Consulting Letter - International Business Machines Corp. and NetScreen Technologies Inc.
IBM Global Services
August 9, 2001
Consulting Letter
Statement of Work (SOW)
Mr. James Gifford
Chief Information Officer
NetScreen Technologies, Inc.
350 Oakmead Parkway
Sunnyvale, California 94085
Dear Mr. Gifford:
IBM is pleased to respond to your request for services to provide NetScreen
Technologies, Inc. (NetScreen) with a hosting environment and technical support
services for your OneWorld version B37.3.1 application. This Consulting Letter
will serve as the Statement of Work while we finalize a formal contract in the
coming weeks that will supersede this consulting letter. The formal contract
will be for a six-month duration.
Thank you for considering IBM as an Application Service Provider for your J.D.
Edwards B7.3.3.1 ERP system. IBM proposes a two-phased project intended to make
your J.D. Edwards ERP system available from an IBM ASP facility.
IBM Responsibilities
In Phase 1, IBM is to:
1. Perform a scooping of the configured OneWorld application in
preparation for application Management Services (AMS) deployment;
2. Restore and test the configured production and prototype (CRP)
environments up their current state on IBM owned hardware; all
unapplied fixes to the application are out of scope and will be
managed through the Change Control Process
3. Refresh with current data prior to cutover;
4. Designate a Service Delivery Manager, and work with NetScreen to
define level 1, 2 and 3 support procedures. (Level 1 call logging is
targeted to be available 24 hours per day, seven days per week. Level
2 support is targeted to be available 13 hours per day, five days per
week, from 7 AM to 8 PM ET);
5. Provide capacity for thirty concurrent users of JDE ASP set vice for
up to six months.
6. Provide CNC (application technical) and IT (operational) support.
7. Increase the capacity of the Enterprise serve to 72.8Gb, using four
18.2 internal drives. The one time cost of this capacity increase will
be passed on to NetScreen through a Change Request.
During Phase I, NetScreen is to define applications in addition to JDE, if any,
running on the current ASP at AristaSoft/Exodus for migration to an IBM Hosting
facility; those additional applications requirements will be managed through the
Change Control Process JDE application fixes to be installed, and negotiate a
Phase II agreement covering long-term ASP services to be provided by IBM for
NetScreen.
1
<PAGE>
In Phase II, IBM is to provide ASP services over a multi-year period.
IBM will provide services and products in accordance with your IBM International
Customer Agreement (IICA). Your IICA was signed on July 24, 2001, by NetScreen
and on July 25, 2001 by IBM, and is incorporated by reference into this
authorization.
Under this Phase I authorization, IBM is not responsible for"
Your products:
A third party's products, including products you license from our
subcontractors; or IBM's previously installed products.
NetScreen Responsibilities
1) Provide IBM with copies of relevant One World application software and One
World data files.
2) Applications in addition to JDE, if any, running on the current ASP for
migration to an IBM ASP facility;
3) JDE release upgrades to be installed, and
4) Negotiate a Phase II agreement covering long-term ASP services to be
provided by IBM for NetScreen.
5) Data Communications link (and cost) to the IBM data center.
NetScreen will also make available the appropriate personnel a necessary for the
IBM to provide the desired assistance. In addition, NetScreen will provide the
necessary facilities communication and support of any needed system or project
documentation to the IBM.
Charges and Estimated Duration
------------------------------
This authorization to proceed with Phase I of the proposed project is valid for
up to 60 days from the signing. Charges will include a one-time set up of
$237,000.00 plus $16,000 per month. IBM will invoice NetScreen for services
provided plus out-of-pocket expenses we incur. NetScreen agrees to pay IBM upon
receipt of such invoices.
This Consulting Letter outlines the services to provide NetScreen with a hosted
JD Edwards environment and technical (CNC) and IT support services. This offer
will expire in 7 days unless extended in writing by IBM. The IBM services
described in this Consulting Letter will be performed in accordance with the
terms and conditions of the International IBM Customer Agreement in place with
NetScreen.
Termination
-----------
Provided that NetScreen has paid the one-time set-up fee and fulfilled it's
responsibilities as specified above, IBM shall have no right to cancel or
terminate this Agreement, or the services provided hereunder, for a period of
three (3) months from the date of this Consulting Letter. Thereafter, for each
month of service, provided that NetScreen has paid the monthly service charge
specified above applicable to such month and fulfilled their responsibilities,
IBM shall
2
<PAGE>
have no right to cancel or terminate this Agreement, or the services provided
hereunder. If NetScreen fails to fulfill it's responsibilities or pay the
one-time set-up fee or monthly service charge as specified above, IBM shall have
the option to terminate this Agreement as provided in this Consulting Letter.
Thereafter either of us may terminate this authorization at any time upon
written notice to the other. We will stop all work upon receipt of such written
notice. This letter is contingent on a successful review of an IBM Credit Risk
Assessment. In any of the above events, the terms of this authorization will
become the final understanding of the parties and will govern the services,
products, and materials provided through their expiration or termination.
Please confirm that these terms and your IICA are the complete agreement
regarding this authorization by signing and returning the enclosed copy of this
letter to me. We look forward to starting this project as soon as possible. IBM
may utilize materials available from other engagements or sources. Any
Deliverables created by IBM under this Engagement Letter Statement of Work will
be Type II Materials as defined by the International IBM Customer Agreement.
We are most appreciative of your confidence in IBM Global Services. We are also
very excited about the opportunity to work with NetScreen on this project.
Sincerely,
/s/ Larry Mirto
Larry Mirto
Practice Executive
IBM Global Services
Each of us agrees that the complete agreement between us about these Services
consists of 1) this Statement of Work and 2) the International IBM Customer
Agreement in place NetScreen, Inc.
Agreed to: Agreed to:
NetScreen, Inc. International Business Machines
Corporation
By /s/ James Gifford By /s/ Robert Sisson
---------------------------------- -----------------------------------
Authorized Signature Authorized Signature
Name (type or print): James K Gifford Name (type or print): Robert Sisson
--------------- -------------
Date: August 9, 2001 Date: August 9, 2001
------------------------------- -----------------------------
IBM Customer #: 6106130
Reference IBM Customer Agreement #: 60033258A
Return Address:
IBM
400 Executive Pkwy.
Suite 300
San Ramon, CA 94568
3
<PAGE>
ADDITIONAL TERMS AND CONDITIONS
-------------------------------
Required Consent and Indemnity
NetScreen will promptly obtain and provide to IBM all Required Consents
necessary for IBM to provide the Services described in the Statement of Work. A
Required Consent means any consents or approvals required to give IBM and IBM's
subcontractors the right or license to access, use and/or modify (including
derivative works) to the hardware, software, firmware and other products that
NetScreen uses, without infringing the ownership or license rights (including
patent and copyright) of the providers or owners of such products.
NetScreen will indemnify, defend and hold IBM, IBM's affiliates, and
subcontractors, harmless from and against any and all claims, losses,
liabilities and damages (including reasonable attorneys' fees and costs) arising
from or in connection with any claims (including patent and copyright
infringement) made against IBM, alleged to have occurred as a result of
NetScreen's failure to provide any Required Consents.
IBM will be relieved of the performance of any obligations that may be affected
by NetScreen's failure to promptly obtain and provide any Required Consents to
IBM.
Proprietary Software
During the course of the project IBM may introduce and utilize pre-existing
tools, methodologies, processes, applications code, templates and any related
documentation. IBM and NetScreen's project team members may both utilize these
tools and products. IBM will retain ownership of all such pre existing
proprietary products and IBM will remove those products from NetScreen's systems
when this Statement of Work is completed.
Security Disclaimer
IBM is not providing any Security services under this Statement of Work. As such
IBM does not make any representations regarding, and NetScreen assumes all
responsibility for, the Security readiness, or lack of readiness, of the
deliverable(s).
You understand and agree that the Services performed by us will be performed
using reasonable care and skill, reflecting the level of knowledge and expertise
possessed by those individuals performing the Services at the time such Services
are performed. You understand and agree that new technology, configuration
changes, software upgrades and routine maintenance, among other items, can
create new and unknown security exposures. Moreover, computer "hackers" and
other third parties continue to employ increasingly sophisticated techniques and
tools, resulting in ever-growing challenges to individual computer system
security. It is your sole responsibility to maintain the security of your
computer systems and the data contained in them. Our performance of Services
does not constitute any representation or warranty by us about the security of
your computer systems including, but not limited to, any representation that
your computer systems are safe from intrusions or any other security exposures.
4
<PAGE>
FINALLY, YOU UNDERSTAND AND AGREE THAT, OTHER THAN THE WARRANTY FOR IBM SERVICES
SET FORTH IN THE AGREEMENT, WE PROVIDE NO OTHER WARRANTIES, WHETHER EXPRESS OR
IMPLIED, IN CONNECTION WITH ANY DELIVERABLES UNDER THIS STATEMENT OF WORK, AND
THAT ALL OTHER WARRANTIES, INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTY
OR MERCHANTABILITY AND FITNESS FOR PARTICULAR PURPOSE ARE EXPRESSLY DISCLAIMED.
APPENDIX A: Project Control Procedure
The following will be utilized if a change to this Statement of Work is required
A Project Change Request (PCR) will be the vehicle for communicating change. The
PCR, must describe the change; the rationale for the change and the effect the
change will have on the project. The Project Manager/Manager of the requesting
party will review the proposed change and determine whether to submit the
request to the other party.
The IBM Service Delivery Manager and NetScreen Project Manager will review the
proposed change and approve it for further investigation or reject it. IBM will
specify any charges for such investigation. If the investigation is authorized,
the Project Managers will sign the PCR that will constitute approval for the
investigation charges. IBM will invoice NetScreen for any such charges. The
investigation will determine the effect that the implementation of the PCR would
have on price, schedule and other terms and conditions of the agreement.
A written Change Authorization and/or Project Change Request (PCR) must be
signed by both parties to authorize implementation of the investigated changes.
5
<PAGE>
TABLE OF CONTENTS
Page
PART 1 - GENERAL ...................................................2
1.1 Definition ..................................................2
1.2 Agreement Structure .........................................3
1.3 Delivery ....................................................5
1.4 Charges and Payment .........................................5
1.5 Changes to the Agreement Terms ..............................6
1.6 IBM Business Partners .......................................7
1.7 Mutual Responsibilities .....................................7
1.8 Your Other Responsibilities .................................8
1.9 Patents and Copyrights ......................................9
1.10 Limitation of Liability ....................................10
1.11 Agreement Termination ......................................10
1.12 Geographic Scope ...........................................11
1.13 Governing Law ..............................................11
PART 2 - WARRANTIES ...............................................11
2.1 The IBM Warranties .........................................11
2.2 Extent of Warranty .........................................12
2.3 Items Not Covered by Warranty ..............................13
PART 3 - MACHINES .................................................14
3.1 Title and Risk of Loss .....................................14
3.2 Production Status ..........................................14
3.3 Installation ...............................................14
3.4 Machine Code and Licensed Internal Code ....................15
PART 4 - PROGRAMS .................................................17
4.1 License ....................................................17
4.2 License Details ............................................17
4.3 Program Components Not Used on the Designated Machine ......18
4.4 Distributed System License Option ..........................18
4.5 Program Testing ............................................18
4.6 Program Protection .........................................18
4.7 Program Services ...........................................18
4.8 License Termination ........................................19
4.9 Programs Licensed under Other Agreements ...................19
PART 5 - SERVICES .................................................20
5.1 IBM Services ...............................................20
5.2 Personnel ..................................................20
5.3 Materials Ownership and License ............................20
5.4 Automatic Service Renewal ..................................20
5.5 Termination and Withdrawal .................................21
5.6 Service for Machine (during and after warranty) ............21
5.7 Automatic Maintenance Coverage (following warranty) ........23
5.8 Other Maintenance Coverage .................................23
PART 6 - OPTIONS ..................................................24
6.1 Offshore Acquisitions ......................................24
PART 7 - COUNTRY UNIQUE TERMS .....................................26
7.1 Multiple Countries .........................................26
7.2 AMERICAS ...................................................29
7.3 ASIA PACIFIC ...............................................32
7.4 EUROPE, MIDDLE EAST, AFRICA (EMEA) .........................38
-1-
<PAGE>
IBM International Customer Agreement
Part 1
- General
1.1 Definition.
Customer Lead Company is the legal entity within our Enterprise that signs
this Agreement.
Customer-set-up Machine is an IBM Machine that you install according to
IBM's instructions.
Date of Installation is the following:
1. for an IBM Machine that IBM is responsible for installing, the
business day after the day IBM installs it or, if you defer
installation, makes it available to you for subsequent installation by
IBM;
2. for a Customer-set-up Machine and a non-IBM Machine, the second
business day after the Machine's standard transit allowance period;
and
3. for a Program
a basic license, the later of the following:
i. the day after its testing period ends;
ii. the second business day after the Program's standard transit
allowance period,
b copy, the date (specified in a Transaction Document) on which IBM
authorizes you to make a copy of the Program, and
c chargeable component, the date you distribute a copy of the
chargeable component in support of your authorized use of the
Program.
Designated Machine is either 1) the machine on which you will use a Program
for processing and which IBM requires you to identify to it by type/model
and serial number, or 2) any machine on which you use the Program if IBM
does not require you to provide this identification to IBM.
Enterprise is any legal entity (such as a corporation) and the subsidiaries
it owns by more than 50 percent. An Enterprise also includes other entities
which are mutually agreed-to, as listed in Schedule A.
2
<PAGE>
IBM Lead Company is the legal entity within International Business Machines
Corporation's Enterprise that signs this Agreement. The IBM Lead Company
and Customer Lead Company are referred to together as "Lead Companies."
Licensed Internal Code is Machine Code used by certain Machines IBM
specifies (called "Specific Machines").
Machine is a machine, its features, conversions, upgrades, elements, or
accessories, or any combination of them. The term "Machine" includes on IBM
Machine and any non IBM Machine (including other equipment) that IBM may
provide to you.
Machine Code is microcode, basic input/output system code (called "BIOS"),
utility programs, device drivers, and diagnostics delivered with an IBM
Machine.
Materials are literary works or other works of authorship (such as
programs, program listings, programming tools, documentation, reports,
drawings and similar works) that IBM may deliver to you as part of a
Service. The term "Materials" does not include Programs, Machine Code, or
Licensed Internal Code.
Product is a Machine or a Program.
Program is the following, including the original and all whole or partial
copies:
1. machine-readable instructions and date;
2. components;
3. audio-visual content (such as images, text, recordings, or pictures);
and
4. related licensed materials.
The term "Program" includes an IBM Program and any non-IBM Program that IBM
may provide to you. The term does not include Machine Code, Licensed
Internal Code, or Materials.
Service is performance of a task, provision of advice and counsel,
assistance, support, or access to a resource (such as access to an
information database) IBM makes available to you.
Specifications is a document that provides information specific to a
Product. For an IBM Machine, IBM calls the document "Official Published
Specifications". For an IBM Program licensed under this Agreement, IBM
calls it "Licensed Program Specifications.
Specified Operating Environment is the Machine and Programs with which a
Program is designed to operate, as described in the Program's
Specifications.
1.2 Agreement Structure
Attachments
3
<PAGE>
Some Products and Services have terms in addition to those IBM specifies in
this Agreement. IBM provides the additional terms in documents called
"Attachments" which are also part of this Agreement. Depending upon their
country of use, Attachments may have different names. Attachments will be
signed by both of us if requested by either of us.
Transaction Documents
For each business transaction, IBM will provide you with the appropriate
"Transaction Documents" that confirm the specific details of the
transaction. Transaction Documents are also part of this Agreement.
Transaction Documents will be signed by both of us if requested by either
of us. The following are examples of Transaction Documents with examples of
the information they may contain: following are examples of Transaction
Documents, with examples of the information they may contain:
1. addenda (contract-period duration, start date, and total quantity);
2. change authorizations (description of agreed changes to an existing
Service statement of work);
3. exhibits (eligible Products by category);
4. invoices (item, quantity, and amount due);
5. statements of work (scope of Services, responsibilities, deliverables,
completion criteria, estimated schedule or contract period, and
charges); and
6. supplements (Machine quantity and type ordered, price, estimated
shipment date, and warranty period).
Conflicting Terms
If there is a conflict among the terms in the various documents, those of
an Attachment prevail over those of this Agreement. The terms of a
Transaction Document prevail over those of both of these documents.
IBM's Acceptance of Your Order
A Product or Service becomes subject to this Agreement when IBM accepts
your order by doing any of the following:
1. sending you a Transaction Document;
2. shipping the Machine or making the Program available to you; or
3. providing the Service.
Your Acceptance of Additional Terms
You accept the additional terms in an Attachment or Transaction Document by
doing any of the following:
4
<PAGE>
1. signing the Attachment or Transaction Document;
2. using the Product or Service, or allowing others to do so; or
3. making any payment for the Product or Service.
1.3 Delivery
IBM will try to meet your delivery requirements for Products and Services
you order, and will inform you of their status. Transportation charges, if
applicable, will be specified in a Transaction Document.
1.4 Charges and Payment
The amount payable for a Product or Service will be based on one or more of
the following types of charges:
1. one-time (for example, the price of a Machine);
2. recurring (for example, a periodic charge for Programs or measured use
of Services);
3. time and materials (for example, charges for hourly Services); or
4. fixed price (for example, a specific amount agreed to between us for a
custom Service).
Depending on the particular Product, Service, or circumstance, additional
charges may apply (such as special handling or travel related expenses).
IBM will inform you in advance whenever additional charges apply.
Recurring charges for a Product begin on (or, in some countries, after) its
Date of Installation. Charges for Services are billed as IBM specifies
which may be in advance, periodically during the performance of the
Service, or after the Service is completed.
Amounts are due upon receipt of invoice and payable as IBM specifies in a
Transaction Document. You agree to pay accordingly, including any late
payment fee.
It any authority imposes a duty, tax, levy, or fee, excluding those based
on IBM's net income, upon any transaction under the Agreement, then you
agree to pay that amount as specified in an invoice or supply exemption
documentation. You are responsible for personal property taxes for each
Product from the date IBM ships it to you.
One-time and recurring charges may be based on measurements of actual or
authorized use (for example, number of users or processor size for
Programs, meter readings for maintenance Services or connect time for
network Services). You agree to provide actual usage data if IBM specifies.
If you make changes to your environment that impact use charges (for
example, change processor size or configuration for Programs), you agree to
5
<PAGE>
promptly notify IBM and pay any applicable charges. Recurring charges will
be adjusted accordingly. Unless IBM agrees otherwise, IBM does not give
credits or refunds for charges already due or paid. In the event that IBM
changes the basis of measurements, its terms for changing charges will
apply.
IBM may increase recurring charges for Products and Services, as well as
labor rates and minimums for Services provided under the Agreement, by
giving you three months' written notice. As increase applies on the first
day of the invoice or charging period on or after the effective date IBM
specifies in the notice.
IBM may increase one-time charges without notice. However, an increase to
one-time charges does not apply to you if 1) IBM receives your order before
the announcement date of the increase and 2) one of the following occurs
within three months after IBM's receipt of your order:
1. IBM ships you the Machine or makes the Program available to you;
2. you make an authorized copy of a Program or distribute a chargeable
component of a Program to another Machine; or
3. a Program's increased use charge becomes due.
You receive the benefit of a decrease in charges for amounts which become
due on or after the effective date of the decrease.
Services for which you prepay must be used within the applicable contract
period. Unless IBM specifies otherwise, IBM does not give credits or
refunds for unused prepaid Services.
1.5 Changes to the Agreement Terms
For a change to the terms of this Agreement (Parts 1 through 7) to be
valid, both of us must sign it.
In order to maintain flexibility in our business relationship however, IBM
may change the terms of its Product and Service offerings by giving you
three months' written notice. These changes are not retroactive. They
apply, as of the effective date IBM specifies in the notice, only to new
orders, renewals, and on-going transactions that do not expire. For
on-going transactions with a defined renewable contract period, you may
request that IBM defer the change effective date until the end of the
current contract period if 1) the change affects your current contract
period and 2) you consider the change unfavorable. Changes to charges for
Products and Services will be implemented as described in the Charges and
Payment section above.
Additional or different terms in any written communication from you (such
as an order) are void.
6
<PAGE>
1.6 IBM Business Partners
IBM has signed agreements with certain organizations (called "IBM Business
Partners") to promote, market, and support certain Products and Services.
When you order IBM Products or Services (marketed to you by IBM Business
Partners) under this Agreement, IBM confirms that it is responsible for
providing the Products or Services to you under the warranties and other
terms of this Agreement. IBM is not responsible for 1) the actions of IBM
Business Partners 2) any additional obligations they have to you, or 3) any
products or services that they supply to you under their agreements.
1.7 Mutual Responsibilities
Both of us agree that under this Agreement:
1. neither of us grants the other the right to use its (or any of its
Enterprise's) trademarks, trade names, or other designations in any
promotion of publication without prior written consent;
2. all information exchanged is non-confidential. If either of us
requires the exchange of confidential information, it will be made
under a signed confidentiality agreement;
3. each of us is free to enter into similar agreements with others;
4. each of us grants the other only the licenses and rights specified. No
other licenses or rights (including licenses or rights under patents)
are granted;
5. each of us may communicate with the other by electronic means and such
communication is acceptable as a signed writing to the extent
permissible under applicable law. An identification code (called a
"user ID") contained in an electronic document is sufficient to verify
the sender's identity and the document's authenticity;
6. each of us will allow the other reasonable opportunity to comply
before it claims that the other has not met its obligations;
7. neither of us will bring a legal action more than two years after the
cause of action arose unless otherwise provided by applicable law
without the possibility of contractual waiver or limitation;
8. neither of us is responsible for failure to fulfill any obligations
due to causes beyond its control; and
9. neither of us may assign this Agreement, in whole or in part, without
the prior written consent of the other. Any attempt to do so is void.
Neither of us will unreasonably withhold such consent. The assignment
of this Agreement, in whole or in part, within the Enterprise of which
either of us is a part or to a successor organization by merger or
acquisition does not require the consent of
7
<PAGE>
the other. It is not considered an assignment for IBM to divest a
portion of its business in a manner that similarly affects all of its
customers.
1.8 Your Other Responsibilities
You agree:
1. not to resell any Service without IBM's prior written consent. Any
attempt to do so is void;
2. that this Agreement will not create any right to cause of action for
any third party, nor will IBM be responsible for any third party
claims against you except as described in the Patents and Copyrights
section below or as permitted by the Limitation of Liability section
below for bodily injury (including death) or damage to real or
tangible personal property for which IBM is legally liable;
3. to acquire Machines with the intent to use them within your Enterprise
and not for reselling, leasing, or transferring to a third party,
unless either of the following applies -
a. you are arranging lease-back financing for the Machines, or
b. you purchase them without any discount or allowance, and do not
remarket them in competition with IBM's authorized remarketers;
4. to allow IBM to install mandatory engineering changes (such as those
required for safety) on a Machine. Any parts IBM removes become IBM's
property. You represent that you have the permission from the owner
and any lien holders to transfer ownership and possession of removed
parts to IBM;
5. that you are responsible for the results obtained from the use of the
Products and Services;
6. to provide IBM with sufficient, free, and safe access to your
facilities for IBM to fulfill its obligations;
7. to allow International Business Machines Corporation and entities
within its Enterprise to store and use your contact information,
including names, phone numbers, and e-mail addresses, anywhere they do
business. Such information will be processed and used in connection
with our business relationship, and may be provided to contractors,
Business Partners, and assignees of International Business Machines
Corporation and entities within its Enterprise for uses consistent
with their collective business activities, including communicating
with you (for example, for processing orders, for promotions, and for
market research); and
8. to comply with all applicable export and import laws and regulations.
8
<PAGE>
1.9 Patents and Copyrights
For purposes of this section, the term "Product" includes Materials,
Machine Code and Licensed Internal Code.
If a third party claims that a Product IBM provides to you infringes that
party's patent or copyright, IBM will defend you against that claim at its
expense and pay all costs, damages, and attorney's fees that a court
finally awards or that are included in a settlement approved by IBM,
provided that you:
1. promptly notify IBM in writing of the claim; and
2. allow IBM to control, and cooperate with IBM in, the defense and any
related settlement negotiations.
If such a claim is made or appears likely to be made, you agree to permit
IBM to enable you to continue to use the Product, or to modify it, or
replace it with one that is at least functionally equivalent. If IBM
determines that none of these alternatives is reasonably available, you
agree to return the Product to IBM on its written request. IBM will then
give you a credit equal to:
1. for a Machine, your net book value provided you have followed
generally-accepted accounting principles;
2. for a Program, the amount paid by you or 12 months' charges (whichever
is less); and
3. for Materials, the amount you paid IBM for the creation of the
Materials.
This is IBM's entire obligation to you regarding any claim of infringement.
Claims for Which IBM is Not Responsible
IBM has no obligation regarding any claim based on any of the following:
1. anything you provide which is incorporated into a Product or IBM's
compliance with any designs, specifications, or instructions provided
by you or by a third party on your behalf;
2. your modification of a Product, or a Program's use in other than its
Specified Operating Environment;
3. the combination, operation, or use of a Product with other Products
not provided by IBM as a system, or the combination, operation of use
of a Product with any product, data, apparatus, or business method
that IBM did not provide, or the distribution, operation or use of a
Product for the benefit of a third party outside your Enterprise; or
9
<PAGE>
4. infringement by a non-IBM Product alone.
1.10 Limitation of Liability
Circumstances may arise where, because of a default on IBM's part or other
liability, you are entitled to recover damages from IBM. In each such
instance, regardless of the basis on which you are entitled to claim
damages from IBM (including fundamental breach, negligence,
misrepresentation, or other contract or tort claim), IBM is liable for no
more than:
1. payments referred t in the Patents and Copyrights section above;
2. damages for bodily injury (including death) and damage to real
property and tangible personal property; and
3. the amount of any other actual direct damages up to the greater of
U.S. $100,000 (or equivalent in local currency) or the charges (if
recurring, 12 months' charges apply) for the Product or Service that
is the subject of the claim. For purposes of this item, the term
"Product" includes Materials, Machine Code, and Licensed Internal
Code.
This limit also applies to any of IBM's subcontractors and Program
developers. It is the maximum for which IBM and its subcontractors and
Program developers are collectively responsible.
Items for Which IBM is Not Liable
Under no circumstances is IBM, its subcontractors, or Program developers
liable for any of the following even if informed of their possibility:
1. loss of, or damage to, data;
2. special, incidental, or indirect damages or for any economic
consequential damages; or
3. lost profits, business, revenue, goodwill, or anticipated savings.
1.11 Agreement Termination
Either of us may terminate this Agreement on written notice to the other
following the expiration or termination of the terminating party's
obligations.
Either of us may terminate this Agreement if the other does not comply with
any of its terms, provided the one who is not complying is given written
notice and reasonable time to comply.
10
<PAGE>
Any terms of this Agreement which by their nature extend beyond the
Agreement termination remain in effect until fulfilled, and apply to both
of our respective successors and assignees.
1.12 Geographic Scope
The rights, duties, and obligations of each of us are valid only in the
country in which the transaction is performed or, if IBM agrees, the
country where the Product is placed in productive use, except that all
licenses are valid as specifically granted.
1.13 Governing Law
Both you and IBM consent to the application of the laws of the country in
which the transaction is performed to govern, interpret, and enforce all of
your and IBM's rights, duties, and obligations arising from, or relating in
any manner to, the subject matter of this Agreement, without regard to
conflict of law principles.
In the event that any provision of this Agreement is held to be invalid or
unenforceable, the remaining provisions of this Agreement remain in full
force and effect.
Nothing in this Agreement affects any statutory rights of consumers that
cannot be waived or limited by contract.
The United Nations Convention on Contracts for the International Sale of
Goods does not apply.
IBM International Customer Agreement
Part 2
- Warranties
2.1 The IBM Warranties.
Unless IBM specifies otherwise, the following warranties apply only in the
country of acquisition.
Warranties for IBM Machines
For each IBM Machine, IBM warrants that it:
1. is free from defects in materials and workmanship; and
2. conforms to its Specifications.
The warranty period for a Machine is a specified, fixed period commencing
on its Date of Installation. During the warranty period, IBM provides
repair and exchange Service for the Machine, without charge, under the type
of Service IBM designates for the Machine.
11
<PAGE>
If a Machines does not function as warranted during the warranty period and
IBM is unable to either 1) make it do so or 2) replace it with one that is
at least functionally equivalent, you may return it to IBM and your money
will be refunded.
Following expiration of the warranty period all IBM Machines you acquire
under this Agreement will automatically receive maintenance Service for a
charge unless you request in writing that this Service not be provided.
Additional terms regarding Service for Machines during and after the
warranty period are contained in Part 5.
Warranty for IBM Programs
For each warranted IBM Program, IBM warrants that when it is used in the
Specified Operating Environment, it will conform to its Specifications.
The warranty period for a Program expires when its Program Services are no
longer available. During the warranty period, IBM provides defect-related
Program Services without charge. Program Services are available for a
warranted Program for at least one year following its general availability.
If a Program does not function as warranted during the first year after you
obtain your license and IBM is unable to make it do so, you may return the
Program and your money will be refunded. To be eligible, you must have
obtained your license while Program Services (regardless of the remaining
duration) were available for it. Additional terms regarding Program
Services are contained in part 4.
Warranty for IBM Services
For each IBM Service, IBM warrants that IBM performs it:
1. using reasonable care and skill; and
2. according to its current description (including any completion
criteria) contained in this Agreement, an Attachment, or a Transaction
Document.
Warranty for Systems
Where IBM provides Products to you as a system IBM warrants that they are
compatible and will operate with one another. This warranty is in addition
to IBM's other applicable warranties.
2.2 Extent of Warranty
The warranties stated above will not apply to the extent that there has
been misuse, accident, modification, unsuitable physical or operating
environment, operation in other than the Specified Operating Environment,
improper maintenance by you, or failure
12
<PAGE>
caused by a product for which IBM is not responsible. With respect to
Machines, the warranty is voided by removal or alteration of Machine or
parts identification labels.
THESE WARRANTIES ARE YOUR EXCLUSIVE WARRANTIES AND REPLACE ALL OTHER
WARRANTIES OR CONDITIONS, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED
TO, THE IMPLIED WARRANTIES OR CONDITIONS OF MERCHANTABILITY AND FITNESS FOR
A PARTICULAR PURPOSE.
2.3 Items Not Covered by Warranty
IBM does not warrant uninterrupted or error-free operation of a Product or
Service or that IBM will correct all defects,
IBM will identify IBM Products that it does not warrant.
Unless IBM specifies otherwise, it provides Materials, non-IBM Products,
and non-IBM Services WITHOUT WARRANTIES OF ANY KIND. However, non-IBM
manufacturers, suppliers, or publishers may provide their own warranties to
you.
13
<PAGE>
IBM International Customer Agreement
Part 3
- Machines
3.1 Title and Risk of Loss
IBM transfers title to a Machine to you or, if you choose, your lessor,
upon payment of all the amounts due. For a feature, conversion, or upgrade
involving the removal of parts which become IBM's properly, IBM reserves
transfer of title until IBM receives payment of all the amounts due and the
removed parts.
IBM bears the risk of loss for the Machine up to and including its Date of
Installation. Thereafter, you assume the risk.
3.2 Production Status
Each IBM Machine is manufactured from parts that may be new or used. In
some cases, a Machine may not be new and may have been previously
installed. Regardless, IBM's appropriate warranty terms apply.
3.3 Installation
You agree to provide an environmental meeting the specified requirements
for the Machine.
IBM has standard installation procedures. IBM will successfully complete
these procedures before it considers an IBM Machine (other than a Machine
for which you defer installation or a Customer-set-up Machine) installed.
You are responsible for installing a Customer-set-up Machine and, unless
IBM agrees otherwise, a non-IBM Machine.
Machine Features, Conversion and Upgrades
IBM sells features, conversions and upgrades for installation on Machines,
and, in certain instances, only for installation on a designated,
serial-numbered Machine. Many of these transactions involve the removal of
parts and their return to IBM. As applicable, you represent that you have
the permission from the owner and any lien holders to 1) install features,
conversions and upgrades 2) transfer ownership and possession of removed
parts (which become IBM's property) to IBM. You further represent that all
removed parts are genuine, unaltered, and in good working order. A part
that replaces a removed part will assume the warranty or maintenance
Service status of the replaced part. You agree to allow IBM to install the
feature, conversion, or upgrade within 30 days of its delivery. Otherwise,
IBM may terminate the transaction and you must return the feature,
conversion, or upgrade to IBM at your expense.
14
<PAGE>
3.4 Machine Code and Licensed Internal Code
Machine Code is licensed under the terms of the agreement provided with it
and this Agreement.
Certain Machines IBM specifics (called "Specific Machines") use Licensed
Internal Code (called "LIC"). International Business Machines Corporation,
one of the entities within its Enterprise, or a third party owns LIC
including all copyrights in LIC and all copies of LIC (this includes the
original LIC, copies of the original LIU, and copies made from copies). LIC
is copyrighted and licensed (not sold).
IBM will identify each Specific Machine in a Transaction Document. If you
are the rightful possessor of a Specific Machine, IBM grants you a license
to use the LIC (or any replacement IBM provides) on, or in conjunction
with, only the Specific Machine, designated by serial number, for which the
LIC is provided. IBM licenses the LIC to only one rightful possessor at a
time.
Under each license, IBM authorizes you to do only the following:
1. execute the LIC to enable the Specific Machine to function according
to its Specifications;
2. make a backup or archival copy of the LIC (unless IBM makes one
available for your use), provided you reproduce the copyright notice
end any other legend of ownership on the copy. You may use the copy
only to replace the original when necessary and
3. execute and display the LIC as necessary to maintain the Specific
Machine.
You agree to acquire any replacement for, or additional copy of, LIC
directly from IBM in accordance with IBM's standard policies and practices.
You also agree to use that LIC under these terms.
You may transfer possession of the LIC to another party only with the
transfer of the Specific Machine. If you do so, you must 1) destroy all
your copies of the LIC that were not provided by IBM, 2) either give the
other party all your IBM-provided copies of the LIC or destroy them, and 3)
notify the other party of these terms. IBM licenses the other party when
that party accepts these terms by initial use of the LIC. These terms apply
to all LIC you acquire from any source.
Your license terminates when you no longer rightfully possess the Specific
Machine.
15
<PAGE>
Actions You Inlay Not Take
You agree to use the LIC only as authorized above. You may not do, for
example, any of the following:
1. otherwise copy, display, transfer, adapt, modify, or distribute the
LIC (electronically or otherwise), except as IBM may authorize in the
Specific Machine's Specifications or in writing to you;
2. reverse assemble, reverse compile, or otherwise translate the LIC
unless expressly permitted by applicable law without the possibility
of contractual waiver.
3. sublicense or assign the license for the LIC; or
4. lease the LIC or any copy of it.
16
<PAGE>
IBM International Customer Agreement
Part 4
- Programs
4.1 License
When IBM accepts your order, IBM grants you a nonexclusive, nontransferable
license to use the Program in the country in which the transaction is
performed. Programs are owned by International Business Machines
Corporation, one of the entities within its Enterprise, or a third party
and are copyrighted and licensed (not sold).
4.2 License Details
Under each license, IBM authorizes you to:
1. use the Program's machine-readable portion on only the Designated
Machine. If the Designated Machine is inoperable, you may use another
machine temporarily. If the Designated Machine cannot assemble or
compile the Program, you may assemble or compile the Program on
another machine.
If you change a Designated Machine previously identified to IBM, you
agree to notify IBM of the charge did its effective date;
2. use the Program to the extent of authorizations you have acquired;
3. make and Install copies of the Program, to support the level of use
authorized, provided you reproduce the copyright notices and any other
legends of ownership on each copy or partial copy, and
4. use any portion of the Program IBM 1) provides in source form, or 2)
marks restricted (for example, "Restricted Materials of IBM") only
to-
a. resolve problems related to the use of the Program, and
b. modify the Program so that It will work together with other
products.
You agree to comply with any additional terms IBM may place on a Program.
IBM identifies these in the Program's Specifications or in a Transaction
Document.
Actions You May Not Take
You agree not to:
1. reverse assemble, reverse compile, or otherwise translate the Program
unless expressly permitted by applicable law without the possibility
of contractual waiver; or
17
<PAGE>
2. sublicense, assign, rent, or lease the Program.
4.3 Program Components Not Used on the Designated Machine
Some Programs have components that ore designed for use on machines other
than the Designated Machine on which the Program is used. You may make
copies of a component and its documentation in support of your authorized
use of the Program. For chargeable components, you agree to notify IBM of
the component's actual date of distribution which is its Date of
Installation.
4.4 Distributed System License Option
For some programs, you may make a copy under a Distributed System License
Option (called a "DGLO" copy). IBM charges less for a DSLO copy than for
the original license (called the "Basic" license). In return for the lesser
charge, you agree to do the following while licensed under a DSLO:
1. have a Basic license for the Program;
2. provide problem documentation and receive Program Services (if any)
only through the location of the Basic license; and
3. distribute to, and install on, the DSLO's Designated Machine, any
release, correction, or bypass that IBM provides for the Basic
license.
4.5 Program Testing
IBM provided a testing period for certain Programs to help you evaluate if
they meet your needs. If IBM offers a testing period, it will start 1) the
second business day after the Program's standard transit allowance period,
or 2) on another date specified in a Transaction Document. IBM will inform
you of the duration of the Program's testing period.
4.6 Program Protection
For each Program, you agree to:
1. ensure that anyone who uses it (accessed either locally or remotely)
does so only for your authorized use and complies with the IBM's terms
regarding Programs; and
2. maintain a record of all copies and provide it to IBM at this request.
4.7 Program Services
IBM provides Program Services for warranted Programs and for selected other
Programs. If IBM can reproduce your reported problem in the Specified
Operating Environment,
18
<PAGE>
IBM will issue defect correction information, a restriction, or a bypass.
IBM provides Program Services for only the unmodified portion of a current
release of a Program.
IBM provides Program Services 1) on an on-going basis (with at least six
months' written notice before IBM terminates Program Services), 2) until
the date IBM specifies, or 3) for a period IBM specifies.
4.8 License Termination
You may terminate the license for a Program on one month's written notice,
or at any time during the Program's testing period.
Licenses for certain replacement Programs may be acquired for an upgrade
charge. When you acquire these replacement Programs, you agree to terminate
the license of the replaced Programs when charges become due, unless IBM
specifies otherwise.
IBM may terminate your license if you fail to comply with the licensed
terms. If IBM does so, your authorization to use the Program is also
terminated.
4.9 Programs Licensed under Other Agreements
IBM provides many Programs which are licensed under the terms of the
agreements provided with them.
19
<PAGE>
IBM International Customer Agreement
Part 5
- Services
5.1 IBM Services
Services may be either standard offerings or customized to specific
requirements.
5.2 Personnel
Each of us is responsible for the supervision, direction, control, and
compensation of our respective personnel.
IBM reserves the right to determine the assignment of its personnel.
IBM may subcontract a Service, or any part of it, to subcontractors
selected by IBM.
5.3 Materials Ownership and License
IBM will specify Materials to be delivered to you. IBM will identify them
as being "Type I Materials," "Type II Materials," or otherwise as we both
agree. If not specified, Materials will be considered Type II Materials.
Type I Materials are those, created during the Service performance period,
in which you will have all right, title and interest (including ownership
of copyright). IBM will retain one coy of the Materials. You grant IBM 1)
an irrevocable, nonexclusive, worldwide, paid-up license to use, execute,
reproduce, display, perform, distribute (internally and externally) copies
of, and prepare derivative works based on, Type I Materials and 2) the
right to authorize others to do any of the former.
Type II Materials are those, created during the Service performance period
or otherwise (such as those that preexist the Service), in which IBM or
third parties have all right, title, and interest (including ownership of
copyright). IBM will deliver one copy of the specified Materials to you.
IBM grants you an irrevocable, nonexclusive, worldwide, paid-up license to
use, execute, reproduce, display, perform, and distribute, within your
Enterprise only, copies of Type II Materials.
5.4 Automatic Service Renewal
Renewable Service renew automatically for a same length contract period
unless either of us provides written notification (at least one month prior
to the end of the current contract period) to the other of its decision not
to renew.
20
<PAGE>
5.5 Termination and Withdrawal
Either of us may terminate a Service if the other does not meet its
obligations concerning the Service.
You may terminate a Service, on notice to IBM provided you have met all
minimum requirements and paid any adjustment chares specified in the
applicable Attachments and Transaction Documents. For a maintenance
Service, you may terminate without adjustment charge provided any of the
following circumstances occur:
1. you permanently remove the eligible Product, for which the Service is
provided, from productive use within your enterprise;
2. the eligible location, for which the Service is provided, is no longer
controlled by you (for example, because of sale or closing of the
facility); or
3. the Machine has been under maintenance Service for at least six months
and you give IBM one month's written notice prior to terminating the
maintenance Service.
You agree to pay IBM for 1) all Services IBM provides and any Product and
Materials IBM delivers through Service termination, 2) all expenses IBM
incurs through Service termination, and 3) any charges IBM incurs in
terminating the Service.
IBM may withdraw a Service or support for an eligible Product on three
months' written notice to you. If IBM withdraws a Service for which you
have prepaid and IBM has not yet fully provided it to you, IBM will give
you a prorated refund.
Any terms which by their nature extend beyond termination or withdrawal
remain in effect until fulfilled and apply to respective successors and
assignees.
5.6 Service for Machine (during and after warranty)
IBM provides certain types of Service to keep Machines in, or restore them
to, conformance with their Specifications. IBM will inform you of the
available types of Service for a Machine based on its county of
installation. At its discretion, IBM will 1) either repair or exchange the
failing Machine and 2) provide the Service either at your location or a
service center.
When the type of Service requires that you deliver the failing Machine to
IBM, you agree to ship it suitably packaged (prepaid unless IBM specifies
otherwise) to a location IBM designates. After IBM has repaired or
exchanged the Machine, IBM will return it to you at its expense unless IBM
specifies otherwise. IBM is responsible for loss of, or damage to, your
Machine while it is 1) in IBM's possession or 2) in transit in those cases
where IBM is responsible for the transportation charges.
You agree to:
21
<PAGE>
1. obtain authorization fro the owner to have IBM service a Machine that
you do not own; and
2. where applicable, before IBM provides Service -
a. follow the problem determination, problem analysis, and service
request procedures that IBM provides,
b. secure all programs, data, and funds contained in a Machine, and
c. inform IBM of changes in a Machine's location.
When Service involves the exchange of a Machine or part, the item IBM
replaces becomes its property and the replacement becomes yours. You
represent that all removed items are genuine and unaltered. The replacement
may not be new, but will be in good working order and at least functionally
equivalent to the item replaced. The replacement assumes the warranty or
maintenance Service status of the replaced item. Before IBM exchanges a
Machine or part, you agree to remove all features, parts, options,
alterations, and attachments not under IBM's service. You also agree to
ensure that the item is free of any legal obligations or restrictions that
prevent its exchange.
Some parts of IBM Machines are designated as Customer Replaceable Units
(called "CRUs"), e.g., keyboards, memory, or hard disk drives. IBM provides
CRUs to you for replacement by you. You must return all defective CRUs to
IBM within 30 days of your receipt of the replacement CRU. You are
responsible for downloading designated Machine Code and Licensed Internal
Code updates from an IBM Internet Web site or from other electronic media,
and following the instructions that IBM provides.
Any feature, conversion, or upgrade IBM services must be installed on a
Machine which is 1) for certain Machines, the designated, serial-numbered
Machine and 2) at an engineering-change level compatible with the feature,
conversion, or upgrade.
Repair and exchange Service does not cover:
1. accessories, supply items, and certain parts, such as batteries,
frames, and covers;
2. Machines damaged by misuse, accident, modification, unsuitable
physical or operating environment, or improper maintenance by you;
3. Machines with removed or altered Machine or parts identification
labels;
4. failures caused by a product for which IBM is not responsible; or
5. service of Machine alternations.
IBM manages and installs selected engineering changes that apply to IBM
Machines and may also perform preventive maintenance.
22
<PAGE>
IBM provides maintenance Service for selected non- IBM Machines.
Warranty Service Upgrade
For certain Machines, you ay select a Service upgrade from the standard
type of warranty Service for the Machine. IBM charges for the Service
upgrade during the warranty period.
You may not terminate the Service upgrade or transfer it to another Machine
during the warranty period. When the warranty period ends, the Machine will
convert to maintenance Service at the same type of Service you selected for
warranty Service upgrade.
5.7 Automatic Maintenance Coverage (following warranty)
All IBM Machines you acquire under this Agreement will automatically be
covered by billable maintenance Service, unless you request otherwise in
writing, following expiration of their warranty. The type of Service will
be that provider for IBM Machines of the same type installed at that
location. If there are no similar IBM Machines, then the type of Service
will be the basic Service available for that Machine type. You may cancel
the automatic coverage by notifying IBM in writing within one month after
the date of the Machine's first maintenance Service invoice. However, you
will be charged for any maintenance Service which IBM has performed at your
request.
5.8 Other Maintenance Coverage
Whenever you order maintenance Service for Machines that are not subject to
automatic maintenance coverage, IBM will inform you of the date on which
maintenance Service will begin. IBM may inspect the Machine within one
month following that date. If the Machine is not in an acceptable condition
for service, you may have IBM restore it for a charge. Alternatively, you
may withdraw your request for maintenance Service. However, you will be
charged for any maintenance service which IBM has performed at your
request.
23
<PAGE>
IBM International Customer Agreement
Part 6
- Options
6.1 Offshore Acquisitions
In certain countries, Products will be provided directly from International
Business Machines Corporation or its subsidiaries through an offshore
acquisition. With this option, delivery, acquisition, and applicable
transfer of title take place outside the country of installation and you
are responsible for importation. Charges are based on the country of
installation. Warranty and installation responsibilities are performed by a
local service organization. Other Services will be provided by the local
International Business Machines Corporation subsidiary under separate
terms.
The following terms amend the sections specified below for offshore
acquisitions:
1.4 Charges and Payment
The following is added to this section:
You agree to pay in full all charges due upon shipment from the supplying
location either:
1. as cash prepayment by certified check or bank transfer in a form
mutually acceptable; or
2. by establishment of a letter of credit under the provisions specified in
a Transaction Document.
Adjustments, taxes and additional charges chargeable to you under this
Agreement may be billed subsequent to shipment and are payable in full, in
the currency specified in the relevant Transaction Document, within 30 days
of the date of such billing.
International Business Machines Corporation, or its subsidiary providing
Products to you, may cancel this Agreement or any order under it without
liability on its part if you fail to provide cash prepayment or to
establish a letter of credit in accordance with the provisions specified in
the relevant Transaction Document.
You will bear the full cost and responsibility for obtaining all necessary
consents from any government or related authority to enable you to clear
the Machines from customs for importation into the country of installation.
1.12 Geographic Scope
The following replaces this section:
24
<PAGE>
All your rights and all obligations of International Business Machines
Corporation (or its subsidiary providing Products to you) are valid only in
the country in which the transaction is performed or, if International
Business Machines Corporation (or its subsidiary providing Products to you)
agrees, the country where the Product is placed in productive use, except
that all licenses are valid as specifically granted.
3.1 Title and Risk of Loss
The following replaces the first sentence in this section:
Title to each Machine will pass to you between the port of exportation and
the port of importation of the country of installation provided payment has
been received in full.
4.1 License
The following replaces this section:
When your order is accepted, you will be granted a nonexclusive,
nontransferable license to use the Program in the country in which the
Program is installed. Programs are owned by International Business Machines
Corporation, one of the entities within its Enterprise, or a third party
and are copyrighted and licensed (not sold).
25
<PAGE>
IBM International Customer Agreement
Part 7
- Country Unique Terms
The terms of this Agreement apply for all countries specified in Schedule A
except that the following terms are country amendments which replace or
modify terms in Parts 1 through 6 for the identified country. All terms in
Parts 1 through 6 which are not changed by these amendments remain in
effect.
This part 7 is organized as follows:
7.1 contains multiple country amendments to Part 1, section 1.13 Governing
Laws;
7.2 contains the Americas country amendments to other Agreement terms;
7.3 contains the Asia Pacific country amendments to other Agreement terms;
and
7.4 contains the Europe, Middle East, and Africa country amendments to
other Agreement terms.
7.1 Multiple Countries
Part I - General
1.13 Governing Law
The following replaces the first paragraph in this section as it applies
for those countries identified in bold print below:
Both you and IBM consent to the application of the laws of the country, in
which the transaction is performed to govern, interpret, and enforce all of
your and IBM's rights, duties, and obligations arising from, or relating in
any manner to, the subject matter of this Agreement, without regard to
conflict of law principles. However, the phrase "the laws of the country in
which the transaction is performed" is replaced by the following phrases 1)
"the law of Austria" in Albania, Armenia, Azerbeijan, Belarus,
Bosnia-Herzegovina, Bulgaria, Croatia, Georgia, Hungary, Kazakhstan,
Kyrghystan, FYR Macedonia, Moldavia, Poland, Romania, Russia, Slovakia,
Slovenia, Tajikistan, Turkmenistan, Ukraine, Uzbekistan, and FR Yugoslavia;
2) "the laws of the State or Territory in which the transaction is
performed" in Australia; 3) "the laws of France" in Algeria, Benin, Burkina
Faso, Cameroon, Cape Verde, Central African Republic, Chad, Comoros, Congo
Republic, Djibouti, Democratic Republic of Congo, Equatorial Guinea, French
Guiana, French Polynesia, Gabon, Gambia, Guinea, Guinea-Bissau, Ivory
Coast, Lebanon, Madagascar, Mali, Mauritania, Mauritius, Mayotte, Morocco,
New Celedonia, Niger, Reunion, Senegal, Seychelles, Togo, Tunisia, Vanuatu,
and Wallis & Futuna; 4) "the laws of the Province of Ontario" in Canada; 5)
"the laws of Finland" in Estonia, Latvia, and Lithuania; 6) "the laws of
England" in Angola, Bahrain, Botswana, Burundi, Egypt, Eritrea, Ethiopia,
Ghana, Jordan, Kenya, Kuwait, Liberia, Malawi, Malta, Mozambique, Nigeria,
Oman, Pakistan, Qatar, Rwanda, Sao Tome, Saudi Arabia, Sierra Leone,
Somalia,
26
<PAGE>
Tanzania, Uganda, United Arab Emirates, the United Kingdom, West Bank/Gaza,
Yemen, Zambia, and Zimbabwe; 7) "the laws of the State of New York, United
States of America" in Cambodia, Laos, the United States of America, and
Vietnam; 8) "the laws of the State of New York, United States of America
(except when local law requires otherwise)" in the People's Republic of
China; and 9) "the laws of Hong Kong Special Administrative Region of
China" in Hong Kong, Macau, and Taiwan.
The following paragraphs pertaining to jurisdiction and arbitration are
added to this section as they apply for those countries identified in bold
print below:
Jurisdiction
All of rights, duties and obligations are subject to the courts of the
country in which the transaction is performed except that 1) in Argentina
any litigation arising from this Agreement will be settled exclusively by
the Ordinary Commercial Court of the city of Buenos Aires, 2) in Angola,
Bahrain, Botswana, Burundi, Egypt, Eritrea, Ethiopia, Ghana, Jordan, Kenya,
Kuwait, Liberia, Malawi, Malta, Mozambique, Nigeria, Oman, Pakistan, Qatar,
Rwanda, Sao Tome, Saudi Arabia, Sierra Leone, Somalia, Tanzania, Uganda,
United Arab Emirates, West Bank/Gaza, Yemen, Zambia, and Zimbabwe all
disputes arising out of this Agreement or related to its execution,
including summary proceedings, will be submitted to the exclusive
jurisdiction of the English courts; 3) in Brazil any litigation arising
from this Agreement will be settled exclusively by the court of Rio de
Janeiro, RJ; 4) in France, Algeria, Benin, Burkina Faso, Cameroon, Cape
Verde, Central African Republic, Chad, Comoros, Congo Republic, Djibouti,
Democratic Republic of Congo, Equatorial Guinea, French Guiana, French
Polynesia, Gabon, Gambia, Guinea, Guinea-Bissau, Ivory Coast, Lebanon,
Madagascar, Mali, Mauritania, Mauritius, Mayotte, Morocco, New Caledonia,
Niger, Reunion, Senegal, Seychelles, Togo, Tunisia, Vanuatu, and Wallis &
Futuna all disputes arising out of this Agreement or related to its
violation or execution, including summary proceedings, will be settled
exclusively by the Commercial Court of Paris; 5) in Turkey all disputes
arising out of or in connection with this Agreement shall be resolved by
the Istanbul Central (Sultanahmet) Courts and Execution Directorates of
Istanbul, the Republic of Turkey; 6) in each of the following specified
countries, any legal claim arising out of this Agreement will be brought
before, and settled exclusively by, the competent court of a) Athens for
Greece, b) Tel Aviv for Israel, c) Milan for Italy, d) Lisbon for Portugal,
and e) Madrid for Spain; and 7) in the United Kingdom, both of us agree to
submit all disputes relating to this Agreement to the jurisdiction of the
English courts.
Arbitration
In Albania, Armenia, Azerbeijan, Belarus, Bosnia-Herzogovina, Bulgaria,
Croatia, Georgia, Hungary, Kazakhstan, Kyrghystan, FYR Macedonia, Moldavia,
Poland, Romania, Russia, Slovakia, Slovenia, Tajikistan, Turkmenistan,
Ukraine, Uzbekistan, and FR Yugoslavia all disputes arising out of this
Agreement or related to its violation, termination or nullity will be
finally settled under the Rules of Arbitration and Conciliation of the
International Arbitral Center of the Federal Economic Chamber in
27
<PAGE>
Vienna (Vienna Rules) by three arbitrators appointed in accordance with
these rules. The arbitration will be held in Vienna, Austria, and the
official language of the proceedings will be English. The decision of the
arbitrators will be final and binding upon both parties. Therefore,
pursuant to paragraph 596(2) of the Austrian Code of Civil Procedure, the
parties expressly waive the application of paragraph 595(1) figure 7 of the
Code. IBM may, however, institute proceedings in a competent court in the
country of installation.
In Cambodia, Laos, and Vietnam disputes and differences arising out of or
in connection with this Agreement shall be finally settled by arbitration
which shall be held in Singapore in accordance wit the Rules of the
International Chamber of Commerce (ICC). The arbitrator or arbitrators
designated in conformity with those rules shall have power to rule on their
own competence and on the validity of the Agreement to submit to
arbitration. The arbitration award shall be final and binding for the
parties without appeal and the arbitral award shall be in writing and set
forth the findings of fact and the conclusions of law.
All proceedings shall be conducted, including all documents presented in
such proceedings, in the English language. The number of arbitrators shall
be three, with each side to the dispute being entitled to appoint one
arbitrator.
The two arbitrators appointed by the parties shall appoint a third
arbitrator before proceeding upon the reference. The third arbitrator shall
act as chairman of the proceedings. Vacancies in the post of chairman shall
be filled by the president of the ICC. Other vacancies shall be filled by
the respective nominating party. Proceedings shall continue from the stage
they were at when the vacancy occurred.
If one of the parties refuses or otherwise fails to appoint an arbitrator
within 30 days of the date the other party appoints its, the first
appointed arbitrator shall be the sole arbitrator, provided that the
arbitrator was validly and properly appointed.
The English language version of this Agreement prevails over any other
language version.
In Estonia, Latvia, and Lithuania all disputes arising in connection with
this Agreement will be finally settled in arbitration. Each party will
appoint one arbitrator and they will jointly appoint the chairman. If they
cannot agree on the chairman, then the chairman will be appointed by the
Central Chamber of commerce in Helsinki. In the arbitration, the Finnish
law on arbitration will be adhered to. The arbitrators will come together,
and the arbitration will take place, in Helsinki. The official language of
the proceedings will be English.
In the People's Republic of China any disputes arising from or in
connection with this Agreement will first be resolved through friendly
consultation, failing which either of us has the right to submit the
dispute to the China International Economic and Trade Arbitration
Commission in Beijing, the PRC, for arbitration in accordance with its
arbitration rules in force at the time. The arbitration tribunal will
consist of three
28
<PAGE>
arbitrators. The language to be used therein will be English and Chinese.
An arbitral award will be final and binding on all the parties, and will be
enforceable under the Convention on the Recognition and Enforcement of
Foreign Arbitral Awards (1958). The arbitration fee will be borne by the
losing party unless otherwise determined by the arbitral award. During the
course of arbitration, this Agreement will continue to be performed except
for the part which the parties are disputing and which is undergoing
arbitration.
--------------------------------------------------------------------------------
7.2 AMERICAS
ARGENTINA
PART 1 - GENERAL
1.2 Agreement Structure
IBM's Acceptance of Your Order
The following sentence replaces this subsection:
A Product or Service becomes subject to this Agreement when IBM
accepts your order by signing a Transaction Document.
Your Acceptance of Additional Terms, items 2 and 3 do not apply.
BRAZIL
PART 1 - GENERAL
1.2 Agreement Structure
IBM's Acceptance of Your Order The following sentence replaces this
subsection:
A Product or Service becomes subject to this Agreement when IBM
accepts your order by signing a Transaction Document.
Your Acceptance of Additional Terms, items 2 and 3 do not apply.
1.4 Charges and Payment
The following sentence replaces this subsection:
IBM may increase one-time charges, recurring charges for Products and
Services, as well as labor rates and minimums for Services provided
under this Agreement with notice. IBM's ability to increase such
charges, rates and minimums will be subject to the requirements of
Brazilian law.
29
<PAGE>
1.7 Mutual Responsibilities
The following replaces Item 5:
5. each of us may communicate with the other by electronic means and
such communication is acceptable as a signed writing. An
identification code (called as "user ID") contained in an electronic
document is sufficient to verify the sender's identity and the
document's authenticity:
The following replaces Item 7:
7. neither of us will bring a legal action more than two years after
the cause of action arose:
PART 3 - MACHINES
3.4 Machine code and Licensed Internal Code
The following replaces Item 2 under Actions You May Not Take:
2. reverse assemble, reverse compile, or otherwise translate the
LIC:
PART 4 - PROGRAMS
4.2 License Details
The following replaces Item 1 under Actions You May Not Take:
2. reverse assemble, reverse compile, or otherwise translate the
Program; or
CANADA
PART 1 - GENERAL
1.8 Your other responsibilities
The following replaces Item 3:
3. to acquire Machines with the intent to use them within your
Enterprise and not for reselling, leasing, or transferring to a third
party, unless you are arranging
lease-back financing for the Machines:
1.10 Limitation of Liability
The following replaces Item 2:
2. damages for bodily injury (including death) and physical harm to
real property and tangible personal property caused by IBM's
negligence; and
30
<PAGE>
MEXICO
PART 1 - GENERAL
1.4 Charges and Payment
The following is added after the first sentence in the seventh
paragraph:
For those Products and Services priced in Mexican currency, IBM may
increase recurring charges by giving you fifteen days' written notice.
PERU
PART 1 - GENERAL
1.10 Limitation of Liability
The following is added as the last paragraph applying to this entire
section:
The limitations and exclusions specified in this section will not
apply to damages caused by IBM's gross negligence.
UNITED STATES OF AMERICA
PART 2 - WARRANTIES
2.2 Extent of Warranty
The following paragraph is added to this section:
If a Machine is subject to federal or state or consumer warranty laws.
IBM's statement of limited warranty included with the Machine applies
in place of these Machine warranties.
PART 3 - MACHINES
3.1 Title and Risk of Loss
The following replaces the first paragraph:
When IBM accepts your order, IBM agrees to sell you the Machine
described in a Transaction Document. IBM transfer title to you or, if
you choose, your lessor when IBM ships the Machine. However, IBM
reserves a purchase money security interest in the Machine until IBM
receives the amounts due. For a feature, conversion, or upgrade
involving the removal of parts which become IBM's property, IBM
reserves a security interest until IBM receives a payment of all the
amounts due and the removed parts. You agree to sign an appropriate
document to permit IBM to perfect its purchase money security
interest.
31
<PAGE>
--------------------------------------------------------------------------------
7.3 ASIA PACIFIC
AUSTRALIA
PART 1 - GENERAL
1.4 Charges and Payment
Add the following paragraph after the third paragraph:
All charges or other amounts payable under this Agreement are
specified to include applicable goods and services tax ("GST").
Replace entire paragraph starting "If any authority imposes a
duty. . ." with the following paragraph:
If any government or authority imposes a duty, tax (other than
income tax), levy, or fee, on the Agreement or on the Product or
Service itself, that is not otherwise provided for in the amount
payable, you agree to pay it when IBM invoices you. If the rate
of GST changes, IBM may adjust the charge or other amount payable
to take into account that change from the date the change become
effective.
1.9 Patents and Copyrights
The following replaces the fourth paragraph:
Subject to any rights you may have under the Trade Practices Act
1974, this is IBM's entire obligation to you regarding any claim
of infringement.
1.10 Limitation of Liability
The following paragraph is added to this section:
Where IBM is in breach of a condition or warranty implied by the
Trade Practices Act 1974, IBM's liability is limited to:
1. where IBM supplied Services, the cost of having the Services
supplied again, or
2. where IBM supplied goods, the repair or replacement of the
goods, or the supply of equivalent goods. Where that
condition or warranty relates to right to sell, quiet
possession or clear title, or the goods are of a kind
ordinarily acquired for personal, domestic or household use
or consumption, then none of the limitations in this
paragraph apply.
32
<PAGE>
PART 2 - WARRANTIES
The following paragraph is added to this Part:
The warranties specified this Part are in addition to any right you
may have under the Trade Practices Act 1974 or other legislation and
are only limited to the extent permitted by the applicable
legislation.
2.2 Extent of Warranty
The second sentence in the first paragraph does not apply.
PART 5 - SERVICES
5.6 Service for Machines (during and after warranty)
Item 3 in the seventh paragraph does not apply.
INDIA
PART 1 - GENERAL
1.7 Mutual Responsibilities
The following replaces item 7:
7. if no suit or other legal action brought, within three years after
the cause of action arose in respect of any claim that either of us
may have against the other, the rights of the concerned party in
respect of such claim will be forfeited and the other party will stand
released from its obligations in respect of such claim; and
1.10 Limitation of Liability
The following replaces items 2 and 3:
2. liability for bodily injury (including death) or damages to real
property and tangible personal property limited to that caused by
IBM's negligence; and
3. as to any other actual damage arising in any situation involving
nonperformance by IBM pursuant to, or in any way related to the
subject of this Agreement, the charge paid by you for the individual
Product or Service that is the subject of the claim. For purposes of
this item, the term "Product" includes Machine Code, Licensed Internal
Code, and Materials.
Applicability to subcontractors and Program developers (unchanged)
33
<PAGE>
INDONESIA
PART 1 - GENERAL
1.11 Agreement Termination
Add the following paragraph just prior to the Last printed paragraph:
We both waive in this regard, the provision of article 1266 of the
Indonesian Civil Code to the extent the article provision requires
such court decree for the termination of any agreement creating mutual
obligations.
JAPAN
PART 1 - GENERAL
1.1 Definitions
The following replaces the Date of Installation definition
Date of Installation for both Machines and Programs is the expiration
date of the Inspection Period:
The following is added to this section:
Inspection Period
a) The Inspection Period for a Machine commences on the day following
IBM physical installation of the Machine and expires on the 10th day.
b) The Inspection Period for a Customer-set-up Machine commences on
the day following its shipment from IBM and expires on the 10th day.
c) The Inspection Period for a Program commences on the day following
its shipment date from IBM and expires on the 10th day.
You will inspect and confirm the Machine or Program during this
period.
1.7 Mutual Responsibilities
The following is added to item 6:
Any doubts concerning this Agreement will be initially resolved
between us in good faith and in accordance with the principal of
mutual trust.
1.8 Your Other Responsibilities
The following replaces item 3 (b):
34
<PAGE>
b. you purchase them without any discount or allowance;
1.9 Patents and Copyrights
The following replaces the second paragraph:
If a third party claims that a Product IBM provides to you infringes
that party's patent (including utility model registrations and design
registrations) or copyright, IBM will defend you against that claim at
its expense and pay all costs, damages, and attorney's fees that a
court finally awards or that are included in a settlement approved by
IBM, provided that you:
1. (unchanged)
2. (unchanged)
1.11 Agreement Termination
The following paragraph is added to this section:
When all or a substantial portion of either party's assets, credits or
business are so changed as to make a continued performance of that
party's obligations impracticable or impossible, the other party may
terminate this Agreement with prior written notice.
PART 3 - MACHINES
3.1 Title and Risk of Loss
The following sentence is added after the first sentence in the first
paragraph:
When you choose an IBM financing arrangement, this Agreement will be
deemed terminated for the financed Machine on the day the financing
transaction becomes effective under IBM's lease agreement.
PART 5 - SERVICES
5.8 Other Maintenance Coverage
Only the first sentence applies
MALAYSIA
PART 1 - GENERAL
1.10 Limitation of Liability
Items for Which IBM is Not Liable
35
<PAGE>
Delete the word "special" in item 2
NEW ZEALAND
PART 1 - GENERAL
1.10 Limitation of Liability
The following paragraph is added to this section:
Where Products or Services are not acquired for the purposes of a
business as defined in the Consumer Guarantees Act 1993, the
limitations to this section are subject to the limitations in that
Act.
PART 2 - WARRANTIES
The following paragraph is added to this Part:
The warranties specified in this Part are in addition to any rights
you may have under the Consumer Guarantees Act 1993 or other
legislation which cannot be excluded or limited. The Consumer
Guarantees Act 1993 will not apply in respect of any goods or services
which IBM provides, if you require the goods or services for the
purposes of a business as defined in that Act.
PEOPLES REPUBLIC OF CHINA
PART 1 - GENERAL
1.1 Definitions
The following definition is added:
Date of Delivery is the date IBM makes delivery of the Product to you
or your agent in Hong Kong.
The following replaces the Date of Installation definition:
Date of Installation is the following:
1. for a Machine, the earliest of -
a. for an IBM Machine IBM is responsible for installing, (i) the
business day after the day IBM installs it or (ii) two calendar
months after the Date of Delivery,
b. for a Customer-set-up (CSU) Machine and a non-IBM Machine, (i)
the second business day after arrival at your installation
location of the Machine or (ii) two months after the Date of
Delivery,
36
<PAGE>
When a CSU Machine is delivered for connection to a non-CSU Machine
delivered by IBM, the Date of Installation of the CSU Machine will be
the later of the two installation dates (described in b above):
2. For a Program, the earliest of -
a. the second business day after the Program's arrival at your
installation location,
b. two months after the Date of Delivery, or
c. the date, specified in a Transaction Document, on which IBM
authorizes you to make a Distributed System License Option copy.
1.3 Delivery
The following is added to this section:
IBM will deliver Products FOB to your designated carrier in Hong Kong.
You are responsible for shipment into the People's Republic of China.
PART 4 - PROGRAMS
4.5 Program Testing
This section does not apply.
PART 6 - OPTIONS
6.1 Offshore Acquisition
The following replaces the first sentence of 3.1 Title and Risk of
Loss as it applies to offshore acquisitions:
Title to each Machine will pass to you at the point of entry into
mainland China, provided that the amounts payable under the Agreement,
have been received from you in full.
PHILIPPINES
PART 1 - GENERAL
1.10 Limitation of Liability
Items for Which IBM is Not Liable
Delete the words "special" and economic in Item 2.
37
<PAGE>
2. special (including nominal and exemplary damages), moral,
incidental, or indirect damages or for any economic consequential
damages; or
SINGAPORE
PART 1 - GENERAL
1.10 Limitation of Liability
Items for Which IBM is Not Liable
Delete the words "special" and economic in Item 2.
TAIWAN
PART 1 - GENERAL
1.8 Your Other Responsibilities
Replace item 3.b with the following:
b. you purchase them without any discount or allowance;
1.9 Patents and Copyrights
In the second paragraph, delete "attorney's fees."
1.10 Limitation of Liability
Delete the second paragraph.
--------------------------------------------------------------------------------
7.4 EUROPE, MIDDLE EAST, AFRICA (EMEA)
The following terms apply to all EMEA countries identified in Schedule A unless
a specific country term states otherwise.
PART 1 - GENERAL
1.2 Agreement Structure
The following paragraph is added to the beginning of this section.
Unless specifically agreed to by you and IBM for any transaction, you
acknowledge that the terms and conditions below applicable to purchase
of Machines, licensing of Programs, and acquisition of Services
represent separate transactions which remain legally independent from
one another.
38
<PAGE>
1.8 Your Other Responsibilities
The following replaces item 3.b:
b. you purchase them without any discount or allowance:
1.10 Limitation of Liability
In item 3, replace "U.S. $100,000" with "EUR 500,000 (five hundred
thousand euros)"
All additional terms apply to the referenced region or country.
CENTRAL AND EASTERN EUROPE (CEE)
The following terms apply to all CEE countries identified in Schedule A.
PART 1- GENERAL
1.1 Definitions
The following definition is added:
Date of Delivery is the date IBM makes delivery of the Product to you
or your agent at the distribution platform specified in the
Transaction Documents.
The following replaces the Date of Installation definition for
Machines:
Date of Installation is the following:
1. for an IBM Machine IBM is responsible for installing the earlier
of -
(a) the business day after the day IBM installs it, or
(b) two months after the Date of Delivery;
2. for a Customer-set-up (CSU) Machine and a non-IBM Machine, twenty
five (25) days after shipment, unless otherwise specified by IBM;
and
3. when a CSU Machine is delivered for connection to a non-CSU
Machine delivered by IBM, the Date of Installation of the CSU
Machine will be the later of the two installation dates
(described in 1 and 2 above).
1.2 Agreement Structure
IBM's Acceptance of Your Order
The following sentence replaces this subsection:
39
<PAGE>
Products become subject to this Agreement when IBM World Trade
Corporation accepts your order by confirming acceptance of your order
in writing, but not later than when the Products are provided to you.
1.4 Charges and Payment
The following is added to the 5th paragraph:
If you are required to apply an income withholding tax, you agree to
use the rate stipulated in the applicable double taxation treaty
between your country and the United States of America and to provide
IBM World Trade Corporation with a certificate of payment of the
withheld amount issued by the applicable tax authority in your
country.
1.7 Mutual Responsibilities
The following replaces the fourth sentence of item 0:
The assignment of this Agreement, in whole or in part, within the IBM
Enterprise or to a successor organization by merger or acquisition
does not require your consent.
1.8 Your Other Responsibilities
The following replaces item 8:
B. to comply with all applicable export and import laws and
regulations and to cooperate in any inspections required by such laws
and regulations.
PART 3 - MACHINES
3.3 Installation
Machine Features, Conversions and Upgrades
The following is added at the end of this subsection:
For purposes of this subsection, removed parts become the property of:
a. the relevant IBM subsidiary in countries where such subsidiary is
located; or
b. IBM World Trade Corporation upon commencement of the export
procedures in all other countries.
PART 5 - SERVICES
5.6 Service for Machines (during and after warranty)
40
<PAGE>
The following replaces the first sentence of the fourth paragraph:
When Service involves the exchange of a Machine or part, the
replacement becomes yours and the replaced item becomes the property
of:
a. the relevant IBM subsidiary in countries where such subsidiary is
located; or
b. IBM World Trade Corporation upon commencement of the export
procedures in all other countries
PART 6 - OPTIONS
6.1 Offshore Acquisition
The following replaces the first sentence of 3.1 Title and Risk of
Loss as it applies to offshore acquisitions:
Title to each Machine will pass to you upon shipment provided IBM
World Trade Corporation has received payment in full. Otherwise, title
passes when IBM World Trade Corporation receives payment in full.
AUSTRIA
PART 1 - GENERAL
1.2 Agreement Structure
Your Acceptance of Additional Terms, Items 2 and 3 do not apply.
1.8 Your Other Responsibilities
the following is added to item 7:
For the purposes of this clause, contact information will also include
information about you as a legal entity, for example revenue data and
other transactional information.
PART 3 - MACHINES
3.3 Installation
Machine Features, Conversions and Upgrades
The following replaces the fourth sentence:
The purchase price is valid only under the precondition that removed
parts have not been exchanged, altered, or repaired without the
consent of the manufacturer.
41
<PAGE>
PART 5 - SERVICES
5.5 Termination and Withdrawal
The following sentence is added to the end of the first paragraph:
If IBM fails to meet its obligations concerning the Service, you
remain responsible to pay for the portion of the Service which IBM
completed and which you can utilize.
5.6 Service for Machines (during and after warranty)
The following sentence is added to the second paragraph:
During the warranty period, IBM will reimburse you for the
transportation charges for delivery of the failing Machine to IBM and
will return it to you at its expense.
DENMARK
PART 3 - MACHINES
3.1 Title and Risk of Loss
The following replaces the first sentence in the first paragraph:
IBM reserves right of ownership to the Machine until receipt of
payment in full after which title to the Machine is transferred to you
or, if you choose, your lessor.
EGYPT
PART 1 - GENERAL
1.1 Definitions
The following replaces the Date of Installation definition:
Date of Installation is the following::
1. for an IBM Machine IBM is responsible for installing, the
earliest of -
a. the day IBM installs it,
b. the day it is cleared from customs if your installation site
is not ready or you elect to defer installation, or
c. 45 days after its shipment date contained in the shipping
documentation; and
42
<PAGE>
2. for a Customer-set-up Machine and a non-IBM Machine, the earliest
of -
a. the business day following its arrival at the ship-to
address, or
b. 45 days after its shipment date contained in the shipping
documentation; and
3. (unchanged)
PART 6 - OPTIONS
6.1 Offshore Acquisition
The following sentence is added to this section:
You are responsible for all banking charges.
FRANCE
PART 1 - GENERAL
1.4 Changes and Payment
The following is added to the end of the fourth paragraph:
The rate of late payment fees will be three times the French legal
rate, applied from the due date up to the full payment completion
date.
The following is added to the end of the seventh paragraph:
If you disagree with the increase, you may terminate the transaction
by notifying IBM, in writing, within fifteen days after the date of
IBM's notification to you of the increase.
1.5 Changes to the Agreement Terms
The following is added to the end of the second paragraph:
If you disagree with the change, you may terminate the transaction by
notifying IBM, in writing, within fifteen days after the date of IBM's
notification to you of the change.
1.10 Limitation of Liability
The following replaces the second sentence in the first paragraph:
In such instances, regardless of the basis on which you are entitled
to claim damages from IBM, IBM is liable for no more than:
43
<PAGE>
1. (unchanged)
2. (unchanged)
3. (unchanged except to replace "U.S. $10,000" with "EUR 500,000
(five hundred thousand euros)")
GERMANY
PART 1 - GENERAL
1.2 Agreement Structure
Your Acceptance of Additional Terms, items 2 and 3 do not apply.
1.4 Charges and Payment
"Three months" is replaced with "four months" in the second item of
the second sentence in the eighth paragraph.
1.10 Limitation of Liability
The following paragraph is added to this section:
The limitations and exclusions specified in the Agreement will not
apply to damages caused by IBM intentionally or by gross negligence.
PART 2 - WARRANTIES
2.1 The IBM Warranties
The following paragraphs are added to this section:
The minimum warranty period for Products is six months.
In case a program is delivered without Specifications, IBM will only
warrant that the Program information correctly describes the Program
and that the Program can be used according to the Program Information
within the free test period.
The following replaces the first paragraph under the subsections
titled "Warranty for IBM Machines" and "Warranty for IBM Programs".
The warranty for an IBM Product covers the functionality of the
Product for its normal use and the Product's conformity to its
Specifications.
In case IBM is unable to repair an IBM Machine, you can alternatively
ask for a partial refund as far as justified by the reduced value of
the unrepaired Machine or ask for a cancellation of the respective
agreement for such Machine and get your
44
<PAGE>
money refunded. For Programs and Services, the partial refund is
applicable accordingly.
2.2 Extent of Warranty
The following replace the first paragraph:
IBM does not warrant uninterrupted or error-free operation of a
Product or Service.
The following replaces the third paragraph:
Unless IBM specifies otherwise, IBM provides Materials and non-IBM
Services WITHOUT WARRANTIES OF ANY KIND. If IBM delivers non-IBM
Products to you, the same warranties as for IBM Products are
applicable unless otherwise agreed in a Transaction Document. IBM does
not make any guarantee representations ("zugesicherte eigonechaften")
regarding Products.
PART 3 - MACHINES
3.3 Installation
Machine Features, Conversions and Upgrades
The following replaced the fourth sentence;
The purchase price is valid only under the precondition that removed
parts have not been exchanged, altered, or repaired without the
consent of the manufacturer.
PART 5 - SERVICES
5.5 Termination and Withdrawal
The following sentence is added to the end of the first paragraph;
If IBM fails to meet its obligations concerning the Service, you
remain responsible to pay for the portion of the Service which IBM
completed and which you can utilize.
5.6 Services for Machine (during and after warranty)
The following sentence is added to the second paragraph:
During the warranty period, IBM will reimburse you for the
transportation charges for deliver of the failing Machine to IBM and
will return it to you at its expense.
45
<PAGE>
IRELAND
PART 1 - GENERAL
1.10 Limitation of Liability
The following replaces this section:
For purposes of this section, Default means any act, statement,
omission, or negligence on the part of IBM in connection with, or in
relation to, the subject matter of an Agreement in respect of which
IBM is legally liable to you whether in contract or tort. A number of
Defaults which together result in, or contribute to, substantially the
same loss or damage will be treated as on Default occurring on the
date of occurrence of the last such Default.
Circumstances may arise where, because of a Default, you are entitled
to recover damages from IBM. Save in respect of the payments referred
to in our Patents and Copyrights terms above, this section sets out
the extent of IBM's liability and your sole remedy.
1. IBM will accept unlimited liability for death or personal injury
caused by the negligence of IBM.
2. Subject always to the items for Which IBM is Not Liable below,
IBM will accept unlimited liability for physical damage to your
tangible property resulting from the negligence of IBM.
3. Except as provided in items 1 and 2 above, IBM's entire liability
for actual damages for any one Default will not in any event
exceed:
a. In respect of Machines (which for the purposes of this
provision includes Machine Code and Licensed Internal Code)
the greater of 1) EUR 500,000 (five hundred thousand euros)
or equivalent in local currency, or 2) 125% of he total
purchase price payable for the Machine directly related to
the Default; and
b. In respect of Programs and Services, the greater of 1) EUR
500,000 (five hundred thousand euros) or equivalent in local
currency, or 2) 125% of the total purchase price payable or
the charges (if recurring, 12 months' charges apply) for the
Program or Service directly relating to the Default.
These limits also apply to any of IBM's subcontractors and Program
developers. It is the maximum for which IBM and its subcontractors and
Program developers are collectively responsible.
46
<PAGE>
Items for Which IBM is Not Liable
Save or respect to any liability referred to in item 1 above, under no
circumstances is IBM, its subcontractors, or Program developers liable
for any of the following even if IBM is informed of their possibility:
1. loss of, or damage to, data;
2. special, indirect, or consequential loss; or
3. loss of profits, business, revenue, goodwill, or anticipated
savings.
PART 2 - WARRANTIES
2.2 Extent of Warranty
The following paragraph is added to this section:
Except as expressly provided in -
1. these terms and conditions, or
2. Section 12 of the Sale of Goods Act 1893 as amended by the Sale of
Goods and Supply of Services Act, 1980 ("the 1980 Act"), all
conditions or warranties (express or implied, statutory or otherwise)
are hereby excluded including, without limitation, any warranties
implied by the Sale of Good Act 1893 as amended by the 1980 Act
(including, for the avoidance of doubt, Section 39 of the 1980 Act).
ITALY
PARTY 1 - GENERAL
1.2 Agreement Structure
Your Acceptance of Additional Terms
The following sentence is added at the end of this subsection:
You must give your express acceptance of specific clauses according to
articles 1341 and 1342 of the Italian Civil Code. If you are a
consumer, article 1469 of the Italian Civil Code, including amendments
1 through 6, shall apply.
1.8 Your Other Responsibilities
Item 7 does not apply.
47
<PAGE>
1.10 Limitation of Liability
The following replaces the second sentence in the first paragraph:
In each such instance unless otherwise provided by mandatory law, IBM
is liable for no more than:
1. (unchanged)
2. damages for bodily injury (including death); and
3. (unchanged except to replace "U.S. $100,00" with "EUR 500,000
(five hundred thousand euros)")
Applicability to subcontractors and Program developers (unchanged)
Items for Which IBM is Not Liable
Replace the first paragraph with:
Unless otherwise provided by mandatory law, IBM, its subcontractors
and its Program developers are not liable for any of the following:
1. (unchanged)
2. (unchanged)
3. (unchanged)
PART 2 - WARRANTIES
2.2 Extent of Warranty
Add the following text to the end of the second paragraph:
EXCEPT AS PROVIDED BY MANDATORY PROVISIONS OF LAW.
PORTUGAL
PART 1 - GENERAL
1.10 Limitation of Liability
Items for Which IBM is Not Liable
Replace the first paragraph with:
Unless otherwise provided by mandatory law, IBM, Its subcontractors
and its Program developers are not liable for any of the following:
48
<PAGE>
1. (unchanged)
2. (unchanged)
3. (unchanged)
SOUTH AFRICA, NAMIBIA, LESOTHO, AND SWAZILAND
PART 1 - GENERAL
1.1 Definitions
The following definitions are added to this section:
Base Index is the Index, on which IBM's current Machine prices are
based, and is specified on the invoice.
Closing Index is the Index ruling on the business day prior to
shipment, and is specified on the invoice.
Index is the South Africa Rand equivalent to one Euro at any time,
and/or any other currency until as specified by IBM in the Transaction
Document.
Index-Linked Machine is any Machine so designed by IBM, the charge for
which is subject to a currency adjustment as described in section 1.4
Charges and Payment.
Territory is the Republic of South Africa, Namibia, Lesotho and
Swaziland, and any other territory as may be changed or designated by
us from time to time.
1.4 Charges and Payment
The following paragraph is added to this section:
IBM will increase or decrease the price of Index-Linked Machines by a
currency adjustment which is equal to the price specified in the
Transaction Documents, adjusted if applicable in respect of a price
increase or decrease, multiplied by 75%, multiplied by (Closing Index
minus Base Index) divided by the Base Index; i.e. currency adjustment
= price x (Closing Index - Base Index) / Base Index.
1.7 Mutual Responsibilities
The following paragraph is added to Item 8:
Each of us will take all reasonable steps, by whatever lawful means
that are available, to resume full performance as soon as practicable
and will seek agreement to modification of the relevant provisions of
this Agreement in order to accommodate the new circumstances caused by
the act of fore majeure. If we fail
49
<PAGE>
to agree within 60 (sixty) days of the act of force majeure first
occurring, either of us may thereafter terminate this Agreement with
immediate written notice.
1.10 Limitation of Liability
The following paragraph is added to this section:
IBM's entire liability to you for actual damages arising in all
situations involving non-performance by IBM in respect of the subject
matter of this Agreement will be limited to the charge paid by you for
the individual Product or Service that is the subject of you claim
from IBM.
PART 3 - MACHINES
3.1 Title and Risk of Loss
The following replaces the second paragraph:
IBM bears the risk of loss for the Machine up to and including its
date of delivery. Thereafter, you assume the risk.
SPAIN
PART 3 - MACHINES
3.1 Title and Risk of Loss
The following replaces the first paragraph:
Title to Machines passes upon shipment. If you fail to pay, or delay
making payment, IBM reserves the right to either require fulfillment
of the transaction or terminate the transaction and recover the
Machines. You agree to maintain possession of the Products acquired
under this Agreement until IBM has received payment in full.
PART 5 - SERVICES
5.2 Personal
The following is added as a second sentence in the first paragraph:
With respect to you employees, IBM or its subcontractors' employees
(individually, the Employer) who are making in the other's premises,
IBM and you will furnish appropriate certification and any other
documents which may reasonably be required to confirm the Employer's
compliance with its statutory obligations for payment of employment
remuneration.
50
<PAGE>
SWITZERLAND
1.8 Your Other Responsibilities
The following is added to item 7:
For purposes of this clause, contact information will also include
information about you as a legal entity, for example revenue data and
other transactional information.
PART 3 - MACHINES
3.1 Title and Risk of Loss
The following is added to the first paragraph:
In the event you delay payment, IBM may either register retention of
title in the official Registry at your expense or revoke the
transaction. In the event IBM revokes the transaction, you will
immediately return the Machine to IBM upon its request.
TURKEY
PART 3 - MACHINES
3.1 Title and Risk of Loss
The following replaces the first sentence in the first paragraph and
the entire second paragraph:
Title and risk of loss for a Machine transfers to you or, if you
choose, your lessor upon delivery.
3.2 Product Statue
The following replaces this section:
IBM fulfills customer orders for IBM Machines as newly manufactured in
accordance with IBM's production standards.
UNITED KINGDOM
PART 1 - GENERAL
1.10 Limitation of Liability
The following replaces this section:
51
<PAGE>
For purposes of this section, Default mean any act, statement,
omission, or negligence on the part of IBM in connection with, or in
relation to, the subject matter of an Agreement in respect of which
IBM is legally liable to you whether in contract or tort. A number of
Defaults which together result in, or contribute to, substantially the
same loss or damage will be treated as one Default.
Circumstances may arise where, because of a Default, you are entitled
to recover damages from IBM.
Save in respect of the payments referred to in our Patents and
Copyrights terms above, this section sets out the extent of IBM's
liability and you sole remedy.
1. IBM will accept unlimited liability for:
a. death or personal injury caused by the negligence of IBM;
and
b. any breach of its obligations implied by Section 12 of the
Sale of Goods Act 1979 or Section 2 of the Supply of Goods
and Services Act 1982.
2. IBM will accept unlimited liability, subject always to the Items
for Which IBM is Not Liable below, for physical damage to your
tangible property resulting from the negligence of IBM.
3. IBM's entire liability for actual damages for any one Default
will not in any event, except as provided in items 1 and 2 above,
exceed:
a. in respect to Machines (which for the purposes of this
provision includes Machine Code and Licensed Internal Code)
the greater of 1) EUR 500,000 (five hundred thousand euros)
or equivalent in local currency, or 2) 125% of the total
purchase price payable for the Machine directly related to
the Default; and
b. in respect of Programs and Services, the greater of 1) EUR
500,000 (five hundred thousand euros) or equivalent in local
currency, or 2) 125% of the total purchase price payable or
the charges (if recurring, 12 months' charges apply) for the
Program or Service directly relating to the Default.
These limits also apply to any of IBM's subcontractors and Program
developers. It is the maximum for which IBM and its subcontractors and
Program developers are collectively responsibility.
Items for Which IBM is Not Liable
Save with respect to any liability referred to in item 1 above, under
no circumstances is IBM, its subcontractors, or Program developers
liable for any of the following even if IBM is informed of their
possibility:
52
<PAGE>
1. loss of, or damage to, data;
2. special, indirect, or consequential loss; or
3. loss of profits, business, revenue, goodwill, or anticipated
savings.
PART 2 - WARRANTIES
2.3 Items Not Covered by Warranty
The following replaces the first sentence in the third paragraph.
Unless IBM specifies otherwise and to the extent it is permitted by
applicable law, IBM provides Materials, non-IBM Products, and non-IBM
Services WITHOUT WARRANTIES OF ANY KIND.
53
<PAGE>
IBM INTERNATIONAL CUSTOMER AGREEMENT
------------------------------------
SCHEDULE A TO IBM INTERNATIONAL CUSTOMER AGREEMENT
List of Customer and IBM Lead and Local Companies
Revised Schedule (Yes or No):
If revised -
Customer Lead Company Authorized Signature:
Date:
Customer Names IBM
Countries Geography/Region and Addresses Organizations
--------------------------------------------------------------------------------
54
<PAGE>
IBM INTERNATIONAL CUSTOMER AGREEMENT
------------------------------------
The Customer Lead Company and IBM Lead Company agree to coordinate the
activities of the customer Enterprises companies and IBM Enterprises companies
in their respective Enterprises, under this IBM International Customer Agreement
(called the "Agreement"). When used in this Agreement, "IBM" means the IBM
Enterprise company that is providing Products and Services, and "you" means the
customer Enterprise company that is ordering them, subject to the Agreement.
This Agreement covers business transactions you may do with IBM to purchase
Machines, license Programs, and acquire Services.
This Agreement is written in English and signed with the understanding that the
Lead Companies are bound by its terms. The Lead Companies will distribute copies
of the Agreement to their respective Enterprise companies. The respective
Enterprise companies will acknowledge acceptance of these terms through a
Transaction Document which incorporates this Agreement by reference.
This Agreement (including Schedule A) and its applicable Attachments and
Transaction Documents are the complete agreement regarding these transactions,
and replace any prior oral or written communications between us. By signing
below, both of us agree to the terms of this Agreement without modification.
Once signed, 1) unless prohibited by applicable law or specified otherwise, any
reproduction of this Agreement, an Attachment, or Transaction Document made by
reliable means (for example, photocopy or facsimile) is considered an original
and 2) all Products and Services ordered under this Agreement are subject to it.
Agreed to: Agreed to:
Customer Lead Company IBM Lead Company
Lead Company name: Lead Company name:
By /s/ James Gifford By /s/ Robert Sisson
---------------------------------- ----------------------------------
Authorized Signature Authorized Signature
Name (type or print): James K Gifford Name (type or print): Robert Sisson
--------------- ---------------
Date: July 24, 2001 Date: July 25, 2001
------------------------------- -------------------------------
Customer Lead Company address: Agreement number: 600I3258A
350 Oakmead Pkwy IBM Lead Company address:
MS 400
Sunnyvale, CA 94085 IBM Global Services
2710-S Gateway Oaks Dr., Ste 200
Sacramento, CA 95833
55
<PAGE>
IBM INTERNATIONAL TECHNICAL SUPPORT AGREEMENT
This Agreement covers Machines and support services of selected Machines either
manufactured or sold by the Manufacturer.
The Agreement is written with the understanding that the Lea Countries are bound
by its terms. IBM and Manufacturer will distribute copies of the Agreement to
their respective Countries where applicable. The respective Countries will
acknowledge acceptance of these terms through a Statement of Work (SOW) and/or
an application Transaction Document which incorporates this Agreement by
reference.
This Agreement, including without limitation Part 1 - General, Part 2 - Country
Unique Terms, the SOWs, Attachments and Transaction Documents, is the complete
agreement regarding these transactions, and replace any prior oral or written
communications between the parties. By signing below, both parties agree to the
terms of this Agreement. Once signed, 1) unless prohibited by local law or
specified otherwise, any reproduction of this Agreement or any of its
constituent of documents, made by reliable means (for example photocopy or
facsimile) is considered an original and 2) all Machines and Services under this
Agreement are subject to it.
By its signature below, the Manufacturer represents and warrants that it has all
necessary corporate power and authority to execute or direct the execution of
this Agreement (including without limitation Part 1 - General, Part 2 - Country
Unique Terms, SOWs, Attachments and Transaction Documents) on its own behalf, as
well as on behalf of its Subsidiaries and Related Companies which may perform
certain obligations hereunder; to perform its obligations hereunder; and to
consummate the transactions contemplated hereby. If any portion of this
Agreement is signed by Manufacturer's authorized agent, Manufacturer will
concurrently provide IBM/Local IBM with a letter stating that such agent is
authorized to sign such document, which letter shall be attached as an exhibit
to such document. This Agreement has been duly authorized by all required
corporate action and no other action on the part of the Manufacturer is
necessary to authorize the execution and performance hereof. The Manufacturer
irrevocably guarantees performance by its Subsidiaries and Related Companies of
their obligations under this Agreement, and acknowledges and agrees that this
guaranty is without regard to any lack of validity or enforceability of any
portion of this Agreement or its constituent documents. This Agreement is a
legal, valid, and binding obligation of the Manufacturer, enforceable against
the Manufacturer in accordance with its terms and subject to applicable
bankruptcy and insolvency laws and to general equitable principles.
Agreed to: Agreed to:
Manufacturer Lead Country: IBM Lead Country
By /s/ James Gifford By /s/ James A. Greenough
----------------------------------- -------------------------------------
Authorized Signature Authorized Signature
Name (type or print): James K. Gifford Name (type or print): James A. Greenough
---------------- ------------------
Date: September 14, 2001 Date: September 17, 2001
-------------------------------- ----------------------------------
56
<PAGE>
Customer Lead Country address: Agreement number: MW00033
350 Oakmead Pkwy IBM Lead Country address:
Sunnyvale, CA 94085
1585 Park Pike
West Chester, PA 19380-6113
57
<PAGE>
TABLE OF CONTENTS
PART 1 - GENERAL
1.0 Scope of Work
2.0 Definitions
3.0 Term, Termination and Cancellation
4.0 Charges
5.0 Payment Terms
6.0 Taxes
7.0 Machine Additions/Deletions/Withdrawals
8.0 Failure to Deliver/Rights to Technical Data
9.0 Mfr. Warranty
10.0 IBM Warranty for Services
11.0 Confidential Information
12.0 Most Favored Customer Benefits
13.0 Public Disclosure
14.0 Relationship of the Parties
15.0 Amendments and Changes
16.0 Interfering Code
17.0 Communications
18.0 Advertising and Use of Trademark
19.0 Indemnification
20.0 Limitation of Liability
21.0 Gifts or Gratuities
22.0 Employees
23.0 Commercial Insurance
24.0 Force Majeure
25.0 Order of Precedence
26.0 Severability
27.0 Successors
28.0 Limitation on Actions
29.0 Assignment
30.0 Compliance with Governmental Legal Requirements
31.0 Waiver
32.0 No Conflicts
33.0 Nonexclusive Agreement
34.0 Governing Law and Forum
35.0 Complete Agreement
36.0 Third Party Beneficiary
PART 2 - COUNTRY UNIQUE TERMS
EMEA - LIST OF THE IBM WORK TRADE EMEA COUNTRIES
GERMANY
IRELAND
ITALY
58
<PAGE>
PORTUGAL
TURKIYE
ASIA PACIFIC
AUSTRALIA
INDONESIA AND MALAYSIA
PAKISTAN
PEOPLE'S REPUBLIC OF CHINA
NORTH AMERICA
UNITED STATES OF AMERICA
CANADA
59
<PAGE>
IBM INTERNATIONAL TECHNICAL SUPPORT AGREEMENT
PART 1 - GENERAL
This International Technical Support Agreement ("Agreement") is entered into
between International Business Machines Corporation ("IBM") and Manufacturer
("Mfr."), whereby IBM and Mfr. Mutually agree to the following:
1.0 Scope of Work
IBM/Local IBM intends to provide, and Mfr. Agrees to support machine service and
support services to end users of Mfr. Machines as specifies in this Agreement.
As such, Mfr. Agrees to provide certain Mfr. Deliverables and parts and
IBM/Local IBM agrees to provide certain IBM deliverables as required by this
Agreement for machines set forth in the "ELIGIBLE MACHINE LIST". Machine service
will be provided to the end user for the Mfr. By IBM or its local domestic or
international subsidiaries ("IBM/Local IBM") acting as subcontractors of Mfr.
The IBM deliverables may be more fully set forth in the SOWs, and Attachment or
a Transaction Document which may be issued by IBM/Local IBM.
The Mfr. Deliverables may be more fully set forth in attached SOWs and/or
purchase orders.
The purchase orders shall constitute the only commitment by IBM/Local IBM to
expend any monies hereunder, IBM/Local IBM makes no representation, warranty or
commitment to do any minimum amount of business hereunder.
Mfr. Maintenance Agreements will be sold to end users by Mfr. Or IBM/Local IBM
will sell its Maintenance Agreements to end users.
The provision for such service(s) will be subject to acceptance of the terms and
conditions of Part 1 - General Agreement and signing of the SOWs and/or
Transaction Documents between IBM and Mfr. The SOW and/or Transaction Document
for each applicable country will be appended to the Agreement once signed.
IBM/Local IBM may, in its sole discretion, agree to enter into such SOW and/or
Transaction Document.
Transaction Documents must be signed by all parties thereto and will define, as
needed, the local characteristics of the service to be performed, local terms
and conditions including rates, and it prices. Such Transaction Documents may
include the SOWs.
2.0 Definitions
2.1 The term documentation shall refer to, but not be limited to, manuals,
engineering changes (ECs), microcode, microcode updates, and diagnostics.
2.2 The term due diligence period shall mean the initial period of up to
one-hundred-twenty (120) days of this Agreement during which data is
gathered and analyzed to substantiate the assumptions made in this
Agreement related to service delivery requirements,
60
<PAGE>
processes, expectations, prices, and measurements of success. The due
diligence period runs concurrently with the implementation period.
2.3 The term Effective Date shall mean the last date upon which this Agreement
is executed by both parties.
2.4 The term end user shall mean the ultimate user of the machines.
2.5 The term firmware shall mean microcode in read-only memory.
2.6 The term implementation period shall mean the initial period of up to
one-hundred-twenty (120) days of this Agreement during which both parties
will prepare for services implementation by jointly defining and developing
services support procedures for services as defined in the Statement of
Work and taking other pre-performance steps as necessary. The
implementation period runs concurrently with the due diligence period.
2.7 The term lead country is the country in which the parties executing "Part 1
- General" are organized.
2.8 The term machine service shall mean both warranty and post warranty machine
maintenance service provided to end users of Mfr.
2.9 The term machine shall mean the hardware items specified in the "ELIGIBLE
MACHINE LIST" which are manufactured and/or sold by the Mfr.
2.10 The term Mfr. Deliverables shall mean those items and materials as
described in the SOWs and/or Transaction Documents and in purchase orders,
which are to be delivered to IBM/Local IBM by Mfr. Including but not
limited to, parts, manuals, diagnostics, engineering changes (ECs),
technical support, training, microcode and microcode updates, resale tax
exemption certificates, as well as items ordered via IBM/Local IBM purchase
order (if any).
Mfr. will bear the entire cost of shipments for parts and/or other Mfr.
deliverables.
The term IBM deliverables shall mean those items and materials as described
in the SOW and/or Transaction Document which are to be delivered to Mfr. by
IBM/Local IBM.
2.11 The term parts shall mean repair parts, new and/or refurbished, that are
consigned, sold or otherwise provided to IBM/Local IBM by Mfr. and used for
repair of Mfr.'s machines pursuant to this Agreement.
2.12 The term purchase order shall mean a written IBM/Local IBM Purchase Order.
2.13 Related Company shall mean a corporation, company or other entity:
1. which is a Subsidiary of a party to this Agreement; or
61
<PAGE>
2. of which a party hereto is a Subsidiary; or
3. which is another Subsidiary of a corporation, company or other entity
of which a party hereto is a Subsidiary.
2.14 The term response time shall mean (as applicable) the average period of
time it is anticipated to take for the service technician to arrive on-site
a the end user location. With respect to remote services, it is the period
of time necessary for the end user to talk to the remote support
technician.
2.15 The term Subsidiary means any corporation, company or other entity:
1. more than fifty percent (50%) of whose outstanding shares or
securities (representing the right to vote for the election of
directors or other managing authority); or,
2. which does not have outstanding shares or securities, as may be the
case in a partnership, joint venture or unincorporated associate, but
more than fifty percent (50%) of whose ownership interest
(representing the right to make the decisions for such corporation,
company or other entity) are, now or however, owned or controlled,
directly or indirectly, by either Mfr. or IBM, provided, however, the
company or other entity shall be deemed to be a Subsidiary only so
long as such ownership or control exists.
2.16 The term time & material ("T&M") shall mean the performance method and
billing rates by which IBM/Local IBM will perform and bill Mfr. for time
(i.e., labor time, travel time) and material (i.e., parts, supplies, etc.)
requirements that are not covered under the scope of this Agreement.
3.0 Term, Termination and Cancellation
3.1 The term of this Agreement is five (5) years from the "Effective Date".
This Agreement may be further extended by way of a mutually signed written
agreement of extension between IBM and Mfr.
3.2 Any terms of this Agreement which, by their nature extend beyond its
termination, remain in force and effect and apply to the parties, their
respective successors and assigns.
3.3 IBM may terminate this Agreement, with or without cause, at any time upon
at least ninety (90) days prior written notice.
3.4 IBM or Mfr. may immediately terminate this Agreement for a material breach
by the other party of its obligations hereunder if that breach is not cured
by the party in breach within thirty (30) days after receiving written
notice thereof.
3.5 IBM may terminate this Agreement upon thirty (30) days prior written notice
to Mfr. is Mfr. is in material breach of its obligations under any other
agreement between
62
<PAGE>
IBM/LocalIBM and Mfr. relating to a transaction, exclusive of the
transactions contemplated hereunder, with a value of not less than fifty
thousand (50,000) USD or lead country currency equivalent.
3.6 IBM may terminate this Agreement upon thirty (30) days prior written notice
to Mfr. if Mfr. makes any change to Mfr.'s warranty practice which
materially changes IBM/Local IBM's obligations under this Agreement.
3.7 The applicable Transaction Documents signed in the countries will become
effective on the dates specified in the Transaction Documents. The
termination of this Agreement will also terminate any SOW and/or
Transaction Document between Mfr. And IBM/Local IBM, subject to the
termination-related terms of the applicable Transaction Documents.
3.8 IBM/Local IBM may cancel any purchase order, or line item thereon, for Mfr.
deliverables and/or parts, without penalty provided written notice of
cancellation is given at least thirty (30) days prior to the scheduled
delivery date.
3.9 Any Mfr. deliverables and/or parts required to be provided to IBM/local IBM
under the terms of this Agreement, SOW, Attachments, and Transaction
Documents ordered by IBM/Local IBM and the purchase order having been
accepted by Mfr. prior to termination of this Agreement, shall be delivered
in accordance with the terms of this Agreement or that purchase order,
unless that purchase order is specifically cancelled, as outlined in
Subsection 3.8.
3.10 A Local IBM may immediately terminate its Transaction Document and/or SOW
for a material breach by Mfr. of its obligations thereunder if such breach
is not cured by Mfr. within thirty (30) days after receipt of written
notice thereof.
3.11 IBM/Local IBM may terminate machine service for specific machines, which
includes but is not limited to machines for which parts are no longer
commercially available, by providing a ninety (90) days' prior written
notice to Mfr., except in the case of a material breach by Mfr., in which
case IBM/Local IBM may immediately terminate pursuant to Subsection "3.4".
3.12 IBM/Local IBM may stop providing any services described in the SOWs by
providing ninety (90) days prior written notice to Mfr. except in the case
of material breach by Mfr., in which case IBM/Local IBM may stop providing
any of such services immediately if such breach is not cured by Mfr. within
thirty (30) days after written notice thereof.
3.13 Upon termination or expiration of this Agreement, Mfr. will continue to
provide Mfr. deliverables, and other support as necessary to allow
IBM/Local IBM to fulfill IBM/local IBM's then-current (as of the date of
termination) end user contractual obligations under the terms and
conditions of this Agreement.
3.14 Without prejudice to any other right or remedy, this Agreement and IBM's
obligations contained herein shall terminate immediately upon written
notice in the event (a) Mfr. commences (i) a voluntary case against itself
or (ii) any other proceedings under any
63
<PAGE>
reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law applicable to Mfr.;
or (b) an involuntary case or other such proceeding is commenced against
Mfr. and such case or proceeding is not dismissed within 30 days; or (c)
Mfr. is adjudged to be insolvent or shall fail to pay, or shall state that
it is unable to pay, its debts generally as they become due.
4.0 Charges
The service charges will be determined in the SOW, applicable attachments,
and/or Transaction Documents.
5.0 Payment Terms
5.1 Amounts are due upon receipt of invoice and are payable as IBM/Local IBM
specifies in the invoice. Mfr. agrees to pay accordingly, including any
late payment fee.
5.2 Any amounts not paid within the terms stated on the IBM/Local IBM invoice
will subject to a late payment fee that will be equal to 2% per month,
based on the outstanding balance, until paid in full, or the highest rate
allowed by law, whichever is less.
5.3 Payment by IBM/Local IBM shall not be construed as acceptance of any
improper, non-conforming, defective or unsuitable Mfr. deliverables and/or
parts, nor shall it be construed as a waiver of any of IBM/Local IBM's
rights or remedies under this Agreement.
6.0 Taxes
If any authority imposes a duty, tax or fee (excluding those based on
IBM/Local IBM's net income) on this Agreement or on the services supplied
(not otherwise provided in the Transaction Documents), Mfr. agrees to pay
that amount as IBM/Local IBM specifies in the invoice.
7.0 Machine Additions/Deletions/Withdrawals
7.1 If either party requests the ADDITION of machines, the requesting party
will provide the other party with such request in writing. Upon acceptance
of the request by the other party, the requesting party will allow up to
one hundred twenty (120) days from date of request for such machines to be
added to this Agreement by way of a written amendment to the "ELIGIBLE
MACHINE LIST".
7.2 Mfr. agrees to provide one hundred twenty (120) days prior written notice
to IBM/Local IBM of Mfr.'s intent to DELETE from this Agreement or WITHDRAW
from the marketplace any of the machines listed in the "ELIGIBLE MACHINE
LIST" and identify all machines intended for deletion or withdrawal.
7.3 If machines are serviced under an IBM/Local IBM maintenance agreement
between IBM/Local IBM and the end user, Mfr. agrees to provide for parts
availability and
64
<PAGE>
technical support, including Mfr. deliverables, for a period of five (5)
years beyond the deletion or withdrawal date of the machine(s).
8.0 Failure to Deliver/Rights to Technical Data
8.1 Mfr. will, during the term of this Agreement, maintain and deliver to
IBM/Local IBM all Mfr. deliverables and documentation relating to parts,
machine repairs, repair vendors, training, and support of the Mfr. machines
listed in the "ELIGIBLE MACHINE LIST". Should Mfr. be unable to provide
IBM/Local IBM with the required support, Mfr. deliverables, or parts, Mfr.
will grant to IBM/Local IBM the right to obtain and use the Mfr.
deliverables and/or parts as necessary to continue support of the machines
to enable IBM/Local IBM to satisfy all outstanding contractual commitments
to IBM/Local IBM's customers.
8.2 Mfr. grants to IBM/Local IBM:
1. an irrevocable, non-exclusive, worldwide, royalty-free license to use,
execute, reproduce, display, perform, and distribute (internally and
externally) copies of, and prepare derivative works based upon the
Documentation referenced in Section "8.1"; and
2. the right to authorize others to do any of the foregoing in support of
IBM/Local IBM's installed base of machines in the event that Mfr.
fails to deliver as described in Section "8.1".
8.3 Other than pre-existing materials contained therein, Mfr. represents and
warrants the originality of the software/microcode provided to IBM/Local
IBM under this Agreement, and that no portion of such software/microcode or
its use or distribution, violates or is protected by any copyright or
similar right of any third party. AS to such preexisting materials, Mfr.
represents and warrants that Mfr. has acquired full, clear and unencumbered
title thereto, or that Mfr. has the right to grant IBM/Local IBM the
license set forth in Section "8.2".
9.0 Mfr. Warranty
9.1 Mfr. warrants that all Mfr. deliverables and/or parts shall be free of
defects in material, workmanship, or design.
10.0 IBM Warranty for Services
IBM/Local IBM warrants that it will perform the services using reasonable care
and skill in accordance to current description of the services contained in the
Agreement, SOW, or Local Transaction Document (LTD). IBM/Local IBM does not
warrant that it will correct all defects. Unless specified otherwise in writing,
IBM deliverables are provided without warranties of any kind.
IBM/Local IBM is not providing any Year 2000 services (i.e., Year 2000
assessment, conversion or testing), under this Agreement. IBM/Local IBM shall
not be responsible for its failure to
65
<PAGE>
perform any of its obligations (including, for example, to meet service levels)
under this Agreement, if such a failure is the result, directly or indirectly,
of the inability of 1) a customer's or 2) a third party's or 3) Mfr.'s machines
inability to correctly process, provide and/or receive data with other machines
or deliverables. IBM/Local IBM assumes no responsibilities or obligations to
cause machines or deliverables to accurately exchange date data with other
machines under this Agreement.
11.0 Confidential Information
Mfr. understands that IBM/Local IBM does not wish to receive from Mfr. any
information which may be considered confidential or proprietary to Mfr. or any
third party. Mfr. represents and warrants that no information has been provided
to IBM/Local IBM that is confidential or proprietary to Mfr. or any third party
and IBM/Local IBM will not be obligated to retain in confidence or restrict
IBM/Local IBM's use of any information received from Mfr. In the event it
becomes necessary to provide or exchange information that is deemed confidential
or proprietary to either party, such provision or exchange shall not take place
prior to the signing of an Agreement for Exchange of Confidential Information
(AECI), incorporated herein by reference.
12.0 Most Favored Customer Benefits
Mfr. warrants to IBM/Local IBM that the prices quoted to IBM/Local IBM by Mfr.
do not exceed those offered by Mfr. to any other unaffiliated entities under
similar terms and conditions. If, during this Agreement, Mfr. sells such items
for lower prices to any other entity, IBM/Local IBM will be offered the benefit
of such lower prices under the same terms and conditions. Mfr. agrees to notify
IBM/Local IBM in writing of such lower prices within ten (10) calendar days
after being made available to others.
13.0 Public Disclosure
Neither party will disclose the terms and conditions of this Agreement without
the express written consent of the other, except as may be required by law or
governmental rule or regulation, as explicitly stated otherwise in this
Agreement, or to establish a party's rights under this Agreement; provided,
however, that if either party seeks to disclose for reasons not requiring the
other party's consent, the disclosing party will limit the disclosure to the
extent required and will allow the other party to review the information
disclosed and will apply, where available, for confidentiality, protective
orders and the like. Any review by either party under this Section will not be
construed to make such party responsible for the content of the disclosure.
Notwithstanding the above, IBM/Local IBM or Mfr. may disclose the terms and
conditions of this Agreement to a Related Company.
14.0 Relationship of the Parties
Neither party is the other party's legal representative nor agent for any
purpose, and neither party has the authority to, and shall not make, any
warranties or representations or create any obligations on behalf of the other
party.
66
<PAGE>
15.0 Amendments and Changes
1. This Agreement may not be amended, modified, or altered except in
writing and duly executed by the parties so bound.
2. IBM or Mfr. may request a change to this Agreement. Any change in this
Agreement may result in a change in the charges or other terms under
this Agreement. Either party, if requested by the other, will submit
all change requests in writing.
3. Depending on the extent and complexity of Mfr. requested changes,
IBM/Local IBM may charge for its effort required to analyze such
requests. When charges are necessary in order for IBM/Local IBM to
analyze a change, IBM/Local IBM will provide Mfr. with a written
estimate and begin analysis upon IBM/Local IBM's receipt of Mfr.'s
written authorization.
4. To formalize a mutually agreed upon change, IBM/Local IBM will prepare
a written amendment for signature by both parties which will describe
the agreed upon change and set forth any modifications to the terms of
this Agreement.
5. In the event of an inconsistency between Amendments and/or SOWs, the
wording in the most current Amendment will prevail over any
inconsistent wording in previous Amendments or SOWs.
6. Failure of the parties to agree to the change may cause termination of
this Agreement in accordance with Subsection "3.3" of Section "3.0
Term, Termination and Cancellation."
16.0 Interfering Code
Mfr. represents and warrants that Mfr. deliverables produced under this
Agreement will not knowingly contain any code, programming instructions, or set
of instructions that is intentionally constructed with the ability to damage,
interfere with, or otherwise adversely affect computer programming code, data
files, or hardware without the consent and intent of the computer user. Mfr.
will establish and enforce commercially reasonable procedures, which shall be
reviewed with IBM/Local IBM at IBM/Local IBM's request, to prevent any such
code, programming instruction, or set of instructions from being incorporated by
any employee of or subcontractor to Mfr. into any Mfr. deliverable and shall
promptly notify IBM/Local IBM of any knowledge or suspicion of Mfr. that any
such materials have been incorporated in the Mfr. deliverables.
17.0 Communications
Each party has appointed coordinators and other contacts which are identified in
the "CONTACT INFORMATION". The coordinators shall be responsible for maintaining
liaison between IBM/Local IBM and Mfr. and for determining the adequacy,
acceptability and fitness of the deliverables and service. Other country
coordinators are defined in the respective Transaction Documents for such
countries.
67
<PAGE>
18.0 Advertising and Use of Trademark
Provided that pricing, terms and conditions are not disclosed Mfr. and IBM/Local
IBM may each, solely for the purpose of performing its obligations under this
Agreement, communicate to individual third parties that IBM/Local IBM is a
service provider for Mfr., and describe to third parties the services provided
hereunder. However, neither party will communicate such information to the
general public by any means, such as public broadcast, printed brochures, media
advertisements, electronic communications, including but not limited to the
Internet and World Wide WEB and other such communications to the general public,
without the prior written consent of the other party.
Neither party shall use the other party's trademark without the express written
consent of the other party, and nothing contained herein is intended to, or
shall be construed to grant either party any license or right regarding the
other party's trademark, trade name, service mark, or logo.
19.0 Indemnification.
Mfr. agrees to indemnify IBM/Local IBM from, and hold IBM/Local IBM harmless
against, any and all claims actions, liabilities, costs (including reasonable
attorney fees) and expenses arising out of or in any way related to claims of
patent, trademark, or copyright infringement or trade secret misappropriation
arising out of or in any way related to any machines, parts, or deliverables
(including diagnostic software) provided to IBM/Local IBM by Mfr. under this
Agreement.
20.0 Limitation of Liability
IBM/Local IBM's entire liability and Mfr.'s exclusive remedy are set forth in
this Section.
Under no circumstances is IBM/Local IBM liable for economic consequential
damages (including lost profits or savings) or incidental damages, even if
IBM/Local IBM is informed of their possibility.
IBM/Local IBM's liability for actual damages, for any claims whatsoever, will be
limited to one hundred thousand (100,000) USD or lead country currency
equivalent, except for claims by Mfr. for bodily injury or damage to real
property or tangible personal property for which IBM/Local IBM is legally
liable. Under no circumstances will IBM/Local IBM be liable for any damages
claimed by Mfr. based on any third party claim.
The aforesaid limitations will apply, regardless of the form of action, whether
in contract or in tort, including negligence.
21.0 Gifts or Gratuities
Both parties agree not to give or offer gifts or gratuities of any type to the
other party's employees or members of their families. Gifts include
entertainment, personal services, favors, discounts, or other preferential
treatment of any kind. Such gifts or offerings may be construed as attempts to
improperly influence the business relationship between the parties.
68
<PAGE>
22.0 Employees
In no event will employees or agents of either party be considered employees or
agents of the other party. Both parties assume full responsibility for the
actions of their respective personnel under this Agreement and shall be solely
responsible for their respective supervision, daily direction and control, wage
rates, withholding income taxes, disability benefits, or the manner and means
through which the work under this Agreement will be accomplished.
23.0 Commercial Insurance
Mfr. will maintain comprehensive general liability insurance for claims for
damages because of bodily injury (including death) and property damage caused by
or arising out of acts or omissions of Mfr.'s employees. Such insurance shall be
in the combined single amount of not less than one million (1,000,000) USD or
lead country currently equivalent and shall name IBM/Local IBM as an additional
insured. A certificate of insurance shall be furnished to IBM/Local IBM upon
request. Mfr. will also maintain Worker's Compensation insurance in the
statutory amount. In no event shall the insurance be cancelled or materially
changed without prior written notice to IBM/Local IBM.
24.0 Force Majeure
Neither party will be considered in default or liable for any delay or failure
to perform any provision of this Agreement if such delay or failure arises
directly or indirectly out of an act of God, acts of the public enemy, freight
embargoes, strikes, quarantine restrictions, unusually severe weather
conditions, insurrection, riot, and other such causes beyond the reasonable
control of the party responsible for the delay or failure to perform, provided
the affected party notifies the other party within fifteen (15) calendar days of
the occurrence.
25.0 Order of Precedence
In the event of an inconsistency between terms of the various documents, the
order of precedence shall be:
1. Statement of Work ("SOW")
2. Transaction Document (including Local Transaction Documents)
3. Other Relevant Attachments
4. Body of this Agreement ("PART 2 - COUNTRY - UNIQUE TERMS'), prevails over
("PART I - GENERAL")
26.0 Severability
In the event that any term or condition contained in this Agreement is held to
be invalid or unenforceable, the remaining terms and conditions shall be
unaffected and shall continue to inure to the benefit of and to be binding upon
the parties thereto.
69
<PAGE>
27.0 Successors
The terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the parties and their respective successors, assigns and legal
representatives.
28.0 Limitation on Actions
Neither party will bring a legal action more than two years after the cause of
action arose unless otherwise provided by local law without the possibility of
contractual waiver or limitation.
29.0 Assignment
Mfr. must obtain IBM's written consent prior to assigning this Agreement, or any
of Mfr.'s right hereunder, or delegating any of Mfr.'s duties hereunder.
IBM/Local IBM's rights under this Agreement are freely assignable, IBM/Local IBM
and Mfr. may assign or delegate all or part of this Agreement or Transaction
Document to their respective subsidiaries or Related Companies.
30.0 Compliance with Governmental Legal Requirements
Each party agrees to comply and do all reasonable things necessary to help the
other party comply with all country and local laws, regulations, and ordinances
relative to this Agreement.
31.0 Waiver
Failure by either party to insist in any instance upon strict conformance by the
other party to any term herein or failure by either party to act in the event of
a breach shall not be construed as a consent to or waiver of any subsequent
breach of the same or of any other term contained herein.
32.0 No Conflicts
Each party hereby represents and warrants that it has the authority to enter
into and perform this Agreement and that the execution, delivery, and
performance of this Agreement does not.
1. violate any provision of law, statute, rule or regulation to which
this Agreement is subject; or
2. violate any order, judgment, or decree applicable to that party; or
3. conflict with, result in a breach or default under, or cause the
termination of, any term or condition of any provision of any court
order, trust document, agreement, document or other instrument or
commitment which is binding on that party.
33.0 Nonexclusive Agreement
Nothing in this Agreement will prohibit either party from performing like or
similar services for any other person or entity.
70
<PAGE>
34.0 Governing Laws and Forum
Part 1-General of this Agreement shall be governed by the law of the lead
country, without references to conflicts of law principles. SOWs shall be
governed i) if issued with respect to work performed in any country included on
the attached list of "EMEA Countries," by French law; or ii) if issued with
respect to work performed in countries not included on the attached list of
"EMEA Countries," by the law of the country in which the SOW is issued. Country
Unique Terms, purchase orders, Attachments, and Transaction Documents (including
Local Transaction Documents) shall be governed by the law of the country in
which the transactions contemplated thereunder are performed. The "United
Nations Convention on Contracts for the International Sale of Goods" does not
apply.
35.0 Complete Agreement
This Agreement, its Attachments and relevant Transaction Documents constitute
the entire Agreement and understanding of the parties with respect to the
subject matter hereof, and no representations, terms, or agreements, other than
those set forth herein have been relied upon or shall be binding upon any of the
parties or imputed to any of them.
36.0 Third Party Beneficiary
This Agreement is not intended to benefit any party except IBM/Local IBM and
Mfr. It is the parties express intent that this Agreement is not a third-party
beneficiary contract.
IBM International Technical Support Agreement
The terms of this Agreement apply for all countries, except that the following
terms are country amendments which replace or modify the General Terms in Part 1
for the identified country. All General Terms which are not changed by these
amendments remain in effect as written.
EMEA-LIST OF THE IBM WORLD TRADE EMEA COUNTRIES
----
--------------------------------------------------------------------------------
- ABU DHABI - GUERNSEY - POLAND
--------------------------------------------------------------------------------
- AJMAN - GUINEA - PORTUGAL
--------------------------------------------------------------------------------
- ALBANIA - HUNGARY - QATAR
--------------------------------------------------------------------------------
- ALGERIA - ICELAND - RAS EL-KHAIMA
--------------------------------------------------------------------------------
- ANGOLA - IRAN - REUNION
--------------------------------------------------------------------------------
- ARMENIA - IRAQ - ROMANIA
--------------------------------------------------------------------------------
- ASCENSION ISLAND - IRELAND - RUSSIA/CIS
--------------------------------------------------------------------------------
- AUSTRIA - ISLE OF MAN - RWANDA
--------------------------------------------------------------------------------
- AZERBAIJAN - ISRAEL - SAUDI ARABIA
--------------------------------------------------------------------------------
- BAHRAIN - ITALY - SCILLY ISLES
--------------------------------------------------------------------------------
- BELARUS - IVORY COAST - SEMEA ITALY
--------------------------------------------------------------------------------
- BELGIUM - JERSEY - SENEGAL
--------------------------------------------------------------------------------
- BENIN (EX-DAHOMEY) - JORDAN - SERBIA
--------------------------------------------------------------------------------
- BOSNIA-HERZEGOVINA - KAZAKHSTAN - SEYCHELLES
--------------------------------------------------------------------------------
- BOTSWANA - KENYA - SHARJAH
--------------------------------------------------------------------------------
71
<PAGE>
--------------------------------------------------------------------------------
- BULGARIA - KIRGHIZIA - SIERRA LEONE
--------------------------------------------------------------------------------
- BURKINA FASO (EX-UV) - KUWAIT - SLOVAK REPUBLIC
--------------------------------------------------------------------------------
- BURUNDI - KYRGYZSTAN - SLOVENIA
--------------------------------------------------------------------------------
- CABO VERDE - LATVIA (BALTIC CTRY) - SOMALIA
--------------------------------------------------------------------------------
- CAMEROON - LEBANON - SOUTH AFRICA
--------------------------------------------------------------------------------
- CENTRAL AFRICAN REP - LESOTHO - SPAIN
--------------------------------------------------------------------------------
- CHAD - LIBERIA - ST. HELENA
--------------------------------------------------------------------------------
- COMOROS - LIBYA - SUDAN
--------------------------------------------------------------------------------
- CONGO-BRAZAVILLE - LIECHTENSTEIN - SWAIZILAND
--------------------------------------------------------------------------------
- CROATIA - LITHUANIA (BALTIC) - SWEDEN
--------------------------------------------------------------------------------
- CYPRUS - LUXEMBOURG - SWITZERLAND
--------------------------------------------------------------------------------
- CZECH REPUBLIC - MACEDONIA - SYRIA
--------------------------------------------------------------------------------
- DENMARK - MADAGASCAR - TADJIKISTAN
--------------------------------------------------------------------------------
- DJIBOUTI - MALAGASY - TANZANIA
--------------------------------------------------------------------------------
- DUBAI - MALAWI - TOGO
--------------------------------------------------------------------------------
- EGYPT - MALI - TUNISIA
--------------------------------------------------------------------------------
- ESTONIA (BALTIC) - MALTA - TURKIYE
--------------------------------------------------------------------------------
- EQUATORIAL GUINEA - MARTINIQUE - TURKMENIA
--------------------------------------------------------------------------------
- ERITREA - MAURITANIA - TURKMENISTAN
--------------------------------------------------------------------------------
- ETHIOPIA - MAURITIUS - UZBEKISTAN
--------------------------------------------------------------------------------
- FINLAND - MAYOTTE - UGANDA
--------------------------------------------------------------------------------
- FRANCE - MOLDOVA - UKRAINE
--------------------------------------------------------------------------------
- FRENCH GUYANA - MONACO - UMIM AL QIWAN
--------------------------------------------------------------------------------
- FRENCH POLYNESIA - MOROCCO - UNITED ARAB EMIRATES
--------------------------------------------------------------------------------
- FUJAIRA - MOZAMBIQUE - UNITED KINGDOM
--------------------------------------------------------------------------------
- FYROM (Former Yugoslav - NAMIBIA - VANUATU
Republic of Macedonia)
--------------------------------------------------------------------------------
- GABON - NETHERLANDS - WALLIS ET FUTUNA
--------------------------------------------------------------------------------
- GAMBIA - NEW CALEDONIA - YEMEN-NORTH
--------------------------------------------------------------------------------
- GEORGIA - NIGER - YEMEN-SOUTH
--------------------------------------------------------------------------------
- GERMANY - NIGERIA - YUGOSLAVIA (EX)
--------------------------------------------------------------------------------
- GHANA - NORTHERN IRELAND - ZAIRE
--------------------------------------------------------------------------------
- GIBRALTAR - NORWAY - ZAMBIA
--------------------------------------------------------------------------------
- GREECE - OMAN - ZAMBIA
--------------------------------------------------------------------------------
- GUADELOUPE - PAKISTAN
--------------------------------------------------------------------------------
GERMANY
Section 20.0 Limitation of Liability (Additional Term)
The limitations and exclusions specified in the agreement will not apply to
damages caused by IBM with fraud or gross negligence and for express warranty.
IBM is liable for assured characteristics. The maximum amount of liability is
limited to one million ($1,000,000)
72
<PAGE>
deutsche marks. Our liability under this term is limited to the violation of
essential contractual terms in cases of ordinary negligence.
IRELAND
Section 10.0 IBM Warranty (Additional Term)
Except as expressly provided in these terms and conditions, all statutory
conditions, including all warranties implied, but without prejudice to the
generality of the foregoing all warranties implied by the Sale of Goods Act 1893
or the Sale of Goods and Supply of Services Act 1980 are hereby excluded.
ITALY
Section 20.0 Limitation of Liability (Replacement Term)
The second sentence of the third paragraph of this section is canceled and
replaced by the following:
"Unless otherwise provided by mandatory law, this limitation will not apply to
claims by Mfr. for bodily injury (including death) and damage to real property
and tangible personal property caused solely by our negligence."
PORTUGAL
Section 20.0 Limitation of Liability (Replacement Term)
Unless otherwise provided by mandatory law, under no circumstances is IBM/Local
IBM liable for economic consequential damages (including lost profits or
savings) or incidental damages, even if IBM/Local IBM is informed of their
possibility.
TURKIYE
Section 34.0 Governing Law and Forum (Replacement Term)
This Agreement will be governed by the Turkiye laws. All conflicts arising from
this Agreement will be finally settled by the Courts of Commerce and Execution
Offices of the Main Courthouse of Istanbul (Sultanahmet).
ASIA PACIFIC
AUSTRALIA
Section 10.0 IBM Warranty (Additional Term)
The warranties specified in this Section are in addition to any rights the Mfr.
may have under the Trade Practices Act of 1974 or other legislation and are only
limited to the extent possibility by the applicable legislation.
73
<PAGE>
INDONESIA AND MALAYSIA
IBM business is conducted through local organizations acting as our agents. IBM
will provide you with the name of the relevant organization that will fulfill
this Agreement.
PAKISTAN
Section 3.9 (Additional Term)
Mfr. will undertake and comply with all legal requirements, including obtaining
all licenses necessary for importation of Mfr. parts for delivery to Local IBM.
PEOPLE'S REPUBLIC OF CHINA (Additional Terms)
Mfr. may use a buyer as the agent to acquire Services from IBM in the People's
Republic of China. The buyer will act on Mfr.'s behalf to sign the Transaction
Document.
Section 1.0 Scope of Work
The Transaction Document is the standard IBM China Maintenance Contract with IBM
China/Hong Kong Corporation for taxation purposes.
Section 5.0 Payment Terms
All banking charges incurred in the People's Republic of China shall be borne by
Mfr. and those incurred outside of the People's Republic of China shall be borne
by IBM.
Section 34.0 Governing Law and Forum
The laws of the state of New York govern this agreement. Any dispute concerning
this Agreement may be settled by arbitration. The arbitration will take place in
Stockholm, Sweden, under the auspices of the International Arbitration Center in
English in accordance with the rules then in effect under the United Nations
Commission on International Trade Law (UNCITRAL). The United Nation's Convention
on agreements for the International Sale of Goods will apply.
The arbitration award will be final and binding on both parties and both parties
shall act accordingly. The arbitration fee shall be borne by the losing party.
NORTH AMERICA
-------------
UNITED STATES OF AMERICA
Section 34.0 Governing Law and Forum (Additional Term)
The laws of the State of New York govern the Agreement and SOW. Both parties
expressly waive their right to a trial by jury for an action resulting from the
Agreement and/or SOW.
74
<PAGE>
CANADA
Section 10.1 IBM Warranty (Additional Term)
Warranties include both warranties and conditions.
Section 20.0 Limitation of Liability (Additional Term)
IBM liability for bodily injury (including death) or damage to real property and
tangible personal property shall be limited to that caused by IBM negligence.
Under no circumstances is IBM liable for any indirect damages and harm to
records and data.
This "Limitation of Liability" Section applies regardless of the basis on which
Mfr. is entitled to claim damages from IBM, including, but not limited to:
1. breach of contract, even if fundamental breach; or
2. tort, including, but not limited to, negligence or
misrepresentation.
Section 34.0 Governing Law and Forum (Replacement Term)
The laws in the Province of Ontario govern this Agreement.
75
<PAGE>
Attachment A - Statement Of Work for USA ("SOW-A")
& Other USA A-Series Attachments ("A-Attachments")
For
Help Desk & Technical Support (HD&TS) Services
To
International Technical Support Agreement Number MW00033
Between
NetScreen Technologies, Inc. ("Mfr" or "NetScreen")
And
International Business Machines Corporation ("IBM")
Contained herein are the Statement of Work for USA (the "SOW-A") and other
relevant USA Attachments (the "A-Attachments") to the IBM International
Technical Support Agreement (the "Agreement").
This SOW-A and it's a-Attachments apply to Help Desk & Technical Support (HD&TS)
services only.
All references to Attachments by their title are references to A-Attachments
found herein unless indicated otherwise.
Attachment A (the "SOW-A") and it's A-series Attachments (the "A-Attachments"),
along with SOW-B and the B-Attachments, collectively comprise the "Agreement"
number MW00033.
The SOW-A and A-Attachments becomes effective once signed by both parties and
both parties are bound by "PART 1 - GENERAL" and "PART 2 - COUNTRY UNIQUE TERMS"
of Agreement MW00033, incorporated by reference, between NetScreen Technologies,
Inc., as Mfr. Organizational Entity for USA (hereinafter "Mfr") and IBM
Corporation for USA (hereinafter "IBM").
The SOW-A and A-Attachments describes the responsibilities of both Mfr and IBM
for support services on the machines listed in Attachment A entitled "ELIGIBLE
MACHINE LIST for USA" which are either manufactured or sold by Manufacturer.
The SOW-A and A-Attachments, in conjunction with the Agreement, constitutes the
complete Agreement for the USA and replaces any prior oral or written
communications between the parties. By signing below, both parties agree to the
terms and conditions of the SOW-A and A-Attachments to the Agreement.
Once signed, 1) unless prohibited by local law or specified otherwise, any
reproduction of the SOW-A and A-Attachment made by reliable means (for example
photocopy or facsimile) is considered an original and 2) all machines listed and
services described hereunder are subject to it.
Each signatory hereto represents and warrants that he/she is authorized to sign
the SOW-A and A-Attachments on behalf of the party indicated.
76
<PAGE>
IN WITNESS WHEREOF, and by the act of signing below, the parties hereto have
caused the SOW-A and all A-Attachments to be signed and accepted in their
entirety by their respective duty authorized representatives.
ACCEPTED AND AGREED TO: IBM Corporation (for USA)
NetScreen Technologies, Inc.,
Mfr. Organizational Entity (for USA)
By /s/ James K. Gifford By /s/ James Greenough
---------------------------------- ----------------------------------
Authorized Signature Authorized Signature
Name (type or print): James K. Gifford Name (type or print): James Greenough
---------------- ---------------
Title: Vice President Systems & Services Title: Contract Advisor
--------------------------------- ------------------------------
Date: August 9, 2001 Date: August 9, 2001
------------------------------ -------------------------------
77
<PAGE>
Table of Contents
Attachment A - STATEMENT OF WORK for USA
1.0 Purpose
2.0 Services Implementation
2.1 Due Diligence/Implementation Period
3.0 Deliverables
4.0 Administrative Requirements
5.0 Call Handling
6.0 Mfr Technical Support
6.1 Mfr Technical Support (Mfr TS) Assistance Outside Normal
Business Hours
7.0 Training
8.0 Changes to the Statement of Work and Attachments
8.1 Change Requests
8.2 Change Administration
Attachment A1 - ELIGIBLE MACHINE LIST for USA
Attachment A2 - SERVICES SUPPORT CHARGES for USA
1.0 Help Desk & Technical Support ("HD&TS") Services Charges
1.1 One-Time Setup/Start-Up Charge
1.2 Monthly Minimum Per Case Help Desk & Technical Support
("HD&TS") Charge
1.3 HD&TS Training Charge
Attachment A3 - CONTACT INFORMATION for USA
1.0 Technical Contacts
2.0 Administration/Billing Contacts
3.0 Other Contacts
Attachment A4 - TRAVEL EXPENSE GUIDELINES for USA
1.0 Reimbursement Expenses
2.0 Required Invoice Back-up Documentation
Attachment A5 - HELP DESK & TECHNICAL SUPPORT SERVICES for USA
1.0 Scope of Services
2.0 Support Levels Defined
3.0 Training
4.0 Equipment
5.0 Problem Incident Management
6.0 Call Severity
7.0 Additional Services and Support
8.0 Contacts
78
<PAGE>
Attachment A - STATEMENT OF WORK for USA
To reference to "PART 2 - COUNTRY UNIQUE TERMS" of the ITSA, "NORTH AMERICA",
the Section entitled "UNITED STATE OF AMERICA" is amended as follows:
All changes herein apply to USA only. Any other countries that may be added to
this Agreement are not bound by the below USA-only ITSA changes.
For good and valuable consideration hereby acknowledged by both of us, each of
us agrees to amend the referenced IBM International Technical Support Agreement
(ITSA) with the following changes which are hereby incorporated into the ITSA
under "PART 2 - COUNTRY UNIQUE TERMS", "NORTH AMERICA", "UNITED STATES OF
AMERICA", and all changes herein take precedence over the affected content in
"PART 1 - GENERAL" of ITSA. In the event of inconsistency between changes to the
ITSA, the most current changes will govern.
The following USA "replacement" definition take precedence over the
like-numbered definitions in "PART 1 - GENERAL" of the Agreement. Also, some
"additional" USA definitions are defined below.
1.0 Scope of Work (Change in USA wording for "1.0" of "PART 1 - GENERAL" of
---------
the Agreement):
The fifth paragraph has been abbreviated to read as follows: "Mr.
Maintenance Agreements will be sold to end users by Mfr." All else
remains unchanged.
2.0 Definitions (Replacement USA term for "2.10" & "2.10" of "PART 1 -
-----------
GENERAL" of the Agreement):
2.4 The term end user shall mean the ultimate user of the machines and Mfr.'s
authorized resellers, distributors or NetScreen Business Partners.
2.10: The term Mfr deliverables shall mean those items and materials as
described in the SOW-A and A-Attachments and/or purchase orders, which
are to be delivered to IBM by Mfr including but not limited to manuals,
diagnostics, engineering changes (Ecs), technical support training, micro
code and micro code, updates, resale tax exemption certificates, as well
as items ordered via IBM purchase order (if any) and if applicable,
installation procedures.
Mfr will bear the entire cost of shipments for Mfr deliverables.
The term IBM deliverables shall mean those items and materials as
described in the SOW-A and A-Attachments that are to be delivered to Mfr
by IBM, including but not limited to an implementation plan, and IBM
HD&TS Operations Guide.
2.0 Definitions (Additional USA terms to "2.0 Definitions" of "PART 1 -
----------
GENERAL" of the Agreement):
79
<PAGE>
2.17 The term IBM HD&TS Operations Guide shall mean the specific set of
administrative instructions that IBM customizes and provides to Mfr by
the end of the implementation period.
3.0 Term, Termination and Cancellation (Change of Subsection "3.3" in Section
"3.0" of "PART 1 - GENERAL" of the Agreement):
3.3 IBM or Mfr. may terminate this Agreement, with or without cause, at any
time upon at least ninety (90) days prior written notice.
4.0 Prices (Replacement USA Section for "4.0 Charge" or "PART 1 - GENERAL" of
-----------
the Agreement):
4.1 Mfr will pay IBM the support fees listed in "Attachment A2 - SERVICES
SUPPORT CHARGES for USA", which will be mutually agreed in writing via
the amendment process:
1. once during the due diligence/implementation period;
2. once twelve months after end of the due diligence/implementation
period; and
3. once every succeeding twelve-month period thereafter.
IBM will provide Mfr with ninety (90) days prior written notice of any
price adjustments.
4.3 If applicable, travel expenses authorized in advance by Mfr will be
reimbursed to IBM in accordance with Attachment entitled "TRAVEL EXPENSE
GUIDELINE for USA".
5.0 Payment Terms (Additional USA terms to "5.0" of "PART 1 - GENERAL" of the
----------
Agreement):
5.4 If IBM is submitting an invoice to Mfr for pay by Mfr, IBM's invoice
shall include the complete IBM Agreement number. IBM's original invoice
shall be mailed to the address below.
NetScreen Technologies, Inc.
Accounts Payable
350 Oakmead Parkway
Sunnyvale, CA 94085
6.0 Taxes (Replacement USA term for "6.0 Taxes") of "PART I - GENERAL" of the
-----------
Agreement):
IBM will include appropriate sales and use taxes on IBM's invoices to Mfr
unless Mfr has provided IBM with resale tax exemption certificates at the
start of this Agreement, for each state in which service is being
performed by IBM. In the event the parties enter into subsequent
agreement for services to be performed in additional states, Mfr will
provide IBM with resale tax exemption certificates before the start of
any such services.
80
<PAGE>
8.0 Failure to Deliver/Rights to Technical Data (Replacement USA term for
Subsection "8.2", item "1," of Section "8.0" of "PART 1 - GENERAL" of the
Agreement):
1. an irrevocable, non-exclusive, worldwide, royalty-free license to use,
execute, reproduce, display, perform, and distribute (internally and
externally) copies of the documentation referenced in Section "8.1"; and
12.0 Most Favored Customer Benefits: Deleted entirely from "PART 1 - GENERAL"
of the Agreement.
19.0 Indemnification (Replacement USA term for "19.0 Indemnification" of "PART
-----------
1 - GENERAL" of the Agreement):
Mfr. Agrees to indemnify and defend IBM/Local IBM against, any and all
claims, actions, liabilities, costs (including reasonable attorney fees)
and expenses resulting from i) third party claims of patent, trademark or
copyright infringement or trade secret misappropriation arising out of or
in any way related to the machines, parts, software, diagnostics,
training manuals or other documentation, microcode or microcode updates
supplied by Mfr. Or its representatives to IBM/Local IBM of Mfr.'s end
users, or ii) third party claims for bodily injury or damage to real or
tangible personal property for which Mfr. is liable.
IBM/Local IBM agrees to indemnify and defend Mfr. against, any and all
claims, actions, liabilities, costs (including reasonable attorney fees)
and expenses resulting from i) third party claims of patent, trademark or
copyright infringement or trade secret misappropriation arising out of or
in any way related to the IBM Administration Guide or written reports
supplied by IBM or its representatives to Mfr. under this Agreement, or
ii) third party claims for bodily injury or damage to real or tangible
personal property for which IBM is liable.
In the event of such a claim as described in this Section 19, the
indemnifying party shall indemnify and defend the indemnified party from
and against any and all losses, damages, expenses (including reasonable
attorney fees) and costs arising out of such claim; provided, however,
that the indemnified party shall: (a) notify the indemnifying party
promptly in writing of any such claim; (b) give the indemnifying party
sole control over the defense and settlement of such claim, except that
any non-monetary settlements affecting the indemnified party require the
consent of the indemnified party; and (c) provide reasonable cooperation
in defending any such claim, at the indemnifying party's expense.
End cross-reference to "PART 2 - COUNTRY UNIQUE TERMS" of the ITSA, "NORTH
--------------------------------------------------------------------------
AMERICA", "UNITED STATES OF AMERICA".
-------------------------------------
1.0 Purpose
This is the Statement of Work for USA (the "SOW-A") and other USA
Attachments (the "A-Attachments") for incorporation into the
International Technical Support Agreement
81
<PAGE>
(the "Agreement") Number MW00033 between Mfr. Organizational Entity for
USA (hereinafter "Mfr" or "NetScreen") and IBM Corporation for USA
(hereinafter "IBM").
The SOW-A and A-Attachments describe the Help Desk and Technical Support
("HD&TS") services and the responsibilities of both Mfr and IBM.
The term of this SOW-A runs concurrently with the term of the ITSA unless
the SOW-A is sooner terminated. IBM may terminate all or part of the
SOW-A and/or one or more A-Attachments upon ninety (90) days prior
written notice to Mfr.
IBM intends to provide the following service to Mfr end users, and Mfr
agrees to support such service by providing certain Mfr deliverables as
required and described by the SOW-A and A-Attachments. The services to be
provided are Help Desk and Technical Support ("HD&TS") Services.
Mfr will be responsible for overall end user satisfaction for services
provided under the SOW-A and A-Attachments.
2.0 Services Implementation
IBM requires an implementation period of up to thirty (30) days from the
effective date of the SOW-A to implement HD&TS services.
IBM will notify Mfr in writing when the implementation period has elapsed
or is complete and IBM is ready to commence with HD&TS services.
Successful implementation by IBM is contingent upon Mfr's timely delivery
of all Mfr deliverables (described in the SOW-A and A-Attachments) deemed
necessary by IBM for successful commencement of HD&TS services.
2.1 Due Diligence/Implementation Period
There will be a due diligence period which shall run concurrently with
the implementation period. During the concurrent due
diligence/implementation period, IBM and Mfr will jointly define and
develop service support procedures or services as defined in both the
SOW-A and A-Attachments. During this period:
1. all assumptions used in the development of the SOW-A and other
A-Attachments, and all roles and responsibilities related thereto, will
be validated for accuracy;
2. customized procedures will be developed to include administrative
processes, services delivery, problem severity definitions and escalation
procedures to assure timely resolution of all in-scope problems/requests
managed by IBM; and
3. an ongoing communications and management plan will be established in
support of services agreed to by Mfr and IBM.
82
<PAGE>
Changes to the SOW-A or A-Attachments shall be processed per provisions
in Section entitled "Changes to the Statement of Work and Attachments" of
the SOW-A. Any discoveries and/or changes that result from the due
diligence/implementation period may result in modification to the
estimated schedule of delivery, charges, or other terms and conditions
contained within the SOW-A and/or A-Attachments. IBM will provide Mfr
with ninety (90) days prior written notice of any price adjustments.
3.0 Deliverables
There are two types of deliverables; "Mfr deliverables" and "IBM
deliverables", both of which are defined in the Agreement and/or the
SOW-A.
IBM service level objectives:
1. Longest telephone hold waiting time of 5 minutes in the queue waiting
for IBM service representative.
2. Abandoned calls of less than 2%. Abandoned calls are calls terminating
before they are answered or calls routed to voicemail.
3. Voice messages returned within 30 minutes.
4. 80% of the cases resolved within one day with the balance resolved
within 48 hours unless escalated to Mfr. A case is an IBM problem
management record within the IBM problem management system.
5. All cases logged into IBM Problem Management System at the end of each
call.
6. All resolved cases closed in IBM Problem Management System the same
day the cases are resolved.
4.0 Administrative Requirements
Mfr Responsibilities
Mfr will:
1. coordinate all field communication activities between Mfr and the end
user regarding service support as a part of the SOW-A and A-Attachments
and all subsequent Amendments;
2. designate a Mfr focal point to provide information to the IBM focal
point to facilitate IBM's development of the IBM HD&TS Operations Guide;
3. perform all Mfr responsibilities associated with the SOW-A and
A-Attachments;
4. provide IBM access to the Mfr end user service agreement database. Mfr
shall provide a flat file of customer names, their Mfr contracted service
level agreements, and
83
<PAGE>
expiration dates, which will be updated by Mfr and provided to IBM on at
least a monthly basis.
IBM Responsibilities
IBM HD&TS will:
1. receive all Level 1 and 2 eligible end user service call requests on
machines in the "ELIGIBLE MACHINE LIST for USA" via Mfr telephony switch
from Mfr. Any calls for machines not in the "ELIGIBLE MACHINE LIST for
USA" will be returned to Mfr.
2. verify the end user is under Mfr's service agreement and, for those
Mfr end users not under a Mfr service agreement, IBM will continue to
provide HD&TS services under this Agreement and notify Mfr of the
occurrence;
3. provide initial problem determination. If the problem is resolved, IBM
HD&TS will close the call:
4. if the action plan provided by IBM HD&TS Level 1 or Level 2 support
engineers does not resolved the problem, IBM HD&TS and Mfr Level 3 will
work together in problem resolution;
5. not be held accountable for down time, repair time, response time, or
end user satisfaction issues that are the result of Mfr's inability to
fulfill its responsibilities
6. provide IBM HD&TS telephone number and pager numbers to Mfr for use by
Mfr to contact IBM to provide information regarding a customer case it
handled. IBM shall be available twenty-four (24) hours a day, seven (7)
days a week to respond to Mfr. Such call to IBM by Mfr will not be
considered a billable case.
7. respond to Mfr telephone call requests to provide information
regarding a case IBM handled within fifteen (15) minutes from receipt of
such telephone requests during normal business hours and within thirty
(30) minutes when outside normal business hours.
8. will resolve with Mfr end users' complaints about the performance of
IBM Level 1 and Level 2 service representatives.
9. will accept Mfr end user calls regarding issues and concerns with the
service provided under this SOW-A and address appropriate; for those end
user issues and concerns beyond IBM's control, the end user call will be
transferred to the Mfr, who then has the responsibility to address the
issues and concerns; and
10. all end user issues not directly related to Level 1 and Level 2 are
to be routed to the Mfr.
84
<PAGE>
6.0 Mfr. Technical Support
The technical contacts for both parties are identified in Attachment entitled
"CONTACT INFORMATION for USA".
Mfr Responsibilities
Mfr will maintain the necessary expertise, capabilities, and resources to enable
IBM to support and maintain the machines, including but not limited to the
following?
1. make available all nonproprietary diagnostic programs and/or
procedures required for IBM to service the machines;
2. provide to IBM, when requested and at no cost to IBM, complete copes
of all machine documentation deemed necessary by IBM to provide service
on the machines listed in Attachment entitled "ELIGIBLE MACHINE LIST for
USA";
3. develop and make available to IBM a trouble-shooting guide that lists
error codes by emulation and their likely fix. Mfr will provide copies of
the trouble-shooting guide to IBM as requested, at no charge;
4. provide Mfr TS toll free telephone number and pager numbers to IBM,
which will be recorded in the IBM HD&TS Operations Guide and used by IBM
to request technical support for the machines, at no charge to IBM. A
recorded answering system is not acceptable for this purpose. The
assistance shall be available twenty-four (24) hours a day, seven (7)
days a week. Normally this assistance will be provided remotely by
telephone, however, if it is mutually agreed that this method of
assistance is not effective, Mfr. will provide on-site assistance at the
end user location;
5. respond to IBM telephone call requests for assistance within fifteen
(15) minutes from receipt of such telephone requests, during the hours of
8:00 a.m. local prevailing time to 5:00 p.m. local prevailing time,
Monday through Friday. IBM may elect to stay on hold awaiting connection
to a Mfr technical support representative; and
6. assist IBM as required in determining if a problem is outside the
scope of services, at no charge to IBM.
6.1 Mfr. Technical Support (Mfr TS) Assistance Outside Normal Business Hours
Technical support assistance on weekends, holidays, and when outside
Mfr's normal business hours of 8:00 a.m. local prevailing time to 5:00
p.m. local prevailing time, Monday through Friday, will be provided
through the following procedure:
1. IBM will contact Mfr TS via a professional toll free telephone
answering service (PTAS) during normal business hours and via a non toll
free cell phone number or pager during after hours.
85
<PAGE>
2. IBM will identify itself and request emergency technical support
assistance. IBM will provide the PTAS with the appropriate IBM contact
name, area code and phone number.
3. Mfr will respond within thirty (30) minutes from the time the PTAS or
pager was initially contacted. If a Mfr TS representative cannot be
reached, the PTAS will notify the IBM caller.
IBM HD&TS will defer the closure of the service call with the end
user and invoke the escalation procedures established in the IBM HD&TS
Operations Guide.
4. IBM may contact the PTAS at any time during the thirty (30) minutes
response time window to request a status on the request for emergency
technical support assistance.
7.0 Training.
Refer to attachment entitled "HELP DESK & TECHNICAL SUPPORT SERVICES for
USA" for additional training requirements.
1. Mfr will be responsible for providing all machine related training for
the number of HD&TS representatives required to support the SOW-A and
other relevant A-Attachments throughout the term of the SOW-A.
2. Mfr will develop training course content. Mfr and IBM will mutually
agree on training course content.
3. Mfr agrees to develop training course content, as follows:
a. IBM's role will be to assist Mfr in understanding the HD&TS
representative audience, assist with content recommendations, and
review the training course materials to ensure it meets HD&TS
requirements.
b. During training course materials development, Mfr will, on a
mutually agreed upon time schedule, provide IBM with drafts of
course materials for review and feedback.
c. IBM will require Mfr's assistance to define and list the
service tasks and make applicable product/machine manuals
available for review.
d. If IBM personnel will be required to travel in order to support
the service representative development training effort, then Mfr
will be responsible for reasonable travel and living expenses.
e. For Self Study type training materials (Video, CD-ROM, etc.)
developed by the Mfr, Mfr will provide a mutually agreed upon
quantity of such training materials to IBM that IBM will
distribute to its HD&TS representatives. Mfr will resupply and
provide updates to the Self Study type materials as required.
86
<PAGE>
4. As a part of the training development, Mfr and IBM will mutually
agree on the training location for classroom/laboratory type
courses and the delivery method of training. The preferred
delivery method for HD&TS representative training to support the
machine(s) listed in the Agreement is Instructor-Led
Classroom/Hand On Lab training.
a. For Instructor-Led classroom/Hands On Lab training, Mfr will
perform the delivery.
5. The training plan will be the result of a completed course
development process with both parties agreeing to the training
schedule.
6. Provided training shall include but not be limited to:
a. machine/system overview;
b. service manual overview/review;
c. hardware/software service procedures;
d. installation procedures;
e. lab work documents & procedures for Instructor-Led
Classroom/Hands-On Lab training or interactive Self-Study
training; and
f. actually problem case reviews and problem determination
procedures.
7. To supplement the above-training components, Mfr will, prior to
course development, provide to IBM and objective list detailing
proposed specific course functions.
8. Each student will receive a complete set of machine servicing
documentation upon completion of the training class.
9. Mfr will provide all required hardware, software and spare parts
to support an IBM classroom/laboratory training deliver effort,
unless readily available within the IBM Raleigh Support Center
locations.
10. IBM will reserve the right to review and recommend charges to the
training course content and delivery method as well as review and
approve any alternative method of training deliver proposed by
Mfr.
11. New and/or additional machines added to Attachment entitled
"ELIGIBLE MACHINE LIST for USA" will require a reevaluation of the
training methodology by IBM.
12. All costs associated with the training of HD&TS representatives on
machines listed in Attachment entitled "ELIGIBLE MACHINE LIST for
USA", or training
87
<PAGE>
conductedon new and/or additional machines added to that
Attachment during the term of the SOW-A, will be the
responsibility of Mfr and at Mfr's expense. These Mfr paid costs
include:
a. all costs associated with the duplication and distribution of
training materials where IBM is performing this service;
b. all costs for HD&TS representatives' reasonable and actual
travel and living expenses incurred in connection with
classroom/laboratory training on the machines;
c. all costs associated with the transportation, setup and control
of training equipment for laboratory based courses; and
d. all costs incurred to bring HD&TS representatives up to the
level of expertise required to support the machines, for which Mfr
agrees to provide additional training at Mfr's expense.
13. Training materials provided to IBM will be considered Mfr
deliverables and grants to IBM the right to use such training
materials as set forth in "PART I - GENERAL", Section entitled
"Failure to Deliver/Rights to Technical Data" of the Agreement.
8.0 Changes to the Statement of Work and Attachments
8.1 Change Requests
IBM or MFR may request changes to the SOW-A and/or A-Attachments only in
writing. The change request must describe the change, the rationale for
the change, and the effect the change will have to the SOW-A,
A-Attachments, and the Agreement.
Both parties will review the proposed change and approve it for further
investigation or reject it within thirty (30) days, unless otherwise
agreed to. IBM will specify any charges for such investigation. If the
investigation is authorized, both parties will agree to it in writing,
which will constitute approval for the investigation charges. IBM will
invoice Mfr for any such charges. The investigation will determine the
effect that the implementation of the change will have on price, schedule
and other terms and conditions of the Agreement.
8.2 Change Administration
Depending on the change, a written Agreement must be signed by both
parties to authorize implementation of the investigated changes. However,
IBM will modify and redistribute the IBM HD&TS Operations Guide in the
event the agreed to change results only in a change to established
procedures.
88
<PAGE>
Attachment A1 - ELIGIBLE MACHINE LIST for USA
--------------------------------------------------------------------------------
Below are the machines eligible for HD&TS services.
Refer to Attachment entitled "SERVICES SUPPORT CHARGES for USA" for charges.
ELIGIBLE MACHINE LIST
---------------------
Manufactured-Assigned Model Number:
-----------------------------------
NS-5
NS REMOTE
NS10
NS100
Note: For machines that are added to this Attachment via Amendment, IBM
requires a period of up to forty-five (45) days from the effective date
of the applicable Amendment to implement HD&TS services.
89
<PAGE>
Attachment A2 - SERVICES SUPPORT CHARGES for USA
--------------------------------------------------------------------------------
The following Services Support Charges apply to the SOW-A and
A-Attachments for the HD&TS services being provided on the machines
listed in the attachment entitled "ELIGIBLE MACHINE LIST for USA". If Mfr
fails to pay in accordance with the terms of the Agreement, IBM reserves
the right to institute prepayment conditions.
1.0 Help Desk & Technical Support ("HD&TS") Services Charges
1.1 One-Time Setup/Start-Up Charge
IBM will invoice Mfr $48,000.00 USD upon the effective date of the SOW-A,
----------
a one-time setup/start-up charge payable in twelve equal monthly
payments, at the beginning of each calendar month, under the terms of the
Agreement. This charge includes the setup/start-up of all processes and
procedures, including all IBM HD&TS escalation and customization
procedures, and IBM systems requirements.
1.2 Monthly Minimum Per Case Help Desk & Technical Support ("HD&TS")
Charge
IBM will stage HD&TS support with the following minimums: 400 cases
prorated the first calendar month, 800 cases the second calendar month,
and 1200 cases the third calendar month after the due
diligence/implementation period ends. Mfr's first three monthly minimum
HD&TS charges will be $11,600.00 USD for the first calendar month,
--------------------------------------------
$23,200.00 USD for the second calendar months, and $34,800.00 USD for the
--------------
third calendar month invoiced upon completion of the due
diligence/implementation period, prorated as stated above, invoiced at
the beginning of each calendar month, payable under the terms of the
Agreement.
Beginning in the fourth calendar month after the end of the due
diligence/implementation period, IBM will invoice Mfr a monthly minimum
HD&TS of $34,800.00 USD, at the beginning of each calendar month, payable
--------------
under the terms of the Agreement.
The total amount invoiced for each month will be equal to a) a minimum
monthly charge as stated above or b) the actual Per Case HD&TS charges,
whichever is greater. At the end of each month, the actual case volume
for that month will be reconciled against the minimum charge. If the
actual case volume is greater than the monthly minimum, an additional
invoice will be created for the incremental amount.
The above minimum charge applies to a 1,200 cases volume per month. Case
volume data will be included with the invoice. Beyond the minimum case
volume, IBM will charge Mfr $29.00 per case.
A case may consist of multiple calls. All cases exceeding eighteen (18)
minutes will be billed as additional cases in eighteen (18) minute case
increments.
Both the monthly and/or Per Case HD&TS services charge includes the use
of IBM's systems, telephony support and labor.
90
<PAGE>
Per Case HD&TS Services charges (including monthly minimum) begin at the
end of the due diligence/implementation period, regardless of IBM's
receipt of Mfr's implementation data and deliverables, or begin when Per
Case HD&TS Services have begun, whichever occurs first.
1.3 HD&TS Training Charge:
Additional HD&TS training during the term of the SOW. A due to new
machines being added and/or function, feature or software changes on
existing machines listed in Attachment ENTITLED "ELIGIBLE MACHINE LIST
for USA" will be at Mfr. expense.
91
<PAGE>
Attachment A3 - CONTACT INFORMATION for USA
--------------------------------------------------------------------------------
1.0 Technical Contacts
TECHNICAL CONTACT FOR IBM USA:
-----------------------------
Jerry Harvey
IBM Corporation
140 Southcenter Court
Morrisville, NC 27560
harveyj@us.ibm.com
------------------
(919) 461-3016
TECHNICAL CONTACT FOR NetScreen:
-------------------------------
Adam Rypinski
NetScreen Technologies, Inc.
350 Oakmead Parkway
Sunnyvale, CA 94085
arypinski@netscreen.com
(408) 730-6045
2.0 Administration/Billing Contacts
ADMINISTRATION/BILLING CONTACT FOR IBM USA:
-------------------------------------------
Connie Rieske (Raleigh)
IBM Corporation
4800 Falls of the Neuse Road
Raleigh, NC 27609
Tel: (919) 713-1710
Fax: 1-(800) 456-5329
E-mail: crieske@us.ibm.com
3.0 Other Contacts
IBM HD&TS PROJECT MANAGER:
-------------------------
Jerry Harvey
IBM Corporation
Tel. (919) 461-3016
Fax: (800) 426-3379
Pager: (919) 523-7738
E-mail: harveyj@us.ibm.com
------------------
92
<PAGE>
NetScreen PROJECT MANAGER:
-------------------------
Roberto Angeles
NetScreen Technologies, Inc.
350 Oakmead Parkway
Sunnyvale, CA 94085
rangels@netscreen.com
(408) 730-6067
IBM ALLIANCE SALES REPRESENTATIVE:
1.0 Technical Contacts
TECHNICAL CONTACT FOR IBM USA:
-----------------------------
Jerry Harvey
IBM Corporation
140 Southcenter Court
Morrisville, NC 27560
harveyj@us.ibm.com
------------------
(919) 461-3016
TECHNICAL CONTACT FOR NetScreen:
-------------------------------
Adam Rypinski
NetScreen Technologies, Inc.
350 Oakmead Parkway
Sunnyvale, CA 94085
arypinski@netscreen.com
(408) 730-6045
2.0 Administration/Billing Contacts
ADMINISTRATION/BILLING CONTACT FOR IBM USA:
-------------------------------------------
Connie Rieske (Raleigh)
IBM Corporation
4800 Falls of the Neuse Road
Raleigh, NC 27609
Tel: (919) 713-1710
Fax: 1-(800) 456-5329
E-mail: crieske@us.ibm.com
93
<PAGE>
3.0 Other Contacts
IBM HD&TS PROJECT MANAGER:
-------------------------
Jerry Harvey
IBM Corporation
Tel. (919) 461-3016
Fax: (800) 426-3379
Pager: (919) 523-7738
E-mail: harveyj@us.ibm.com
------------------
NetScreen PROJECT MANAGER:
-------------------------
Scott Salisbury
IBM Corporation
404 Wyman Street
Waltham, MA 02254
(781) 639-7848
Pager: (800) 759-8888
Pager ID: 8887900
94
<PAGE>
Attachment A4 - TRAVEL EXPENSE GUIDELINES for USA
--------------------------------------------------------------------------------
Mfr will reimburse IBM in accordance with the following guidelines for
reasonable and actual travel and living expenses authorized in advance by Mfr
and incurred solely in connection with services furnished under the SOW-A and
A-Attachments. IBM's employees will exercise reasonable cost effectiveness when
incurring these expenses.
IBM will submit an invoice to Mfr with the required supporting documentation to
obtain reimbursement.
1.0 Reimbursement Expenses
Subject to the conditions stated above, Mfr will reimburse IBM for:
1. reasonable transportation expenses, such as a per mile charge as
described above, tolls, parking fees, taxis, and vehicle rentals;
2. air transportation at the tourist or coach class rates for the most
direct route of a schedule airline;
3. lodging charges, to the extent they are commensurate with the average
rates charged for that immediate area;
4. reasonable expenses for meals;
5. reasonable tipping;
6. reasonable valet and laundry charges if a trip extends beyond four (4)
days; and
7. necessary business calls made on Mfr's behalf.
Mfr will not reimburse personal expenses, such as hotel shop purchases,
alcoholic beverages, and sundry items.
2.0 Required Invoice Back-up Documentation
The following information will be included with all invoices:
1. IBM International Technical Support Agreement (the "Agreement")
number;
2. IBM Subcontractor Agreement number, (if applicable);
3. Statement of Work number (if applicable);
4. expenses incurred;
95
<PAGE>
5. all supporting receipts;
6. the remit-to address;
7. the name of Mfr representative who authorized the expense; and
8. IBM's invoice number and its date.
96
<PAGE>
Attachment A5 - HELP DESK & TECHNICAL SUPPORT SERVICES for USA
--------------------------------------------------------------------------------
1.0 Scope of Services
IBM will provide Level 1 and Level 2 Help Desk & Technical Support ("HD&TS")
Services for Mfr machines listed in Attachment entitled "ELIGIBLE MACHINE LIST
for USA." Level 3 calls will be escalated to Mfr.
2.0 Support Levels Defined
Level 1: Support calls pertaining to basic operation, installation, setup,
configuration assistance and minimal net-work integration as it relates to
adapting the Mfr machines to target Local Area Network (LAN). Level 1 support
calls are generally resolved through the use of the instruction manuals or other
user documentation.
Level 2: Support calls pertaining to the analysis, troubleshooting, and
debugging of interoperability issues related to adapting the Mfr machines to the
target LAN.
Level 3: Support calls pertaining to complex analysis, troubleshooting, and
debugging of Mfr machines using in-depth knowledge of TCP/IP protocols, firewall
and VPN technology and advanced network analysis tools and debugging techniques.
The development of the procedures to support these services and all training of
IBM Support Center Representatives required to deliver such services will be
completed during due diligence/implementation period.
The IBM HD&TS hours of operation will be 24 hours a day, 7 days a week.
IBM Responsibilities
IBM will provide the following Level 1 and Level 2 HD&TS Services as described
below. IBM will have ownership of the service call during the Level 1 and Level
2 service process, including end user communications. In addition, IBM will
provide end user configuration and usage support.
A. Level 1 services will consist of:
1. initial call receipt and entry into IBM's Problem Management System;
2. documenting of end user operation problems including known trouble
codes in the IBM Problem Management System;
3. Level 1 problem determination will consist of:
a. performing database search;
97
<PAGE>
b. providing WEB Page direction;
c. end user dialogue;
d. answering general how-to questions;
e. providing problem isolation support; and
4. escalating to IBM Level 2 engineers for resolution of all Mfr end user
calls received by IBM which cannot be resolved by IBM Level 1 service
representatives.
B. Level 2 services will consist of:
1. further problem determination through symptom analysis;
2. for those instances when the failure is machine related, IBM will
contact Mfr per procedures in "Attachment A" (the SOW-A), Section
entitled "Call Handling", "IBM Responsibilities";
3. for those instances when the failure is known operating system
software communications or inter-operability failure, and the fix has
been made generally available by the software manufacturer, IBM Level 2
will advise Mfr end user of the availability of the software upgrade
through the Mfr's software support licensing agreements. The end user
will be provided with a contact as provided to IBM by Mfr, and
for those instances in which IBM has completed all problem isolation and
determination efforts up to and including Level 2 machine and software
technical support, and an end user problem still exists, IBM will
transfer Mfr end user and problem incident to the responsibility of Mfr
Level 3 Technical Support.
C. IBM's response for IBM HD&TS Services will be based on:
1. IBM Level 1 and Level 2 technical support responsibilities; and
2. problem severity.
Mfr Responsibilities
Mfr will:
1. assume ownership of a call once IBM has performed Level 1 and Level 2
machine and software technical support when problem determination and
resolution actions have not corrected the end user problem;
98
<PAGE>
2. be responsible for, upon receiving ownership of a Mfr end user
problem;
a. maintaining end user contact based on problems severity;
b. accessing the IBM Problem Management System to review current
call status and IBM documented problem determination and
resolution actions already taken;
c. updating the IBM Problem Management System with incident status
and corrective action taken to resolve the problem;
d. transferring the problem incident record to IBM HD&TS for
problem incident closure; or
e. transferring the problem incident back to IBM HD&TS for problem
resolution and call management closure.
3.0 Training
Mfr will provide, at no cost to IBM, training to IBM service representatives on
Mfr machines listed in Attachment entitled "ELIGIBLE MACHINE LIST for USA",
which will include training on both hardware and software machine
configurations.
The initial training phase will consist of IBM-designated service
representatives obtaining skills transfer at designated IBM lab, as mutually
agreed upon by both Mfr and IBM during the due diligence/implementation period.
Once the IBM-designated services representatives are considered by the parties
to be trained, Mfr technical support representatives will work in the IBM lab to
complete machine setup and transfer of procedural skills.
The second phase of machine and software training will be provided during the
due diligent/implementation period by Mfr to all IBM service representatives
providing Level 1 and Level 2 services to Mfr end users on behalf of Mfr. The
training will take place at the IBM lab, unless mutually agreed by Mfr and IBM
to occur elsewhere.
4.0 Equipment
Mfr will consign and provide to IBM, all machines, software, and all other
equipment required to diagnose and simulate problem re-creation in an end user
environment, unless readily available within the IBM Raleigh Support Center
locations. The costs of the equipment and the freight charges to ship the
consignment to IBM will be the responsibility of Mfr.
All machine, software, and other equipment requirement will be determined after
IBM and Mfr have worked together through the initial training phase.
99
<PAGE>
5.0 Problem Incident Management
Service call entry and problem incident management will be handled through the
IBM Problem Management System. Mfr end users will be transferred to IBM's HD&TS
via the Mfr's telephony switch.
Upon receipt of an end user call, IBM HD&TS will answer the call on behalf of
Mfr and enter the problem incident into the IBM Problem Management System. The
end user will be provided with a problem number that will be used throughout the
length of the incident.
Mfr will be provided with training from IBM on the access and usage of the IBM
Problem Management System on one of Mfr's e-Service or WEB enabled desktop
computers during the due diligence/implementation period.
IBM will provide Mfr with a USER ID, PASSWORD and the proper levels of authority
to access all Mfr end user database and problem incident information on the IBM
Problem Management System.
Mfr will also be provided with a Problem Management queue name where calls can
be sent electronically by IBMHD&TS when support by Mfr Level 3 TS needs to be
invoked.
6.0 Call Severity
Mfr end user problem incidents will be assigned a severity upon initial call
entry with concurrence from the end user. That severity will be used throughout
the length of the problem incident to determine how both Mfr and IBM respond to
the call. The end user may change the severity of the problem incident at any
time. IBM will not change the severity of the problem incident without agreement
from Mfr end user.
Severity and corresponding response will be defined as follows:
Severity 1 - Machine is down. Situation is critical. End user expects an update
to the problem incident every four (4) hours.
Severity 2 - End user is severely impacted by the performance of the machine.
Update to the problem incident will be provided to the end user every
twenty-four (24) hours.
Severity 3 - End user is moderately impacted by the performance of the machine.
Update to the problem incident will be provided to the end user every four (4)
days.
Severity 4 - End user is not impacted by the performance of the machine but
feels there is a problem that must be addressed. Update to the problem incident
will be provided to the end user every eight (8) days.
The severity levels will be included in the maintenance agreement between Mfr
and the end user, and will also be used by both Mfr and IBM service
representatives. All target dates must be adhered to based on the severity level
set by the end user.
100
<PAGE>
7.0 Additional Services and Support
As new machines are added to Attachment entitled "ELIGIBLE MACHINE LIST for USA"
and/or function, features or software are added to Mfr machines currently
supported by IBM, all requirements for education and equipment as defined in
this Attachment will apply.
IBM will provide statistical performance measurements listed below to Mfr. Other
performance measurements as listed below, when requested by Mfr, will be
mutually developed and agreed to by IBM and Mfr. If additional measurements are
requested by Mfr, they may be provided to Mfr at an additional cost.
7.1 Total number of calls received. - Weekly
7.2 Total number of abandoned calls. - Weekly
7.3 Average waiting time for calls waiting in queue. - Weekly
7.4 Longest waiting time for calls waiting in queue. - Weekly
7.5 Total number of cases resolved within the same day. - Monthly
7.6 Total number of aging cases resolved within 48 hours. - Monthly
7.7 Total number of cases escalated to Mfr. - Monthly
The IBM lab may function as a BETA test site for new machines added to
Attachment entitled "ELIGIBLE MACHINE LIST for USA" or features, functions to
Mfr machines currently supported by IBM, at Mfr's expense. The IBM lab used for
a BETA test site would support initial training requirements of IBM service
representatives.
8.0 Contacts
Refer to Attachment entitled "CONTACT INFORMATION for USA".
101