maintenance Charge for usage will be invoiced following the pl:~riod in which it is incurred. All other charges will be invoiced when or after they are incurred. PAYMENT The CU1tomer will remit payment to IBM within 30 days after the date of invoice. The Customer will receive a partial credit of maintenance charges invoiced upon the withdrawal of Machines or termination of this Agreement prior to the expiration of the period for which the invoice applies. WITHDRA WAL/TERMINA TION The Customer may withdraw a Mac~ine from this Agreement upon one month's written notice to IBM <I) after the Machine has been under tllis Agreement for at least six months, b} after the Machine has been under this Agr0ement for at least one month. provided it has been removed from the Customer's location or c) on the effective date of an increase in the Minimum Maintenance Charge or Additional Maintenance Charges. . IBM may withdraw a Machine from this Agreement upon three months' written notice to tt1C Customer one year or more after maintenance service for each sLich Machine has commenced, but not prior to the end of the period for which IBM has submitted an invoice to tile Customer for service under this Agreementforsuch Machines. IBM may withdraw a Machine from this Agreement upon one month's written notice to the Customer following any repetition of the need for additional repair of such Machine caused by non-18M maintenance activity, as described in item (8) of the Section entitled "Services for Additional Charge:' Either party may withdraw Machines or terminate this Agree- ment at any time by written notice for failure of the otherto comply with any of its terms and conditions. This Agreement may be terminnted by either party, upon one month's written notice, following withdrawal of all Macrijrles and fulfillment of all obligations hereunder. Page 6 of 17 c .. --"<;-:;;-i.;.,:c:,.:.j.:-" -""--'" ,...._~,.,.------..., -~ ~~ DISCLAIMER AND LIMITATION OF LIABILITY iBM will in no event be liable for lost pr -;, lost savings or other consequential damages even if IBM I .Jeen advised of the possibility of such damages, or for any claim against the Custo- mer by; any olher party. IBM is relieved of responsibility for all loss of funds contained in, dispensed by or associated with any Machine. IBM's liability to the Customer for damages, from any cause whatsoever, and regardless of the form of action, whether in contract or in tort including negligence, shall be limited to actual damages up to the greater of $50,000 or 12 months' maintenance charges for the specific Machines under this Agreement that caused the damages or that are the subject matter of or are directly related to the cause of action. Such charges will be those in effect for the specific Machines when the cause of action arose The foregoing limitation of liability will not apply to claims for personal injury or damage to real property or tangible persona! property caused by IBM's negligence. GENERAL Service provided under Ihis Agreement does not assure unin- terrupted operation of the Machines and IBM is not responsible for failure to render service due to causes beyond Its control This Agreement is not assignable without the prior written consent of IBM Any attempt to assign any of the rights. duties or obligations of this Agreement without such consent is void. IBM may, upon 12 months' written notice to the Customer, modify the terms and conditions of this Agreement. except that IBM may, upon three months' written notice to the Customer, modify thQ lf~rms Jnd conditions of the Section,s entitled "P~riods of Maintenance Servl' .. "Charges" and "Services for Additional Charge." Otherwise, Agreement can only be modified by a written agreement dUlY signed by persons authorized to sign agreements on behalf of the Customer and IBM. Variance from the terms and conditions of this Agreement in any Customer order or other written notification will be of no effect. The Customer represents that the Customer is either the owner of the Machines under this Agreement, or authorized by the owner to include such Machines under this Agreement. No action, regardless of its form, arising out of this Agreement, may be brought by either party more than two years after the cause of action has arisen, or, in the case of an action for nonpayment, more than two years from the date the last payment was due. This Agreement will be governed by the laws of the State of New York. THE CUSTOMER ACKNOWLEDGES THAT THE CUSTOMER HAS READ THIS AGREEMENT, UNDERSTANDS IT. AND AGREES TO BE BOUND BY ITS TERMS AND CONDITIONS. FURTHER, THE CUSTOMER AGREES THAT THIS AGREE- MENT, ANO SUPPLEMENTS REFERENCING THIS AGREE- MENT, WILL BE THE COMPLETE AND EXCLUSIVE STATE- MENT OF THE AGREEMENT BETWEEN THE PARTIES. SUPERSEDING ALL PROPOSALS OR PRIOR AGREEMENTS, ORAL OR WRITTEN. AND ALL OTHER COMMUNICATIONS BETWEEN THE PAnTIES RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT. Agreement for IBM Licensed Programs (Z125-3358-00) International Business Machines Corporation (18M) and the Customer agree that, when this Agreement is signed by the Customer and accepted by IBM, the following terms and conditions will apply to any IBM licensed program materials offered under this Agreement when ordered by the Customer and the order is accepted as provided herein. Under these terms and conditions. IBM will 1 ) furnish licensed programs to the Customer. 2) furnish licensed optional materials in support of such licensed programs. 3) grant the Customer a nontransferable and nonexclusive license in the United States and Puerto Rico to use the licensed program materials, and 4) provide program services, all as described herein. The Customer agrees with respect to the licensed programs to accept the responsibility for 1) their selection to achieve the Customer's intended results, 2) their installation, 3) their use, and 4) the results obtained therefrom. The Customer also has the responsibility for the selection and use of. and results obtained from, any other programs, programming, equipment or services used with the licensed programs. Specific licensed program materials may be ordered under this Agreement by 1) a Supplement to this Agreement (Supplement) signed by the Customer, 2) a written order, specifying the licensed program materials and the designated machine, signed by the Customer, or 3) such other ordering procedure as shall be deSignated by IBM for the specific licensed program materials. IBM will accept any such order under this Agreement by providing the Customer a Supplement specifyinq the supplemental terms applicable to such licensed program materials, Upon receipt of the Supplement by the Customer, IBM shall thereby grant a nontransferable and nonexclusive license in the United States and Puerto RICO for licensed program materials subject to the terms and conditions of this Agreement. Use of the licensed program materials or the first payment of charges due hereunder, whichever first occurs following receipt of the Supplement, will constitute the Customer's acceptance of the supplemental terms specified in the Supplement Any terms which this Agreement states are to be specified by IBM for a licensed program and/or related licensed optional materials will be stated in the Supplement tor that licensed program DEFINITIONS The term "licensed program" in this Agreement shall mean a licensed data processing program consisting of a series of instructions or statements in machine readable form, and/or any licensed data base consisting of a systematized collection of data in machine readable form, and any related licensed materials such as, but not limited to, flow charts, logic diagrams and listings provided for use in connection wittl the licensed data processing program. The term "licensed optional materials" in this Agreement shall mean any machine readable or printed material not included in the licensed program and which is designated by IBM as available under license to Customers who have licensed the program to which such optional materials relate. The term "licensed program materials" in this Agreement shall mean both the licensed program and the licensed optional materials as defined above. The term "restricted materials" in this Agreement shall mean any licensed program materials which are labeled "Restricted Materials of IBM." The term "use" in this Agreement shall mean copying any portion of the \tcensed program materials into a machine and/or transmittin~ ~m to a machine for processing of the machine instructioliS, %lla;tements or data contained in SUC~l materials. '2125-9029-111 TERM This Agreement is effective from the date on which it is accepted by IBM and will remain in effect until terminated by the Customer upon onc month's written notice, or by IBM as set forth in this section. This Agreement may be terminated by the Customer only when all licensed program materials licensed hereunder are discontinued and all licensed program materials have been returned or destroyed. Licenses granted under this Agreement may be discontinued by the Customer upon one month's written notice, except that, during the testing period, the Customer may discontinue any license at any time upon written notice effective immediately. IBM may discontinue any license or terminate this Agreement upon written notice effective immediately if the Customer fails to comply with any of the terms and conditions of this Agreement. Notice of discontinuance of any or all licenses shall not be considered notice of termination of this Agreement unless specifically stated. Notice of discontinuance of any licensed program shall be notice of discontinuance of the license and of all licensed program materials obtained in connection therewith. LICENSE Each license wanted under Ihis Aqrccment auttlOrizes U-w Customer to' PilfW 7 (Jf 17 a) use the licensed program miltcrials J, .Iilchinc rcndnble form on the machine or machines (hereinafter referred to 3S "machine") d(~signated in an applicable Supplement for sllch licensed program materials and in conjunction therewith to store the licensed program materials in, transmit them through, or display them on, units associated with such desig- nated machine: b) utilize the licensed progrZlrTl mtlterials in printed form in sup- port of the use of the licensed program; and/or c) copy or translate the licensed program materials in machine readable form into any machine readable or printed form to provide sufficient copies to support the Customer's use of the licensed program as authorized under this Agreement. Licensed program materials provided by IBM in printed form, microfiche or other non-machine readable form may not be copied. Additional copies may be obtained under license from IBM at the charges then in effect. With respect to restricted materials, t11e authorizations granted under the preceding paragraphs of this section are limited solely to the following purposes: a) making modifications to tile Customer's products and/or pro- grams so that they will function with the licensed programs to which the restricted materials apply; b) making modifications, subject to the provisions of Ole section entitled "Permission to Modify," to the Ilcense(j progrcuns to which the restricted materials apply; and/or c) assisting the Customer in problem determination, problem source identification and/or problem resolution activities associated with the use of the licensed programs to which Hle restricted materials apply. A separate license is required for each machine on which any licensed program materials will be used. except as provided in the subsections entitled "Temporary License Transfer," "Installation License" and "Location License." For any licensed program thLlt is a data base, the license granted in this section is further limited to permit access to sLlch data base exclusively by the Customer. Except as provided in the section entitled "Protection and Security of Licensed Program M'-lteri<lls," the Customer shall not make or permit any manner of 3ccess to any form of such data base, or part thereof, for the purpose of making available to any other person any data contained in such data base. The Customer shall not use, print, copy, translate or display the licensed program materials, in wt101e or in part, unless ex- pressly authorized in this Agreement. The Customer shall not reverse assemble or reverse conlpile the licensed programs in whole or in part. Temporary License Transfer The Customer is authorized to transfer the license to and use the licensed program materials on: 1) a backup machine when the designated machine or an asso- ciated unit required for use of the licensed program is tempo- rarily inoperable until operable status is restored and process- ing on the baCkup machine is completed; or 2) another machine for assembly or compilation of the licensed program materials if the designated machine and its asso- ciated units do not provide the configuration required for as- sembly or compilation. Installation License When IBM specifies "Installation License Applies" the Customer is also authorized to use the licensed program materials on any other machine in the same installation as the designated machine. For purposes of this Agreement, "same installation" shall mean a single room or contiguous rooms unless otherWise agreed to in writing by 18M. Location License When IBM specifies "Location License Applies" the Customer is also authorized to use the licensed program materials on any other machine in the same location as the designated machine. For purposes of this Agreement, "same location" shall mean a single physical Customer location designated by a single mailing address and contained within a single building unless otherwise agreed to in writing by IBM. Change in Designated Machine The Customer may notify IBM of the Customer's Intention to change the designation of the machine on which licensed program materials are to be used. The change of designation will be effective upon the date set fortn In the form entitled .___M~'W'_"'''~'.'_'~_ . Confirmation of Chil"ue in Designated MaCrline" furnished to the Custom"r by IBM. Additional Licenses E<1ch additional license for licensed program materials already licensed by the Customer under this Agreement must be ordered ilS described herein For additional licenses, in lieu of distribution from IBM. the Customer may elect to copy those licensed program materials previously distributed to that Customer by IBM in machine readable form. The Customer may make such copy upon receipt of a Supplement issued by IBM wtlich designates the Effective Date for Additiona! License requested by Hle Customer. The testing period, if any, for such additional license will commence on the Effective Date for Additional License. Permission to copy granted in this subsection does not apply to licensed program materials provided by IBM in printed form For certain licensed programs, IBM may offer the Distributed Systems License Option (OSLO) under which licenses in addition to the initlilllicense (8<lsic License) fT]Jy be obtained for a OSLO d131-ge. When ordering Jdditional licenses for such a licensee! progrJm. the Customer must designate whether an additional B,lSic or OSLO License is requested. For each OSLO License, the Customer will: 1) copy those licensed program materials previously distributed in machine rCildahlc form to the Customer by IBM under the Basic License and use slIch copies on the machine designatecJ in the Supplement; 2) provide problem documentation to IBM througll the location of the Basic License: 3) at IBM's request, recreate allY problems at the location of the B3sic License. if Local SerJice or l.ocal Assistance as spec i- fip,d by IBM is available for the Basic License: and 4) distribute to, instail and test on the OSLO designated machine any new release, cOlrection or bypass proVided by IBM to the Basic License designated [llC\chine Program services and the warranty. if any, for the licenscej program will be provided for DSLO Licenses only through the: Basic License loctltion and there will he no testing period for the DSLO Licenses. Unless the Customer designates another Basic License. nl ,tice of discontinuance of a Basic License shall be notice of discontinuance of all OSLO licenses for that Basic License. CHARGES The charges applicable to eactl licensed program will be specified by IBM and will consist of a one-time charge, an upgrade charge, periodic charges, and any Initial charge and/or anv process charge. Periodic charges. which may be monthly. quarterly, semi- annual or annual. will continue until the licensed program is discontinued. However, for certain licensed programs. IBM may specify a consecutive number of payments after which further periodic charges will be waived For certain licensed programs, IBM may designate one or more replacement licensed programs. When a licensed program is discontinued and replaced by the Customer with an IBM designated replacement licensed program an upgrade charge as spccilic:d by IBM will apply. Licensed optional materials may be subject to a charge as specified by IBM. Any additional charges for program services for licensed programs will be at IBM's then applicable hourly service rates and minimum charges and such services will be provided under the terms and conditions of this Agreement unless provided under separate written agreement signed by the Customer and IBM. Commencement and Invoicing of Charges Periodic charges will commence on the day, Monday through Friday, following the end of the testing period. or 10 days after Shipment of the licensed program by IBM if there is no testing period, except as set forth below In this subsection. Monthly charges for a partial month's use will be prorated based on a thirty- day month. Other periOdiC charges will not be prorated and are not refundable in whole or in part. Periodic charges will be invoiced in advance. Unless otherwise speCified by 18M, one-time charges, initial charges, upgrade charges and licensed optional materials charges will be due on the day, Monday through Friday,.!ollowing the end of the testing period, or 10 days after shipment of the licensed program materials by IBM if there is no testing period or if Page 8 of 17 .. such Reriod has expired, except as forth below in this subsecTion. For ~dditionallicellses for which the Customer has mode copies pursuant to the subsection entitled "Additional Licenses" and for which there is no testing period, periodic charges will commence and other charges will be due upon the Effective Date for Additional License designated in the Supplement. Process charges will be due upon receipt by the Customer of the licensed program materials to which such charges apply and are not refundable even if the Customer discontinues the licensed program prior to or during the testing period. Payment will be made as stated in the invoice. Applicabte Taxes in addition to the charges due under this Agreement, the Customer agrees to pay amounts equal to any taxes resulting from this Agreement, or any activities hereunder, exclusive of taxe~based on IBM's net income. Price""'Changes Periodic charges are subject to change by IBM upon three months' written notice to the Customer. Any changes in periodic charges become effective on the first day of the Period which commences on or after the effective date specified in the notice. Initial charges, one-time charges, process or upgrade charges, and charges for licensed optional materials are subject to change without prior notice except that such charges shall not be increased if, prior to the date of the notice, 1) the licensed program materials had been shipped by IBM, or 2) the Customer had copied licensed program materials pursuant to the subsection entitled "Additional Licenses." In addition, if the Customer's written order was received by IBM prior to the announcement of such increase in charges, such charges shal! not be increased if, within one month after the date of notice, shipment of the licensed program materials occurs or the Customer copies licensed program materials pursuant to the subsection entitled "Additional Licenses." If charges are increased for any licensed program materials, the Customer may discontinue them in accordance with the provisions of this Agrel~ment; other\Nise, the new char~18s will become effective. SHIPMENT The Estimated Shipment Date for licensed programs will be specified by IBM. However, IBM does not represent or warrant that such shipment date will be met. IBM will notify the Customer of Ule type of program storage media required for shipment. Unless returnable or disposable media are used, the program storage media mus~, be provided by the Customer or ordered from IBM at the applicable charge. Except when other\Nise specified by IBM, licensed program ma- terials will be shipped to the Customer without shipping charge. Any special shipment requested by the Customer will be at Customer expense. LICENSED PROGRAM TESTING For each licensed program IBM wil! specify the testing period, if any, during which the licensed program will be made available for nonproductive use. The purpose of the testing period is to permit the Customer to determine whether the licensed program functions selected by the Customer operate together and to assist the Customer in determining whetller the licensed program meets the Customer's requirements. The testing period will begin 10 days after shipment of the licensed program by IBM or on the Effective Date for Additional License, untess otherwise specified The Customer may discontinue the licensed program, upon written notice effective immediately, at any time during the testing period, in which event periOdic charges, one-time charges, initial charges. upgrade charges and licensed optional materials charges wil) not be due. However, process charges will be payable. Unless such notice of discontinuance is given, ttle Customer will be deemed, at the end of the testing period, to have decided to retain the licensed program under the provisions of this Agreement. In the event that the licensed program is used for productive purposes during the testing period, the Customer will notify IBM and the testing period will be deemed to have ended as of the date upon which the Customer commences productive use Subsequent releases, if any, of a licensed program which have the same program number will be made available to the Customer 2125-0029-01 for productive use fl., ,)f test on the designated machine while the Customer contHll10S productive use of a previous release on lhnt m<lcl)ine iHld P;IYS arplicnhl(J ch<:lrw~~; therefor. The Customer has HlC right to decide whether to intal! any such releases or continue use of a previous release having given due regard to the provisions of the section entitlr:d "Progr,ul1 Services." In the event of discontinuEHlce of a licensed program and subsequent rcorocrinD of the same licensed program for the same installation {or location, W~lf'n IBM has specified "Location License Applies"}, there will be no testing period for the subsequent license RISK OF LOSS If licensed program materials are lost or damaged during stllprnent from IBM, IBM will replace such lIcensed program materials and program storage medIa at no addItional charge to the Customer. If licensed program materials are lost or damaged while In the possession of the Customer, IBM will replace such licensed program materials. at the applicable charges, jf any, for processing, distribution, and/or program storage media. EARLY SHIPMENT OF LICENSED PRiNTED MATERIALS When the Customer tlas received a Supplement issued by IBM for a ,generally available licensed program, licensed program materials which are provided by IBM In printed form will, upon Customer request, be shipped to the Customer up to six months prior to shipment of the machine readable portion of the licensed program materials. TIle licensed printed materials, thus provided, may not be copied In any form for any purpose. If the Customer does not request that the machine readable portion of the licunsed program materials be shipped within six months followinq Ull~ elato of shiprnent 01 the licensed printed materials, ttw Customer will discontinue the license and return or dQstroy Ole printeej m<lteri;:lIs The charge lor early shipment 01 licensed printed materials will consist of any applicable process charges. Progri1m services. if Jny, Will not hn provided prior to shipment of the machine rf:adClble rortion of the Ilu~nsed program rnaterii1ls PROGRAM SERViCES For each licensed program, IBM Will speCify the types and dumtions of program services, If any to be prOVided Without additional cl1mge for i1 current release of the I,icensed program. Program services will commence at the beginning of the licensed program tesling period or, if there is no testing periOd for that license, when periodic charges commence or other charges are due. Program services will be subject to the provisions of the section entitled "Specified Operating Environment," Types of Service Centml Service -- When Central Service is specified one or more service locations will bl:} designnted which will accept documentation, JIl a format preSCribed by IBM, Indicating that a problem IS caused by a defect in the licensed program. Central Service will respond to a defect in the unaltered portion of a current release of the licensed program by issuing: defect correction information such as correction documentation, cor- rected code, or notice of availability of corrected code; or a restriction or il bypass Unless LOCo1l Set'vice is also specified for the licensed progrnrn. the Customer will be responsible lor the preparation and submission of documentation to Central Service IBM may also establish a center (Support Center) 10 prOVide the Customer with telL~phone ilssist;:mce in problem diagnosis and resolution. Wt)en i1 Support Center is established for a licensed progrilm and a problern occurs wt)ich the Customer believes IS related to the use of a licensed prograrn, Ole Customer will contact the Support Center and will perform Clppropriate problem definition activities imd remedial actions, as prescribed by the Support Center, prior to any dispatch of Cin IBM representative IBM also offers other services through Support Centers with or without charge, as applicable Local Service-When Local Service is specified and a problem occurs which the Customer determines is caused by the use of a licensed program and the diCl.gnosis of the IBM representative indicates the problem is caused by a defect in the unaltered portion of il current rt~lease of the licensed prowam. the IBM reprcsentilliv8 Will perform the folloWlrlq problem resolution activities: Pw~e 9 of 17 " 1) attempt to correct or bYPilss IIle defect by providing the Cus- to~r with correction information Issued by Central Service, if available: or 2) submit documentation to Central Service, if specified as avail- able; and, in any event 3) if the licensed program is inoperable, make a reasonable attempt to resolve the problem by applying a local fix or providing a bypass. Local Assistance-When Local Assistance is specified and the Customer encounters a problem, which the Customer's diagnosis indicates is caused by a defect in the unaltered portion of a current release of the licensed program, the Customer may request IBM assistance in resolving the problem. Such assistance, if requested, wi!! be provided by an IBM representative and may be subject to the availability of personnel. This assistance may include, but not extend beyond, the following problem resolution activities: 1) a,tempting to correct or bypass the defect by providing the Customer with correction information issued by Centr.11 Ser- vice, if available; or 2) assisting lh(~ Customer with pn:;paring documentation for submission to Cent!nl Service, if specifinci lEi ;lV,lllilh!(~: ,111(1. in any event 3) if the licensed pr-ogram is inoperable, m.1king .1 m.lsonablf: attempt to resolve the problem by applying n local fix or pr"ovid- ing a bypass. Program Services Duration For each licensed program the types of program SArVlce provided will be specified as available: 1) until discontinued by IBM INith a minimum of six rnonH1S' writ- ten notice: or 2) until a designated calendnr date: or 3) during the testing period; or 4) for a designated number of months for each license. In the event the Customer discontinues a licensed program and sub- sequently reorders it for the same Installation (or location, when IBM has specified "Location license Applies"), the service duration lticn In effect will be reduced by the number of months for which such service was previously provided. When a subsequent release of a licensed program which has th(:~ same program number becomes cwail<:lble, IBM may discontinue program services for any or all prior releasi.~sby I'lotice effective on the date stated therein For any licensed prowam, !8M shall havp the nghlto ctlillgC for any of the foregoing program services to the extent they are not specified as provided without additional charge, Olher types of program services may be specified by 18M. IBM shall also have the right to ctlarge for any additional effari which results from providing program services for an altered licensed program or for a release which is not current. IBM does not guarantee service results or represent or warrant that all errors or program defects will be corrected. PERMISSION TO MOOIFY The Customer may modify any licensed program materials in machine readable form and/or merqe such rIlilterials into oth(~r program material to form an updated work fur till) CW;!UIllPr'S uwn use; provided that, upon discontinuance of the licensed pl'Ogranl, the licensed program materials will be completely removed from the updated work and dealt with under this Agreement as if permission to modify or merge had never been granted. Any portion of the licensed program materials included in such an updated work will continue to be subject to all terms of this Agreement. PROTECTION ANO SECURITY OF L1CENSEO PROGRAM MATERIALS The Customer will take appropriate action, by instruction, agreement or otherwise, with any persons permitted access to licensed program materials so as to enable the Customer to satisfy the Customer's obligation under this Agreement ~II copies of licensed program materials provided by IBM or mdde by the Customer including translations or compilations or partial copies within modifications, derivative works, and updated works are the property of IBM and may not be distributed hy the Customer to any other persons, including other licensees of the licensed program, without 18M's prior written consent. The Customer will reproduce and include the copyright notice on any such copies made hy the Customer in accordance with the copyright instructions provided by IBM. The Customer will maintain records of the n~jmher an _atien of all copies of licensed program materials and will notify IBM in writing If ttle original or any copy of the licensed prograrn materials will be kept at an installation (or location, when IBM has specified --Location License Appllen other than that of the machine designated in the applicable Supplement. The Customer will insure, prior to disposing of any media, that any licensed program materials contained thereon have been erased or otherwise destroyed. The Customer will not provide or otherwise make available any licensed program materi8.ls in any form without IBM's prior written consent except to Customer employees or IBM employees, or to other persons during the period such other persons are on the Customer-'s premises, for purposes specifically related to the Customer's authorized use of the licensed program LICENSED PROGRAM SPECIFICATIONS For each licensed program which IS warranted, IBM will publish, at the time; that licensed program becomes generally available, a document cntitlpd "Licensed Progr(HT1 Specifications." SUC~l Licensed Pro(llllr1l ~:;pccificiltlnrlS fllclY be updated by IBM from timC' to \illl(~ ,lI1d srJcll LJplidtc~.; milY constitute (l change in speCification:;. WARRANTY EClch licensed PIOqr;Hll whiell is specified in ttle Supplement as w<llr,mted will confollT1, whell :;Illpped to the Customer, to Ull:~ Licensed Progrilln Specifici1tlons which are in effect for that licensed program at that tim8_ provided the licensed program is properly used in a Sp(-.~cified Operating Environment. If the Customer helieves there is a defect In a licensed program such that It does not meet its Licensed Program Specifications, tile Customer must notify IBM while program services are availabl8 for the program, IBM does not warrant that the functions con- tained in a licensed program will meet the Customer's requir'cments or will operate in the combinations which may be selected fOf use by the Customer, or that the operation of the licen;:;od program 1;'11111 be uninterrupted or error free or that all progr<lm defects will be corrected All other licensed progr-arns will be distributed on an "As Is" basis Without warranty of any kind either express or implied THE FOREGOING WARRANTIES ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR tMPLlED, INCLUDING. BUT NOT LIMITED TO, THE IMPLlEO WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. SPECIFIEO OPERATING ENVIRONMENT Each licensed progrilm is designed to operate on one or more mM mQchine types {lnd, In most instances, in conjunction win, other IBM equipment <'l.nd programs. The Licensed Program Specifications for e3ch warranted licensed program will state the p.nvironment in which the licensed program is designed to operate. For licensed programs distributed on an "As Is" basis, thE'; Specified Opmatinq Environment will be stated in a notice of availability of the licensed progri:lm. Progr,lm services for a licensed program used in other than Cl SpeCified Operating Elwlronmcnt are subject to Ilmitation~, occasioned by the ddferences between the Specified Operating Environment and the Customer's operating environment and by the extent of the loc;]1 IBM r'cpresentative's knowledge oj the Customer's equipment and programs. Such program services wil! be subject to the follOWing conditions: 1) When performing Local Service or Local Assistance, IBM's ob- ligation is limited to having the local IBM representative apply 3 reasonable effort to provide program services as described In the applicable portion of Hle section entitled "Program Ser~ vices." Furthermore, the local IBM representative will only hn expected to operate a machine designated in the SupplemeI if it was marketed or manufactured by IBM. IBM will have the right to charge for ,my additional effort required to perform these progmm services 2) Central Service will only respond to defects which will occur when Central Service operates the iicensed program in c Specified Operating Environment RETURN OR OESTRUCTION OF L1CENSEO PROGRAM MATERIALS Within one month after the d<lte of discontinuAnce of any license granted hemunder, unless the requirement is waived by IBM, the Customer will furnish to It3M a completed form entitled p{j(]{~ 10 Df 17 ~ "18M Licensed Program Certificate of Return or Deslruction" certifying that through the Customer's r -I effort, and to the best of the Customer's knowledge, the ori~ and all copies of the licensed program materlals received frOI), ,dM or made in connec- tion IIlith such license have been returned to IBM or destroyed. This requirement will apply to all copies in any form including translations or compilations or partial copies within modifications, derivative works, and updated works, whether partial or complete, and whether or not modified or merged into other program materials as authorized herein. However, upon prior written authorization from 18M, the Customer may retain a copy for archival purposes only. The requirement to return or destroy will apply to a licensed data base; it will not apply to individual pieces of data obtained by the Customer from such data base and which constitute a minor portion of such data base. When the Customer has licensed a new version of a licensed program, which carries a different program number, and discontinues the prior version, the Customer may retain the prior version of the licensed program for a period not to exceed three months following its date of discontinuance, to be used only if a defect in the new version prevents its use. During this period, the Customer will pay only the applicable charges for the new version of the licensed program. Within .one month following this three- month period, unless the requIrement IS waived by IBM, the Customer will furnish IBM a completed form entitled "IBM Licensed Program Certificate of Return or Destruction" for the prior version as set forth above. PATENTS AND COPYRIGHTS IBM will, at its expense, defend the Customer against any claim that licensed program materials supplied hereunder infringe a patent or cOPYright in the United States or Puerto Rico and subject to the limitation of liability set forth in the section entitled "Limitation of Remedies," IBM will pay all costs, damages and attorney's fees that a court finally awards as a result of such claim. To qualify for such defense and payment, the Customer must. 1) give IBM prompt written notice of any such claim; and 2) allow IBM to control, and fully cooperate with IBM in, the defense and all related settlement negotiations. However, if the damages attributable to a claim of infringement of a patent in the United States or Puerto Rico may exceed such limitation of liability, the Customer may elect to defend against the claim provided that IBM may fully participate in the defense and/or agrees to Hny settlement of slIch claim. The Customer agr"C!cs to allow IBM, at IBM's option ~llld expense, if suCh claim has occurred or in IBM's judgment is likely to occur, to procure the right for the Customer to continue using the licensed program materials or to replace or to modify them so that they become non-infringing; and, if neither of the foregoing alternatives is available on terms which are reasonable in IBM's judgment, upon written request, the Customer will return the licensed program materials to IBM; and, for licensed programs whose total charges are fully paid, the Customer may receive a credit as established by IBM. IBM shall have no obligation with respect to any such claim based upon the Customer's modification of the licensed program materials or their combination, operation or use with data or programs not furnished by IBM or in other than the Specified Operating Environment. This section states IBM's entire obligation to the Customer regarding infringement or the like. LIMITATION OF REMEDIES IBM's entire liability and the Customer's exclusive remedy shall be as follows: In all situations involving performance or nonperformance of licensed programs furnished under this Agreement. the Customer's remedy is 1) the correction by IBM of licensed program defects, or 2) if, after repeated efforts, IBM is unable to make the licensed program operate as warranted, the Customer shall be entitled to recover actual damages to the limits set forth in his section. For any other claim concerning performance or nonper- formance by IBM pursuant to, or in any other way related to, the subject matter of this Agreement and any Supplement hereto, the Customer shall be entitled to recover actual damages to the limits set forth in this section. IBM's liability for damages to the Customer for any cause whatsoever, and regardless of the form of action, wllctllcr in contract or in tort including negligence, shall be limited to the greater of $25,000 or the one-time charge paid for, or any charges Z125.go2V.01 which would be due lor twelve months' use of. the licensed program that causer "- ~ damages or that is the subject matter of, or is directly related 18 cause of action. Such charges shall be those ill effect when tlie cause of action arose and shall include any initial or process charges paid to 18M. ThiS limitation of liability will not apply to claims for copyright infringement or for personCl.1 injury or damage to re31 or tangible personal property caused by IBM's negligence. In no event will IBM be liable for any damages arising from performance or nonperformnnce of the licensed program during the licensed program testing period or for any damages caused by the Customer's failure to perform the Customer's responsibilities, or for any lost profits. lost savings or other consequential damages, even if IBM has been advised of the possibility of such damages, or for any claim, against the Customer by any other party, except as prOVided in the section entitled "Patents and Copyrights." IBM EOUCATION COUflSES The Custom(~r agrees Olat all 01 the terms and conditions applicable to restricted materials contained in this Agreement shall be incorporated into the Agreement between the Customer <1nd ISM (~ntitled "T('rllls ;me! ConditIons for IBM Classes and Educ<ltion Mah;rr;lls" and apply to 1l1("lterials, regardless 01 forrn, labeled "Restflclc:d M;ltefli1ls of IBM" when distributed to the Customer in conjunction Wlttl an IBM Education Course. ADDITIONAL PRODUCTS AND SERVICES In addition to tile licensed program materials and program serVices provided under thiS Agreement, IBM offers other products and services at separate charges under applicable written IBM agreements. IBM and the Customer agree U1at such products and services cannot be the subject of an oral agreement GENERAL This Agreement is not assignable: none of the licenses granted hereunder nor any of, the licensed program materials or copies thereof may be sublicensed, assigned or transferred by the Customer without the prior written consent of IBM. Any attempt to sublicense, <lssign .or transfer any of the rights, duties or obligations under thiS Agreement is void. Licensed program materials furnisrled under this Agreement ill'C tn he lIsed only on rn,lchinr:s loc(1tr'd in the United Slfltes and Puel to nic(J The terms of this Agreement may be modificrj by IBM upon throe months' wntten nolicf! tn the Customer, except that any 1ll0dific.:ltlo~S of the terms <lnd conditions which relate specifically to termination of thiS Agreement or discontinuance of license::; granted under this Agreement as provided in the section entitled "Term" shall be effective only as to licensed program materials deSignated in a Supplement Issued by IBM after the date of such notice. Modifications shall become effective unless the Customer terminates this Agreement or discontinues any applicable licenses before ttlC effective date thereof. Otherwise, lhe Agreement or any Surrlernent ca.n only be modified by a written agreement duly signed by persons authorized to sign agreements on behalf of the Customer and IBM, and variance from or addition to the terms and conditions of this Agreement and any Supplement in any Customer purchase order or other written notification will be of no effect. IBM is not responsible for failure to fulfill its obligations under this Agreement due to causes beyond its control No action, regardl8ss of form, arisin~J out of this A9reemenl may be brought by either party 1) in the case of an action arising out of breach of the provisions of the section entitled "Protection and Security of Licensed Program Materials" more than six years after such cause of action has arisen, 2) in the case of an action for nonpayment, more than two years frorn the date the last payment was due, or 3) in the cnse of any other action, more than two years after the cause of action has arisen. The Agreement will be governed by tile laws 01 the State of New York. THE CUSTOMER ACKNOWLEDGES THAT THE CUSTOMER HAS REAO THIS AGREEMENT. UNDERSTANOS IT. AND AGREES TO BE BOUND BY ITS TERMS AND CONDITIONS. FURTHER. THE CUSTOMER AGREES THAT THIS AGflEE- MENT ANO ITS APPLICABLE SUPPLEMENTS ARE THE COM- PLETE ANO EXCLUSIVE STATEMENT OF THE AGREEMENT fJ:I~J(~ I 1 of 17 llETWEEIlI THE PARTIES. EXCEPT AS PROVIDED IN THE SECTION ENTITLEO "IBM EDUCATION COURSES:' SUPER- SEDING ALL PROPOSALS OR PRIOR AGREEMENTS, ORAL OR WRITTEN, AND ALL OTHER COMMUNIQA.TlONS BE- TWEEN THE PARTIES RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT, Agreement for Lease or Rental of IBM Machines (Z125-3320-00) International Business Machines Corporation (18M) and the Customer agree that the following terms and conditions will apply to any Customer order for lease or rental of IBM machines that is accepted by IBM under this Agreement. Under these terms and conditions, iBM will 1) lease or rent machmes to the Customer, 2) provide maintenance service for machines and 3} as available, furnish programming and programming services, all as described herein. The Customer agrees to accept the machines, maintenance service, programming and programming services under the terms and conditions of this Agreement. The Customer further agrees with respect to the machines and programming to accept the responsibility for 1) their selection to achieve tlle Customer's intended results, 2) their use anct.3} the results obt8ined therefrom. The Customer also has the responsibility for the selection and use of, and results obtained from. any other equipmont, progrmTls or services used with tile !ll;lchill(~S CIllO proqrammlng The term "mac!lllles" as used in III is AgrOGrlICllt refers to m<Jcllilles and/or their model convcrsiolls and features unless the context mquires individual reference Specific mnchines, model convorsions <1nd jr~{ltlJreS lx;come slloject to ttlis A9r[>(~mcnt when pither il writlcn order 10 lease; or (j written order to rent is signed by ttle Customer and 3cceptcd by IUM. For (.',-,cl1 order to lease ill1lilcllH1e. IUM will plovide tlle Customer <l Supplement to this Agreement (Supplement) confirming ttle specifiC tel'ms applicable to the machine. Installation of the machine or payment of the first invoice for Monthly Lease Char~JGs. w~lichpvcr first OCCLJI.S followin~J receipt of the Supplement. will constitute lhe Customer's acceptance 01 SUdl specific terms INSTALLATION The Customer agrees 10 provide a suitilb\e CIlVirOrlrllC'1l1 for Il1e machines as specified by IBM and, except as otherwise specified by 18M, to furnish all labor required for unp~cking and ~Iacifl~l each machine In the desired location, Each iTlaclline will be installed as specified by IBM. Installation By IBM IBM will install machines wl'lich are not identified by IBM as Customer Set-Up. IBM will install features and model conversions on the serial-numbered machine for which ttley are ordered. The first day of charoe for such machine, foature or model c0nversion will be the day (Monday througll Friday) following tile cay the machine. feature or modpl conversion is installed by IBM Customer Set-Up Each machine, feature and model conversion identified by IBM as Customer Set-Up (CSU) will be set up by the Customer in accordance with the instructions furnistlcd by IBM. A CSU machine will be considered to be installed on the last day (Monday through Friday) of ttle CSU allowance period specified by I 3M for such machine. The CSU allowance period commences on the day (Monday through Friday) following the date of receipt of the machine at the Customer's premises, However, wtlen a CSU machine is delivered in conjunction wittl. and for attachment to, 3 non-CSU machine delivered from 18M, slJCll CSU nnchinewill be considered to be installed on Ihe later of 1) the installation date of such non-CSU machine or 2) the installation date of the CSU machine as determined above. A CSU fnalure or mod(d conversion Will he cOl1siclcr(~d 10 h(~ i!l~ stalled on8 rnonl!l lollo'/,f1!lq IlIe lalcr of lIs (~stilll;jl{'ct dalt~ of shipment or its actual date of shipment from 10M. CSU features and model conversions will be installc(l on the scrial'.n\lmb(~red mnchine for which they em:':! ordcn~d. The first day of cllal-ge jor SUCll m3clline. feature or model conversion will be the day (Monday through Friday) following the day the machine, feature or model conversion is considered to be installed. CONTRACT PERIOD IBM will determine the Lease or Rental Contract Period or Periods for which each machine is eligible_ The Customer may select the Lease or Rental Contract Period for each machine from the alternatives available. Lease Contract Period A Lease Contract Period has a Commencement Date, a Base Term and an Expiration Date each of which will be specified in the Supplement. The Commencement Date for an eligible machine being installed will be ttle day (Monday through Friday) following the day that the ~ine is installed, as specified In the Section entitled "lnsta1l!l\'lbn:' provided the written order to lease the mat. hine jc: ~~i}lrl hy IBM on or before SLIr:h r:':'mmencement mW The COlTllllPnCcmcnt Dille lor 8fl eligible mactline already il\st~ll('d under a Rcnt.11 Contract Period will be the day the written order to lea~e the mactline is received by IBM. The Commence- ment Dilte of a new Lca.se Contract Period for a machine already Hlstallpu under a Lease Contract Period or Extension will be the deW immediately following the Expiration Date of such Lease Contmct Period or Extension, provided that the written order for a !lew Lease Contract Period for the machme is received by IBM on or before such Commencement Date. Ttle Expiration Date of a Lease Contract Period is determined initially by adding the Base Term to the Commencement Date, and t~lCreClfter may be adjusted as described in the Section entitled "Maclline Modifications-" A LCJc;e Contract PCi'IC)(l may be extended as (1escribed in the Section entitled "Lease Contract Period Extension." Rental Contract Period A Rental Contract Period has a Commencement Date and is of indefinite dUtfltion The Commencement Date for an eligible machine being installed will be the day (Monday throuqh Friday) following the day that the machine is installed, (is specified in the Section entitled "Installation." The Commencement Date for an eligible 1ll8chine already inslnlled will be ttlO day followinq the Expimtion Dnto of its Lease Contract Period or Extension. CHARGES The Customer agrees to pay all charges as described in this S(~cti()n. IDrv1 reserves Ih(~ rinht to offer machines for lease or rl~nl(l! on longer than a rnontl1ly chnrge basi~~ and, if so, this Section would be construed accordin~~ly. IBM will determine tIle Montl11y Lease Charge or Monthly Pental, CllJrge i1pplic8blc to the Le;:\se .or Rental ContrJct Period or Perl.ods f.or which eacrl mactlrne IS eligible. In addition, IBM Will specify the Plan Offering for each machine as: Plan A: Each Plan A machine which is Installed under a Rent- al Contract Period is subject to an Additional Use Charge for billable time in excess of 176 hours in any calendar month, is measured by an IBM meter. at an hourly rate which is equal to 1/176th of the Monthly Rental Charge multiplied by IBM's applicable Additional Use Charge Percent then generally in effect. There is no Additional Use Charge for a Plan A machine which is installed under a Lease Contract Period or Extension. Plan B: For each Plan B machine, the Monthly Lease Charge or Monthly Rental Charge provides the Customer with unlimited use in any calendar month. Plan C: Each Plan C machine is subject to a Monthly Use Charge which is determined by multiplying the amount of pro- cessing performed by the machine, as measured by an IBM meter, by ,IBM's applicable Monthly Use Charge Ratejs) then generally in effect. Plan 0: For each Plan D mactline, model upgrade and feature, there will be an Initial Period of Maintenance Service, as f)~lge 12 01 17 described in this Section, during whictl IBM will provide, at no additional charge, the availability of rTl"'l1tenance service 24 hours per day, seven days per week c nlimited use of the machine in any calendar month. Thereb.. _t, the Monthly Lease Char\ll! or Monthly Rental Charge provides the Customer with the availability of maintenance service during the period from 7 a.m. to 6 p.m" Monday through Friday. (Base Period of Main- tenance Service) and unlimited use of the machine in any calendar month. The Customer may select Optional Periods of Maintenance Service as designated by IBM in the. IBM Plan 0 Optional Periods of Maintenance Service Exhibit (Exhibit). The Custo- mer may select or change Optional Periods of Maintenance Ser- vice upon 15 days' prior written notice to IBM. Optional Periods of Maintenance Service are subject to an Additional Monthly Maintenance Charge based on the Ma- chine Group and determined by multiplying the Addition31 Monthly Maintenance Charge Rate for the machine by the applicable Percentages for the Optional Periods of Maintenance Service shown in the Exhibit. Additional Monthly Maintenance Charges will commence upon the expiration of thetnitia! Period of Maintenance Service or on the effective date of the Opllonal Periods of Maintenance Service, whichever is later. The Initial Period of Maintenance Service COll1ll1ences on the day (Monday through Friday) following the day thilt the Pion D machine IS installed. as specified in tl1e Section entitled "Installation," and has a duration as established in writing by IBM. If the Initial Period of Maintenance Service expires on a Friday or Saturday, it will be extended by two days or one day, respectively. so that the last day of such Initial Period of Maintenance Service will be on a Sunday. If the Customer requests maintenance service for a Plan 0 machine to be performed at a time outside the Periods of Maintenance Service, the service will be provided for additional charge as described In the Section entitled "Maintenance Service." Monthly charges for each machine will begin on the Com- mencement Date of its Lease Contract Period or Extension or Rental Contract Period. unless otherwise specified in this Section. Meter Readings IBM will install and maintain its meters for Plan A and Plan C machines. For each Plan A machine, wllere required. and for each Plan C machine, the Customer agrees to furnish a monthly report to IBM showing the meter reading as of the close of the lilst WOI k (jay of each calendar month. The Customer agrees not to intcl fere with the proper operation of the meters. Increases in Lease Contract Period Monthly Charges For each year of a Lease Contract Period for a machine. begin- ning with the Commencement Dale designated in the Supple- ment. and thereafter with each Anniversary Date, Ihere will be a maximum Monthly Lease Charge (Upper Limit) for that year. The Upper Umit for the first year .of the Lease Contract Period is calculated by increasing the initial Monthly Lease Charge in effect for a machine on the Commencement Date specified in tile Sup- plement by an amount which is derived by multiplying the initial Monthly Lease Charge by the Upper Limit Percent specified in the Supplement. The Upper limit for each succeeding year is calculated by increasing the Upper Limit forthe preceding year by an amount which is derived by multiplying the initial Monthly Lease Charge by the Upper limit Percent specified in the Supple- ment. For these calculations. when a machine becomes SUbject to the provisions of a Lease Contract Period on or alter .111110Uncc- ment, but before the effective date, of an Increase in the Monthly Lease Charge, such increased Charge will be used as the initial Monthly Lease Charge. For a machine not yet installed. if the CustorTler's written order fo' a machine has been receIVed by IBM, IBM may not increase the Monthly Lease Charge or Upper Limit Percent unless written notice shall have been given to the Customer at least three months before the date of Shipment. In the event of such increase. the Customer may elect to void the order for the affected machine within one month of notification of such increase by IBM For a machine which is installed, IBM may increase the Monthly Lease Charge upon three months' prior written notice_ SlIch increased Montllly Lease Ch,Hge will be the lowest of 1) 111(~ Monthly Rental Charge generally in effect for such maclline on the effective date specified in the notice. 2) the Monthly Lease Charge generally in effect for such machine on the effective ditte specified in the notice for Customers commencing a new Lease Contrilct Period with the same Base Term or 3) the Upper limit in effect for Hlat year, and, to the extent ttlat any increase cxcncds 1Iw applicable Upper Limit. tile excess will iJutol11;-ltically bc~ (]Ih~ctlvc on ensuing Anniversary Dates. Z12$-1029-01 The Upper Limit Percent specified in the Supplement will not be increased during the I ("'se Contract Penod. The MonHlly Lease ge for a model upgrade or feature addi- tion may be increasl-,. !>y IBM In the same manner and in accordance with the same Upper Limit calculations as for ma- chines ;md pursuJnt to the provisions set forth in the Section entitled "Mi1chine Modifications." The Monttlly Use Ch,Hgc Rate(s) for each Plan C machine may be increased by IBM in the same manner and in accordance with the same Upper Limit calculations as Monthly Lease Charges IBM mAy IIlcrcasf' the Additional Monthly Maintenance Charge Rilte or the PerCCnlilrleS for Optional Periods of Maintenance Service, 01' 113M m,lY ch<lng(~ ttw Machine Group designation or H1C Optional Periods of Milirltenance Service, at any time upon three months' prior written notice to the Customer. Upon 15 days' prior written 11011(:(: to IflM. HlC Customer may discontinue any Optionnl PC:I iods of Milintc:ni"lncc Service ,dleeted by such notice on the cff(~ctivc datc of the increilsc or ch,Hlge. OtherWise, the new Rate, Perccntages, M;l(;tllm~ Grollp d(~sign(1tion and Optional PC:I"ioos of Milirlt(,I\;lll(:(~ ~;(~rvl(;() wllll.lc;cor1lc effective ,IS specified Except ilS I_-.lrovid(;c! In ttlis Section and III the Section entitled "'Lease COlltract Period Extension," alllncr8ases in Hle Monthly Lnasr: Ch;nqr;, MOllt1i1y Use CtliH\W niltc;(~;) iHlcJ LJpp(!r Limit Per- cc:nt will [)(:COIlH: cffL~ctlvc or) !tIC dnlc ~;pnclflud in 11"1(: notice of slIcll illcl(;a~;(' Increases in Rental Contract Period Monthly Charges For il machine under a f1mltal Contract Period, IBM may In- crease tile Monthly Rental Charge. Additional Use Charge Rate 01 Monthly Use Charge Rate(s) upon three months' prior written notice_ The Customer may discontinue any machine included in such notice on the effective date of the increase upon one month's prior written notice. Otherwise, the new Charge and Rates will become effective as specified. IBM may increase the Additional Monthly Maintenance Charge Rate or the P8rcentages for Optional Periods of Maintenance Service, or IBM may change the Machine Group designation or tile Optional Periods of Maintenance Service. at any time upon three months' prior written notice to the Customer. Upon 15 days' prior written notice to IBM. the Customer may discontinue any Optional Penod.s of. Maintenance Service affected by such notice on the effectivc date of the incrc,"!e or change. Otherwise, the new Rate. Pr;rccl1tilqP~,. Machine Cru\Jp dr:~;iqn<ltion (lnd Optior1i11 Pr:rlods of Millntell,ll1cC Service will heconlC effective as ~;p0cifif;d Hourly Service Charges IBM'::> 110lJlly service lilIes ;JlHllllillilTlllJIl ch<lrgt:s af(: subject If) change by IBM withc)ljt Ilotice. Destination Charges All destination ch;WW~ for each machine, model conversion or fC;-Iture. both from ;-Inri to dcsiqniltcd IBM 10cJtions, and (lny rigging ch(]rges will be p<lid by the Customer in accordance With IBM's then current shipping Clnd billing practices. The cost of labor for cmtlng and uncrating is a ClJstomer expense except when pr~dDlrned ill ;m InM IOGlliol1 Applicable Taxes In addition to the cflill'ges due under this Agreement, the Custo- mer agrees to pay amounts cqlJallo any taxes resulting trom this Agreement. or 8ny actiVities hereunder, exclUSive ot property taxes and taxes based on IBM's net income LEASE CONTRACT PERIOO EXTENSION LJnles~; otllcrwise sp()cifi(~d ill tl1(~ Sllpplernent, the Customer may extend a Lease Contmct PCI'iod for (] machine any number 01 times 1m OnE~ year and one time for a period of less than one year The Commencement Di1te of an Extension will be the day follow- ing the Expimtion Date of tht~ Lease Contrflct Period or Extension ttlen in effect. The charges and terms Jnd conditions for the ensu1I1g Extension may be ch<1nged by IBM, but will not be changed by IBM from the elate three months prior to the Commencement Date of such Extp.nsion Ihrollqh its Expiralion Date, except as de- SCribed in ttlis Section and exu:pt th(]t if such Expiration Dilte is .1djlJstecl as desCl"lhcd III the Section entitled "MC1.chine Modifica- tions," till' r;1l<1rqi:s dlll'inq trH: ,ldjll:-;tmnnt prriod may be IIlCI(~<l:;(~d IlY lHM III ;1lC!JI(1;]I\(:(: wilil 1111' Upper I 1m II prr;w;lorri dnsclibeu III tile S(~c:tl()I)S (~!ltltlC'd "lllcr"l)(\Ses 1r1 L(;<Ise Contract Period MOI1Hily CI1;1I-qi:S" and "Purch<1se Option." Prior to the Expiration Dale of a L(~<l~-;p Contr:lct P(~riod or oll(~'.yei1r Extension, IBM will prOVide tile ellstOlller with written notice of all SUCll chargns ilnd tr:rnl~:; ,lnd conditions for ttle ensuing Exten:~ion. DlIrill~lllH' fxh'IlS1011 ttl(~rc~ Will tX~;-1Il Upper Lirnil Tile Upper LlIl1lt 101 \Ill: LX\CI1:;iull I~; c;ilcuLi\ed IJY iIlU(:;]~;lll1J ttw initial Monthly Lcase Ch(H~W in effect for a /T1Clchlne on the Commence- P;lU>J 13 of 17 , ment Date of such Extension by an amo!'.' which is derived by multiplying such initial Monthly Lease Cr by the Upper Limit Percer.t specified in the Supplement. un,,,,,,$ such Upper Limit Percentjs modified by written notice lor the ensuing Extension, in which event such modified Upper Limit Percent will apply. For a machine which is Installed under an Extension, IBM may increase ttle Monthly Lease Charge upon three months' prior written notice. Such increased Monthly Lease Charge will be the lowest of 1) lhe Monthly Rental Charge generally in eflect lor such machine on the effective date specified in the notice, 2) the Monthly Lease Charge generally in effect for such machine on the effective date specified in the notice for Customers commencing a new Lease Contract Period with the same Base Term or 3) the Upper Limit in eHect lor the Extension. The Monthly Lease Charge for a model upgrade or feature addi- tion may be Increased by IBM in the same manner and in accordance with the same Upper Limit calculations as for ma- chines and pursuant to the provisions set forth in the Section pntitled "Machine Modifications." The Monthly Use Charge Rate(s) for eaell Plan C machine may be increased by IBM in the same manner and in accordance with the same Upper Limit calculations as Monthly Loase Charges. IBM may increase ttle Additional Monthly Maintenance Charge nate or the Percentages for Optional Periods 01 Maintenance Ser- vice, or IBM may cllange the Machine Group designation or the Optional Periods of Maintenance Service, at any time upon three months' prior written notice to the Customer. Upon 15 days' prior written notice to IBM, the Customer may discontinue any Op- tional Periods of Maintenance Service affected by such notice on the effective date of the increase or ctlange. Otl1erwise, the new Rate, Percentages, Machine Group designation and Optional Periods of Maintenance Service will become effective as specified. The one-year Extension Period for each machine will com- mence automatically unless the Customer notifies IBM in writing on qr before the Expiration Date of the Lease Contract Period or current one-year Extension that the Customer elects one of the following choices, as available: a) to extend lor a period of less than one year at the end 01 which time the machine will be placed under a Rental Con- tract Period, jf available, unless otherwise agreed: b} to commence a new Lease Contract Period: c} to place the machine under a Rental Contract Period: or d) to purchase the machine. In addition, the Customer may discontinue a machine or feature or request a model downgrade effective on ttle Expiration Date of a Lease Contract Period or Extension upon one month's prior written notice. MACHINE MODIFICATIONS Upon the Customer's written request, IBM will make field installable model conversions or feature changes to Cl machine installed under this Agreement. Model Upgrades and Feature Additions A model upgrade is defined as a model conversion whIch results in an increase in the Monthly Lease Charge or Monthly Rental Charge. Each model upgrade or feature addition to a machine installed under a Lease Contract Period or Extension mllY be placed either under that LeClse Contract Period or Extension or, d Clvai!ahle, under a Rental Contr<lct Period a) 11 placed under that Lease Contract Period or Extension, the model upgrade or feature addition will be installed at IBM's applicable MonHlly Lease Charge and Monlt,ly Use Charqe Rate(s), if any, then generally in effect for new orders for such mode! upgrade or feature having the same Base Term as the installed machine. When a model upgrade is installed under thaI Lease Contract Period or Extension, such Lease Contract Period or Extension will be lengthened to rrovide a common EXpirAtion Datp for the mactllne and the model up- grade. When a feature addition is installed under tl1at Lease Contract Period or Extension, such Lease Contract Period or Extension will not be lengthened. The model upgrade or feature addition will assume the same Anniversary Date (but not the same Commencement Date) and Upper Limit Percent as the installed machine for purposes of determining future increases in tile Monthly Lease Charge and any applicable Monthly Use Charge Rate(s). b) If placed under a Rental Contract Period, the mOdelllpW,-lde or feature addition to a machine which is under a Lease Contract Period or Extension will be installed ,It IBM's Monthly;Rent~l Charge then generally in effect. For a model upgrade'{Jr'f-eaturc addition to a Plan A maclline, nn addi- tional-cfi~U-!1e, ,as specified by IBM. will applyeu of any Additii Use r rge. For a model upgrad\? or feature addltloi, to a P ,; machine, IBM's applicable Monthly Use Cllarge Rate~::'J then genemlly in effect will apply. The Expiration Date of the Lease Contract Period or Extension will not be adjusted. Each model upgrade or feature addition to a machine installed under a Rental Contract Period may only be placed under a Rental Contract Period and will be installed at 18M's Monthly Rental Charge, and Additional Use Charge Rate or Monthly Use Charge Rate(s), as applicable, then generally in eHect. A model upgrade or feature addition to a Plan 0 machine for which the Customer has elected Optional Periods of Maintenance Service will be installed at IBM's applicable Additional Monthly Maintenance Charges, as provided in this Agreement, based on the Additional Monthly Maintenance Charge Rate, if any, then generally in effect for new orders. The Commencement Date for a model upgrade or feature addi- tion will be tile day (Monday through Friday) following the day l!lat the model upgrade or feature addition is installed. as specified in ttle Section entitled "Installation," provided IBM has received the written ordt:~r specifying le"se or rentnl of the model upgrade or fCillurc ,lddilion by such Dnle Model Downgrades and Feature Discontinuances A model downgradQ is defined as a model conversion which results in (l dccrcJse in 1118 Monthly Lease Ch;::lrue or Monthly Rental Charge. The downgrade of a model or discontinuance of a feature prior to tlw ExpirJtion Date of Its Lease Contr<1ct Period or Extension will be subject to the provisions of the Section entitled, "Termi- nation Charges." The downgrade of a model or discontinuance of a feature in- stalled under a Rental Contract Period will not result in a Termi 1a- tion Charge. DISCONTINUANCE NOTICE Subject to the Sections entitled "Increases in Rental Contract Period Monthly Charges," "Lease Contract Period Extension." "Limitation of Remedies" and "Termination Charges," the Custo- mer may, at any time after installation, discontinue a processor complex unit up'on three months' prior written notIce, or discon tinue any other machine or any field removable feature or request a field removable model downgrade upon one month's prior written notice. TERMINATION CHARGES The Customer will pay IBM as a Termination Charge, upon termination of a Lease Contract Period or one-year Extension, for a machine discontinuance or model downgrade prior to the Expiration Date of such Lease Contract Period or Extension, the lesser of: a) The Termination Charge Percent specified in the Supplrj- ment multiplied by the Remaining Contract Value: or b) the Termination Charge Months specified in the Supplement multiplied by the applicable Monthly Lease Charge Value as of the date of termination. The Remaining Contract Value of a mac~,ine or model down- grade is determined by multiplying its applicable Monthly Lease Charge Value as of the date of termln3tlon by the number of months rClTlalfllng in its Lease Contract Period or L:.xtension. The discontrnuance of a fcalme will not IT~sult In ;1 Termination ChJrge. except th<lt the Monthly Lease Char~w of any feature which is on a machlnp at any time Within three mont~lS prior to th(~ d<lte of termination of the Lease Contract Period or Extension for sucll machine will be included in the MonUlly Ler1.Sl~ Charge Value of such machine. For a machine not yet installed, if the Customer's written order for the machine has been received by IBM, IBM may not increase the Termination Charge Percent or the Termination Charge Months unless written notice shall have been given to the Customer at least three months before the date of shipment. For a. machine which is installed, IBM may not increase such Percent or MonU,s during a Lease Contract Period. Return of a machine to 16M upon the Customer's request during a Lease Contract Period or Extensioll for any reason, including m(J.c~,ine replacement for model conversion or feature changes wl1icll are !lot field installable, or UlJE~ to Hie Customer's failure to comply with any of the terms and conditions of this Agreement. shall be a termination for purposes of this Section. The purchase of (l machine under the provisions of the Section entitled "Purcl1asp Option" will not res! lit in a Termination Char~]e. PURCHASE OPTION _ n1C Customer nlClY elect to purchase (1 machine installed under a Lpasc~ Contract Period or Extension by 0.xecllting a Supplement to Agremnent for Purchase of IBM Machines. Upon request from Page 14 of 11' , the Customer, IBM will quote a net purcha!'" .."otlon price for such machine, including its model upgrades features, as of a specific month that is not more than three r, .v"ths from the date of the reqllli'sl. The net purchase option price, as calculated tor each machine, will be the lower of 1) the Purchase Price stated in the Supple- ment for the machine, including its model upgrades and features, as modified in accordance with this Section. less any applicable purchase option credits not to exceed an amount determined by multiplying such modified Purchase Price by the Maximum Purchase Accrual Percent, or 2) IBM's purchase price then generally in effect for the machine, including its model upgrades and features, less any applicable purchase option credits not to exceed an amount determined by multiplying such purchase price by the Maximum Purchase Accrual Percent. The Maximum Purchase Accrual Percent will be specified in the Supplement. The purchase option credits are determined by multiplying: a) the applicable Monthly Lease Charges paid under this Agreement by the Purchase Option Percent specified in tile applicable Supplement; and b) applicable charges. if any, paid under other IBM agree~ ments by the purctlase option percents applicable undef those agreements. ror purposes of this calcul<ltion, the period during which l110nlhly etlarges are eligible for purellase option crl)dlts is llllJ pCHod during which the machine has been continuously installed. Eligible monthly charges wlil be applied in the order in whICh they are first incurred and do not include Additional Use Charges, Monthly Use Charges or Additional Monthly Maintenance C !larges. When a machine ceases to be installed under this Agreement, all purchase option credits accrued hereunder with regard to that machine shall expire. Purchase option credits accrue individually for each machine, model upgrade and feature. Purchase option credits are not trans~ ferable to other Customers or between machines, or among a machine, its models and features. For a machine not yet installed, if the Customer's written order for the machine has been received by IBM prior to the announce- ment of a Purchase Price increase or a decrease in Purchase )ption Percent or Maximum Purchase Accrual Percent, IBM may flat increase such Price nor decrease such Percents unless writ- ten notice shall have been given to the Customer at least three months before the date of Shipment. For a machine which is installed, IBM may increase the Purchase Price stated in the Supplement immediately upon written notice, subject to Upper Limits determined in the same manner as for Monthly Lease Charges as described in the Sections entitled "Increase in Lease Contract Period Monthly Charges" and "Lease Contract Period Extension." The Purchase Option Percent and Maximum Purchase Accrual Percent for a ma- chine will not be decreased during a Lease Contract Period. The Customer may elect to purchase a machine installed undpr a Rental Contract Period by executing a Supplement to A!Jfcc~ ment for Purchase of IBM Machines. Upon request from the Customer, IBM will quote the then applicable purchase price for such machine, including its model upgrades and features, as of {I specific month that is not more than three months from the date of the request. SHIPMENT IBM agrees to schedule each maclline for shipment in accord~ ance with IBM's applicable shipment sequence and will confirm in writing, and amend as necessary, the Customer's schedule. Prior to shipment, IBM will make reasonable accommodation to a delay requested by the Customer. PROGRAMMING The term "programming" as used in this Agreement shall mean such programming as IBM may make generally available, from time to time, without separate charge, for machines of the types ordered by the Customer under this Agreement. IBM will furnish such programming as may be requested by the Customer. The term "programming services" shall mean such services as IBM may generally make available without separate charge in connection with programming. IBM will determine the program- ming services available and their duration. The terms "programming" and "programming services" do not include IBM programs and services that are aV':lil<lble for il separate charge or which are offered under separate written agreements. ALTERATIONS AND ATTACHMENTS An .'::Ilter<'l'tion is defined as any char~SJe to an IBM 1l1:1chinc wH; tas from IBM's phvsic.<1: 1ll(~cl1.1ntcal or ~triclll ?' machine design whet' or not additional devices or parts are required. An attachm .> defined as the mechanical, electrical or electronic intercOllllection to an IBM machine of non-IBM equipment and devices not supplied by IBM. An alteration to a machine may be made upon prior written notice to IBM. An attachment to a machine may be made without notice to IBM. The Customer agrees to accept the responsibility for making any such alteration or attachment, its use and the results obtained therefrom, and to pay all charges related to the alteration or attachment as described in the Section entitled "Services for Additional Charge," The Customer further agrees to remove any alteration or attachment and to restore the machine to its normal, unaltered condition prior to its return to IBM, or upon notice from IBM that the alteration or attachment creates a safety hazard or renders maintenance of the machine impractical. MAINTENANCE SERVICE IBM will provide maintenance service to keep each machine in, or restore it 10, good working order and will make all necessary adjustments, repairs and parts replacements. The Customer agrees to provide InM full, fr(H~ <'Ind safe {1(;(;(:S5 to the machines to provide fllaillll'rlilllCC :;(~Ivi(;e. I h(~ Cll~,loHlcr is rcsponsilJle Ie; implement ilppropri,lle silfcquilfds for Cuslomer's data. The ClJSIO!I\(H j~; 11~~;p{)fI~;d)I(~ for rPfllovillq, cOlllrollirlq and f(~rlar.irlO or J'CIO;HJlllq IUrlds COIlI;Ulled ifl th(: m;lchines. IUM will service mactlines contilininn funds only when the cash container cannot be opened prior to repair by IUM, in WhiGtl case the Customer will remove the: funds ,lS soon (IS the container tli1S been opened. The Optional Periods of Maintenance Service for a Plan 0 machine on Monday througtl Fnday must include the Base Period of Maintenance Service and must be the same consecutive hours e3ch day, and the Optional Period on Saturday or Sunday must be the same consecutive hours on all Saturdays or Sundays. If the Customer request maintenance service for a Plan 0 machine to be performed at a time outside the Periods of Maintenance Service, the service, including travel and waiting time, will be furnished under this Agreement at IBM's then applicable hourly service rates and minimum charges, and travel expense; howev'er, there will be no addltional charge for main- tenance parts. TRAVEL EXPENSE Except as provided for Plan [) machines in the Section entitled "Maintenance Service," there will be no charge for travel ex- pense associated with maintenance service or programming service under this Agreement except that actual travel expense will be ctlargcd when Hie site at which the machine is located 1) is within the contiguous States and is normally inaccessible by both private aulomobiJe and scheduled public transportation, or 2) is outside the contiguous States and is normally inaccessible by private automobile SERVICES FOR ADDITIONAL CHARGE The Customer agrpps to pay, at 18M's then appliC<lble hourly service rates alld minirnllrll chargp:;, parts and m<iteriJI prices and travel expense, all char~ws for ~;crvicct; and 10 pay for loss of or damage to a mactline, caused by 1) use of the rnachine for purposes other than for wtlich designed, 2) alterations and attachments, or 3) vandalism or burglary of machines designed to contain funds. The Customer also agrees to pay, at IBM's then applicable hourly service rales and minimum charges, parts and material wices nnd tmvel expense, all charges for service for accessories, and for repair of damage, replacement of parts (due to other than normal wear) or repetitive service calls caused by the use of supplies. All services (including but not limited to services relating to pre~installation planning, inspections, relocation of machines, engineering changes and altered programming) which may be made available by IBM to the Customer, with or without separate charge, in connection with any machines or programming supplied under this Agreement shall be subject to the terms and conditlons of this Agreement unless such services are prOVided under another written agreement signed by the Customer and IBM ADDITIO~AL PRODUCTS ANO SERVICES In addition to the machines, programming and services rrovidcd tinder this ^qrcemcnt, IRM offers other products and services at separate charges under applicable written IBM agreements. IBM and tile Customer agree that such products and services cannot he the sllhwcl of ilrl oral aqr(:crncnl. The CustoflH'r rnny Clllltr,'l(:1 willI 111M 11)1 any ~;(lcll Jlrodtjcl~; ()! services as ,lV,1ilable, hlll only untler the terms and cUflditIO!\~-; of a written 8grccmcnt sir/ned by thc~ Customer 3.nd !8M. r",lqe 15 of 1/ ~ RISK OF LOSS OR OAMAGE During the period a machine, model cc sian or feature is in transit 0r in the possession of ttle Customc" 10M and its insurers, if any, r..ieve the Customer of responsibility for all risks of loss of or damage to the (l1{-lchine, model convt)rsion or feature excapt lor loss or damage 1) caused by nuclear radiation or radioactive contamination for which the Customer is legally liable, and 2) as set forth in the Section entitled "Services for Addition.11 Charge." IBM is relieved of responsibility for aJlloss of funds contained in. dispensed by or associated wilh any machine. INVOICING Monthly Lease Charges. Monthly Rental Charges and Additional Monthly Maintenance Charges will be invoiced in advance as of the first of each month or at greater intervals in accordance with IBM's then current billing practices. Additional Use Charges and Monthly Use Charges will be invoiced in the month following the month in which they are incurred or at greater intervals in accordance with IBM's then current billing practices. Charges for maintenance service and other services furnisFled at IBM's hourly service rates will be invoiced when or after the service is performed. When a machine, model conver- sion or feature is installed, or an Optional Period of Maintenance Service is in effect, for a part of a calendar month, the Monthly Lease Charge, Monthly Rental Charge or any applicable Addi- \tonal Monthly Maintenance Charge will be prorated on the basis of a 3D-day month. Additional Use Charges will be prorated in accordance with IBM's established practices. Payment will be made within 30 days after the date of invoice. All other charges due hereunder are payable as specified in the invoice. WARRANTIES ISM warrants that each machine, model upgrade or feature addition will be in good working order on the day that it is installed and that it will conform to IBM's official published specifications. Thereafter, IBM will make all adjustments, repairs and parts replacements necessary to maintain the machine, subject to the provisions stated in the Sections entitled "Maintenance Service," "Services for Additional Charge" and "Risk of Loss or Damage." ISM further warrants that programming designated by IBM (01 use with a machine and for whicll programming services are available will conform to IBM's official published specifications when shipped to tile Cll~;t()1l1Cf if proPL'lly ll:;c:d 011 SIIC!lll1,lClliIlC: TtlCrealter, IBM will provide programming service, subject to the provisions stated in the Section entitled "Programming." IBM does not warrant that the functions contained in the programming will operate in the combinations which may be selected for use by the Customer, or will meet the Customer's requirements. ALL PROGRAMMING FOR WHICH NO PROGRAMMING SERVICES ARE AVAILABLE IS OISTRIBUTED ON AN "AS IS" BASIS WITHOUT WARRANTY. IBM does not warrant that the operation of the machine or programming will be uninterrupted or error free, or that all programming errors will be corrected. THE FOREGOING WARRANTIES ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, PATENT AND COPYRIGHT INDEMNITY IBM will defend the Customer against a claim that machines or programming supplied hereunder infringes a U.S. patent or copyright, or that the machine's operation pursuant to a current release and modification level of any programming supplied by IBM infringes a U.S. patent. IBM will pay resulting costs, damages and attorney's fees finally awarded provided that: a) the Customer promptly notifies IBM in writing of the claim; and b) IBM has sole control of the defense and all related settle- ment negotiations. If such claim has occurred, or in 18M's opinion is likely to occur, the Customer agrees to permit IBM, at its option and expense, either to procure for the Customer the right to continue using the machines or programming or to replace or modify the same so that they become non-infringing. If neither of the foregoing alternatives is reasonably available, the Customer agrees to return the machines or programming on written request by IBM No Termination Charges will be payable on SLJch returned machines, and the Customer will pay only those charges which were payable prior to the date of such return. IBM has no liability for any claim based upon the combination, operation or use of any machines or programminG :Jplied hereunder with equip' t or data not supplied by 18M, or with any program other th, in ac1dition to programming supplied by IBM if such claim W()llld have been ilvoided by use of another program whether or not cap8111e ot achieving the same resullc" or based lIpun i1lteriltion ut the machines or modification of any programmin9 supplied t1ernunder, The foregoing states the entire obligation of IBM with respect to infringement of patents and copyrights. LIMITATIONS OF REMEDIES 10M's entlf'e liability and Ihe Customer's exclusive remedy stlClrr be as follows In all situations involving performance or non-performance of machines, model upgrades, features or programming furnished under this Agreement, the Customer's remedy is 1) the adjustment or repair of the mactline, model upgrade or feature, or replacement of its parts by IBM, or, at ISM's option, replacement of the machine, model upgrade or feature, or correction of programming errors, or 2) if, after repeated efforts, IBM is unable to illstall the machine, model upgrade or feature or a replacement machine, model upgrade or feature in good working order, or to restore it to good working order, or to make programming operate, all as warranted, the Customer shall be entitled to recover actual damages to the limits set forth in this Section. Far any other claim concerning performance or non- performance by IBM pursuant to, or in any way related to the subject matter of, this Agreement and any Supplement or other order under this Agreement, the Customer shall be entitled to recover actual damages to the limits set forth in this Section. 18M's liability for damages to the Customer for any cause wtlatsoever, and regardless of the form of action. whether in contract or in tort including negligence, shall be limited to the greater of $100.000 or twelve Monthly Lease Charges or Monthly Rental Charges for the specific machines that caused the damages or that are the subject matter of or are directly related to the cause of action. Such Charges shall be those in effect for the specific machines when the cause of action arose. The foregoing limitation of liability Will not apply to the payment of cost and damage awards referred to in the Section entitled "Patent and Copyright Indemnity," or to claim:.; for person<11 injury or damage to real property or ti-in[lIble personal property cClused by IBM's negligence. In nn pvenl will IHM l)f~ liilhlr~ for <1ny Ollfl1aqes ctllJsed hy thp ClIStOl1ll~r'S failure to perform Ul(~ ClIsloJ11(:r's responSibilities, or for any lost profits, lost savings or other consequential damages, even if IBM has been advised of the possibility of such damages, or for any claim against tile Customer by any other party, exc ~pt as provided in the Section entitled "Patent and Copyri~ht Indemnity." The Customer may discontinue a machine forthwith without Termination Charges for failure of IBM to comply with any of the terms and conditions of this Agreement applicable to such machine. GENERAL This Agreement is not assignable; none of the machines may bL sublet, assigned or transferred by the Customer without the prior written consent of 18M. Any attempt to sublet, assign or transfer any of the rights, duties or obligations of this Agreement without such consent is void. Machines under ttlis Agreement are to be located only in the United States and Puerto Rico. The Customer agrees to keep IBM informed of the location of each machine. Each machine remains 18M's property and may be removed by IBM at any time after discontinuance of the machine. IBM shall have full, free and safe access to each machine for this purpose. IBM may, upon three months' prior written notice to the Customer, discontinue a machine or feature or downgrade a model under a Rental Contract Period at any time or under a Lease Contract Period or Extension on its Expiration Date. IBM may discontinue a machine forthwith for failure of the Customer to comply with any of the terms and conditions of this Agreement applicable to such machine. The Agreement mily be terminated by either party, upon one month's prior written notice, following the discontinuance of all rnacnines and fulfillment of all obligations hereunder. SUbject to the terms of the following paragraph, IBM may, upon twelve months' prior written notice, modify the terms and conditions of this Agreement. except that IBM may, upon three months' prior written notice. modify the terms and conditions of the Sections entitled "Contract Period," "Charges," "Termination Charges," "Purchi1se Option," "Lease Contract Period E.tenslOn" and "Machine Modifications," Any such modification will apply all the effective date specified in the notice to all Rental Contract Periods and to new Lease Page 16 of 17 Contract Periods or Extensions which ~ a Commencement Date QP or after the date 01 the notice. SUe ,odification will apply to cuuent Lease Contract Periods or Extensions upon their Expiration Dates, provided slIch occur on or alter the effective date, For a lease machine which was on order prior to the dale of the notice and is shipped within three months following the date of the notice, and for an Extension which will commence within three months following the date of the notice, the effective date of such modification will be the Expiration Date of the initial Lease Contract Period or the ensuing Extension, respectively. Other.. wise, the Agreement or any Supplements can only be modified by a written agreement duly signed by persons authorized to sign agreements on behalf of the Customer and IBM, and variance from the terms and conditions of this Agreement and any Supple- ments in any Customer order or other written notification will be of no effect. IBM is not responsible for failure to fulfill its obligations under this Agreement due to causes beyond its control. No action, regardl )1 toml, anStrl~ out of thiS Agreement may be broLJ~]lrt by \ ,;r party more ttwn two years after the calise at ilCtion hilS ,Hisf:n, or, in the Cilse at an 8ctlon for nonpay- ment, rnor(~ th,m IWD y(;m~; from th(~ dale the last pilyrncnt was dllC This Agreement will be rJoverncd by the laws of the State of New York. THE CUSTOMER ACKNOWLEDGES THA T THE CUSTOMER HAS READ THIS AGREEMENT. UNDERSTANOS IT ANO AGREES TO BE BOUNO BY ITS TERMS AND CONOITIONS. FURTHER, THE CUSTOMER AGREES THAT THIS AGREE- MENT ANO ITS APPLICABLE SUPPLEMENTS AND EXHIBITS ARE THE COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN THE PARTIES. SUPERSEDING ALL PROPOSALS OR PRIOR AGREEMENTS, ORAL OR WRITTEN, AND ALL OTHER COMMUNICATIONS BETWEEN THE PARTIES RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT. Agreement for Hourly IBM Machine Service (Z120-2826-00) International Business MaChines Corporation (IBM) by its acceptance of this Aqreemcnt ;lgrees to furnish and the Customer agrees to accept on the following terms and conditions Hourly IBM Machine Service al an IBM Facdity for prolJram testing and other activities, including conversion, directly related to program testing. Hourly IBM Machine Service IS comrrised of lhe availability and use of machines and programs (applicable System Control Programming and certaill Licensed Prowam Products) as mutually agreed upon by the Customer and IBM at the IBM Facility. TERM This Agreement is effective from the date it is accepted by IBM and shall remain in force until terminated by the Custer-ner upon one month's prior written notice, or by IBM upon three months' prior written notice. The availability of machines and pm~lrams may be modified or terminated by IBM upon one montll'S notice. USE The service furnished under this Agreement shall be used exclusively by the Customer for program testing Clnd olher activities, including conversion, directly rclJled to prograll1 testing, This includes testing activities associated with either IBM furnished or Customer furnished programs. The Customer represents to IBM that he is currently or prospectively a user of IBM products, and will not use tile service being furrllsllcd IIlHk~1 ttlis Agreement except in conjunction with the Customer's llse or prospective use of such IBM products CHARGES The Customer agrees to pay charges for Hourly IBM Machine Service in accordance with IBM's established rates in effect when the service is rendered. All charges are subject to change upon three months' notice. Charges accrue when the service is available for the Customer's use, as agreed upon by tile Customer and IBM at the IBM Facility. Charges will be invoiced monthly for services rendered and are payable on receipt of invoice. There shall be added to any charges under this Agreement amounts equal to any applicable taxes however dpslgn<ltcd, levied or based on suCh charges or on this Agreement m th(~ services rendered hereunder, or on the machines and rHogr.1ms or their use, including state and local pr-ivilege or excise 1,1XCS based on gross revenue, and any taxes or amounts in lieu tllcreot paid or payable by IBM in respect of the foregoing, exclusive of personal property taxes assessed on the machines or progr<lll1s and taxes based on net income STORAGE MEDIA AND SUPPLIES Except for storage media necessary for the availability and use of IBM furnished programs and inCidental consumption of pC'lper ~ .Jrms and cards utilized, all supplies, materials and other storage media required by the Customer to use the machines must be furnished by the Customer and must meet IBM specifications MAINTENANCE IBM shall have full and free access to the machines and programs for maintenance purposes. Charges for any .z~-iiI;iV~ ___.... ~:,..u.;~~. adjustments, component replacements or repairs due to the neqligcnce of ttw Customer will be borne by the Customer. When n1<1chines or programs ,lre unavailable during the Customer's scheduled tlours due to required maintenance, such time will be rescheduled as mulually agreed upon by the Customer and. IBM GENERAL The CtJ~t()Tm~r is ~~oI0Iy responsible for the (lccur(lcy and ,ldcqu<lcy of ;111 pluqr;lIll111illq ll~;(:d ill conneclion wilh lh(~ lll.1ctlill(;s, the operation of ttlC machines when the maUllnes are sctledulcd for Ule Customer's eXCllJsive use, and tile resultant out- put ther(;of. IBM ;lSSIIIlWS no rw,ponsihilily for loss or sr:curity of Custolller d;lla m rr:cofcJs. Progr~lIns furnish(~d by IBM arC' provided lor lll(' Cw;tornc:r'~-; IJSf~ tlt the lUM F<lcility. The Customer agrees (101 10 copy allY such programs for use outside of the IBM F<lcility m remove any such programs from IBM's premises IBM MAKES NO WARRANTIES EXPRESS OR IMPLlEO, INCLUDING BUT NOT L1MITEO TO, THE IMPLIED WAR- RANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. IBM will not be liable for lost profits, for any claim against the Customer by any other party, or for consequential damages even if IBM has been advised of the possibility of such damages. IBM sh<lll not be liable for failure to make Hourly IBM Mi1chine Service available due to causes heyond IUM's control. No ;\cllon, wgilrdlr:ss 01 form, arising Ollt of tile Il.lflSilctl(H1S IIIHh~f tillS ^qn;fnm~1I1, 11'1;\y be brought hy f:itlwr pillty lllort) tl1,111 one y(~ar ,lfter Hw cause of action has ~IC(;llI('cl, (~x(;(~pl 111;11 ;Ill ;lcli()l1 fur rloll[l(JYIflf:IlII11ay be hrouql-11 within olle year after Hle date allast p3ymcnt nle terms of this Agreement may be modified by IBM upon tlllee months' written notice to the Customer. Trw Customer may exercise tile Customer's right to terminate; otherwise, such nlodification shall becorne effective. This Agreement shall be governed by the laws of the State of New York and constitutes the entire agreement between the Customer and IBM with respect to Hourly IBM Machine Service Tile forenoing ternlS and conditions shall prevail notwithstanding the terms of ;my order" subnlllted by tile CustOlrl(;( with respect to Hourly IBM Machine Service. THE CUSTOMER ACKNOWLEOGES THAT HE HAS READ THIS AG<1EEMENT, UNDERSTANDS IT AND AGREES TO ALL TERMS AND CONOITIONS STATED HEREIN. Pilqr~ 17 of 1'1