<PAGE>
                                                                   Exhibit 10.11
 
                            IBM EDUCATION DIVISION
                                      AND
                        INDUSTRIAL TRAINING CORPORATION
                               STATEMENT OF WORK

I.  IBM RESPONSIBILITIES

a)  IBM will provide to ITC the names of an IBM and customer coordinator for
    each customer acquiring ITC products in connection with this SOW. IBM will
    provide the names of these individuals to the ITC Marketing Representative
    at FAX (703) 713-0065.

b)  IBM will issue a purchase order for each order from ITC. The purchase order
    will contain all applicable customer information. The purchase order will be
    faxed to Marketing Education Coordinator in Herndon, Virginia at Fax 
    (703)713-0065.

c)  If IBM requires ITC's support for a qualified customer at the point of sale,
    IBM will engage one of the ITC Marketing Representatives by calling Joan
    Dasher at (800) 638-3757.
    
II.  ITC RESPONSIBILITIES

a)  ITC will ship the products directly to IBM's customer within five days
    following ITC's receipt of IBM's purchase order.  Orders exceeding $100,000
    may require additional lead time for shipment.
    
b)  ITC will invoice IBM within one month following shipment of all products
    included within the applicable IBM purchase order.

c)  ITC will provide marketing support for large sales opportunities through
    the designated IBM coordinator for that customer.  ITC will pay all expense
    associated with this support.

d)  ITC's Help Desk will be available for the IBM Coordinator and customer
    coordinator identified for each IBM account, and all end users on an as-
    needed basis. IBM Client Representatives may use the Help Desk between the
    hours of 5:00 pm and 7:00 pm EST.

    Help Desk support will be available for 3 months from the agreed upon date
    for such services, not to exceed a period of six months from the date of
    product delivery. Extended help desk support can be arranged at a later date
    at an agreed upon price.

e)  ITC agrees to provide four days of training for IBM Professional Development
    Consultants and other IBM personnel or representatives on how to
    successfully implement a large ITC software and services installation. This
    may be conducted in two separate sessions. ITC will cover ITC's expenses for
    these trainings.

f)  ITC may upon request and availability, provide subcontracted resources to
    facilitate the implementation phase of these products at an agreed upon
    price.

                                       1
<PAGE>
 
g)  If customers require additional ITC products, and contact ITC directly, ITC
    agrees to involve the IBM Client Representatives in the transaction. ITC
    will ship the product that the customer requires.

III.  MUTUAL RESPONSIBILITIES

    ITC and IBM are committed to joint marketing efforts which may include trade
    shows, web site linkages, brochures, advertising, and press releases. All
    joint marketing efforts will be mutually agreed upon. Except as otherwise
    agreed, each party will be responsible for its own expenses incurred in
    connection with such marketing activities.

IV.  ELIGIBLE PROGRAM PRODUCTS

     ACTIV/(R)/ PC Skills Learning Library

       Windows Courseware:
          Microsoft (R) Courseware
          .    Using Word
          .    Using Excel
          .    Using Access
          .    Using PowerPoint
          .    Using Microsoft Mail

       Lotus (R) Courseware:
          .    Using AmiPro
          .    Using 1-2-3
          .    Using Lotus Notes
          .    Using Freelance
          .    Using cc:Mail
 
       Plus Courseware:
          .    Using Personal Computers
          .    Using Windows 3.xx (R)
          .    Using Windows 95 (R)
          .    Using WordPerfect (R)

 
V.  PRICING
 
a)  Courseware
<TABLE>
<CAPTION>
 
   QUANTITY           ITC ED. PRICE        IBM PRICE       DISCOUNT
<S>                   <C>                  <C>             <C>
  1-7 Copies             $1,568             $  862            45%
 Over 8 copies           $1,125             $  675            40%
</TABLE> 

                                       2
<PAGE>
 
b)  Additional Workbooks
<TABLE> 
<CAPTION>  
          # OF WORKBOOKS/ORDER       IBM PRICE/WORKBOOK  DISCOUNT
          <S>                        <C>                 <C>     
                  1-200                  $12.00             25%
                 201-350                 $10.88             32%
                 351-500                  $9.60             40%
                 501-800                  $8.32             48%
                   801                    $6.72             58%
</TABLE>
c)  Preferred Remarketer Status

    ITC will grant to IBM pricing no less favorable than pricing offered by ITC
    to other education market resellers.

d)  Special Bid Pricing

    Special bid pricing for district or school-wide implementations will be
    mutually agreed upon by IBM and ITC.  Specific financial considerations
    relating to the special bid pricing will be agreed upon at that time.  Items
    for consideration at that time will include, but not be limited to, pricing,
    discounting, marketing and services.

e)  Demo Pricing

    ITC will provide IBM up to a total of 40 copies of courses requested by IBM,
    at no charge, to support IBM's Professional Development Consultants and
    IBM's Courseware Marketing Specialists. Additional copies will be available
    to IBM for $100 per title for marketing, training and demonstration
    purposes.

    Upon completion of development by ITC, ITC will provide to IBM, without
    charge, 300 copies of its Marketing CD-ROMs, for use by IBM's Client
    Representatives.

VI. PRODUCT UPGRADES

a)  Upgrades are available from ITC when new versions of a purchased product
    are released.  Version upgrades do not include new titles in a Library (for
    example, "Using Windows 95" is not an upgrade for "Using Windows").

b)  Upgrade Pricing:
<TABLE> 
<CAPTION> 
           DAYS AFTER PURCHASE               PRICE
           <S>                          <C>    
             Up to 90 days                   Free
             91-180 days                $300 per title
             181-365 days               $600 per title
</TABLE> 

                                       3
<PAGE>
 
     Actual shipping charges will be billed.

c)   Upgrade Ordering Procedure

  1) Upgrades will be ordered through a customer purchase order issued to IBM,
     which will be submitted to the ITC representative.  The purchase order
     must refer to the original order number.

  2) When the order is received by ITC, a return authorization number will be
     issued to the customer for returning the courseware to be upgraded.

  3) The upgraded courseware will be shipped by ITC to the customer or IBM site
     if specified.

  4) An invoice will be submitted to IBM.

  5) The old courseware must be returned to ITC within 10 days of receipt of the
     upgraded courseware.  If not returned within the specified time frame, ITC
     will issue a new invoice for the differential between the upgrade pricing
     and the new courseware pricing to the customer.

  6) The customer will pay all shipping charges for return of the old
     courseware.

VII.  RETURN AND EXCHANGE POLICY

1)   Unopened courseware may be returned within 30 days of the date of purchase
     for a full refund.

2)   After 30 days, but not to exceed 90 days, unopened courseware may be
     exchanged for different courseware titles.

3)   Workbooks may not be returned more than 30 days after the date of receipt.

VIII.  IBM AND ITC COORDINATORS

The contract coordinators responsible for receiving all notices and
administering this SOW are as follows:

                                       4
<PAGE>
 
  For IBM:
  Gary Wolfe
  IBM
  Mail Stop WG2D
  3200 Windy Hill Road
  Atlanta, GA  30329
  (770) 835-7107

  For ITC:
  Harvey Shuster
  ITC
  2000 RiverEdge Parkway, Suite 590
  Atlanta, GA  30328
  (770) 984-0991

The technical coordinators responsible for coordinating all technical matters
associated with this SOW are as follows:

  For IBM:
  Jennifer Stowell
  IBM H06B1
  4111 Northside Drive
  Atlanta, GA  30327
  (404) 238-3514

  For ITC:
  Joan Dasher
  ITC
  13515 Dulles Technology Drive
  Herndon, VA  20171
  (703) 713-3335

IX.  DURATION OF SOW

The initial term of this SOW will be for a period of one year commencing January
1, 1997.  Thereafter, this SOW will be automatically renewed for additional one
year terms, unless either party provides written notice to the other that it
does not intend to renew not less than 90 days prior to the expiration of the
then current term.  Any material changes to the SOW need to be materially agreed
upon by both parties.

X.  ADDITIONAL TERMS AND CONDITIONS

For purposes of this Statement of Work, the IBM Subcontractor Agreement is
amended as follows:

                                       5
<PAGE>
 
1)   Notwithstanding the definition of "Materials" in Section 1 of the
     Agreement, modifications ITC makes to its Program Products in connection
     with this SOW will not be considered Materials, but will be considered part
     of ITC's program product.

2)   IBM agrees not to reverse assemble, reverse compile, or otherwise translate
     ITC's Program Products.

3)   Under the heading of "Your Other Responsibilities" and the subheading of
     "you agree to" in Section 4 of the Agreement, the first sentence of Item 4
     is amended to read as follows:

     "comply with all reasonable requirements issued by us (such as those
     regarding hazardous materials, safety, and your performance of work on our
     premises)."

4)   Except as specifically granted in the Agreement or this Statement of Work,
     no rights or licenses are granted to IBM in ITC's Program Products.

5)   For purposes of Section 13 of the Agreement ("Changes to Agreement Terms),
     this Statement of Work will not be deemed to be an on-going transaction.


Agreed to:                        Agreed to:
Industrial Training Corporation   International Business Machines Corporation



By: /s/ Christopher E. Mack       By: /s/ David E. Moran
   -----------------------------     --------------------------------
        Authorized Signature              Authorized Signature

Name: /s/ Christopher E. Mack     Name: /s/ David E. Moran
   -----------------------------       ------------------------------
             Type or Print                  Type or Print

Date: 12/27/96                    Date: 1/13/97
     ---------------------------       ------------------------------

Subcontractor Address:            IBM Office Address:
13515 Dulles Technology Drive     P.O. Box 218
Herndon, VA  20171-3413           Building #1, Room 035
                                  Dayton, NJ  08810
                                  Attn:  Stewart Horton


                                       6
<PAGE>
 
                          IBM SUBCONTRACTOR AGREEMENT

We welcome you as our subcontractor.

We are committed to providing our customers with the highest quality products
and services, and establishing and maintaining their satisfaction. As our
subcontractor. we look to you to help us fulfill this commitment.

This IBM Subcontractor Agreement (called the "Agreement") and its applicable
Attachments and Transaction Documents are the complete agreement regarding your
provision of Services and Deliverables, and replace any prior oral or written
communications between
us.

By signing below, each of us agrees to the terms of this Agreement. Once signed,
1) 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 Services and Deliverables you provide under this Agreement
are subject to it.

Agreed to:                         Agreed to:
Industrial Training Corporation    International Business Machines Corporation
 
 
By: /s/ Christopher E. Mack        By: /s/ David E. Moran
   ---------------------------        ------------------------------
Name (type or print):              Name (type or print): 
     Christopher E. Mack                David E. Moran

 
Date: 12/27/96                     Date: 1/13/97
     
 
Subcontractor address              IBM Office address:
13515 Dulles Technology Drive      P.O. Box 218
Herndon, VA  20171                 Bldg #1 Room 035
                                   Dayton, NJ  08810
                                   
                                   
                                   Attention:  Stewart Horton
                                   
                                   IBM Subcontract Agreement number:
                                   IE672101

After signing, please return a copy of this Attachment to the local "IBM Office
address" show above.

                                       7
<PAGE>
 
IBM SUBCONTRACTOR AGREEMENT

                               TABLE OF CONTENTS
<TABLE>
<CAPTION>
 
Section                Title                Page  Section              Title               Page
<S>      <C>                                <C>   <C>      <C>                             <C>
     1.  Definitions......................     2      10.  Materials and Inventions......     7
     2.  Agreement Structure..............     2      11.  Patents and Copyrights........     7
     3.  How We Engage You For a Project..     3      12.  Liability.....................     7
     4.  Our Relationship.................     3      13.  Changes to the Agreement Terms     8
     5.  Personnel,.......................     5      14.  Termination...................     8
     6.  Compliance with Laws.............     5      15.  Waiver of Noncompliance.......     8
     7.  Insurance Coverage...............     5      16.  Electronic Communications.....     8
     8.  Prices, Payment, and Taxes.......     6      17.  Governing Law.................     8
     9.  Warranty.........................     6
</TABLE>
1. DEFINITIONS

   DELIVERABLE IS any item, specified in the Statement of Work, that you provide
   (for example, equipment, Program Products, or Materials).

   EQUIPMENT is a machine, its features, elements, cables, or accessories, or
   any combination of them. The term "Equipment" includes the documentation
   required to install, support, use, and maintain the Equipment.

   MATERIALS are work product such as programs, program listings, programming
   tools, documentation, reports, and drawings. The term "Materials" does not
   include Program Products, but does include modifications of a Program
   Product.

   PROGRAM PRODUCT is your commercially available software product and the
   documentation required to install, support, use, and maintain it. Our
   customer is the licensee (and we are not).

   SERVICES are the work you and your personnel perform to complete the scope of
   work described in a Statement of Work. Deliverables may result from such
   work.

2. AGREEMENT STRUCTURE

   ATTACHMENTS

   We may specify terms in addition to those in this Agreement (for example,
   terms that apply specifically to construction work) in documents called
   "Attachments", which are also part of this Agreement. Both of us agree to the
   terms of an Attachment by signing it.

   TRANSACTION DOCUMENTS

   We will provide to you the appropriate "Transaction Documents" that supply
   additional information about your provision of Services or Deliverables, and
   which are also part of this  Agreement. The following are examples of
   Transaction Documents, with examples of the information they may contain:

                                       8
<PAGE>
 
   1. Statements of Work (scope of work and payment schedule);
 
   2. Change Orders (changes to the Statement of Work); and

   3. Exhibits (residency requirements. travel expense guidelines, and sales/use
      tax registration numbers). You accept the terms in an Exhibit by 1)
      signing it, 2) performing Services, 3) providing a Deliverable, or 4)
      accepting payment from us.
  
   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.
 
3. HOW WE ENGAGE YOU FOR A PROJECT

   This Agreement is not a commitment by us to give you any work. When we wish
   to engage you as our subcontractor for a specific project, we will issue a
   Statement of Work, which both of us must sign. You may not begin work until
   we have specifically authorized you to do so, in writing.

   CHANGES TO A STATEMENT OF WORK

   A Statement of Work may only be modified by a Change Order, which both of us
   must sign. Any changes to the Statement of Work may affect the estimated
   schedule, payments, and other terms.

4. OUR RELATIONSHIP

   MUTUAL RESPONSIBILITIES

   Each of us agrees that under this Agreement

   1. you are an independent contractor. Neither of us is a legal representative
      or agent of the other, and you and your personnel are not our employees;

   2. the term personnel includes your employees, professionals you engage (such
      as consultants, architects. and engineers), and all of your other
      subcontractors. You agree that you are responsible for the work performed
      under this Agreement, whether by you or your personnel;

   3. you are incorporated or organized as a partnership, authorized to do
      business in the State in which Services or Deliverables are provided;

   4. we will provide your license agreement for each Program Product to our
      customer. We are not a party to the license agreement and do not assume
      any obligation for violations of it. We may install and test the Program
      Product for our customer. For recurring-charge licenses, we will notify
      you when to begin invoicing our customer. If a Program Product is
      available under the IBM Cooperative Software Program, the terms of that
      agreement will control the distribution of that Program Product;

                                       9
<PAGE>
 
   5. we may independently develop, acquire, and market materials, equipment, or
      programs that may be competitive with (despite any similarity to those you
      provide:

   6. each of us is free to enter into similar agreements with others, set its
      own prices, and conduct its business in whatever way it chooses, provided
      there is no interference with performing the obligations under this
      Agreement:

   7. neither of us will offer gifts or gratuities to personnel of the other or
      members of their families;

   8. neither of us grants the other the right to use its trademarks, trade
      names, or other designations in any promotion or publication, without
      prior written consent;

   9. all information exchanged is nonconfidential. If either of us requires the
      exchange of confidential information, it will be made under a signed
      confidentiality agreement; and

  10. neither of us will bring a legal action against the other more than two
      years after the cause of action arose.

  YOUR OTHER RESPONSIBILITIES

  You agree not to do any of the following:

   1. subcontract any of your obligations under this Agreement, without our
      prior written consent:

   2. assign, or otherwise transfer, this Agreement or your rights under it, or
      delegate your obligations, without our prior written consent. Any attempt
      to do so is void:

   3. assume or create any obligations on our behalf, or make any
      representations about us other than those we authorize (in writing);

   4. disclose the terms of this Agreement without our prior written consent; or

   5. conduct your business in a way (for example, failure to maintain the
      highest quality professionalism) that adversely affects our reputation or
      goodwill.

   You agree to:

   1. perform Services and provide Deliverables as specified in the Statement of
      Work, and according to their schedule (if any). You also agree to have a
      process-driven approach to your work efforts that is repeatable and
      measurable. On our request, you agree to review the approach with us;

   2. ensure that the Equipment is certified to the applicable national
      standards by a nationally recognized testing laboratory, such as the
      Underwriters Laboratory (UL);

   3. transfer title to Equipment to our customer (and not to us). You are
      responsible for risk or loss for a Deliverable until it is delivered to us
      or our customer;

                                       10
<PAGE>
 
   4. comply with all requirements issued by us (such as those regarding
      hazardous materials, safety, and your performance of work on our
      premises). You also agree to dispose of all chemicals and other toxic
      materials or substances according to all applicable laws and regulations;

   5. not interfere with our customer's business operations while performing
      under this Agreement;

   6. use information connected with this Agreement only in support of your work
      under it:

   7. provide us with relevant financial information about your business
      enterprise on request;

   8. maintain records according to generally accepted accounting principles to
      support your invoices to us. You agree to retain such records for three
      years following the end of the related Statement of Work. You also agree,
      upon our request, to provide us with relevant records, including proof of
      required licenses and permits. We have the right to inspect them and audit
      your compliance with this Agreement on your premises during normal
      business hours. We also have the right to reproduce such records and
      retain the copies. We may use an independent auditor

   9. refund amounts we paid to you (including license fees) for Equipment or
      Program Products, if we refund amounts our customer paid us for them (for
      example. when they are returned);

      and

  10. meet customer satisfaction requirements (if any) specified in a Statement
      of Work. You also agree, upon our request, to 1) review with us your
      process for assessing customer satisfaction and 2) participate in customer
      satisfaction programs.

5. PERSONNEL

   Each of us will authorize a person to represent us in all matters concerning
   this Agreement. These representatives will be available throughout the term
   of this Agreement. Each of us will 1) address all notices to the other's
   representative and 2) promptly notify the other in writing if this person is
   replaced.

   You agree to:

   1. ensure that your personnel are adequately trained;

   2. have agreements with your personnel to enable you to meet your obligations
      under this Agreement. You agree to ensure that such personnel are licensed
      under all applicable laws and regulations;

   3. be responsible for the supervision, control, compensation, and health and
      safety of your personnel;

   4. for your personnel who perform work on our premises, provide us advance
      written notice regarding those you plan to assign. You also agree to
      promptly notify us of personnel you plan to remove; and

                                       11
<PAGE>
 
   5. inform us if you plan to assign a former employee of ours to perform under
      this Agreement. We reserve the right not to approve such assignment.

6. COMPLIANCE WITH LAWS

   You agree to comply, and assist us in complying, with all applicable 1)
   Federal, State, and local laws and regulations (such as those regarding FCC
   Class A or B certification for Equipment, and environmental protection) and
   2) building codes, ordinances, and standards (such as those issued by utility
   companies and public authorities). Upon our request, you agree to provide us
   with appropriate Equipment safety and certification documentation.

   In particular, you agree to comply (unless you are exempt) with 1) Executive
   Order 11248 (Equal Employment Opportunity) and 2) the Occupational Safety and
   Health Act of 1970.

   You agree to promptly notify us, in writing, of any charge of noncompliance
   filed against you.

   FEDERAL REPORTING REQUIREMENTS

   To comply with Federal law, you agree not to employ or compensate any
   individuals to perform activities under this Agreement (without our prior
   written approval) who were, within the last two years:

   1. members of the armed forces in a pay grade or 0-4 or higher; or
 
   2. civilians employed by the Department or Defense with a pay rate equal to,
      or greater than, the minimum rate for a grade GS-13.

   You agree to provide us with any information that we need to comply with this
   law.
 
7. INSURANCE COVERAGE

   You agree to maintain during the term of this Agreement, and at your expense:

   1. Workers Compensation insurance, as required by law, including employer's
      liability insurance with a minimum limit of $100,000 per occurrence;

   2. general liability insurance, covering bodily injury (including death) and
      property damage arising out of acts or omissions by you or your personnel.
      The minimum limit is $1,000,000 per occurrence; and

   3. automobile insurance, covering bodily injury (including death) and
      property damage. The minimum limit is $1,000,000 per occurrence.

   We may require other types of insurance (for example, property coverage). If
   so, we will specify the type and minimum limits.
 
   You agree to 1) name us as an additional insured on each insurance policy and
   2) provide that the insurer gives us one month's written notice of any change
   in, or cancellation of, the insurance. Upon our request, you will provide us
   insurance certificates reflecting the above.

                                       12
<PAGE>
 
8.  PRICES, PAYMENT, AND TAXES

    You agree not to charge higher prices to us than those you charge to others
    who are similarly situated. You agree to give us the benefit of any price
    decrease for 1) Equipment and Program Products not yet installed and 2)
    recurring-charge licenses, from the date a price decrease becomes effective.

    We will pay you the price specified in the Statement of Work. That price
    will include all applicable taxes, but not those based o your net income. We
    will also reimburse you for expenses (such as those for travel), provided
    you have obtained our prior written approval and adhered to our guidelines.
    You are not eligible for payment under this Agreement, when we approve you
    as an IBM Business Partner and those activities duplicate any of your
    subcontractor activities. We may withhold payment if 1) we find the Services
    or Deliverables to be unsatisfactory or 2) you otherwise fail to comply with
    the terms of this Agreement.

    As a reseller of Equipment, Program Products, and some Services (for
    example, Multiple Vendor Services), we are not required to pay, and you
    agree not to charge us, taxes for those items. Upon your request, we will
    provide supporting documentation.

    You agree to pay all transportation charges required for the shipment of
    Equipment and Program Products (if applicable) to the location we specify.

    You agree to submit invoices within one month following completion of the
    work specified in the Statement of Work, We will pay you following our
    receipt of an acceptable invoice and supporting documentation (such as an
    itemized list or reimbursable expenses).

9.  WARRANTY

    You warrant that:

    1.  Services are performed

        a. in a skillful, competent, and workmanlike manner,

        b. according to the description in the Statement of Work, and

        c. to meet any specific conditions (called Completion Criteria )
           identified in the Statement of Work:

    2.  Equipment conforms to its specifications, and is free from defects in
        materials and workmanship; and

    3.  each Program Product and Material conforms to its specifications.

    You agree that for each Deliverable, the above warranties will be in effect
    for a period of one year from its date or installation or acceptance (for
    example, acceptance of an architectural drawing). If Services or
    Deliverables do not comply with their warranties, you agree to correct the
    deficiency without charge and in a timely manner. You agree that we may
    pass your standard warranty for a 

                                       13
<PAGE>
 
     Deliverable through to our customer who may deal directly with you. If
     there is a conflict between the above warranties and your standard
     warranty, the more favorable warranty applies. You agree to offer an
     optional post-warranty maintenance service for Equipment or to cooperate
     with us on arrangements for such service.

     In addition, you warrant that:

     1.  each Deliverable does not violate anyone's intellectual property or
         other rights;

     2.  you have the right to license each Program Product or Material, or to
         grant us the rights in it; and

     3.  you have tested each Program Product or Material for harmful code and
         removed any such code.

10. MATERIALS AND INVENTIONS

    All materials you create under this Agreement are Works Made for Hire. If
    any of the Materials do not qualify as Works Made for Hire, you hereby
    assign to us all right, title, and interest (including ownership of
    copyright) in such Materials. Such assignment allows us to obtain in our
    name, copyrights, registrations, and similar protections, which may be
    available in the Materials. You agree to assist us, if required, to perfect
    these rights. You will provide us with at least one copy of such Materials.

    If any preexisting materials are contained in the Materials you provide to
    us, you grant us 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, such materials
    and 2) the right to authorize others to do any of the former.

    INVENTIONS

    An "Invention" is any idea, concept, design, technique, invention,
    discovery, or improvement, whether or not patentable, that any of your
    personnel first conceives or reduces to practice while performing under this
    Agreement, and for which a patent application is filed.

    You grant us 1) an irrevocable, nonexclusive, world-wide, paid-up license
    (under any patent covering an Invention) to make, have made, use, lease,
    sell or otherwise transfer. any apparatus, and to practice any method,
    covered by an Invention and 2) the right to authorize others to do any of
    the former.

11. PATENTS AND COPYRIGHTS

    You will indemnify us for all damages, liabilities, losses, and expenses
    arising out of any claim that a Deliverable infringes a patent or copyright.
    If such a claim is made, or appears likely to be made, you agree to enable
    our and our customer s continued exercise of all rights granted in the
    Deliverable, or modify or replace it. If we determine that none of these
    alternatives is reasonably available, the Deliverable will be returned to
    you. In addition to your obligation to indemnify us, you agree to refund the
    money we paid you for it.

12. LIABILITY

                                       14
<PAGE>
 
  Under no circumstances are we liable for economic consequential damages
  (including lost profits or savings) or incidental damages, even if we are
  informed of their possibility

  You are responsible for:

  1.  obligations referred to in the patent and copyright terms described above.
      You are also responsible for any damages associated with the infringement
      or violation of our intellectual property rights by you or your personnel;

  2.  bodily injury (including death), and damage to real property and tangible
      personal property, arising out of your or your personnel's performance
      under this agreement; and

  3.  any other actual loss or damage, including any reprocurement costs we
      incur associated with your breach of this Agreement.

  Except for the obligations stated above, under no circumstances are you liable
  for economic or consequential damages (including lost profits or savings) or
  incidental damages, even if you are informed of their possibility.

  You will indemnify us for claims by others made against us arising out of your
  performance under this Agreement or as a result of your relations with anyone
  else.

13.  CHANGES TO THE AGREEMENT TERMS

  In order to maintain flexibility in our relationship, we may change the terms
  of this Agreement by giving you one month's written notice. However, these
  changes are not retroactive. They apply, as of the effective date we specify
  in the notice, only to Statements of Work that are 1) signed on or after the
  date of the notice and 2) for on-going transactions (such as Multiple Vendor
  Services).

14.  TERMINATION

  We may terminate a Statement of Work. with or without cause, on written
  notice. Upon receipt of such notice, you agree to stop work immediately. You
  agree to make available to us all Deliverables, including work-in-progress
  such as notes. drafts, and sketches). We will pay you for all Services and
  Deliverables we accept. Such payment constitutes our entire liability to you.

  Otherwise, a Statement of Work terminates when your obligations under it are
  met.

  You may terminate this Agreement effective upon the termination or completion
  of all Statements of Work under it.

  Any terms of this Agreement, which by their nature extend beyond its
  termination, remain in effect until fulfilled, and apply to respective
  successors and assignees.

15. WAIVER OF NONCOMPLIANCE

  Failure by us to insist on strict performance or to exercise a right when
  entitled. does not prevent us from doing so at a later time. either in
  relation to that act or any subsequent one.

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16. ELECTRONIC COMMUNICATIONS

  Each of us may communicate with the other by electronic means. Each of us
  agrees to the following for all electronic communications:

  1.  an identification code (called a "USERID") contained in an electronic
      document is legally sufficient to verify the sender's identity and the
      document's authenticity;

  2.  an electronic document that contains a USERID is a signed writing; and

  3.  an electronic document, or any computer printout of it, is an original
      when maintained in the normal course of business.

17. GOVERNING LAW

  The laws of the State of New York govern this Agreement.

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