<PAGE>

                                                                   EXHIBIT 10.39

                                        Microsoft will complete:
                                                                      ---------
                                             Agreement Number:         W216312
                                                                      ---------
                                             MCSP Number:              532378
                                                                      ---------

                   Microsoft Application Services Agreement

This Microsoft Application Services Agreement ("Agreement") is by and between
InsynQ Inc., a Microsoft Certified Solution Provider under agreement number
532378, ("Company") and MSLI, GP ("Microsoft"), a Nevada general partnership and
Wholly-owned subsidiary of Microsoft Corporation. Hereinafter, Microsoft and
Company may each be referred to individually as a "Party" or collectively as the
"Parties." By signing this Agreement, Company acknowledges that it has access to
the Internet and the World Wide Web and has the capability to send and receive
electronic mail ("e-mail").

NOW THEREFORE, the Parties agree as follows:

1.   Definitions. Unless otherwise defined, all capitalized terms used in this
     Agreement shall have the meanings provided below:

     "Affiliate" means, with respect to either Company or Microsoft, a legal
     entity that (i) owns or controls a Party, directly or indirectly, or (ii)
     is owned or controlled, directly or indirectly, by a Party, excluding any
     legal entity organized as a joint venture between a Party and a third
     party, or (iii) is directly or indirectly under common ownership or control
     with a Party.

     "Application Services License Rights" or "ASLR" means the document or
     documents accompanying this Agreement that contain the use rights specific
     to each of the Software Products that may be licensed by Company under this
     Agreement.

     "Application Services Provider or "ASP" means an individual or entity that
     provides, delivers, hosts and/or manages software applications and
     software-based services from a centrally located facility to customers
     through the Internet or a private network on a rental or subscription
     basis.

     "Application Services" means software applications or software-based
     services that make available, display, run, access, or otherwise interact
     with the functionality of the Software Products and that are provided,
     delivered, hosted and/or managed by Company acting as an Application
     Services Provider.

     "Customer" shall mean an individual, company or legal entity that obtains
     Application Services from Company. A Customer is not required to obtain
     Licenses from Microsoft under this Agreement.

     "Customer Agreement" means the contract between Company and a Customer
     pursuant to which Company provides Application Services to such Customer.

     "Customer License Terms" means the license terms stated in Addendum B to
     this Agreement, which terms shall be incorporated by Company in
     substantially similar form into its Customer Agreements.

     "Effective Date" means the date this Agreement is signed by Microsoft after
     execution by Company.

     "Internal Use" means Company's use of the Software Products in furtherance
     of its internal business purposes or in furtherance of the internal
     business purposes of any of its Affiliates that are granted rights under
     this Agreement.

     "License" or "Licenses" means the non-perpetual, non-exclusive, terminable,
     non-transferable, worldwide and limited right granted by Microsoft to
     Company each month during the Term of this Agreement to copy, install,
     access, display, run, distribute, make available or otherwise interact with
     the functionality of the Software Products in order to provide Application
     Services to Customers.


                                                                    Page 1 of 25







<PAGE>

     "License Order" means the report and order form in Addendum A that must be
     completed each month and submitted to Microsoft by Company for itself and
     on behalf of its Affiliates and any Sublicenses that are granted rights
     under this Agreement.

     "Microsoft Fulfillment" means a Microsoft-authorized distributor of media
     containing Software Products and related printed materials.

     "MS Designated Web Site" means one or more secure, password protected
     Microsoft Internet sites designed to support Microsoft's ASP licensing
     business. Microsoft will from time-to-time provide Company with the
     Internet addresses (URLs), user IDs and passwords required to access each
     MS Designated Web Sites. Company shall treat the user IDs and passwords as
     confidential information.

     "Price List" means the document that is issued monthly and sets forth the
     unit prices for Licenses for each of the Software Products that may be
     licensed under this Agreement.

     "Software Products" means the Microsoft software products that Company may
     license from Microsoft to provide Application Services under this
     Agreement. The term Software Products includes both "Server Software"
     (software that provides services or functionality on a computer acting as a
     server) and "Client Software" (software that allows a computer,
     workstation, terminal, handheld PC, pager, telephone, "smart phone," or
     other electronic device (each of the foregoing a "Device) to access or use
     the services or functionality provided by the Server Software). Any
     software provided to Company by Microsoft that updates or supplement the
     original Software Products is governed by this Agreement and the ASLR.

     "Sublicensee" means a Customer that is an ASP and/or Independent Software
     Vendor ("ISV") only.

     "Term" means the term of this Agreement, which is described in Section 7(a)
     below, including any automatic extension thereof for particular Customer
     Agreements as described in Section 7(a).

2.   Scope of Agreement.

     This Agreement sets forth the terms upon which Company may obtain and
     license the Software Products from Microsoft in order to provide
     Application Services. This Agreement must be read together with the ASLR
     and the Price List, which are a part of this Agreement. Subject to the
     limitations set forth in this Agreement, during the Term of this Agreement,
     Microsoft may in its sole discretion: (i) revise the ASLR in accordance
     with Section 3(c) to address changes in, remove, or add new Software
     Products; (ii) revise the Price List in accordance with Section 4(c).

3.   Licenses and Use of the Software Products.

     (a)  Grant of License. Subject to the terms and conditions of this
          Agreement (including but not limited to sections (b) through (m)
          below, and Section 4 (Ordering and Payment of Licenses)), and subject
          to Company's compliance with the specific use rights for each of the
          Software Products contained in the ASLR, Microsoft shall grant
          Licenses to Company during the Term of this Agreement that will allow
          Company to copy, install, access, display, run, distribute, make
          available or otherwise interact with the functionality of the Software
          Products in order to provide Application Services to Customers.
          Licenses for each of the Software Products shall be valid for one (1)
          calendar month and are obtained by Company in accordance with Section
          4 of this Agreement. The Licenses granted under this Agreement shall
          terminate upon expiration or termination of this Agreement.

     (b)  Restrictions. Except as expressly provided in this Agreement or the
          ASLR, Company may not:

          (1)  rent, lease, or lend or directly or indirectly transfer the
               Software Products to any third party;

          (2)  reverse engineer, decompile, or disassemble the Software
               Products, except and only to the extent that such activity is
               expressly permitted by application law notwithstanding this
               limitation;

          (3)  create derivative works based on the Software Products;

          (4)  remove, modify or obscures any copyright, trademark, patent or
               mask work notices that appear on the Software Products or that
               appear during use of the Software Products; and

                                                                    Page 2 of 25
<PAGE>

     (5)  copy, make available or distribute the Software Products to any third
          party.

(c)  ASLR. During the Term, Microsoft may revise the ASLR in order to add new
     ----
     Software Products, remove existing Software Products, or reasonably modify
     the use rights with respect to existing Software Products.

     (1)  Notice. Company will be provided with no less than thirty (30) days
          ------
          advance notice of revisions to the ASLR, which notice requirement
          shall be satisfied by either: (i) publication of the revised ASLR on a
          MS Designated Web Site no later than the first day of the month
          preceding the month that the revised ASLR goes into effect; or (ii)
          providing Company with the revised ASLR by e-mail to the e-mail
          addresses for Company provided below under Section 15(d) no later than
          the first day of the month preceding the month that the revised ASLR
          goes into effect.

     (2)  Effective Date. The effective date of a revised ASLR shall be no less
          --------------
          than thirty (30) days after notice is provided in accordance with
          subsection (c)(1) above. If Company is licensing an existing Software
          Product whose use rights are modified in an ASLR revision, Company's
          use of such Software Product on or after the effective date of the
          revised ASLR shall be deemed to be Company's acceptance of such
          modification. If Company does not agree to such modification,
          Customer's sole recourse shall be to either discontinue its use of the
          Software Product whose use rights have been modified or terminate this
          Agreement in accordance with Section 7(b)(i). If a new Software
          Product is the subject of an ASLR revision, Company may begin
          licensing the new Software Product on the effective date of the
          revised ASLR. If the removal of a Software Product from the ASLR is
          the subject of an ASLR revision, and if Company was licensing the
          removed Software Product at the time of its removal from the ASLR,
          then Company may continue to order Licenses for the removed Software
          Product under the terms of this Agreement and that portion of the then
          current ASLR that specified the use rights applicable to the removed
          Software Product unless Microsoft notifies Company (in accordance with
          Section 15(d) below) that it has removed a Software Product from the
          ASLR due to an intellectual property infringement claim or in
          accordance with a court or other governmental order.

(d)  Copies of Software Products and Printed Materials. For purposes of
     -------------------------------------------------
     installation only, Company may make one (1) backup copy of the Software
     Product media. Any such copy may be made only from legally acquired media
     as set forth in Section 4(f) below and must include all copyright and
     trademark notices. After such installation, Company may retain the one (1)
     copy and the original media on which the Software Products were provided
     solely for archival purposes or reinstallation of the Software Products.
     Company is expressly prohibited from distributing or otherwise providing
     any media containing the Software Products to any Customer or to any third
     party unless Company first obtains Microsoft's written permission, which
     permission may be granted in Microsoft's sole discretion. Company may not
     reproduce any copyrighted Microsoft guides, manuals or other printed
     materials describing or explaining any of the Software Products. Company
     may purchase, on a per-Customer basis, up to ten (10) copies of any such
     guides, manuals or other printed materials from Microsoft Fulfillment for
     each Software Product provided to a Customer in the form of Application
     Services. Microsoft reserves the right to seek additional information and
     verification from Company prior to fulfilling any orders for printed
     materials. If a Software Product contains documentation that is provided
     only in electronic form, Company may print one (1) copy of such electronic
     documentation.

(e)  Intellectual Property Rights. All title and intellectual property rights in
     ----------------------------
     and to the Software Products, and any copies that Company is permitted to
     make herein, are owned by Microsoft or its suppliers. All title and
     intellectual property rights in and to the content which may be accessed
     through use of the Software Products is the property of the respective
     content owner and may be protected by applicable copyright or other
     intellectual property laws and treaties. This Agreement grants Company no
     rights to use such content.

(f)  Sublicense of Application Services. Company may grant to Sublicensees the
     ----------------------------------
     right to make available, display, run, access, or otherwise interact with
     the functionality of the Software Products in the form of Application
     Services, in order to allow such Sublicensees to provide Application
     Services to their customers, subject to the terms of this Section 3(f) and
     the other terms of this Agreement.

                                                                    Page 3 of 25
<PAGE>

     (1)  Identification of Sublicensees. Upon Microsoft's request, Company
          ------------------------------
          shall provide Microsoft with the name, address and other information
          related to the identification of all Sublicensees.

     (2)  Limited Rights. Company's grant of sublicense to a Sublicensee shall
          --------------
          state that no further sublicenses shall be permitted. Company is
          expressly prohibited from distributing or otherwise providing any
          media containing the Software Products to any Sublicensee unless
          Company first obtains Microsoft's written permission, which permission
          may be granted in Microsoft's sole discretion.

     (3)  Customer License Terms. Company's agreement with a Sublicensee shall:
          ----------------------
          (i) contractually obligate the Sublicensee to incorporate the Customer
          License Terms contained in Addendum B, in substantially similar form,
          into the terms and conditions of its customer agreements; and (ii)
          include a provision in its customer agreements that expressly provides
          that Microsoft is an intended third party beneficiary of the customer
          agreement with rights to enforce the Customer License Terms; and (iii)
          require the Sublicensee to cooperate in good faith with Microsoft in
          investigating instances of non-compliance by a customer of the
          Sublicensee with the Customer License Terms, if Microsoft believes in
          good faith that a customer is not in compliance with the Customer
          License Terms.

     (4)  Inspection and Audit. Company's agreement with a Sublicensee shall:
          --------------------
          (i) require the Sublicensee to permit access to its facilities to
          audit and inspection teams sent on behalf of Company or Microsoft, in
          order that such teams may perform an audit of the Sublicensee's
          relevant books and records and/or a reasonable inspection of the
          Sublicensee's computers to determine compliance with the terms hereof;
          and (ii) expressly provide that Microsoft is an intended third party
          beneficiary of the Company's agreement with the Sublicensee with the
          right to enforce the audit rights provision. Any audit and/or
          inspection shall be conducted during regular business hours at the
          Sublicensee's facilities, with at least five (5) days prior notice,
          and in such a manner as not to interfere unreasonably with the
          Sublicensee's business.

     (5)  Ordering Licenses and Payment. Company shall be responsible for
          -----------------------------
          consolidating all information regarding the use of the Software
          Products by each Sublicensee (to provide Application Services to its
          customers), reporting such information to Microsoft through the
          License Order submitted by Company each month under Section 4(a), and
          paying for the appropriate number of Licenses for each such
          Sublicensee.

     (6)  Guarantee. Company unconditionally and irrevocably guarantees each
          ---------
          Sublicensee's fulfillment of the restrictions and obligations imposed
          on Company under the ASLR and under this Agreement concerning the
          Software Products, including, without limitation, restrictions
          concerning reproduction, access, use and/or distribution of any
          portion of the Software Products. Company may, subject to
          confidentiality restrictions, provide a copy of this Agreement and the
          ASLR to a Sublicensee.

     (7)  Indemnification. Company agrees to indemnify Microsoft for all
          ---------------
          damages, costs, and expenses (including reasonable attorney's fees) of
          any kind resulting from any and all unauthorized reproduction,
          installation, access, use and/or distribution of any portion of the
          Software Products by a Sublicensee.

     (8)  Termination of Sublicense. Any sublicense granted by Company hereunder
          -------------------------
          shall terminate upon termination of this Agreement.

(g)  Affiliates. Company may grant to its Affiliates the rights granted to
     ----------
     Company in Section 3(a) above, subject to all the terms and conditions set
     forth in this Agreement and provided that (1) the Affiliate executes an
     Affiliate Agreement in substantially similar form to the agreement
     contained in Addendum C hereto prior to exercising any rights under this
     Agreement, and (2) the Affiliate remains an Affiliate of Company as defined
     herein. Company agrees to keep on file all executed Affiliate Agreements
     and deliver them to Microsoft upon request. Company agrees to
     unconditionally and irrevocably guarantee the Affiliate's compliance with
     the terms and conditions of this Agreement and the ASLR; however,
     Affiliates shall not submit monthly License Orders to Microsoft. Company
     shall be responsible for consolidating all information regarding the use of
     the Software Products by its Affiliates, reporting such information to
     Microsoft through the License Order submitted by Company each month under
     Section 4(a), and paying for the appropriate number of Licenses for such
     Affiliates. Company agrees that it shall be jointly and severally liable
     along with each of its Affiliates for any breach of the provisions of this
     Agreement or the
                                                                    Page 4 of 25

<PAGE>

       ASLR by such Affiliates.

   (h) Internal Use. Unless otherwise stated in the ASLR with respect to certain
       ------------
       Software Products Internal Use of the Software Products by Company is
       permitted under this Agreement; however, the number of Licenses acquired
       each month by Company (including any Affiliates) for such Internal Use
       must be less than fifty percent (50%) of the total number of Licenses
       ordered (calculated on a product-by-product basis) by Company each month.
       This restriction on Internal Use shall not apply during the first ninety
       (90) days of the Term.

   (i) Demonstration, Testing and Evaluation. Subject to the conditions set
       -------------------------------------
       forth in this Section 3(1), Company may demonstrate, evaluate and/or test
       its Application Services offerings without the obligation to pay for
       Licenses under Section 4 hereof, unless such use is proscribed in the
       ASLR with respect to certain Software Products

       (1) Demonstration. Company may permit employees and authorized persons
           -------------
           acting on behalf of Company to access the functionality of the
           Software Products in order to demonstrate Company's Application
           Services to prospective Customers; provided, that, no more than fifty
                                              --------
           (50) user IDs may be issued for such demonstration purposes. Company
           must keep accurate records of every such demonstration, including the
           name of the prospective Customer and the number of user IDs provided
           for such demonstration, and the Software Products must remain at all
           times in the possession and under the direct control of Company.
           Company shall provide Microsoft with a copy of such records upon
           request.

       (2) Evaluation and Testing of Software Products by Company. Company may
           ------------------------------------------------------
           install and use an unlimited number of copies of the Software
           Products solely within its own data center(s) for the purpose of
           testing and evaluation of the Software Products, subject to the
           limitations set forth herein. The Software Products may be connected
           at any point in time to an unlimited number of workstations or
           computers operating on one or more of Company's own internal
           networks, For Software Products commercially released on or before
           the Effective Date of this Agreement, Company's right to test and
           evaluate such products shall begin on the Effective Date and shall
           end ninety (90) days after such Effective Date. For Software Products
           commercially released by Microsoft after the Effective Date of this
           Agreement, Company's right to test and evaluate such products shall
           begin on the release date of such products and shall end ninety (90)
           days after such release date.

       (3) Evaluation of Application Services by Customers. In addition, Company
           ------------------------------------------------
           may also provide Application Services to an unlimited number of
           Customers for a period of time not to exceed thirty (30) days per
           Customer, solely for the purpose of evaluation of such services by
           such Customers, provided that: (i) Company keeps accurate records of
           every such instance it has provided Application Services to a
           Customer under this Section 3(i), which records shall include the
           name of the Customer to whom the Application Services were provided,
           the number of users and access rights provided, and the geographic
           location where the Application Services were used; (ii) Company does
           not charge or impose any fee on the Customer in connection with
           evaluation of the Application Services; (iii) Company ensures that,
           at the end of such thirty (30) day period, all copies of Client
           Software, if any, are either removed from the Customer's Devices or
           are rendered unusable; and (iv) the Customer Agreement between
           Company and Customer includes the Customer License Terms
           substantially in the form attached hereto in Addendum B.

    (j) Outsourcing. Notwithstanding any provision in this Agreement to the
        -----------
        contrary, if Company enters into an agreement with a third party
        ("Outsourcing Company") that provides operational services or support
        services to Company, including but not limited to network management,
        application management or data Center management services (including
        operation, maintenance and control of all data center computer hardware
        ("Servers")), or if Company presently uses an Outsourcing Company in
        such capacity, Company may install or cause to be installed the Software
        Products on the Outsourcing Company's Servers subject to the following
        conditions:

        (1) Identification of Outsourcing Company. Upon Microsoft's request,
            -------------------------------------
            Company shall provide Microsoft with the name, address and other
            information related to the identification of the Outsourcing Company
            that Company uses to provide services to Company.

Microsoft Application Services Agreement (8/1/00)                   Page 5 of 25
<PAGE>

       (2) No Assignment or Delegation: Scope of Use. Company understands and
           -----------------------------------------
           agrees that this Section 3(j) does not constitute an assignment or
           delegation of any of Company's rights or obligations under this
           Agreement or any consent to the assignment of such rights and
           obligations by Microsoft. Company is and shall remain fully
           responsible for all of its obligations under this Agreement and the
           ASLR regardless of the physical location of the Servers containing
           the Software Products. The Outsourcing Company shall only be granted
           access to the Software Products in order to perform operational
           and/or support services for Company and may not use the Software
           Products to provide Application Services to any third party or for
           any other purpose.

       (3) Guarantee. Company unconditionally and irrevocably guarantees the
           ---------
           Outsourcing Company's fulfillment of the restrictions and obligations
           imposed on Company under the ASLR and under this Agreement concerning
           the Software Products, including, without limitation, restrictions
           concerning reproduction, installation, access, use and/or
           distribution of any portion of the Software Products. Company may,
           subject to confidentiality restrictions, provide a copy of this
           Agreement and the ASLR to the Outsourcing Company.

       (4) Indemnification. Company agrees to indemnify Microsoft for all
           ---------------
           damages, costs, and expenses (including reasonable attorneys' fees)
           of any kind resulting from any and all unauthorized reproduction,
           installation, access, use, and/or distribution of any portion of the
           Software Products by the Outsourcing Company.

       (5) Inspection and Audit. Company's agreement with the Outsourcing
           --------------------
           Company shall: (i) require the Outsourcing Company to permit access
           to its data center to audit and inspection teams sent on behalf of
           Company or Microsoft, in order that such teams may perform an audit
           of the Outsourcing Company's relevant books and records and/or a
           reasonable inspection of the Outsourcing Company's Servers to
           determine compliance with the terms hereof; and (ii) expressly
           provide that Microsoft is an intended third party beneficiary of the
           Company's agreement with the Outsourcing Company with the right to
           enforce the audit rights provision. Any audit and/or inspection
           shall be conducted during regular business hours at the Outsourcing
           Company's facilities, with at least five (5) days prior notice, and
           in such a manner as not to interfere unreasonably with the operations
           of the Outsourcing Company.

       (6) Copies of Software Products. Company shall ensure that, upon
           ---------------------------
           termination of its agreement with an Outsourcing Company, all copies
           of the Software Products are completely removed from the Outsourcing
           Company's Servers or are otherwise rendered permanently unusable, and
           that the Outsourcing Company returns or destroys all copies of the
           Software Products in its possession.

   (k) Server Administration and Maintenance. Company may authorize up to five
       -------------------------------------
       (5) employees or authorized persons acting on Company's behalf per data
       center (including persons employed by an Outsourcing Company performing
       services for Company under Section 3(j) above) to have access to and use
       the services or functionality of the Software Products for the sole
       purpose of testing, maintenance and administration of the Software
       Products, without the obligation to pay for Licenses under Section 4
       hereof.

   (l) Branding; Trademarks and Logos. Nothing in this Agreement shall be
       ------------------------------
       construed as granting Company any right, title, interest, or license in
       or to any of Microsoft's names, word marks, logos, logotypes, trade
       dress, designs, or other trademarks other than specifically stated
       herein.

       (l) Branding. Company agrees that it shall place the phrase "Powered by
           --------
           Microsoft.NET Technologies" on: (1) all advertising, collateral, and
           other marketing materials that describe the Application Services;
           arid (ii) the start page, sign-in screen or similar user interface
           first viewed to begin access to the Application Services. Company
           will use commercially reasonable efforts to ensure clear
           identification of the reference to "Powered by Microsoft.NET
           Technologies" in all such materials and on such screens, Company may
           only use the words "Powered by Microsoft.NET Technologies" in
           connection with services that are based upon the use of the Software
           Products; and Company may not use the words in connection with any
           other products or services. From time-to-time in its sole discretion,
           Microsoft may reasonably introduce and require Company to follow
           additional branding and/or logo guidelines. Any such additional
           handing will include any single brand or combination of the following
           brands: "Microsoft," "Microsoft.NET," or such other brands as
           specified by Microsoft, and

Microsoft Application Services Agreement (8/1/00)                   Page 6 of 25
<PAGE>


              will include phrasing such as "Powered by _____," as specified
              by Microsoft.

         (2)  Descriptive References. Company may make descriptive references to
              ----------------------
              Microsoft's non-stylized word marks (but may not use Microsoft's
              logos, logotypes, trade dress, or designs) in product packaging,
              documentation, advertising, and marketing materials, including
              World Wide Web pages, according to Microsoft's standard trademark
              guidelines (available for viewing at
              www.microsoft.com/trademarks). Nothing herein shall restrict
              Microsoft's legal or equitable rights to protect its trademarks
              against infringement, dilution, or other misuse.

     (m) Reservation of Rights. Microsoft reserve all rights not expressly
         ---------------------
         granted herein.

4.   Ordering and Payment of Licenses.

     (a) License Orders. Company is required to order and pay for Licenses each
         --------------
         month for the Software Products. Company shall submit to Microsoft one
         (1) License Order each month using the form in Addendum A. Microsoft
         shall make an electronic version of the License Order available for
         download from a MS designated Web Site. Company's failure to timely
         submit a complete and accurate License Order each month or its failure
         to pay for the appropriate number of Licenses each month in accordance
         with the terms of this Agreement shall be considered a material breach
         of this Agreement under Section 7(b)(2).

         (1)  Affiliates and Sublicensces. If Company has granted rights to its
              ---------------------------
              Affiliates or to any Sublicensees under this Agreement, Company
              shall incorporate and consolidate all use of the Software Products
              by such Affiliates and Sublicensees in Company's monthly License
              Order.

         (2)  Reporting. Company shall use the License Order to accurately
              ---------
              report its use of the Software Products to provide Application
              Services. For each of the Software Products licensed hereunder, in
              accordance with the use rights specified in the ASLR, Company
              shall specify in the License Order the number or processors using
              the Software Products and/or the number of unique individuals
              ("Users") to whom access rights to a Software Product were
              provided in the form of Application Services, whether directly or
              indirectly, during the immediately preceding calendar month.
              Company's use of software or hardware that reduces the number of
              Users directly accessing or utilizing any of the Software Products
              i.e. "multiplexing" or "pooling" software or hardware) shall not
              reduce the number of Licenses required; the required number of
              Licenses would equal the number of distinct inputs to the
              multiplexing or pooling software or hardware "front end." Company
              shall establish a process to ensure accurate reporting and
              ordering of Licenses from Microsoft. A duly authorized officer of
              Company shall certify the License Order as accurate and complete.

         (3)  Submission. The License Order must be submitted to Microsoft no
              ----------
              later than fifteen (15) days after the last day of the preceding
              calendar month. Every License Order shall be delivered
              electronically to Microsoft to the e-mail address specified on the
              License Order form. Company must submit a License Order each month
              regardless of whether any copies of the Software Products were
              made and regardless of whether access and/or use rights were
              provided to Users in the preceding month.

         (4)  Modifications. Microsoft reserves the right to reasonably revise
              -------------
              the License Order form contained in Addendum A from time-to-time
              and modify the procedure for submitting License Orders to
              Microsoft upon thirty (30) days prior notice to Company; however,
              in no event will Company be required to submit more than one (1)
              publication of the revised form or procedures on a MS Designated
              Web Site no later than the first day of the month preceding the
              month that the changes go into effect; and/or (ii) notice provided
              in accordance with Section 15(d).

         (5)  Use of Information Provided by Company. Any information provided
              --------------------------------------
              to Microsoft under a License Order shall be kept confidential by
              Microsoft and shall be used only for revenue calculation, internal
              revenue allocation, compliance, and billing purposes.

     (b) Invoices. Upon receipt of Company's License Order each month,
         --------
         Micorosoft will invoice Company reflecting the number and type of
         Licenses for Software Products reported to Microsoft during the
         specified month. The invoice(s), together with proof/record of payment,
         shall constitute the confirmation for

                                                                    Page 7 of 25

<PAGE>

        Licenses for each month of the Term.

    (c) Price List. Microsoft shall issue the Price List on a monthly basis,
        ----------
        which list shall specify the unit prices payable by Company for Licenses
        under this Agreement. During the Term, Microsoft may modify the Price
        List upon thirty (30) days prior notice to Company, which notice
        requirement shall be satisfied by publication of the revised Price List
        on a MS Designated Web Sire no later then the first day of the month
        preceding the month that the revised Price List goes into effect.

    (d) Payment Term. All amounts payable by Company under this Agreement are
        ------------
        due and owing thirty (30) days after date of invoice from Microsoft. All
        payments not received by Microsoft from Company by the due date stated
        in the invoice may be assessed a finance charge of one and one-half
        percent (1.5%) of the invoice amount per month or the legal maximum,
        whichever is less. Payment by Company to Microsoft is not contingent on
        payment by art Affiliate or a Customer to Company. All payments pursuant
        to this Agreement (i) shall be dischargeable only by payment in United
        States dollars ("Dollars") regardless of any law, rule, regulation or
        statute, whether now or hereafter in existence or In effect in any
        jurisdiction which affects or purports to affect such obligation, and
        (ii) shall not be discharged or satisfied by any tender, or any recovery
        pursuant to any judgment, which is expressed in or converted by the
        Company to any currency other than the full amount of Dollars expressed
        to be payable in respect of fees, royalties and expenses and all other
        amounts payable pursuant to this Agreement. All payments to Microsoft by
        Company shall be in the form of bank wire transfer or electronic funds
        transfer through an Automated Clearing House ("ACH") with electronic
        remittance detail attached. Company shall ensure that the Agreement
        number for this Agreement and the Microsoft invoice number if any, are
        specified on each wire transfer payment made hereunder.

       Company shall remit payment by wire transfer to one of the following
       addresses, depending on location of Company:
<TABLE>
<CAPTION>
      <S>                                                            <C>

       (All locations In the Americas except Canada):                 (Use only if Company only located in Canada):
                                                                           ----
       Microsoft North American Collections #8445O5                   MSLI Western Region Collections
       Attention: Volume Licensing                                    Royal Bank of Canada Plaza Branch
       Account # 3750771767                                           Account #125-39l-3
       ABA#: 11100001-2                                               Bank/Branch Transit 003/0002
       NationsBank of Texas, NA.                                      Toronto, ON
                                                                      Canada

       Remittance detail for wire transfers must also be sent
       either by fax or e-mail:                                       Remittance detail for wire transfers must also be sent either
                                                                      by fax or e-mail:
       Fax:     (425) 936-7329, Attention: Special Agreements
                Payments                                              Fax:      (425) 936-7329, Attention: Special Agreements
                                                                                Payments
       E-mail:  spagpay@microsoft.com                                 E-mail:   spagpay@microsoft.com
                ---------------------                                           ---------------------
</TABLE>

    (e) Rebates. During the Term, on a semi-annual basis, Company shall have the
        -------
        opportunity to earn a rebate of up to three percent (3%) of the total
        amount stated in the monthly invoices sent to Company during the
        previous Six (6) months January 1st to June 30th and July 1st to
        December 31st each a "Rebate Period"), divided as follows: (1) one and
        one half percent (1.5%) of the rebate may be earned for the timely,
        accurate and complete submission of Company's monthly License Order; and
        (2) one and one half percent (1.5%) of the rebate may be earned for
        timely payment of Company's monthly invoice. For purposes of this
        Section 4(c), "timely" means that Microsoft has received the License
        Order and/or payment of the monthly invoice by the due date indicated,
        "accurate" means that Company has correctly populated all reporting
        fields in the License Order, and "complete" means that Company has
        populated all required reporting fields in the License Order. If the
        Effective Date of this Agreement fails within a Rebate Period, Company
        may earn a monthly rebate as provided herein for each whole month
        falling within such Rebate Period.

       (1) Compliance. Company's entitlement to a rebate shall be measured on a
           ----------
           month-to-month basis, and Company's failure to comply with the rebate
           requirements will result in a loss of up to one-sixth

Microsoft Application Services Agreement (8/1/00)                   Page 8 of 25

<PAGE>

         (1/6th) of its total rebate for each month that Company is non-
         compliant during the relevant Rebate Period.

     (2) Payment. Rebates, if any, will be paid to Company in the form of a
         -------
         credit to be applied to the monthly invoice issued to Company three (3)
         months after the end of the relevant Rebate Period. (e.g., the October
         invoice for the January - June Rebate Period). If Company is entitled
         to receive following the of the Term, Microsoft shall apply the rebate
         credit to the final invoice issued to Company under this Agreement. At
         the time of issuance of any rebate credit, if Company is in breach of
         any of the terms of this Agreement, Company's entire rebate shall be
         withheld until Company cures such breach; and, if Company fails to cure
         such breach in accordance with Section 7 hereof, Company's rebate
         credit shall be forfeited.

     (3) Rebate Issues. Company shall notify Microsoft of any issues regarding
         -------------
         the amount of any rebates in writing no later than thirty (30) days
         following Company's receipt of a rebate credit. If written notice is
         not provided to Microsoft within such thirty (30) day period, Company
         shall have waived any and all right to dispute the amount of such
         rebate credit.

(f)  Fulfillment. Company may obtain the media containing the Software Products
     -----------
     from either Microsoft Fulfillment or from any retailer or any authorized
     reseller of full package product. If Software Products are obtained from
     Microsoft Fulfillment, Company's order shall be limited, on a per-order
     basis, to ten (10) copies of media containing the Software Product(s).
     Microsoft Fulfillment will invoice Company for all orders, and payment will
     be made in accordance with Section 4(d). Orders will be shipped only to the
     address specified for Company in Section 15(d). Contact information for
     Microsoft Fulfillment will be provided at the time this Agreement is
     executed by Microsoft or as determined by Microsoft from time-to-time.

(g)  Taxes. The amounts to be paid by Company to Microsoft under this Agreement
     -----
     do not include any taxes (including, without limitation (i) taxes on or
     with respect to or measured by any net or gross income or receipts of the
     Company, (ii) any franchise taxes, taxes on doing business, gross receipts
     taxes or capital stock taxes (including any minimum taxes and taxes
     measured by any item of tax preference), (iii) any taxes imposed or
     assessed after the date upon which this Agreement is terminated, (iv) taxes
     based upon or imposed with reference to Company's real and personal
     property ownership or interests; (v) sales, use VAT and other similar taxes
     imposed upon Company or that it is required to collect as a result of
     providing Application Services as contemplated under this Agreement),
     duties, levies, fees, excises, tariffs, assessments or similar liabilities
     (individually and collectively "Taxes"). Company agrees to pay all Taxes
     (and any penalties, interest, or other additions to any such Taxes) now and
     hereafter properly imposed, levied or assessed by a duly constituted and
     authorized taxing authority on (1) the Software Products provided under
     this Agreement or on any transaction related thereto, (2) the Application
     Services provided by Company, or (3) other goods and services provided to
     Company by Microsoft under this Agreement; provided, however, that Company
                                                --------
     is not obligated to pay taxes based on the net worth, capital, property,
     or income of Microsoft or taxes imposed by reason of Microsoft's doing
     business or being incorporated in a jurisdiction, and for which Microsoft
     is obligated to pay under applicable law ("Microsoft Taxes").

     Any Taxes that (i) are owed by Company as a result of entering into this
     Agreement and the payment of the fees hereunder, (ii) are required or
     permitted to be collected from Company by Microsoft under applicable law,
     and (iii) immediately above the "Collected Taxes"), shall be remitted by
     Company to Microsoft, whereupon, upon request, Microsoft shall provide to
     Company tax receipts or other evidence indicating that such Collected Taxes
     have been collected by Microsoft and remitted to the appropriate taxing
     authority. Company may provide to Microsoft an exemption certificate
     acceptable to Microsoft and to the relevant taxing authority (including
     without limitation a resale certificate) in which case, after the date upon
     which such certificate is received in proper form, Microsoft shall not
     collect the taxes covered by such certificate.

     Company agrees to indemnify,defend and hold Microsoft harmless from any
     Taxes, Collected Taxes or claims, causes of action, costs (including,
     without limitation, reasonable attorneys' fees) and any other liabilities
     of any nature whatsoever related to such Taxes or Collected Taxes,
     exclusive of the Microsoft Taxes.

Microsoft Application Services Agreement (8/1/00)                  Page 9 of 25

<PAGE>

          If, after a determination by foreign tax authorities, any Taxes are
          required to be withheld, on payments made by Company to Microsoft,
          Company may deduct such taxes from the amount owed Microsoft and pay
          them to the appropriate taxing authority; provided however, that
          Company shall promptly secure and deliver to Microsoft and official
          receipt for any such Taxes withheld or other documents neccessary to
          enable Microsoft to claim a U.S. Foreign Tax Credit. Company shall
          remain liable to Microsoft or any amounts withheld by Company for
          which Company has failed to deliver to Microsoft such official
          receipt. Company will make certain that any taxes withheld are
          minimized to the extent possible under applicable law.

5.   Support Services.

     (a)  Microsoft Support. This Agreement does not include technical or
          -----------------
          integration support by Microsoft to Company or to its Customers
          ("Support Services"), and this Agreement does not obligate Microsoft
          to provide such Support Services. Any Support Servies provided by
          Microsoft shall be pursuant to a separate agreement between Microsoft
          and Company. With respect to any technical information provided to
          Microsoft by Company as part of any (if any) Support Services related
          to the Software Products, Coampany agrees that Microsoft (and its
          Affiliates and agents) may collect, process and use such information
          for its business purposes, including for product support and
          development. Microsoft will not disclose such technical information in
          any form that could reveal Company's indentify.

     (b)  Company Support to Customers. Company agrees to procide commercially
          ----------------------------
          reasonable support to its Customers; and, in connection therewith,
          must either (a) obtain and continuously maintain a Microsoft Premier
          support services agreement, or (b) obtain support services through the
          Microsoft Professional support program with prepayment for at least
          ten (10) incidents, or (c) obtain substantially similar support for
          the Software Products from another support services provider.

6.   Facilitating Compliance with License Requirements.

     (a)  Company Obligations. The Company shall make its employees, agents, and
          -------------------
          other individuals having access to or using the Software Products
          under this Agreement aware that the Software Productsa (1) are
          licensed to Company by Microsoft, (2) may only be used subject to the
          terms and conditions contained in this Agreement and the ASLR, and (3)
          may not be copied, transferred or otherwise used in violation of such
          terms and conditions.

     (b)  Customer Agreements. with respect to its Customers and their
          -------------------
          respective users, Company shall (1) contractually obligate its
          Customers to comply with the Customer License Terms contained in
          Addendum B by incorporating same, in substantially similar form, into
          the terms and conditions of its Customer Agreements; and (2) include a
          provision in its Customer Agreements that expressly provides that
          Microsoft is an intended third party beneficiary of the Customer
          Agreement with rights to endorce the Customer License Terms; and (3)
          cooperate in good faith with Microsoft in investigating instances of
          non-compliance by a Customer with the Customer License Terms, if
          Microsoft believes in good faith that a Customer is not in compliance
          with the Customer License Terms. Company shall use its name in place
          of references to "Company" in the Customer License Terms. In addition,
          Company shall ensure that, upon termination of a Customer Agreement,
          all copies of any Client Software, if any, are either completely
          removed from the Customer's computing Devices or are otherwise
          rendered unusable.

     (c)  Record Keeping and Audit.
          ------------------------

          (1) Record Keeping. During the Term and for two (2) years thereafter,
              Company agres to maintain all usual and proper records related to
              its use of the Software Products, the use of the Sotware Products
              by Company's Customers and Sublicensees in the form of Application
              Services, and all other records required under this Agreement. At
              a minimum, Company shall maintain monthly records for each
              Customer, Affiliate, and Sublicensee that specifies the Software
              Products accessed or used, the number of Users (identified by
              unique User IDs or similar specification) and/or the number of
              processors associated with the access or use of such Software
              Products.


          (2) Audit. In order to verify compliance with the terms of this
              -----
              Agreement and the use of Software



                                                                   Page 10 of 25

<PAGE>

         Products by Company and its Customers and Sublicensees, during the Term
         and for two (2) years thereafter, Microsoft may audit Company's
         relevant books and records and/or inspect Company's facilities, data
         center(s) and procedures. Any audit and/or inspection shall be
         conducted during regular business hours at Company's facilities, with
         at least five (5) days prior notice, and in such a manner as not to
         interfere unreasonably with the operations of the Company. At
         Microsoft's sole discretion, an audit may be conducted by an
         independent certified public accountant selected by Microsoft (other
         than on a contingent fee basis). If Microsoft so chooses, it will enter
         into a non-disclosure agreement with the independent public accountant
         performing the audit that will obligate such independent public
         accountant to hold in confidence any of Company's confidential
         information, including any unrelated financial, business and technical
         information observed in the course of the audit, Company agrees to
         provide Microsoft's designated audit or inspection team access to the
         relevant Company records and facilities, If any material unlicensed use
         of Software Products is disclosed during an audit, Company shall
         promptly acquire sufficient Licenses to cover all unlicensed use
         disclosed by any such audit; and Company shall pay to Microsoft an
         amount equal to: (i) the reasonable expenses incurred in conducting
         such audit; plus (ii) an additional License fee of fifteen percent
         (15%) of the price stated in the then current Price List for each of
         the required Licenses. If an audit discloses any material unlicensed
         use of a Software Product by a Customer, it shall be presumed that such
         unlicensed use began upon commencement of such Customer's relationship
         with Company, unless Company's records reasonably demonstrate that such
         unlicensed use was limited in scope and duration. For purposes of this
         Section 6(b), "material unlicensed use of Software Products" shall
         exist if, upon audit, it is determined that, with respect to any
         Software Product the Company has Licenses for fewer than ninety-five
         percent (95%) of the access rights provided to Customers that are
         disclosed by the audit. Microsoft shall use the information obtained or
         observed in the audit solely for the purposes of (x) determining
         whether the Company has been obtaining sufficient Licenses for the
         Software Products it is using and has otherwise complied with the terms
         of this Agreement, (y) enforcing its rights under this Agreement and
         any applicable laws, and (z) determining if Company has accurately
         reported Customer information to Microsoft. Microsoft will hold all
         such information in confidence.

 7. Term and Termination.

    (a) Term. The term of this Agreement is two (2) years, commencing on the
        Effective Date (the "Term"), unless this Agreement is otherwise
        terminated as provided below. Notwithstanding the foregoing, if Company
        is not in breach of this Agreement on the last day of the Term, and if
        Comp any has continuing obligations to provide Application Services
        under any of its existing Customer Agreements that extend beyond the end
        of the Term, then the Term of this Agreement shall be automatically
        extended for the sole purpose of enabling Company to continue to provide
        Application Services to such existing Customers for the remaining
        contract period between Company and such Customers or thirty-six (36)
        months, whichever period of time is shorter; provided however, that in
                                                     --------
        order for the automatic term extension to apply, Company must notify
        Microsoft in accordance with Section 15(d) no later than thirty (30)
        days before the end of the Term that there are existing Customer
        Agreements that extend beyond the end of the Term. Nothing contained
        herein shall be deemed to create any express or implied obligation on
        either party to renew or extend this Agreement or, if the Term of this
        Agreement is extended as provided for in this Section 7(a), to create
        any right to continue such relationship on the same terms and conditions
        contained herein. The number of renewals or extensions notwithstanding,
        this Agreement is and shall always be interpreted as a fixed term
        agreement and not as an indefinite term agreement.

    (b) Termination.
        -----------

        (1) Termination Without Cause. Upon thirty (30) days prior written
            -------------------------
            notice to Microsoft, Company may terminate this Agreement without
            cause.

       (2) Termination for Breach. Either Party may terminate this Agreement as
           ----------------------
           a result of a breach by the other Party of any of the terms and
           conditions of this Agreement, upon thirty (30) days prior written
           notice advising the breaching party of the nature of the breach,
           provided such breach is not thereafter cured within such thirty (30)
           day period.

       (3) Termination by Microsoft. Notwithstanding Section 7(b)(2) above,
           ------------------------
           without prejudice to any other

Microsoft Application Services Agreement (8/1/00)                  Page 11 of 25

<PAGE>

        rights, Microsoft may immediately terminate this Agreement upon written
        notice to Company without an opportunity to cure in the event of a
        breach by Company of Section 3 (Assignment) or any breach of any of the
        terms and conditions contained in the ASLR. In addition, in the event
        Company fails to maintain Microsoft Certified Solution Provider "member"
        status at all times during the Term, Microsoft may terminate this
        Agreement upon thirty (30) days prior written notice, provided such
        failure is not thereafter corrected within such thirty (30) day period.

    (c) Obligations on Termination or Expiration. Any termination or expiration
        ----------------------------------------
        of this Agreement shall automatically terminate all license rights
        hereunder, including but not limited to, all Licenses granted hereunder,
        Upon termination or expiration of this Agreement, Company shall, within
        thirty (30) days, submit a supplemental License Order for any Licenses
        based on actual usage of the Software Products to the date of such
        termination or expiration which have not been previously ordered and
        which by the terms of this Agreement are required to be ordered after
        the month of actual usage. Upon termination or expiration of this
        Agreement, Company shall return to Microsoft, or at Microsoft's
        direction, destroy and certify to Microsoft the destruction of, all
        copies of the Software Products and their component parts that are in
        the possession of Company, or that were otherwise copied or installed
        under this Agreement (and Company shall likewise instruct all Customers,
        its Sublicensees (if any) and their respective customers and Users, as
        applicable). There shall be no refund of amounts paid for media
        containing Software Products that have been so returned or destroyed.

  8. Assignment. Company may not assign or otherwise transfer this Agreement, or
     any rights or obligations hereunder, whether by contract, merger, operation
     of law, or otherwise, without the prior written approval of Microsoft,
     which approval shall not be unreasonably withheld or delayed. "Transfer"
     within the meaning if this Section shall include without limitation any
     merger or consolidation of Company with another entity, where Company is
     not the surviving entity, or the acquisition of more than twenty percent
     (20%) of any class of Company's voting stock by another entity, or the sale
     of no more than fifty percent (50%) of Company's assets. Microsoft may
     transfer its respective rights and obligations hereunder to any Affiliate
     without the prior written approval of Company; provided that Microsoft
     shall remain liable, in accordance with this Agreement, for all Licenses it
     has provided or was obligated to have provided prior to the date of
     transfer. Any attempted assignment in violation of this Section is null and
     void.

  9. Limited Warranties.

     (a) Virus Warranty. Microsoft warrants that it has established and
         --------------
         regularly puts in place procedures, in conformity with applicable and
         the most current industry standards, to guard against the inclusion of
         Viruses, as defined below, in any software prepared by Microsoft,
         including but not limited to the Software Products. A "Virus" is
         defined as any computer code, instruction, data, or program that can or
         may in whole or part disable, materially alter, or damage any software,
         data, or computer hardware or otherwise interfere with or prevent use
         of a computer system. If Company notifies Microsoft in writing that it
         reasonably believes that a Software Product contains a Virus, and if
         Microsoft confirms same, then Microsoft will (1) exercise reasonable
         efforts to correct the Software Product, and (2) provide any resulting
         correction to Company, without charge, when it is available for
         distribution. The foregoing does not apply to any user customizable
         features, or to any add-on features or products chat have not been
         provided by Microsoft, including but not limited to items such as
         macros, scripts and custom programming or formatting features, The
         foregoing states Microsoft's entire liability and Company's exclusive
         remedy for any breach of the warranty described in this Section 9(a).

     (b) Software Product Limited Warranty. Microsoft warrants that each version
         of the Software Products will perform substantially in accordance with
         the end user documentation accompanying such Software Products
         ("Documentation") for a period of ninety (90) days from the date
         Company first copies, installs, accesses, runs, reproduces, displays or
         otherwise interacts with such version of the Software Products (the
         "Warranty Period").

         During the Warranty Period, if Company notifies Microsoft that a
         Software Product has failed to perform substantially in accordance with
         its Documentation, then, at Microsoft's option, Microsoft will either
         (1) use commercially reasonable efforts to repair or replace such
         Software Product; or (2) terminate this

Microsoft Application Services Agreement (8/1/00)                  Page 12 of 25

<PAGE>

         Agreement with respect to such Software Product and refund to Company
         the total amount paid by Company for such Software Product. Any
         replacement Software Products will be warranted for the remainder of
         the Warranty Period or thirty (30) days, whichever period is longer.
         This Limited Warranty is void if failure of the Software Products is
         the result of accident, abuse, misapplication or unauthorized
         modification.

         After expiration of the Warranty Period but during the Term of this
         Agreement, if Company reports in writing any significant deviations
         between performance of a Software Product and its Documentation, and
         such deviations have been already reported by other Microsoft
         licensees, or, after Company's report, are reported commonly by other
         Microsoft licensees and are acknowledged by Microsoft, then Microsoft
         agrees to use commercially reasonable efforts to correct such
         deviations and provide corrections to Company in the form of a fix or
         patch at such time as Microsoft makes such corrections generally
         available to other Microsoft licensees.

         The foregoing states Microsoft's entire liability arid Company's
         exclusive remedy for arty breach of the warranty described in this
         Section 9(b).

     (c) NO OTHER WARRANTIES. EXCEPT FOR THE LIMITED WARRANTIES PROVIDED IN
         -------------------
         SECTIONS 9(a) and 9(b) ABOVE, TO THE MAXIMUM EXTENT PERMITTED BY
         APPLICABLE LAW, MICROSOFT AND ITS SUPPLIERS HEREBY DISCLAIM ALL
         WARRANTIES AND CONDITIONS, WHETHER EXPRESS, IMPLIED OR STATUTORY,
         INCLUDING, BUT NOT LIMITED TO, ANY (IF ANY) IMPLIED WARRANTIES OR.
         CONDITIONS OF MERCHANTABILITY, OF FITNESS FOR A PARTICULAR PURPOSE, OF
         LACK OF VIRUSES, OF ACCURACY OR COMPLETENESS OF RESPONSES OR RESULTS,
         OF TITLE, OF NON-INFRINGEMENT, OF QUIET ENJOYMENT OR QUIET POSSESSION,
         OR OF CORRESPONDENCE TO DESCRIPTION WITH RESPECT TO TEE SOFTWARE
         PRODUCTS. THE ENTIRE RISK AS TO THE QUALITY OF OR ARISING OUT OF USE OR
         PERFORMANCE OF TEE SOFTWARE PRODUCTS, IF ANY, REMAINS WITH COMPANY.

   10. Defense of infringement Claims.

       (a) Microsoft will defend Company and any Company Affiliate against a
           claim by an unaffiliated third party that arty Software Product
           infringes its copyright and/or U.S. patent and pay the amount of any
           resulting adverse final judgment (or settlement to which Microsoft
           consents); provided Company notifies Microsoft promptly in writing of
           the claim and gives Microsoft sole control over its defense or
           settlement. Company agrees to provide Microsoft with reasonable
           assistance in defending the claim, and Microsoft shall reimburse
           Company for any reasonable out-of-pocket expenses incurred in
           providing such assistance,

       (b) Microsoft will not be liable for any copyright or patent infringement
           claim to the extent that the claim is based on Company's (1) use of
           the Software Product after Microsoft notifies Company to discontinue
           use due to an infringement claim; or (2) combining the Software
           Product with a non-Microsoft product, program or data if such claim
           would not have arisen but for such combination; or (iii) altering the
           Software Product if such claim would not have arisen but for such
           alteration. Company will reimburse Microsoft for arty costs or
           damages that result from these actions,

       (c) If Microsoft receives information concerning an infringement claim
           related to a Software Product, Microsoft may, at its expense and
           without obligation to do so, either (1) procure for Company the right
           to continue to use the allegedly infringing Software Product, or (2)
           replace or modify the Software Product to make it non-infringing, in
           which case, Company must immediately stop using the allegedly
           infringing Software Product.

       (d) If any other third party claim is brought against Company or any of
           Company's Affiliates regarding intellectual property of Microsoft,
           Company must notify Microsoft promptly. Microsoft may at its option,
           choose to treat these claims as being covered by this Section 10.

       (e) The rights and remedies granted to Company under this Section 10,
           Section 11 (Limitation of Liability) and Section 12 (Exclusion of
           Incidental, Consequential and Certain Other Damages) state
           Microsoft's entire

Microsoft Application Services Agreement (8/1/00)                  Page 13 of 25

<PAGE>

          liability and Company's exclusive remedy with respect to any claim of
          infringement of the rights of a third party, whether arising under
          statutory or common law or otherwise.

11.  Limitation of Liability. With respect to any damages that Company might
     incur for any reason whatsoever (including, without limitation, all direct
     or general damages) that arise out of or relate to this Agreement or the
     Software Products, the entire liability of Microsoft and any of its
     suppliers, whether based on contract, tort (including negligence), strict
     liability, or otherwise, shall be limited to, in any and all cases, the
     amount actually paid by Company under this Agreement for Licenses for the
     Software Products; plus, in the event of an infringement claim against
     Company under Section 10(a), the costs of defending Company against such
     claim. The Parties agree that the limitations of liability, exclusions of
     damages and warranty disclaimers stated in this Agreement (including
     Sections 9(c), this Section 11 and Section 12) shall apply to the maximum
     extent permitted by applicable law, even if any remedy fails its essential
     purpose.

12.  Exclusion of Incidental, Consequential and Certain Other Damages. In no
     event shall either Party or its suppliers be liable for any special,
     incidental, indirect, or consequential damages or losses (collectively
     "Consequential Damages") whatsoever (including, but not limited to,
     Consequential Damages for disclosure of confidential or other information,
     for business interruption, for personal injury, for loss of privacy, for
     failure to meet any duty including of good faith or of reasonable care, for
     negligence, and for any other pecuniary or other loss whatsoever) arising
     out of or in any way related to the use of or inability to use the Software
     Products, or otherwise under or in connection with any provision of this
     Agreement, even in the event of the fault, tort (including negligence),
     strict liability, breach of contract or breach of warranty of Microsoft or
     any supplier, and even if the injured party or any supplier has been
     advised of the possibility of such damages; provided, however, that the
     exclusion of Consequential Damages shall not apply to Microsoft's
     obligations under Section 10(a) above.

13.  Export Compliance with Laws. Company acknowledges that the Software
     Products are of U.S. origin. Company agrees to comply with all applicable
     international and national laws that apply to the Software Products and/or
     Application Services, including the U.S. Export Administration Regulations,
     as well as end-user, end-use and destination restrictions issued by U.S.
     and other governments. For additional information on the export of
     Microsoft Products, see http://www.microsoft.com/exporting/
                             -----------------------------------

14.  Fault Tolerance.

     (a)  Software Products.  The Software Products are not fault-tolerant and
          -----------------
          are not designed, manufactured or intended for use or resale as on-
          line control equipment in hazardous environments requiring fail-safe
          performance, such as in the operation of nuclear facilities, aircraft
          navigation or communication systems, air traffic control, direct life
          support machines, or weapons systems, in which the failure of the
          Software Products could lead directly to death, personal injury, or
          severe physical or environmental damage ("High Risk Activities").
          MICROSOFT AND ITS LICENSORS SPECIFICALLY DISCLAIM ANY EXPRESS OR
          IMPLIED WARRANTY OF FITNESS FOR HIGHRISK ACTIVITIES.

     (b)  Note On Java Support. The Software Products may contain support for
          --------------------
          programs written in Java. Java technology is not fault tolerant and is
          not designed, manufactured, or intended for use or resale as online
          control equipment in hazardous environments requiring fail-safe
          performance, such as in the operation of nuclear facilities, aircraft
          navigation or communication systems, air traffic control, direct life
          support machines, or weapons systems, in which the failure of Java
          technology could lead directly to death, personal injury, or severe
          physical or environmental damage. Sun Microsystems, Inc. has
          contractually obligated Microsoft Corporation to make this
          disclaimer.

15.  Miscellaneous.

     (a)  Entire Agreement. This Agreement (once accepted by Microsoft as
          ----------------
          evinced by Mircosoft's signature and the issuance of an Agreement
          Number), including any Addenda attached hereto, the ASLR and Price
          List in effect from time-to-time and the Licenses obtained hereunder,
          constitutes the entire agreement between Microsoft and the Company
          concerning the subject matter hereof and merges all prior and
          contemporaneous communications with respect to such subject matter.
          The terms and conditions of these

                                                                   Page 14 of 25

<PAGE>

        documents shall control over any provisions in any Company purchase
        order.

    (b) Order of Precedence. All documents and clauses that comprise this
        -------------------
        Agreement shall be read so as to be consistent to the extent
        practicable. However, to the extent that there is any direct
        inconsistency between the terms contained in this Agreement and the
        ASLR, the terms of this Agreement shall control. For the avoidance of
        doubt, In the event that a subject or a particular use is addressed in
        the ASLR and not in the Agreement, then such provision In the ASLP.
        shall control. Unless the ASLR specifically states otherwise, the ASLR
        shall supersede the terms of any end user license agreement ("EULA")
        that comes with the Software Products. However, if any additional
        software is provided to Company with the Software Products, and such
        additional software comes with a separate EULA, then such software is
        licensed to Company under the terms of the EULA and not under this
        Agreement or the ASLR.

    (c) Amendments. This Agreement, excluding the ASLR and the Price List, may
        ----------
        only be modified by a written instrument that is signed by both Parties.
        Company agrees that Microsoft may amend the ASLR in accordance with
        Section 3(c), and that Microsoft may amend the Price List in accordance
        with Section 4(c).

    (d) Notices. All notices under this Agreement shall be deemed delivered
        -------
        twenty-four (24) hours after they are addressed to a Party as specified
        below and either: (i) deposited in the mail, postage prepaid, certified
        or registered, return receipt requested; or (ii) sent by air express
        courier (e.g., DHL, Federal Express, Airborne), charges prepaid,
        confirmation requested. Microsoft will provide notice of changes to the
        ASLR in accordance with Section 3(c) above; and Microsoft will provide
        notice of changes to the Price List in accordance with Section 4(c)
        above. If a Party's Information below changes during the Term, such
        Party will notify. the other Party in writing on company letterhead in
        accordance with the requirements of this Section.

<TABLE>
<CAPTION>
Company Information                                             Microsoft Information
-------------------------------------------------------------------------------------------------------------------------
<S>                                                             <C>
Application Service Provider Name
  Insynq Inc.                                                   MSLI, GP
-------------------------------------------------------------------------------------------------------------------------
Street Address and/or post office box                           Street Address and/or post office box
  1101 Broadway Plaza                                           6100 Neil Road, Suite 210
-------------------------------------------------------------------------------------------------------------------------
City and State/Province                                         City and State/Province
  Tacoma/WA                                                     Reno, NV
-------------------------------------------------------------------------------------------------------------------------
Country and Postal Code                                         Postal Code
  WA          98402                                             89511-1137
-------------------------------------------------------------------------------------------------------------------------
Contact Name and title                                          Attention
  James Leigh CTD                                               Volume Licensing, Dept. 551
-------------------------------------------------------------------------------------------------------------------------
Phone Number                                                    Phone Number
  (253) 284-2000                                                (775) 823-5600
-------------------------------------------------------------------------------------------------------------------------
Fax Number                                                      Fax Number
   (253) 284-2035                                               (775) 826-7287
-------------------------------------------------------------------------------------------------------------------------
E-Mail Address
  JamesL@insynq.com
-------------------------------------------------------------------------------------------------------------------------
Additional Contact Name and title                               With a Copy of the Notice To:
  Joanie C. Mann    VP Operations
                                                                Microsoft Corporation
                                                                Law and Corporate Affairs
                                                                One Microsoft Way
                                                                Redmond, Washington USA 98052

                                                                Attention: Product Development & Marketing
-------------------------------------------------------------------------------------------------------------------------
Additional Contact Phone Number                                 And to:
  (253) 284-2000
-------------------------------------------------------------------------------------------------------------------------
Additional Contact Fax Number                                   Microsoft Account Manager Name
  (253) 284-2035
-------------------------------------------------------------------------------------------------------------------------
Additional Contact E-Mail Address                               Office Location
  jmann@insynq.com
-------------------------------------------------------------------------------------------------------------------------
Accounts Receivable Contact Name                                E-mail Address (if applicable)
  Barbara Brown
-------------------------------------------------------------------------------------------------------------------------
</TABLE>

Microsoft Application Services Agreement (8/1/00)                  Page 15 of 25

<PAGE>

(e)  Governing Law and Jurisdiction. This Agreement, including the ASLR, and
     ------------------------------
     all matters relating thereto shall be construed and controlled by the laws
     of the State of Washington, USA, exclusive of its choice of law rules; and
     Company hereby consents to the non-exclusive jurisdiction and venue of the
     State and Federal courts sitting in the State of Washington. Legal process
     may be served on either party in the manner set forth in Section 15(d)
     above for the delivery of notices or by such other method as is authorized
     by applicable law or court rule.

(f)  U.S. Government Rights. The Software Products and documentation are
     ----------------------
     provided with RESTRICTED RIGHTS. Use, duplication, or disclosure by the
     Government is subject to restrictions as set forth in subparagraph
     (c)(1)(ii) of the Rights in Technical Data and Computer Software clause at
     DFARS 252.227-7013 or subparagraphs (c)(1) and (2) of the Commercial
     Computer Software--Restricted Rights at 48 CFR 52.227-19, as applicable.
     Manufacturer is Microsoft Corporation, One Microsoft Way, Redmond, WA
     98052-6399.

(g)  Survival. Sections 4(d) and 4(g), 6, 7(c), 9(c), 10(a), 11, 12 and 15 of
     --------
     this Agreement shall survive the termination or expiration of this
     Agreement.

(h)  Attorneys' Fees. If either Party employs attorneys to enforce any rights
     ---------------
     arising out of or relating to this Agreement, the prevailing Party shall be
     entitled to  recover its reasonable attorneys' fees, costs and other
     expenses.

(i)  Confidentiality. The terms and conditions of this Agreement are
     ---------------
     confidential. Neither Party shall disclose such terms and conditions, nor
     the substance of any discussions that led to them, to any third party
     without first obtaining the prior written consent of the other party
     except: (1) as required in the ordinary course of business to an Affiliate
     or agent, or financial or legal advisors who have a need to know such
     information and who have been instructed that all such information is to be
     handled in strict confidence; and (2) in accordance with a judicial or
     other governmental order, provided that the party required to make the
     disclosure either (i) gives the other party reasonable notice prior to such
     disclosure to allow such party a reasonable opportunity to seek a
     protective order or equivalent, or (ii) obtains written assurance from the
     applicable judicial or governmental entity that it will afford such
     information the highest level of protection afforded under applicable law
     or regulation. Notwithstanding the foregoing, in order to ensure that the
     Software Products are used in accordance with the terms of this Agreement,
     and in furtherance of its compliance obligations under Section 6, Company
     may disclose the ASLR to third parties on a need-to-know basis.

(j)  Relationship. Nothing in this Agreement shall be construed to constitute a
     ------------
     joint venture, partnership, agency, representative, or employment
     relationship between the Parties. This Agreement shall not be construed as
     authority for either Party to act for the other Party in any capacity or to
     make commitments of any kind for the account of, or on behalf of, the other
     Party, except to the extent expressly set forth in this Agreement.

(k)  Construction. In the event that any provision of this Agreement conflicts
     ------------
     with governing law or if any provision is held to be null, void or
     otherwise ineffective or invalid by a court of competent jurisdiction, (1)
     such provision shall be deemed to be restated to reflect as nearly as
     possible the original intentions of the Parties in accordance with
     applicable law, and (2) the remaining terms, provisions, covenants and
     restrictions of this Agreement shall remain in full force and effect.
     Failure by either Party to enforce any provision of this Agreement will not
     be deemed a waiver of future enforcement of that or any other provision.
     The headings of the Sections in this Agreement are inserted for convenience
     only and shall not in any way affect the meaning or construction of any
     provision of this Agreement.

(l)  Public Announcements. Neither Party shall make any public announcement
     --------------------
     about this Agreement without the written consent of the other Party, which
     consent shall not be unreasonably withheld or delayed. Either Party may at
     any time make announcements that are required by applicable law, regulatory
     bodies, or stock exchange or stock association rules, so long as the Party
     so required to make the announcement, promptly upon learning of such
     requirement, notifies the other Party of such requirement and discusses
     with such other Party in good faith the exact wording of any such
     announcement.

                                                                   Page 16 of 25

<PAGE>

THIS AGREEMENT DOES NOT CONSTITUTE AN OFFER BY MICROSOFT AND IS NOT LEGALLY
BINDING UNTIL EXECUTED BY EACH PARTY.

The Parties have caused this Agreement to be signed by their duly authorized
representatives below.

[Company]                               MSLI, GP


By:  /s/ John P. Gorst                  By: /s/ Louie LaMourie III
   ---------------------------------       ------------------------------------
      (signature)                            (signature)

Name:    John P. Gorst                  Name:   Louie LaMourie III
     -------------------------------
      (printed)

Title:  Chairman, CEO                   Title:  Contract Administrator
      ------------------------------          ---------------------------------
      (printed)                               (printed)

Date:   8/29/2000                       Date:   9/6/00
     -------------------------------         ----------------------------------
<TABLE>
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                        <C>                                 <C>
This Agreement and attached                 MSLI, GP                            Telephone Number (area code-phone number):
documents should be sent to the             6100 Neil Road                      (775) 823-5600
following address for processing and        Suite 210                           Facsimile Number (area code-phone number):
approval:                                   Reno, NV 89511-1137                 (775) 826-7287
                                            Attention:
                                            Dept. 551, Volume Licensing
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>



Microsoft Application Services Agreement (8/1/00)

                                                                   Page 17 of 25

<PAGE>

                           ADDENDUM A: LICENSE ORDER
                           ----------


Subscriber Access Licenses

ASP Name:
-----------------------------------------------
ASP Street Address:
-----------------------------------------------
ASP City:
-----------------------------------------------
ASP State:
-----------------------------------------------
ASP Zip Code:
-----------------------------------------------
ASP Country:
-----------------------------------------------
ASP Contact Person:
-----------------------------------------------
Agreement Number:
-----------------------------------------------
Effective Date of Agreement:
-----------------------------------------------
Purchase Order Number:
-----------------------------------------------
Report Date:
-----------------------------------------------

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
<S>                  <C>         <C>          <C>           <C>                   <C>        <C>         <C>        <C>
                     SKU         Customer     Customer                                      State (if              Zip (if
Products             Number      Identifier   Name          Street Address        City       app)        Country    app)
------------------------------------------------------------------------------------------------------------------------------------
Exchange KW Std,
US English            1234567    A0511111     Company A     222 Anywhere Street   Seattle     WA          US           98103
------------------------------------------------------------------------------------------------------------------------------------
                                 A0511112     Company B     333 Anywhere Street   Portland    OR          US           99999
------------------------------------------------------------------------------------------------------------------------------------
Windows Server US
English               2345678    A0511111     Company A     222 Anywhere Street   Seattle     WA          US           98103
------------------------------------------------------------------------------------------------------------------------------------
                                 A0511112     Company B     333 Anywhere Street   Portland    OR          US           99999
------------------------------------------------------------------------------------------------------------------------------------
                                 A0511113     Company C     444 Anywhere Street   Bellevue    WA          US           55555
------------------------------------------------------------------------------------------------------------------------------------
Office Standard, US
English               3456789    A0511111     Company A     222 Anywhere Street   Seattle     WA          US           98103
------------------------------------------------------------------------------------------------------------------------------------
                                 A0511112     Company B     333 Anywhere Street   Portland    OR          US           99999
------------------------------------------------------------------------------------------------------------------------------------
                                 A0511113     Company C     444 Anywhere Street   Bellevue    WA          US           55555
------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
-----------------------------------------------------------------------------------------------------------
<S>                     <C>                  <C>                 <C>         <C>                <C>
                        Effective Date       End Date of
Products                of Agreement         Agreement           SALs        Unit Price         Total
-----------------------------------------------------------------------------------------------------------
Exchange KW Std,
US English                                                         100
-----------------------------------------------------------------------------------------------------------
                                                                   250
-----------------------------------------------------------------------------------------------------------
Windows Server US
English                                                             25
-----------------------------------------------------------------------------------------------------------
                                                                    45
-----------------------------------------------------------------------------------------------------------
                                                                    75
-----------------------------------------------------------------------------------------------------------
Office Standard, US
English                                                            100
-----------------------------------------------------------------------------------------------------------
                                                                   300
-----------------------------------------------------------------------------------------------------------
                                                                   200
-----------------------------------------------------------------------------------------------------------
</TABLE>


                                    Page 18

<PAGE>

Dedicated Processor Licenses



ASP Street Address:
-----------------------------------------------
ASP City:
-----------------------------------------------
ASP State:
-----------------------------------------------
ASP Zip Code:
-----------------------------------------------
ASP Country:
-----------------------------------------------
ASP Contact Person:
-----------------------------------------------
Agreement Number:
-----------------------------------------------
Effective Date of Agreement:
-----------------------------------------------
Purchase Order Number:
-----------------------------------------------
Report Date:
-----------------------------------------------

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
<S>                  <C>         <C>          <C>           <C>                   <C>       <C>          <C>       <C>
                     SKU         Customer     Customer                                      State (if              Zip (if
Products             Number      Identifier   Name          Street Address        City       app)        Country    app)
------------------------------------------------------------------------------------------------------------------------------------
SQL, Enterprise
Edition US English    3452167    A0511111     Company A     222 Anywhere Street   Seattle     WA          US           98103
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
-----------------------------------------------------------------------------------------------------------
<S>                     <C>                  <C>                 <C>         <C>                <C>
                        Effective Date       End Date of         Number of
Products                of Agreement         Agreement           CPUs        Unit Price         Total
-----------------------------------------------------------------------------------------------------------
SQL, Enterprise
Edition US English                                                       6
-----------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------
</TABLE>


                                    Page 19


<PAGE>

Shared Processor Licenses

ASP Name:
-----------------------------------------------
ASP Street Address:
-----------------------------------------------
ASP City:
-----------------------------------------------
ASP State:
-----------------------------------------------
ASP Zip:
-----------------------------------------------
ASP Country:
-----------------------------------------------
ASP Contact Person:
-----------------------------------------------
Agreement Number:
-----------------------------------------------
Effective Date of Agreement:
-----------------------------------------------
Purchase Order
Number:
-----------------------------------------------
Report Date:
-----------------------------------------------

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
<S>                  <C>         <C>          <C>           <C>                   <C>        <C>         <C>        <C>
                     SKU         Customer     Customer                                      State (if              Zip (if
Products             Number      Identifier   Name          Street Address        City       app)        Country    app)
------------------------------------------------------------------------------------------------------------------------------------
Commerce
Server, US
English               4567879    A0511111     Company A     222 Anywhere Street   Seattle      WA          US         98103
------------------------------------------------------------------------------------------------------------------------------------
                                 A0511112     Company B     333 Anywhere Street   Portland     OR          US         99999
------------------------------------------------------------------------------------------------------------------------------------
                                 A0511113     Company C     444 Anywhere Street   Bellevue     WA          US         55555
------------------------------------------------------------------------------------------------------------------------------------
                                 A0511114     Company D     555 Anywhere Street   Bethesda     MD          US         22222
------------------------------------------------------------------------------------------------------------------------------------
SQL Ent.
Edition, US
English               3452167    A0511111     Company A     333 Anywhere Street   Seattle      WA          US         98103
------------------------------------------------------------------------------------------------------------------------------------
                                 A0511112     Company B     444 Anywhere Street   Portland     OR          US         99999
------------------------------------------------------------------------------------------------------------------------------------
                                 A0511113     Company C     555 Anywhere Street   Bellevue     WA          US         55555
------------------------------------------------------------------------------------------------------------------------------------
                                 A0511114     Company D     555 Anywhere Street   Bethesda     MD          US         22222
------------------------------------------------------------------------------------------------------------------------------------
Windows  2000
US Eng.               4563217    A0511111     Company A     333 Anywhere Street   Seattle      WA          US         98103
------------------------------------------------------------------------------------------------------------------------------------
                                 A0511112     Company B     444 Anywhere Street   Portland     OR          US         99999
------------------------------------------------------------------------------------------------------------------------------------
                                 A0511114     Company D     555 Anywhere Street   Bethesda     MD          US         22222
------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
<S>                     <C>                <C>              <C>               <C>           <C>          <C>        <C>     <C>
                                                                              Total
                                                            Total Number      Number of
                                                            of Customers      CPUs for      Avg CPUs     Equiv.
                        Effective Date     End Date         for Product in    Product in    Per          CPU        Unit
Products                of Agreement       of Agreement     Column A          Column A      Customer     Licenses   Price   Total
------------------------------------------------------------------------------------------------------------------------------------
Commerce
Server, US
English                                                                 4             20            5
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    5
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    5
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    5
------------------------------------------------------------------------------------------------------------------------------------
SQL Ent.
Edition, US
English                                                                 4              3         0.75
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                 0.75
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                 0.75
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                 0.75
------------------------------------------------------------------------------------------------------------------------------------
Windows  2000
US Eng.                                                                 3             25         8.33
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                 8.33
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                 8.33
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


                                    Page 20

<PAGE>

Individual Consumer Licenses

ASP Name:
--------------------------------------------------------------------
ASP Street Address:
--------------------------------------------------------------------
ASP City:
--------------------------------------------------------------------
ASP State:
--------------------------------------------------------------------
ASP Zip:
--------------------------------------------------------------------
ASP Country:
--------------------------------------------------------------------
ASP Contact Person:
--------------------------------------------------------------------
Agreement Number:
--------------------------------------------------------------------
Effective Date of Agreement:
--------------------------------------------------------------------
Purchase Order Number:
--------------------------------------------------------------------
Report Date:
--------------------------------------------------------------------

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------------
                                                                          Country of
                                                                           Usage for
Products                               SKU Number       CPUs      SALs      SALs        Unit Price        Total
--------------------------------------------------------------------------------------------------------------------------------
<S>                                    <C>              <C>      <C>      <C>           <C>             <C>
Exchange KW Std, US English             1234567                   5000      US
--------------------------------------------------------------------------------------------------------------------------------
Exchange KW Std, US English             1234567                   1700      Canada
--------------------------------------------------------------------------------------------------------------------------------
Windows Server, US English              2345678                   3000      US
--------------------------------------------------------------------------------------------------------------------------------
Office Standard, US English             3456789                   2500      US
--------------------------------------------------------------------------------------------------------------------------------
Commerce Server, US English             4567879           35
--------------------------------------------------------------------------------------------------------------------------------
SQL Ent. Edition, US English            3452167           25
--------------------------------------------------------------------------------------------------------------------------------
Windows Server Adv., US Eng.            4563217           40
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>

The undersigned, by printing his/her name below, hereby certifies that he/she is
duly authorized by Company to complete this License Order reporting form, that
the title listed below is his/her true and correct title, that this report is
complete and correct, and that Company is in compliance with the License Order
reporting requirements of the Applications Services Agreement.

Name (Printed)

-------------------------------------------------
Title

-------------------------------------------------
Date


                                    Page 21
<PAGE>

                       ADDENDUM B: CUSTOMER LICENSE TERMS
              NOTICE REGARDING USE OF MICROSOFT SOFTWARE PRODUCTS

This document ("License") concerns your use of certain Microsoft software
products provided to you as a service by [COMPANY], which includes computer
software and may include associated media, printed materials, and "online" or
electronic documentation (collectively "SOFTWARE PRODUCTS")

[COMPANY] does not own the SOFTWARE PRODUCTS and the use thereof subject go
certain rights and limitations of which you need to be informed Your right to
use the SOFTWARE PRODUCTS as a service is pursuant to your agreement with
[COMPANY] and is subject to your understanding of and compliance with the
following terms.

1.  DEFINITIONS.

    "Client Software" means software that allows a Device to access or utilize
    the services or functionality provided by the Server Software.

    "Device" means each of a computer, workstation terminal, handheld PC, pager,
    telephone, "smart phone," or other electronic device.

    "Server Software" means software that provides services or functionality on
    a computer acting as a server.

    "Other Software" means the software described in Paragraph 14 ("Other
    Rights and Limitations")below.

2.  OWNERSHIP OF SOFTWARE PRODUCTS. The SOFTWARE PRODUCTS are licensed to
    [COMPANY] from MSLI, GP ("Microsoft"), Nevada general partnership and a
    wholly-owned subsidiary of Microsoft Corporation. All title and intellectual
    property rights in and to the SOFTWARE PRODUCTS (including but not limited
    to any images, photographs, animations, video, audio, music, text and
    "applets" incorporated into the SOFTWARE PRODUCTS) are owned by Microsoft or
    its suppliers. All title and intellectual property rights in and to the
    content which may be accessed through use of the SOFTWARE PRODUCT are the
    property of the respective content owner and may be protected by applicable
    copyright or other intellectual property laws and treaties. Nothing herein
    grants you any rights to use such content.

3.  USE OF SOFTWARE PRODUCTS You may only use the SOFTWARE PRODUCTS in
    accordance with the instructions, and in connection with the application
    services, provided to you by [COMPANY]. You are only authorized to remotely
    access the functionality of the SOFTWARE PRODUCTS except for certain Client
    Software and Other Software that may be installed on your Devices as
    expressly authorized by [COMPANY]. Other than such Client Software and Other
    Software, you may not install any other components of the SOFTWARE PRODUCT
    on your Devices.

4.  COPIES. You may not make any copies of the SOFTWARE PRODUCTS; provided,
    however, that you may (a) install one (1) copy of certain Client Software on
    your Device as expressly authorized by [COMPANY]; and (b) you may install
    copies of certain Other Software as described in Paragraph 14 (Other Rights
    and Limitations) below. You must erase or destroy such Client Software
    and/or the Other Software upon termination of your agreement with [COMPANY],
    upon notice from [COMPANY] or upon transfer of your Device to another person
    or entity, whichever first occurs. You may not copy the printed materials
    accompanying the SOFTWARE PRODUCTS.

5.  LIMITATIONS ON REVERSE ENGINEERING, DECOMPLIATION AND DISASSEMBLY. You may
    not reverse engineer, decompile, or disassemble the SOFTWARE PRODUCTS,
    except and only to the extent that such activity is expressly permitted by
    applicable law notwithstanding this limitation.

6.  RENTAL. You may not rent, lease, or lend or directly or indirectly transfer
    the SOFTWARE PRODUCTS to any third party.

7.  TERMINATION. Without prejudice to any other rights, [COMPANY] may terminate
    your rights to use the SOFTWARE PRODUCTS if you fail to comply with these
    licensing terms. In such event, you must cease using and destroy all copies
    of the SOFTWARE PRODUCTS and all of its component parts.

8.  NO WARRANTIES, LIABILITIES OR REMEDIES BY MICROSOFT YOU AGREEMENT IS WITH
    [COMPANY] AND ANY WARRANTIES, ASSUMPTION OF LIABILITY FOR DAMAGES AND
    REMEDIES, IF ANY, ARE PROVIDED BY [COMPANY] AND NOT BY MICROSOFT.

9.  PRODUCT SUPPORT. Product support for the SOFTWARE PRODUCTS is provided to
    you by [COMPANY] and is not provided by Microsoft or its affiliates or
    subsidiaries.

10. NOT FAULT TOLERANT. THE SOFTWARE PRODUCTS MAY CONTAIN TECHNOLOGY THAT IS NOT
    FAULT TOLERANT AND IS NOT DESIGNED, MANUFACTURED, OR INTENDED FOR USE OR
    RESALE IN ENVIRONMENTS OR APPLICATIONS IN WHICH THE FAILURE OF THE SOFTWARE
    PRODUCTS COULD LEAD TO DEATH, PERSONAL INJURY, OR SEVERE PHYSICAL OR
    ENVIRONMENTAL DAMAGE.

11. EXPORT RESTRICTIONS. You acknowledge that the SOFTWARE PRODUCTS are of U.S.
    origin. You agree to comply with all applicable international and national
    laws that apply to the SOFTWARE PRODUCTS, including the U.S. Export
    Administration Regulations, as well as end-user, end-use and destination
    restrictions issued by U.S. and other governments. For additional
    information, see http://www.microsoft.com/exporting/.

12. NOTE ON JAVA SUPPORT. The SOFTWARE PRODUCTS may contain support for programs
    written in Java. Java technology is not fault tolerant and is not designed,
    manufactured, or intended for use or resale as online control equipment in
    hazardous environments requiring fail-safe performance, such as in the
    operation of nuclear facilities, aircraft navigation or communication
    systems, air traffic control, direct life support machines, or weapons
    systems, in which the failure of Java technology could lead directly to
    death, personal injury, or sever physical or environmental damage. Sun
    Microsystems, Inc. has contractually obligated Microsoft to make this
    disclaimer.

13. U.S. GOVERNMENT RIGHTS. ALL SOFTWARE PRODUCTS provided to the U.S.
    Government pursuant to solicitation issued on or after December 1, 1995 is
    provided with the commercial rights and restrictions described elsewhere
    herein. All SOFTWARE PRODUCT provided to the U.S. Government pursuant to
    solicitation issued prior to December 1, 1995 is provided with RESTRICTED
    RIGHTS as provided for in FAR, 48 CFR 52.227-14 (JUNE 1987) or FAR, 48 CFR
    252.227-7013 (OCT 1988), as applicable.

14. OTHER RIGHTS AND LIMITATIONS

    For commerce Server, Host Integration Server and Internet Security and
    Acceleration Server--Use of Redistributable Software ("SDK Software"). If
    included in the SOFTWARE PRODUCT, you may install and use copies of the SDK
    Software on one or more computers located at the your premises solely for
    the purpose of building applications that work in conjunction with the
    Server Software ("Applications"). You may modify the Sample Code (identified
    in the "samples" directories) to design, develope, and test your
    Applications, and may reproduce and use the Sample Code, as modified, on one
    or more computers located at your premises. You may also reproduce and
    distribute the Sample Code, along with any

                                    Page 22
<PAGE>

modifications you make thereto (for purposes of this section, "modifications"
shall mean enhancements to the functionality of the Sample Code), and any other
files that may be listed and identified in a REDIST.TXT file as
"redistributable" (collectively, the "Redistributable Code") provided that you
agree: (1) to distribute the Redistributable Code in object code form and only
in conjunction with your Application, which Application adds significant and
primary functionality to the Redistributable Code; (2) not to use Microsoft's
name, logo, or trademarks to market the Application; (3) to include a valid
copyright notice in your name on the Application; (4) to indemnify, hold
harmless, and defend Microsoft from and against any claims or lawsuits,
including attorney's fees, that arise or result from the use or distribution of
the Application; (5) to otherwise comply with the terms of this License; and (6)
that Microsoft reserves all rights not expressly granted.

For Small Business Server - General (excluding Microsoft SQL Server). Note
Regarding Use of Redistributable Components. You may modify, reproduce and/or
distribute the files listed in the REDIST.TXT file (collectively referred to as
"Redistributable Components") provided that you comply with the Modification and
Distribution Terms listed in such REDIST.TXT file.

For Small Business Server - Microsoft SQL Server. Note REgarding the Use of
Redistributable Components. You have the nonexclusive, royalty-free right to
use, reproduce and distribute the Microsoft SQL Server Desktop Engine ("MSDE")
and the files listed in the REDIST.TXT contained in the SOFTWARE PRODUCT
(collectively, the "Redistributable Code"), provided that you also comply with
the following:

i.   General Requirements. If you choose to redistribute any portion of the
Redistributable Code, you agree:

     A. to distribute the Redistributable Code in object code form and only in
     conjunction with and as a part of a software application product developed
     by you that adds significant and primary functionality to the SOFTWARE
     PRODUCT ("Application");

     B.  not to use Microsoft's name, logo, or trademark to market the
     Application;

     C.  to include a valid copyright notice in your name on the Application;

     D.  to indemnify, hold harmless, and defend Microsoft from and against any
     claims or lawsuits, including attorney's fees, that arise or result from
     the use or distribution of the Application; and

     E.  to otherwise comply with the terms of this License.

You also agree not to permit further distribution of the Redistributable Code by
your end users except you may permit further redistribution of the
Redistributable Code by your distributors if they only distribute the
Redistributable Code in conjunction with, and as part of the Application and you
and your distributors comply with all other terms of this License.

ii.  Additional Requirements for MSDE. If you choose to redistribute MSDE, you
also agree:

     A.  that your Application shall not substantially duplicate the
     capabilities of Microsoft Access or, in the reasonable opinion of
     Microsoft, compete with same; and


     B.  that unless your Application requires your customers to license
     Microsoft Access in order to operate, you shall not reproduce or use MSDE
     for commercial distribution in conjunction with a general purpose word
     processing, spreadsheet or database management software product, or an
     integrated work or product suite whose components include a general purpose
     word processing, spreadsheet, or database management software product
     except for the exclusive use of importing data to the various formats
     supported by Microsoft Access. Note A products that includes limited work
                                    ----
     processing, spreadsheet or database components along with other components
     which provide significant and primary value, such as an accounting product
     with limited spreadsheet capability, is not considered to be a "general
     purpose" product.

For Microsoft SQL Server. Use of Redistributable Code. You have the
nonexclusive, royalty-free right to use, reproduce and distribute the Microsoft
SQL Server Desktop Engine ("MSDE") and the files listed in the REDIST. TXT
contained in the SOFTWARE PRODUCT (collectively, the "Redistributable Code"),
provided that you also comply with the following:

i.   General Requirements. If you choose to redistribute any portion of the
Redistributable Code, you agree:

     A.  to distribute the Redistributable Code in object code form and only in
     conjunction with and as a part of a software application product developed
     by you that adds significant and primary functionality to the SOFTWARE
     PRODUCT ("Application");

     B.  not to use Microsoft's name, logo, or trademark to market the
     Application;

     C.  to include a valid copyright notice in your name on the Application;

     D.  to indemnify, hold harmless, and defend Microsoft from and against any
     claims or lawsuits, including attorney's fees, that arise or result from
     the use or distribution of the Application; and

     E.  to otherwise comply with the terms of this License.

You also agree not to permit further distribution of the Redistributable Code by
your end users except you may permit further redistribution of the
Redistributable Code by your distributors if they only distribute the
Redistributable Code in conjunction with, and as part of the Application and
you and your distributors comply with all other terms of this License.


ii.  Additional Requirements for MSDE. If you choose to redistribute MSDE, you
also agree:

     A.  that your Application shall not substantially duplicate the
     capabilities of Microsoft Access or, in the reasonable opinion of
     Microsoft, compete with same; and

     B.  that unless your Application requires your customers to license
     Microsoft Access in order to operate, you shall not reproduce or use MSDE
     for commercial distribution in conjunction with a general purpose word
     processing, spreadsheet or database management software product, or an
     integrated work or product suite whose components include a general purpose
     word processing, spreadsheet, or database management software product
     except for the exclusive use of importing data to the various formats
     supported by Microsoft Access. Note A products that includes limited work
                                    ----
     processing, spreadsheet or database components along with other components
     which provide significant and primary value, such as an accounting product
     with limited spreadsheet capability, is not considered to be a "general
     purpose" product.

For SMS Server. Installation--Client Software. You may install and use the
Installer component of the Client Software ("SMS Installer") only for the
purpose of creating installation programs through the use of SMS Installer
("Setup Programs"). You may also use and modify the source code designated as
"Sample Code" in the SAMPLES.TXT file for the sole purposes of designing,
developing and testing your Setup Programs. You may also install and use in
object code from the Redistributable Components (as defined below), along with
any modifications you may make to the Sample Code, only on Devices within your
organization for a purpose other than

                                    Page 23
<PAGE>

creation of Setup Programs, provided that: (a) you reproduce and use the
Redistributable Components only in conjunction with or as part of a Setup
Program; (b) a valid SAL is acquired by [COMPANY] on your behalf for Microsoft
Systems Management Server for each User that uses the Redistributable
Components; and (c) you indemnify, hold harmless and defend Microsoft and its
suppliers from and against any claims or lawsuits, including attorneys' fees,
that arise or result from the use of your Setup Program or any software
installed by your Setup Program. You do not have any other right to install or
use SMS Installer. You may reproduce and distribute the files listed in the
REDIST.TXT file (collectively referred to as "Redistributable Components"),
along with any modifications you may make to the Sample Code, provided that you
comply with the Distribution Terms listed in such REDIST.TXT file. Note that the
Distribution Terms include, among other conditions, terms similar to those
described above. Use of the Redistributable Components. You may reproduce and
distribute the files listed in the REDIST.TXT file (collectively referred to as
"Redistributable Components"), along with any modifications you may make to the
Sample Code, provided that you comply with the Distribution Terms listed in such
REDIST.TXT file. Note that the Distribution Terms include, among other
conditions, terms similar to those described in subsections (a) - (c) of the
Client Software note above.

                                    Page 24
<PAGE>

                     ADDENDUM C: AFFILIATE AGREEMENT FORM
                     ------------------------------------

Prior to exercising any license rights (including but not limited to any use of
Software Products) or receiving any confidential information under the
Application Services Agreement between Company and Microsoft (the "Agreement"),
each Company Affiliate (as defined in the Agreement) must execute an Affiliate
Agreement in the form indicated below. Both Company and the Affiliate must keep
the executed Affiliate Agreement on file and must deliver it to Microsoft upon
request.

All capitalized terms used herein are defined in the Agreement.

--------------------------------------------------------------------------------
               [To be printed on Affiliate's company letterhead]

                              AFFILIATE AGREEMENT

For good and valuable consideration, [insert name of affiliate], a corporation
                                      ------------------------
organized under the laws of [insert name of jurisdiction] ("Affiliate") hereby
                             ---------------------------
covenants and agrees with MSLI, GP, a Nevada general partnership and
wholly-owned subsidiary of Microsoft Corporation ("Microsoft"), that Affiliate
will comply with all obligations of [insert name of company that has entered
                                     ---------------------------------------
into the Agreement with Microsoft], a corporation organized under the laws of
---------------------------------
[insert name of jurisdiction] ("Company") under the Microsoft Application
 ---------------------------
Services Agreement between Microsoft and Company effective as of [insert
                                                                  ------
Effective Date] (the "Agreement").
--------------

Any terms used herein that are defined in the Agreement shall have the same
meaning as in the Agreement.

Affiliate acknowledges and agrees that its agreement herein is a condition for
Affiliate to exercise any of the rights granted by Company to Affiliate pursuant
to the terms of the Agreement. Affiliate acknowledges and agrees that is shall
be bound by the terms and conditions of the Agreement applicable to Company and
that it and Company shall be jointly and severally liable to Microsoft for all
obligations related to Affiliate's exercise of any license rights or receipt of
confidential information under the Agreement, including but not limited to, the
payment of monthly fees for Licenses under the Agreement. Notwithstanding the
foregoing, Affiliate acknowledges that all orders and payments to be provided by
each Affiliate to Microsoft under the Agreement shall be consolidated and
provided to Microsoft each month by Company on behalf of Affiliate.

Affiliate acknowledges and agrees that, in the event Affiliate ceases to be an
Affiliate of Company (as such term "Affiliate" is defined in the Agreement),
then the rights granted hereunder shall terminate on the date that Affiliate
ceases to be an Affiliate of Company.

Any terms used herein that are defined in the Agreement shall have the same
meaning as in the Agreement.

IN WITNESS WHEREOF, a duly authorized representative of Affiliate has executed
this document as of the date set forth below. All signed copies of this document
shall be deemed originals.

_____________________________
(Name of Affiliate)

_____________________________
(Signature)

_____________________________
(Print Name and Title)

_____________________________
(Date)
--------------------------------------------------------------------------------

                                    Page 25

<PAGE>

                 Microsoft Application Services License Rights

General Terms

You may not exercise the use rights specified herein unless you are currently a
licensee in good standing under an Application Services Agreement ("ASA") with
Microsoft.

The Application Services License Rights set forth in this document ("ASLR")
apply to the Software Products licensed by you under your ASA. The Licenses
granted to you by Microsoft under the ASA are expressly conditioned upon your
compliance with the use rights described in this ASLR applicable to each of the
Software Products licensed by you. The use rights set forth in this ASLR and all
Licenses for the Software Products terminate upon termination or expiration of
the ASA. This ASLR is part of the ASA, and Microsoft may amend the use rights
specified herein from time-to-time in accordance with the terms of the ASA.

Any limited warranties provided by Microsoft in the ASA with respect to the
Software Products do not apply to any components of such products that may be
redistributed by you under the use rights applicable to a Software Product
contained in this ASLR.

The Software Products are protected by copyright laws and international
copyright treaties as well as other intellectual property laws and treaties. The
Software Products are licensed, not sold, Microsoft reserves all rights not
expressly granted to you.

If a term in this ASLR is capitalized but it not specifically defined herein, it
shall have the meaning set forth in the ASA.

Licenses for Software Products. The Software Products shall be licensed either
by means of a Subscriber Access License or Processor License as specified in the
following list:

<TABLE>
<CAPTION>
Processor License                           Subscriber Access License
-------------------------------------------------------------------------------------------------
<S>                                         <C>
Application Center
-------------------------------------------------------------------------------------------------
Commerce Server
-------------------------------------------------------------------------------------------------
                                            Exchange Server Knowledge Worker Pro
                                            (Exchange Enterprise Server and Conferencing
                                            Server)
-------------------------------------------------------------------------------------------------
                                            Exchange Server Knowledge Worker Standard  Enterprise
                                            Server)
-------------------------------------------------------------------------------------------------
Host Integration Server
-------------------------------------------------------------------------------------------------
Internet Acceleration and Security Server
-------------------------------------------------------------------------------------------------
                                            Microsoft Office Professional*
-------------------------------------------------------------------------------------------------
                                            Microsoft Office Small Business*
-------------------------------------------------------------------------------------------------
                                            Microsoft Office Standard*
-------------------------------------------------------------------------------------------------
                                            Small Business Server
-------------------------------------------------------------------------------------------------
                                            SMS (System Management Server)
-------------------------------------------------------------------------------------------------
                                            SQL Server Standard
-------------------------------------------------------------------------------------------------
SQL Server Enterprise                       SQL Server Enterprise
-------------------------------------------------------------------------------------------------
Windows Server Std                          Windows Server Std
-------------------------------------------------------------------------------------------------
Windows Advanced Server                     Windows Advanced Server
-------------------------------------------------------------------------------------------------
                                            Windows Terminal Services
-------------------------------------------------------------------------------------------------
</TABLE>
* Component products in the suite are available separately, with separate
Subscriber Access Licenses.

Application Services License Rights (Effective Date: August 1, 2000)

                                                                     Page 1 of 8
<PAGE>

Subscriber Access License ("SAL") Rights and Restrictions. (The rights and
restrictions contained in this provision may be modified by the Additional Terms
contained below with regard to SALs for specific Software Products.)

a.   Server Software. You may install any number of copies of any Software
Product on any number of computers capable of running the Server Software
("Servers") for the sole purpose of providing Application Services under the
terms and conditions contained herein and in the ASA. Client Software. You may
install, or authorize the installation of, the Client Software on any Devise for
use solely by a unique individual who receives Application Services from you in
accordance with the terms and conditions contained herein and in the ASA, and
for whom you have acquired, and continue to acquire during such individual's use
of the Client Software, a SAL.

b.   User Access. You must acquire a SAL for each unique individual who is
authorized to access or otherwise utilize the services or functionality of the
Software Products ("User"), whether the Client Software or any other software is
used to do so. One (1) SAL is required for each such unique individual. Each
such User must use a unique user id when accessing the Server Software, SALs
that you acquire may be used only in conjunction with your Server Software. A
user for whom a Sal is acquired is an "Authorized User."

Processor License ("PL") Rights and Restrictions. (The rights and restrictions
contained in this provision may be modified by the Additional Terms contained
below with regard to PLs for specific Software Products.)

a.   Server Software. You may install one (1) copy of the Server Software on a
single Server. If the Server has one (1) or more processors, you must obtain one
(1) PL for each processor on that Server. You may use the Server Software only
with that number of processors for which you are properly licensed. Client
Software. You may install and use the Client Software, if any, on any number of
Devices so long as it is being used only with the Server Software and for the
sole purpose of receiving Application Services from you in accordance with the
terms and conditions contained herein and in the ASA.

b.   User Access. Provided that you have acquired a valid PL for each processor
running the Server Software, any number of Users may use or access the services
of a Server running the Server Software for the sole purpose of receiving
Application Services from you in accordance with the terms and conditions
contained herein and in the ASA. A unique individual using or accessing the
services of a Server running the Server Software for such purposes pursuant to a
PL is an "Authorized User".

Benchmark Testing. You may no disclose the results of any benchmark test of
either the Server Software or Client Software for SQL Server, Application
Center, Commerce Server, Exchange Server, Conferencing Server, Host Integration
Server, or Internet Security and Acceleration Server, to any third party without
Microsoft's prior written approval, which approval may be granted in Microsoft's
sole discretion.

Other Licenses. Your use of software applications installed on the Server, or
accessed through the Server Software may require additional licenses - please
consult the license agreement accompanying such software.

Additional Terms for Specific Software Products
-----------------------------------------------

Application Center, Commerce Server, Host Integration Server ("HIS") and
Internet Security and Acceleration Server ("ISA Server") (PL)

Commerce Server, HIS and ISA Server - Use of Redistributable Software ("SDK
Software"). If included in the Software Product, an Authorized User may install
and use copies of the SDK Software on one or more computers located at the
Authorized User's premises solely for the purpose of building applications that
work in conjunction with the Server Software "(Applications"). An Authorized
User may modify the Sample Code (identified in the "samples" directories) to
design, develop, and test such Authorized User's Applications, and may reproduce
and use the Sample Code, as modified, on one or more computers located at such
Authorized User's premises. An Authorized User may also reproduce and distribute
the Sample Code, along with any modifications such Authorized user makes thereto
(for

Applications Services License Rights (Effective Date:August 1, 2000) Page 2 of 8
<PAGE>

purposes if this section, "modifications" shall mean enhancements to the
functionality of the Sample Code), and any other files that may be listed and
identified in a REDIST.TXT file as "redistributable" (collectively, the
"Redistributable Code") provided that the Authorized User agrees: (1) to
distribute the Redistributable Code in object code form and only in conjunction
with such Authorized User's Application, which Application adds significant and
primary functionality to the Redistributable Code; (2) not to use Microsoft's
name, logo, or trademarks to market the Application; (3) to include a valid
copyright notice in such Authorized User's name on the Application; (4) to
indemnify, hold harmless, and defend Microsoft from and against any claims or
lawsuits, including attorney's fees, that arise or result from the use or
distribution of the Application; (5) to otherwise comply with the terms of this
ASLR; and (6) that Microsoft reserves all rights not expressly granted.

Exchange Server Knowledge Worker Standard and Exchange Server Knowledge Worker
Professional (SAL)

Client Software. You may install, or authorize the installation of, the Client
Software (including without limitation Microsoft Outlook) for Microsoft Exchange
Server on the primary Device of a User for whom you have acquired an Exchange
Knowledge Worker Standard or Professional SAL (the "Primary User"). In addition,
such Primary User may also access or use the functionality of the Server
Software by any other Device that such Primary User uses less than twenty
percent (20%) of the Primary User's total connection time. The term "total
connection time" means the total amount of time the Primary User uses the Client
Software to access or otherwise use the Server Software from a Device. Server-
Based Microsoft Outlook. If you deploy Microsoft Outlook on Servers, rather than
on Users' Devices, then the following shall apply: A User may choose to have
concurrent connections to a Server running Outlook using multiple Devices,
provided that an Exchange Server SAL is acquired for each such concurrent
connection. For instance, you must acquire one (1) SAL for a User who wishes to
access and/or utilize the services and/or functionality to Outlook from both a
PC and a separate laptop at different times of the day. However, you would be
required to obtain two (2) SALs for a User if such individual wished to access
and/or utilize the services and/or functionality of Outlook from both Devices
concurrently.

Knowledge Worker Standard SAL. Usage Limitation. Each User for whom you have
purchased an Exchange Server Knowledge Worker Standard SAL may access and use
the features and functionality of Microsoft Exchange Server 5.5, Enterprise
Edition or Microsoft Exchange 2000 Enterprise Server.

Knowledge Worker Professional SAL. Usage Limitation. Each User for whom you
have purchased an Exchange Server Knowledge Worker Professional SAL may access
and use the features and functionality of Microsoft Exchange 2000 Enterprise
Server and Microsoft Exchange Conferencing Server.

Microsoft Office Professional, Microsoft Office Small Business and Microsoft
Office Standard ("Office Products")* ("SAL")

  "Office Products" includes component products in the suite that are available
separately, with separate SALs, all of which component products are subject to
the use terms specified below.

No Client Software. The Office Products are Server Software, with no Client
Software components.

Concurrent Connections. A User may choose to have concurrent connections to a
Server running one of the Office Products using multiple Devices, provided that
a SAL is acquired for each such concurrent connection. For instance, you must
acquire one (1) SAL for a User who wishes to access and/or utilize the services
and/or functionality of one of the Office Products from both a PC and a separate
laptop at different times of the day. However, you would be required to obtain
two (2) SALs for a User if such individual wished to access and/or utilize the
services and/or functionality of an Office Product from both Devices
concurrently. Separation of Components. You must offer to the Users (and acquire
the SALs for) the complete Office Product installed on your Server, not any
subset of the components of such Office Product (e.g., if Office Professional is
installed, an Office Professional SAL must be acquired even if the User only
uses Microsoft Word). Similarly, you must install and offer the complete Office
Product you are licensing, not any subset of the features of such Office
Product. Restrictions of Evaluation and Testing. Notwithstanding Section 3(i) of
the ASA, you may not provide any existing or prospective Customer (or its
employees) with access to, or the ability to use, any of the Office Products for
the purposes of testing or evaluation by such Customer.

Application Services License Rights (Effective Date: August 1, 2000)

                                                                     Page 3 of 8

<PAGE>

 Small Business Server (SAL)

Installation-Server Software. You may install and use one (1) copy of the Server
Software on a single Server, provided that such Server may not be connected to
more than fifty (50) Devices (Inclusive of any Indirect connections made through
software or hardware that pools or aggregates connections). You may not separate
the Server Software components for use on more than one (1) Server. Regardless
of the number of SALs you acquire for the Software Product, only a single
instance of the Software Product may run in a single domain (other than for data
migration purposes for the period of time necessary to complete the data
migration). Client Software. Subject to the Component Rights and Limitations
below, you may install and use, or authorize installation and use of, the Client
Software for up to fifty (50) Users, provided that you have acquired and
dedicated a Small Business Server SAL to each such User.

Note Regarding Use of Administrator Tools. You may install and use the
integrated Small Business Sever Management Console and related tools and
snap-ins on any Device within your organization for the sole purpose of
administering the Server Software. Note Regarding Use of Redistributable
Components. An Authorized User may modify, reproduce and/or distribute the files
listed in the RESIST.TXT file (collectively referred b as "redistributable
Components") provided that such Authorized User complies with the Modification
and Distribution Terms listed in such REDIST.TXT file.

Small Business Server SAL Requirements. Except as otherwise provided below in
Component Rights and Limitations, you must acquire one (1) Small Business Server
SAL for each User that accesses or utilizes the Server Software components do
                                                                           --
not authorize a User to access and use such individual Server Software
---
components when they are acquired as part of the Software Product; only the
Small Business Server SAL provides a User with such access and use rights.

Component Rights and Limitations.

     a.   Microsoft Windows Server. Processor Limitation. The Windows Server
     Software may be used by no more than four (4) processors of the Server at
     any one time. SAL Requirements. You must acquire one (1) separate Small
     Business Server SAL for each "Authenticated User" or a User that uses
     "Windows Server Services" regardless of what software you use. Terminal
     Services. In addition to a SAL, you must acquire one (1) Windows Server
     Terminal Services SAL or each User that uses "Terminal Services." You do
     not need to acquire a Terminal Services SAL to utilize Terminal Services
     for Users using Devices running a licensed copy of Windows 2000
     Professional. Terminal Services SALs that you acquire may be used only in
     conjunction with your Windows Server Software.

          Definitions.

          . "Authenticated User" is a user who directly or indirectly utilizes
            the Windows Server Integrated Sing-on Service or receives
            credentials from the Windows Directory Services.

          . "Windows Server Services" include File Services (accessing or
            managing files or disk storage), Printing Services (printing to a
            printer managed by the Software Product), Remote Access Service
            (accessing the Server from a remote location through a
            communications link, including a virtual private network), and
            Terminal Services.

          . "Terminal Services" means (i) using the terminal services feature of
            the Windows Server Software to enable Devices to use software
            residing on the Server, or (ii) using other software in conjunction
            with the Windows Server Software to provide similar services.

     b.   Microsoft Exchange Server. Client Software. You may install, or
     authorize the installation of, the Client Software (including Microsoft
     Outlook) for Microsoft Exchange Server on the primary Device of a User for
     whom you have acquired a Small Business Server SAL (the "Primary User"). In
     addition, such Primary User may also access or use the functionality of the
     Server Software by any other Device that such Primary User uses less than
     twenty percent (20%0 of the Primary User's total connection time. The term
     "total connection time" means the total amount of time the Primary User
     uses the Client Software to access or otherwise use the Server Software
     from a Device. Server-Based Microsoft Outlook. If any deploy Microsoft
     Outlook or Servers, rather than on Users' Devices, then the following shall
     apply: A user may choose to have concurrent connections to a Server running
     Outlook using multiple Devices, provided that a Small Business Server SAL
     is acquired for each such concurrent connection. For instance, you must
     acquire one (1) SAL for a


Application Services License Rights (Effective Date: August 1, 2000) Page 4 0f 8
<PAGE>

User who wishes to access and/or utilize the services and/or functionality of
Outlook from both a PC and a separate laptop at different times of the day.
However, you would be required to obtain two (2) SALs for a User if such
Individual wished to access and/or utilize the services and/or functionality of
Outlook from both Devices concurrently.

c.   Microsoft SQL Server.  Client Software.  You may install, or authorize the
installation of, the SQL Server Desktop Component on any Device for use solely
by a User for whom you have acquired a Small Business Server SAL. Client Access.
You do not need a Subscriber Access License in order for a Microsoft SQL Server
to interact only with another Microsoft SQL Server or Microsoft SQL Server,
Enterprise Edition. Note Regarding Use of SQL Server Tools. You may only use the
Management Tools, Books-Online, and Development Tools components of Microsoft
SQL Server on each Device used by a User for whom you have acquired a Small
Business Server SAL. Note Regarding the Use of Redistributable Components, In
addition to the rights granted above, an Authorized User has the nonexclusive,
royalty-free right to use, reproduce and distribute the Microsoft SQL Server
Desktop Engine ("MSDE") and the files listed if the REDIST.TXT contained in the
Software Product (collectively, the "Redistributable Code"), provided that such
Authorized User also complies with the following:

     i.   General Requirements.  If an Authorized User chooses to redistribute
     any portion of the Redistributable Code, such Authorized User agrees:

          A.   to distribute the Redistributable Code in object code form and
          only in conjunction with and as a part of a software application
          product developed by such Authorized User that adds significant and
          primary functionality to the Software Product ("Application");

          B.   not to use Microsoft's name, logo, or trademarks to market the
          Application;

          C.   to include a valid copyright notice in such Authorized Users name
          on the Application;

          D.   to indemnify, hold harmless, and defend Microsoft from and
          against any claims or lawsuits, including attorney's fees, that arise
          or result from the use or distribution of the Application; and

          E.   to otherwise comply with the terms of this ASLR.

     An Authorized User also agrees not to permit further distribution of the
     Redistributable Code by such Authorized User's end users except an
     Authorized User may permit further redistribution of the Redistributable
     Code by such Authorized User's distributors if they only distribute the
     Redistributable Code if conjunction with, and as part of, the Application
     and such Authorized User and its distributors comply with all other terms
     of this ASLR.

     ii.  Additional Requirements for MSDE. If an Authorized User chooses to
     redistribute MSDE, such Authorized User also agrees:

          A.   that such Authorized User's Application shall not substantially
          duplicate the capabilities of Microsoft Access or, in the reasonable
          opinion of Microsoft, compete with same; and

          B.   that unless such Authorized User's Application requires such
          Authorized User's customers to license Microsoft Access if order to
          operate, such Authorized User shall not reproduce or use MSDE for
          commercial distribution in conjunction with a general purpose word
          processing, spreadsheet or database management software product, or an
          integrated work or product suite whose components include a general
          purpose word processing, spreadsheet, or database management software
          product except for the exclusive use of Importing data to the various
          formats supported by Microsoft Access. Note: A product that includes
          limited word processing. spreadsheet or database components along with
          other components which provide significant and primary value, such as
          an accounting product with limited spreadsheet capability, is not
          considered to be a "general purpose" product.

d.   Microsoft Internet Security and Acceleration Server.  Client Access.  You
do not need a Subscriber Access License to access or otherwise utilize the
services or functionality of Microsoft Internet Security and Acceleration
Server.

e.   Health Monitor 2.1.  Permitted Use.  You may use Health Monitor 2.1 to (i)
monitor any Server on which a Server Software component of the Software Product
is installed as authorized in "Installation -- Server Software above and (ii)
monitor any User for whom you have acquired and


Application Services License Rights (Effective Date: August 1, 2000)

                                                                     Page 5 of 8
<PAGE>

dedicated a Small Business Server SAL. Client Access.  No Small Business Server
SAL is required for a User who only uses a Device as the administrative console
for Health Monitor 2.1 provided such User is not itself being monitored by
Health Monitor 2.1.

f.   Shared Fax Service and Shared Modem Service.  Client Access.  You must have
a Small Business Server SAL for each User that accesses or uses the Shared Fax
Service and/or Shared Modem Service Server Software.

g.   Microsoft FrontPage.  You may authorize the installation and use of only
one copy of the Microsoft FrontPage software provided with the Software Product
as Client Software on only one Device per each Customer.


SQL Server (SAL) and SQL Server Enterprise Edition (SAL or PL)

The rights and limitations depend on which license(s) you have acquired with
respect to the Software
Product:  SAL(s) or PL(s).

SAL Requirements (for either SQL Server or SQL Server Enterprise Edition).

You must acquire one (1) SAL for each User who:

     .    accesses or otherwise utilizes the services of the Server Software
          (including Users using Microsoft SQL Server Desktop Engine ("MSDE")
          for such access), or

     .    installs and uses SQL Server Personal Edition, or

     .    uses the Management Tools, Books-Online, and Development Tools
          components of Microsoft SQL Server (collectively "Tools"). A User may
          only use the Tools in conjunction with the Server Software.

Use of Redistributable Code.  In addition to the rights granted above, an
Authorized User has the nonexclusive, royalty-free right to use, reproduce and
distribute the Microsoft SQL Server Desktop Engine ("MSDE") and the tiles listed
in the REDIST.TXT contained in the Software Product (collectively, the
"Redistributable Code"), provided that such Authorized User also complies with
the following:

     i.   General Requirements.  If an Authorized User chooses to redistribute
     any portion of the Redistributable Code, such Authorized User agrees:

          A.   to distribute the Redistributable Code in object code form and
          only In conjunction with and as a part of a software application
          product developed by such Authorized User that adds significant and
          primary functionality to the Software Product ("Application");

          B.   not to use Microsoft's name, logo, or trademarks to market the
          Application;

          C.   to include a valid copyright notice in such Authorized User's
          name on the Application;

          D.   to indemnify, hold harmless, and defend Microsoft from and
          against any claims or lawsuits, including attorney's fees, that arise
          or result from the use or distribution of the Application; and

          E.   to otherwise comply with the terms of this ASLR.

An Authorized User also agrees not to permit further distribution of the
Redistributable Code by such Authorized User's end users except an Authorized
User may permit further redistribution of the Redistributable Code by such
Authorized User's distributors if they only distribute the Redistributable Code
in conjunction with, and as part of, the Application and such Authorized User
and its distributors comply with all other terms of this ASLR.

     ii.  Additional Requirements for MSDE. If an Authorized User chooses to
     redistribute MSDE, such Authorized User also agrees:

          A.   that such Authorized User's Application shall not substantially
          duplicate the capabilities of Microsoft Access or, in the reasonable
          opinion of Microsoft, compete with same; and

          B.   that unless such Authorized User's Application requires such
          Authorized User's customers to license Microsoft Access in order to
          operate. such Authorized User shall not reproduce or use MSDE for
          commercial distribution in conjunction with a general purpose word
          processing, Spreadsheet or database management software product, or an
          integrated work or product suite whose components include a general
          purpose word processing, spreadsheet, or database management software
          product except for the exclusive use of importing data to the various

Application Services License Rights (Effective Date: August 1, 2000)

                                                                     Page 6 of 8
<PAGE>

          formats supported by Microsoft Access. Note: A product that includes
          limited word processing, spreadsheet or database components along with
          other components which provide significant and primary value, such as
          an accounting product with limited spreadsheet capability, is not
          considered to be a "general purpose" product.

OR

PL Requirements (only available for SQL Server Enterprise Edition)

Server Software.  An Authorized User may use the Management Tools, Books-Online,
and Development Tools components of Microsoft SQL Server Enterprise Edition
(collectively "Tools") solely in conjunction With the Server Software. You may
install any number of instances of the Server Software on the Server for use by
any processor for which you have acquired a PL. An "instance" shall mean a
running copy of the Server Software.

Installation Of Server Software On Passive Fall-Over Server.  If the Server
Software is used in a clustered environment, you may use the Server Software on
a temporary basis on a Server that is employed only for fail-over support (the
"Passive Servers") so long as the number of processors on the Passive Server
does not exceed the number of processors on your primary active Server.

Use of Redistributable Code.  In addition to the rights granted above, an
Authorized User has the nonexclusive, royalty-free right to use, reproduce end
distribute the Microsoft SQL Server Desktop Engine ("MSDE") and the files listed
in the REDIST.TXT contained in the Software Product (collectively, the
"Redistributable Code"), provided that such Authorized User also complies With
the following:

     i.   General Requirements.  If an Authorized User chooses to redistribute
     any portion of the Redistributable Code, such Authorized User agrees:

          A.   to distribute the Redistributable Code in object code form and
          only in conjunction with and as a part of a software application
          product developed by such Authorized User that adds significant and
          primary functionality to the Software Product ("Application");

          B.   not to use Microsoft's name, logo, or trademarks to market the
          Application;

          C.   to include a valid copyright notice in such Authorized User's
          name on the Application;

          D.   to indemnify, hold harmless, and defend Microsoft from and
          against any claims or lawsuits, including attorney's fees, that arise
          or result from the use or distribution of the Application; and

          E.   to otherwise comply with the terms of this ASLR.

     An Authorized User also agrees not to permit further distribution of the
     Redistributable Code by such Authorized User's end users except an
     Authorized User may permit further redistribution of the Redistributable
     Code by such Authorized User's distributors if they only distribute the
     Redistributable Code in conjunction with, and as part of, the Application
     and such Authorized User and its distributors comply with all other terms
     of this ASLR.

     ii.  Additional Requirements for MSDE.  If an Authorized User chooses to
     redistribute MSDE, such Authorized User also agrees;

          A.   that such Authorized User's Application shall not substantially
          duplicate the capabilities of Microsoft Access or, in the reasonable
          opinion of Microsoft, compete with same; and

          B.   that unless such Authorized User's Application requires such
          Authorized User's customers to license Microsoft Access in order to
          operate, such Authorized User shall not reproduce or use MSDE for
          commercial distribution in conjunction with a general purpose word
          processing, spreadsheet or database management software product, or an
          integrated work or product suite whose components include a general
          purpose word processing, spreadsheet, or database management software
          product except for the exclusive use of importing data to the various
          formats supported by Microsoft Access. Note: A product that includes
          limited word processing, spreadsheet or database components along with
          other components which provide significant and primary value, such as
          an accounting product with limited spreadsheet capability, is not
          considered to be a "general purpose" product.

SMS Server (SAL)

Installation--Client Software.  An Authorized User may install and use the
Installer component of the Client Software ("SMS Installer") only for the
purpose of creating installation programs through the use of

Application Services License (Effective Date: August 1, 2000)

                                                                     Page 7 of 8
<PAGE>

SMS Installer ("Setup Programs"). An Authorized User may also use and modify the
source code designated as Sample Code" in the SAMPLES.TXT file for the sole
purposes of designing, developing, and testing such Authorized User's Setup
Programs. An Authorized User may also install and use in object code form the
Redistributable Components (as defined below), along with any modifications such
Authorized User may make to the Sample Code, only on Devices within such
Authorized Users organization for a purpose other than creation of Setup
Programs, provided that: (a) such Authorized User reproduces and uses the
Redistributable Components only in conjunction with or as part of a Setup
Program; (b) a valid SAL is acquired for Microsoft Systems Management Server for
each User that uses the Redistributable Components: and (C) such Authorized User
indemnifies, holds harmless and defends Microsoft and its suppliers from and
against any claims or lawsuits, including attorneys fees, that arise or result
from the use of such Authorized Users Setup Program or any software installed by
such Authorized User's Setup Program. An Authorized User does not have any other
right to install or use SMS Installer. An Authorized User may reproduce and
distribute the files listed in the REDIST.TXT file (collectively referred to as
"Redistributable components") along with any modifications such Authorize User
may make to the Sample Code, provided that such Authorized User complies with
the Distribution Terms listed in such REDIST.TXT file. Note that the
Distribution Terms include, among other conditions terms similar to those
described above. Use of the Redistributable Components. An Authorized User may
reproduce ` and distribute the flies listed in the REDIST.TXT file (collectively
referred to as "Redistributable Components'), along with any modifications such
Authorized User may make to the Sample Code, provided that such Authorized User
complies with the Distribution Terms listed in such REDIST.TXT file. Note that
the Distribution Terms include, among other conditions, terms similar to those
described in subsections (a) (c) of the Client Software note above. User Access.
You do not need a SAL in order to permit Users solely to execute Systems
Management Server-to-Systems Management Server communications that are solely
managing a third Device. Administration Console or Utilities You also do not
need to acquire a SAL for Microsoft SQL Server to use the administration console
or utilities provided with Systems Management Server to access or otherwise
utilize the services of Microsoft SQL Server. Metering Services and Client
Access Points. You may install and use the Metering Services and Client Access
Points components of the Server Software on any computer running a validly
licensed copy of Windows NT Server within your organization.

Windows Server and Windows Advanced Server (PL or SAL)

The rights and limitations depend on which license(s) you have acquired with
respect to the Software Product; PL(s) or SAL(s).

PL Requirements.
Installation--Server Software.  You may not separate component parts of the
Server Software for use on more than one Server unless a separate PL is acquired
for each such additional Server.

OR

SAL Requirements.  You must acquire one (1) SAL for each "Authenticated User" or
a User who uses "Windows Server Services' regardless of what software you use.
Terminal Services. In addition to a SAL, you must acquire one (1) Terminal
Services SAL for each User who uses "Terminal Services." You do not need a
Terminal Services SAL to utilize Terminal Services for Users using Devices
running a licensed copy of Windows 2000 Professional. Terminal Services SALs
that you acquire may be used only in conjunction with the Windows Server
Software.

     "Authenticated User" is a User who directly or indirectly utilizes the
     Windows Server Integrated Sign-On Service or receives credentials from the
     Windows Directory Services.

     "Windows Server Services" include File Services (accessing or managing
     files or disk storage), Printing Services (printing to a printer managed by
     the Software Product), Remote Access Service (accessing the Server from a
     remote location through a communications link, including a virtual private
     network), and Terminal Services.

     "Terminal Services" means (I) using the terminal services feature of the
     Server Software to enable Devices to use software residing on the Server,
     or (ii) Using other software In conjunction with the Server Software to
     provide similar services.

Application Services License Rights (Effective Date: August 1,  2000)

                                                                     Page 8 of 8