Exhibit 10.40  



Customer Agreement  


AGT Limited—IBM Canada Ltd.  


        We are pleased to offer you this IBM Customer Agreement to cover the Products and Services we may provide to you. 


        This
Agreement contains the following sections: 



	•
	General
Terms and Glossary (Form No. 0110-0)



	•
	Warranties
(Form No. 0111-0)



	•
	Machines
(Form No. 0112-0)



	•
	Programs
(Form No. 0113-0)



	•
	ServicePlan
Maintenance Services (Form No. 0114-0)



	•
	Project
Services (Form No. 0116-0) 




        As
we provide Products and Services to you over time, Transaction Documents will be added to this Agreement. Together, these documents make up the entire Agreement between us and replace
any prior communications. 


        Thank
you for doing business with us. Please sign below to accept the terms of this Agreement on behalf of your organization. 



	Agreed to:	 	Agreed to:
	

AGT Limited

10020—100 Street

Edmonton, Alberta

T5J 0N5	
 	

IBM Canada Ltd.

Edmonton Branch

10250—101 Street

Edmonton, Alberta

T5J 3P4
	

By: /s/ R.F. Sutcliffe
	
 	

By: /s/ C.B. Olafson

	

Printed name: R.F. Sutcliffe
	
 	

Printed name: C.B. Olafson

	

Title: VP—Corporate Services
	
 	

Title: Branch Manager

	

Date: June 17, 1991
	
 	

Date: June 17, 1991

	

Customer number: 010003	
 	

Agreement number: ICA-010003









 

Table of Contents  



	

Section 1. General Terms	
 	

3
	1.1 Agreement Structure	 	3
	1.2 Ordering Products and Services	 	4
	1.3 Delivery of Products and Services	 	4
	1.4 Price Changes	 	4
	1.5 Warranty and ServicePlan Maintenance Services	 	5
	1.6 Responsibilities for Machine Loss or Damage	 	6
	1.7 Taxes	 	6
	1.8 Patents and Copyrights	 	7
	1.9 Limitation of Liability	 	7
	1.10 Time Limit for Legal Actions	 	8
	1.11 Your Additional Rights	 	8
	1.12 Organizations that Market our Products	 	8
	1.13 Actions Requiring Our Consent	 	8
	1.14 Confidential Information	 	8
	1.15 Obligations Affected by Outside Causes	 	8
	1.16 Access to Your Facilities	 	8
	1.17 Your Responsibility for Results	 	9
	1.18 Electronic Communications	 	9
	1.19 Changes to the Agreement Terms	 	9
	1.20 Notices	 	9
	1.21 Ending this Agreement	 	9
	1.22 Geographic Scope	 	9
	1.23 Governing Law	 	10
	

Section 2. Warranties	
 	

10
	2.1 Warranty Overview	 	10
	2.2 Warranty for IBM Machines	 	10
	2.3 Warranty for IBM Programs	 	11
	2.4 Warranty for IBM Systems	 	11
	2.5 Warranty for IBM Services	 	11
	2.6 Items Not Covered Under Warranty	 	11
	2.7 Extent of Warranty	 	12
	

Section 3. Machines	
 	

12
	3.1 Prices. Payment and Title	 	12
	3.2 Production Status	 	12
	3.3 Installing a Machine or Feature	 	12
	3.4 Licensed Internal Code	 	13
	

Section 4. Programs	
 	

14
	4.1 Grant of License	 	14
	4.2 Actions You May Take Under Your License	 	14
	4.3 Actions You May Not Take Under Your License	 	15
	4.4 Distributed Features	 	15
	4.5 Additional License Copies	 	15
	4.6 Program Testing	 	16
	4.7 Program Protection	 	16
	4.8 Program Charges and Payment	 	16
	 	 	 



2







 


	4.9 Variable Charge Programs	 	16
	4.10 Program Services	 	17
	4.11 Ending the License	 	17
	4.12 Programs not Covered by this section	 	17
	

Section 5. ServicePlan Maintenance Services	
 	

17
	5.1 Description of Our Services	 	17
	5.2 Warranty Options	 	18
	5.3 Charges and Payment	 	18
	5.4 Hours of Coverage	 	19
	5.5 Starting Coverage	 	19
	5.6 Charging Service	 	19
	5.7 Ending ServicePlan Maintenance Services	 	19
	

Section 6. Project Services	
 	

20
	6.1 Statement of Work	 	20
	6.2 Changes to the Statement of Work	 	20
	6.3 Charges and Payment	 	20
	6.4 Personnel	 	20
	6.5 Information Exchange	 	21
	6.6 Ending Project Services Early	 	21
	

Section 7. Glossary	
 	

21





Section 1. General Terms  


        This section contains the general terms that apply to all transactions under any of the other sections of this Agreement. 


1.1   Agreement Structure  


        Words that appear in italic type throughout this Agreement are defined in the Glossary. Generally, other terms are defined when first used, and are capitalized
throughout the Agreement. 


        A.
Amendments and Future Documents 


        Some
Products and Services have terms in addition to those contained in this Agreement. These terms are provided on separate documents called "Amendments", which become part of this
Agreement once signed by both of us. Most of our Products and Services can be ordered under this Agreement. In some cases we may have to sign separate agreements, for example, the IBM Information
Network Agreement. 


        B.
Transaction Documents 


        For
each order you place, you will receive a "Transaction Document" which confirms the details of your order. 


        We
customize most Transaction Documents for you. For example: 



	•
	a
"Statement of Work" may provide details such as scope of work, our respective responsibilities and an estimated schedule; and



	•
	an
invoice will provide details such as items ordered, quantities, amount payable and payment terms. 



3







 





        Transaction
Documents also include documents that are not customized for your order but provide details of a specific Product or Service. For example: 



	•
	"License
Program Specifications" is a Transaction Document that applies to all orders for the same Program; and



	•
	Some
"Exhibits" are Transaction Documents that apply to all orders under a volume discount for the same Products. 




        Some
Transaction Documents, for example, Statements of Work, will be signed by both of us. Others, such as License Program Specifications and Exhibits, are not signed. 


1.2   Ordering Products and Services  


        A. How you place an order 


        You
may order Products and Services under this Agreement as follows: 



	•
	in
writing, for example, a letter,



	•
	orally,
including telephone; or



	•
	electronically,
including facsimile (fax). 






        B.
Our Acceptance of Your Order 


        A
Product or Service is Covered under this Agreement when we accept your order by: 



	•
	providing
you with a Transaction Document which confirms the details of your order:



	•
	shipping
the Product, or



	•
	providing
the Service. 




        C.
Your Acceptance of Specific Terms 


        You
accept the terms in an Amendment or Transaction Document which are relevant to your order by doing any of the following: 



	•
	signing
an Amendment or Transaction Document (if required);



	•
	using
the Product or Service or allowing others to do so; or



	•
	making
any payment for the Product or Service. 




1.3   Delivery of Products and Services  


        We will use reasonable efforts to meet your delivery requirements for Products and Services you order, and will keep you informed of our progress. We pay normal
transportation charges for Products we ship to you. 


1.4   Price Changes  


        The following applies to price changes which relate to Machines, Programs and "ServicePlan Maintenance Services": 


        A.
Price increase: recurring charges 


        If
we increase recurring charges, we will give you three months' written notice. The increase will be effective on the first day of the applicable period stated in the notice. 


4







 



        B.
Price increase: single charges 


        If
we increase single (nonrecurring) charges, we will announce it as effective either immediately, or at a future date. 


        When
the increase is effective immediately, the lower charge will apply to orders we received up to the announcement date if: 



	•
	your
requested delivery date falls within three months after the announcement date; or



	•
	the
invoice date is within three months after the announcement date for the following Program charges: "Additional License", "Distributed Feature", or a group upgrade
charge. 




        When
the increase in charges is effective at a future date, we wilt announce its "Effective Date" and a "Delivery Period". 


        The
lower charge will apply to orders we receive up to the Effective Date if: 



	•
	your
requested delivery date is within the Delivery Period announced; or



	•
	the
invoice date is within the Delivery Period for the following Program charges: Additional License, Distributed Feature, or a group upgrade charge. 




        C.
Your right to cancel 


        You
may cancel an on-order Product or ServicePlan Maintenance Service, to which an increase applies, if you give us written notice within one month of the date we gave you
notice. 


        D.
Price decreases 


        Any
decrease in charges will apply only to charges incurred on or after the effective date of the decrease. 


1.5   Warranty and ServicePlan Maintenance Services  


        The following terms apply to both warranty service and ServicePlan Maintenance Services (also called "Maintenance Services"). 


        A.
Types of Service we offer 


        We
provide certain types of service for a Machine to keep it in, or restore it to, good working order. These are available during the Machine's warranty period or while it is under
Maintenance Services. 


        Depending
on the Machine and the type of service you choose, we may repair or replace your Machine at your location or one of our service locations. The types of service are described in
a bulletin which is available to you separately. 


        Under
Maintenance Services, you may select the type of service only from those available for the Machine. The type of service must be the same for the Machine and its features. 



        When
a type of service involves the exchange of a Machine or part, the item we replace becomes our property and the replacement becomes yours. The replacement may not be new, but will be
in good working order. 


        Before
we exchange a failing Machine, we may inspect it. If it is damaged or parts are missing, we will charge you to restore the Machine to an acceptable condition. 


5







 



        B.
Before we provide services 


        Before
we provide warranty service or Maintenance Services, you agree to do the following, if it applies: 



	•
	get
authorization from the owner, if you are not the owner, to have us service a Machine;



	•
	follow
the problem determination, problem analysis and service request procedures that we provide;



	•
	inform
us promptly of changes in the Machine's location;



	•
	secure
all programs, data and funds contained in the Machine;



	•
	for
a Machine with "Exchange" service, remove all features, options, alterations and attachments which are not under our service;



	•
	for
a Machine with Exchange service, ensure that it is free from any legal obligations or restrictions that prevent its exchange. 




        C.
Your Continued Responsibilities 


        In
return for our comprehensive warranty and Maintenance Services, you agree: 



	•
	to
connect certain repaired or replaced Machines and verify their operation when we complete certain types of service described in a bulletin;



	•
	not
to recreate problems on an IBM Machine covered under this Agreement if the problems initially occurred on another Machine not covered under this Agreement; and



	•
	not
to distribute certain technical Information (such as corrections for installed hardware and software) which we supply to you under this Agreement unless we agree to your
request to do so. 




        D.
Additional Charges 


        Depending
on the particular Service or circumstances, additional charges may apply. For example, you may be charged an additional amount if we have to repair damages caused by
non-IBM-performed activity, or if your location is not accessible by private automobile. 



1.6   Responsibilities for Machine Loss or Damage  


        When you buy a Machine from us, we bear the risk of loss or damage through its Date of installation. After this date, you assume the risk. 


        If
you return a Machine to us for service while it is under warranty or Maintenance Services, the following applies: 



	•
	we
are responsible for its loss or damage while it is in our possession or if we are paying the transportation charges and it is in transit;



	•
	you
are responsible for its loss or damage if you are paying the transportation charges and it is in transit. 




1.7   Taxes  


        You agree to pay any taxes, duties or government levies resulting from any transactions under this Agreement. This does not include taxes based on IBM's net
income. 


6








 



1.8   Patents and Copyrights  


        A. Our responsibilities for claims 


        If
a third party claims that an IBM Product we provide infringes a Canadian patent or copyright, we will defend you against that claim at our expense. In this regard, we will pay all
costs, damages and legal fees that a court finally awards, provided that you: 



	•
	promptly
notify us in writing of the claim; and



	•
	cooperate
with us in, and allow us to control, the defense and any related settlement negotiations. 




        If
such a claim is made or appears likely to be made, you agree to permit us to enable you to continue to use the Product or to modify or replace it. If we determine that none of these
alternatives is reasonably available, you agree to return the Product to us on our written request. We will then give you a credit equal to your net book value for the Product, provided that you have
followed generally accepted accounting principles. 


        This
is our entire obligation to you regarding any claim of infringement. 


        B.
Claims for which we are not responsible 


        We
have no obligation regarding any claim based on any of the following: 



	•
	your
modification of a Product or a Program's use in other than its Specified Operating Environment;



	•
	the
combination, operation or use of a Product with any product, data or apparatus that we did not provide; or



	•
	infringement
by a Non-IBM Product. 




1.9   Limitation of Liability  


        Circumstances may arise where you are entitled to recover damages from us. In each such instance, we are liable for no more than: 


        A.
payments referred to in the "Patents and Copyrights" subsection; 



        B.
damages for physical harm to persons caused by our negligence; 


        C.
damages for physical harm to tangible personal property and real property caused by our negligence; and 


        D.
any direct damages up to the greater of $100,000 or the charges paid for the Product or Service that is the subject of the claim. For recurring charges, the charges paid are
considered to be the charges paid during the 12 months before the claim. 


        This
limitation also applies to our subcontractors and Program developers. It is the most you are entitled to receive from us and our subcontractors and Program developers combined. 


        Under
no circumstances are we liable for any of the following: 



	•
	damages
of third parties claimed against you (other than those under A., B. and C. above),



	•
	harm
to your records or data; or



	•
	special,
indirect or consequential damages (other than those under A. and B. above), including but not limited to lost profits, lost business revenue, or failure to realize
expected savings, even if you informed us of their possibility. 



7







 





        This
"Limitation of Liability" subsection applies regardless of the basis on which you are entitled to claim damages from us, including but not limited to: 



	•
	breach
of contract even if a fundamental breach, or



	•
	tort,
including but not limited to negligence or misrepresentation. 




1.10 Time Limit for Legal Actions  


        Neither of us will bring an action under this Agreement more than two years after the cause of action arose. If you do not meet your payments, each time
you do not pay will be considered a new cause for action. 



1.11 Your Additional Rights  


        You may have additional rights under certain laws that do not allow us to exclude implied warranties or conditions or to exclude or limit certain damages. If so,
those exclusions or limitations may not apply to you. 


1.12 Organizations that Market our Products  


        We have a contractual relationship with certain organizations (such as IBM Agents or IBM Application Specialists) to market and support some of our Products and
Services on our behalf. 


        Orders
you place with us for our Products or Services under this Agreement may be as a result of the marketing activity of these organizations. If so, we confirm that we are responsible
for providing these Products and Services to you under the warranties and other terms of this Agreement. However, we are not responsible for any additional obligations these organizations may have to
you or for any other products and services that they (and not we) may supply to you. 


        Any
Products that you may purchase from re-sellers (such as IBM Authorized Dealers) would not be subject to this Agreement. 



1.13 Actions Requiring Our Consent  


        Our written consent is necessary before you may assign any of your rights or obligations, or re-market any Service. 


        If
you do any of the above before you receive our written consent, your actions will have no legal effect. 


1.14 Confidential Information  


        Each of us agrees not to disclose confidential information to each other in connection with this Agreement. If this is required by either of us, a separate
confidentiality agreement must be signed first. 


1.15 Obligations Affected by Outside Causes  


        Neither of us will be responsible for failing to meet obligations due to causes beyond your or our reasonable control. 


1.16 Access to Your Facilities  


        For us to fulfill our obligations, you agree to provide us with full, free and safe access to your facilities, as reasonably required. If you become aware of any
unsafe conditions or hazardous materials to which our personnel may be exposed, at any of your facilities, you agree to promptly notify us. 


8









   1.17 Your Responsibility for Results  


        You agree to be responsible for the results you obtain from the Products and Services. 



1.18 Electronic Communications  


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



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



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



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




1.19 Changes to the Agreement Terms  


        To be responsive to your needs and to maintain flexibility in our offerings, we may change the terms of this Agreement by giving you three months' written
notice. However, these changes will not be retroactive. They will apply as of the effective date specified in the notice only to new orders (those we
receive on or after the effective date) and to recurring transactions, such as licenses and Maintenance Services. 



        Otherwise,
changes to this Agreement must be signed by both of us. Additional or different terms in any order or written communications from you will have no legal effect. 


1.20 Notices  


        Notices can be: 



	•
	delivered
personally;



	•
	mailed
to you at your address and to us in care of our local marketing office; or



	•
	delivered
by electronic communication, including facsimile (fax). 




        Notices
by mail will be effective 5 days after the postmark date. Electronic notices will be effective when received. 


1.21 Ending this Agreement  


        When both your and our commitments concerning all of your Products and Services have expired or have been ended, you may end this Agreement by giving us written
notice. 


        Either
of us can end this Agreement at any time if the other does not comply with any of its terms, provided the one who is not complying is given written notice and reasonable time to
comply. 


        Any
rights and obligations under this Agreement which by their nature continue after it ends, will remain in effect until they are completed. The terms of this Agreement will also apply
to anyone who receives or is assigned rights in the Agreement. 


1.22 Geographic Scope  


        All your rights, all our obligations and all licenses (except for "Licensed Internal Code") are valid only in Canada. 


9







 



1.23 Governing Law  


        The laws of the Province of Ontario govern this Agreement. 


Section 2. Warranties  


        We provide warranties for certain Products and Services covered under this Agreement. 



2.1   Warranty Overview  


        The complete details and extent of our warranties are provided after this overview. For your convenience, we have summarized the highlights in the following
chart. 



	What we warrant
 
	 	Extent of coverage
	 	What we will do

	IBM Machines	 	•	 	Conform to Specifications	 	•	 	Repair or replace the failing IBM Machine, at no additional charge.
	 	 	•	 	Free from defects in materials and workmanship	 	•	 	Refund your money if unable to repair or replace during the warranty period.
	

Warranted IBM Programs	
 	

•	
 	

Conform to Specifications	
 	

•	
 	

Provide code or information to help correct or bypass a problem or advise you of a restriction of a function, at no additional charge.
	 	 	 	 	 	 	•	 	Refund your money if unable to resolve the problem during the warranty period.
	

IBM Machines and warranted IBM Programs supplied as a system	
 	

•	
 	

Compatible and can operate with one another	
 	

•	
 	

For IBM Machines, and warranted IBM Programs, same as above.
	 	 	 	 	 	 	•	 	Refund your money if not compatible and cannot operate with one another after we provide warranty service.
	

IBM Services	
 	

•	
 	

Perform according to their descriptions	
 	

•	
 	

Refer to a Transaction Document, if applicable.





2.2   Warranty for IBM Machines  


        We warrant that each IBM Machine: 



	•
	conforms
to its Specifications; and



	•
	is
free from defects in materials and workmanship. 




        The
warranty period for an IBM Machine is a specified, fixed period which begins on its Date of Installation. If an IBM Machine does not function as warranted during the warranty period,
we will repair or replace it at no additional charge. If we are unable to do so, you may return it to us and we will refund your money. 


10







 



        During
the warranty period, we will provide service under the type of service designated for the Machine (at no additional charge), or under the "Warranty Option" you have selected, at
the rate which is in effect at that time. Warranty Option is described in the ServicePlan Maintenance Services section. The types of service are described in a separate bulletin which is available
from us. 


        After
the warranty or Warranty Option expires, your IBM Machine will be automatically covered under Maintenance Services. This is described in the section on ServicePlan
Maintenance Services. 


        We
provide warranty service for an IBM Machine feature, conversion or upgrade, only if the IBM Machine on which it is installed is: 



	•
	the
designated, serial-numbered IBM Machine; and



	•
	at
the proper engineering-change level. 




        During
its warranty period, we will manage and install engineering changes that apply to an IBM Machine. 


2.3   Warranty for IBM Programs  


        We warrant certain IBM Programs. For each warranted IBM Program, we warrant that it conforms to its Specifications. We provide Program Services at no additional
charge for warranted IBM Programs. 


        Under
Program Services, we assist you by providing code or information to help correct or bypass the problem or advise you of a restriction of a function. However, for us to assist you,
we must be able to reproduce your reported problem in the Specified Operating Environment. We provide Program Services for only the unmodified portion of a current release of a Program. 


        Program
Services are always available for at least one year following general availability of a warranted IBM Program. They continue to be available until: 



	•
	we
give you six months' written notice to end them; or



	•
	the
date or the end of a period which we specify at the time the Program is announced. 




        Therefore,
the availability of Program Services will depend on when you obtain your license. 


        We
will specify a warranty period for the Program which begins on its Date of Installation. If, during the warranty period, we are unable to make the program function as warranted, you
may return it to us and we will refund your money. 



2.4   Warranty for IBM Systems  


        Where we supply IBM Machines and warranted IBM Programs together as a system, we warrant that they are compatible and can operate with one another. The warranty
services for these IBM Machines and warranted IBM Programs are the same as those described in this section. If these IBM Machines
and warranted IBM Programs are not compatible and cannot operate with one another, even after we provide warranty services, you may return them to us and we will refund your money. 



2.5   Warranty for IBM Services  


        For each IBM Service provided under this Agreement, we warrant that it will be performed according to its description in the applicable Transaction Document. 


2.6   Items Not Covered Under Warranty  


        We do not warrant uninterrupted or "error free" operation of a Product or Service. 


11







 



        We
provide certain IBM Products and IBM Services on an "as is" basis and will identify them to you. 


        Also,
we provide non-IBM Products and non-IBM Services on an "as is" basis. In these cases, non-IBM manufacturers, suppliers and publishers may
provide their own warranties to you. 


2.7   Extent of Warranty  


        These warranties apply only if you use the Products and Services in the manner specified, and only to the current release of a Program. These warranties will have
no legal effect if the Products or Services are misused, damaged by accident, modified, operated in other than the Specified Operating Environment, placed in an unsuitable physical or operating
environment, maintained improperly by you or caused to fail by a product for which we are not responsible. 


        These
warranties replace any conflicting statement of limited warranty included with a Product shipment except those provided by us. 


        THESE
WARRANTIES REPLACE ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OR CONDITIONS OF MERCHANTABLE QUALITY AND FITNESS FOR A
PARTICULAR PURPOSE. 


Section 3. Machines  


        This section contains the terms which apply to a Machine which you order from us under this Agreement. After your order has been accepted, we will sell you
the Machine described in a Transaction Document. 


3.1   Prices, Payment and Title  


        We will confirm the Machine's price in a Transaction Document. We will send you an invoice, and you agree to pay according to the payment terms stated in it. We
transfer title to you on payment of all amounts due regarding the Machine. 



3.2   Production Status  


        Each Machine supplied under this Agreement is manufactured from new parts or new and serviceable used parts (which perform like new parts). In some cases, the
Machine may not be new. Regardless of the Machine's production status, the terms of the Warranty section apply, unless we inform you otherwise. 


3.3   Installing a Machine or Feature  


        Our equipment is designed to operate in a wide range of physical environments. For a Machine to function properly and for us to provide warranty and Maintenance
Services, you agree to provide a suitable physical environment for it. We will advise you of the appropriate environment before delivery. 


        Our
installation procedures vary depending on the Machine you purchase. They are described below: 


        A.
Machines we install 


        Our
standard Installation procedures are designed to ensure that each Machine we install is in good working order and meets its Specifications. We will successfully complete these
procedures before we consider a Machine installed. 


12







 



        B.
Features, conversions and upgrades we install 


        We
sell features, conversions and upgrades for installation only on a designated, serial-numbered Machine. For any of these items, you agree to obtain the permission of the owner of the
Machine (if you are not its owner) and any third party owners to: 



	•
	install
it on the designated Machine; and



	•
	transfer
any removed parts to us. 




        C.
Net-Priced transactions we install 


        In
some cases, the sale and installation of features, conversions and upgrades are called "Net-Priced" transactions because they include associated replacement parts which we
provide on an exchange basis. Therefore, all removed parts become our property. For a Net-Priced transaction, you agree to allow us to install it within 30 days of its delivery and
to recover the removed parts. Otherwise, we may end the sale and you agree to return the feature, conversion or upgrade to us at your expense. 


        D.
Customer Set Up Machines and Non-IBM Machines 


        To
ensure the proper functioning of each Customer Set Up Machine, you are responsible for setting it up according to instructions we provide with it. 


        You
agree to install Non-IBM Machines unless you make arrangements with us to do so. 



3.4   Licensed Internal Code  


        Certain Machines we specify (called "Specific Machines") use Licensed Internal Code (called "Code"). International Business Machines Corporation owns copyrights
in the Code and all copies of the Code, including all copies made from them. 


        We
will identify Specific Machines in a Transaction Document called "Exhibit: Machines Subject to Licensed Internal Code terms", unless we advise you otherwise. We will provide this
Exhibit to you. If you are the rightful possessor of a Specific Machine, we grant you a license to use the Code (or any replacement we provide) on, or in conjunction with, only the Specific
Machine, designated by serial number, for which the Code is provided. We license the Code to only one rightful possessor at a time. 



 Actions you may take  




        Under each license, we authorize you to: 



	•
	execute
the Code to enable the Specific Machine to function according to its Specifications;



	•
	make
a backup or archival copy of the Code (unless we make one available for your use), provided you reproduce the copyright notice and any other legend of ownership on the
copy—you may only use the copy to replace the original, when necessary; and



	•
	execute
and display the Code as necessary to maintain the Specific Machine. 




        You
agree to acquire any replacement for, or additional copy of, the Code directly from us in accordance with our standard policies and practices. You also agree to use that Code under
these terms. 


        You
may transfer possession of the Code to another party only with the transfer of the Specific Machine. If you do so, you must 1) either give the other party all your copies of
the Code or destroy them, and 2) give the other party a completed copy of the Exhibit which we provided to you. We license the other party when it accepts the terms of this
Exhibit by initial use of the Code. The terms apply to all Code you acquire from any source. 


13







 



        Your
license is terminated when you no longer own or rightfully possess the Specific Machine. 



 Actions You May Not Take  




        You agree to use the Code only as authorized above. For example, you may not do any of the following: 



	•
	otherwise
copy, display, transfer, adapt, modify or distribute the Code (electronically or otherwise), except as we may authorize in the Specific Machine's Specifications or
in writing to you;



	•
	reverse
assemble, reverse compile or otherwise translate the Code;



	•
	sub-license
or assign the license for the Code: or



	•
	lease
the Code or any copy of it. 




Section 4. Programs  


        This section contains the terms which apply to a Program that we license to you under this Agreement. 


4.1   Grant of License  


        When we accept your order, we grant you a license for the Program described in a Transaction Document. We warrant that we have the right to license it. The
license is valid only in Canada. 


        Since
Programs are copyrighted and licensed (not sold), we or our suppliers keep title to the Program and to any copies made from it. We also license others to use the same Program. 


4.2   Actions You May Take Under Your License  


        Under each license, we authorize you to take the following actions: 


        A.
Use the Program on the Designated Machine 


        For
most Programs, you agree to identify a Designated Machine to us by type/model and serial (or plant order) number. 


        You
may use the Program's machine-readable portion on only the Designated Machine, unless: 



	•
	the
Designated Machine is inoperable—you may then use the Program on a backup Machine;



	•
	the
Designated Machine cannot assemble or compile the Program—you may then assemble or compile it on another Machine;



	•
	we
grant an "Installation License"—you may then use the Program on any other Machine in the same or adjoining rooms as the Designated Machine; or



	•
	we
grant a "Location License"—you may then use the Program on any other Machine in the same building with the same mailing address as the Designated Machine. 




        Because
we or our supplier own the Program, you agree to notify us if you change the Designated Machine, and to confirm the date of the change. This does not apply to a Program for which
we have specified that you do not need to identify a Designated Machine. 


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        B.
Store the Program 


        You
may store the Program's machine-readable portion in, transmit it through and display it on Machines associated with the Designated Machine. You may also store the Program on a backup
Machine. 


        C.
Support your authorized use 


        You
may do the following to support your authorized use as described above. 



	•
	modify
the Program's machine-readable instructions or data, or merge them into another Program; and



	•
	make
copies of the Program, provided you reproduce the copyright notice and any other legend of ownership on each copy or partial copy. 




        D.
Use restricted materials 


        You
may use any portion of the Program which we in any way mark restricted (for example, "Restricted Materials of IBM") only to: 



	•
	resolve
problems related to the use of the Program; and



	•
	modify
the Program so that it will work together with other products, 




        You
agree to comply with any additional terms (for example, a usage restriction) that a Program's Specifications may contain. We provide the Specifications to you with the Program. For
an "as is" Program, any additional terms are contained in a document called "Notice of Availability". 


4.3   Actions You May Not Take Under Your License  


        You agree not to do any or the following: 



	•
	sub-license,
assign or transfer the license for any Program;



	•
	distribute
any Program to any third party; or



	•
	reverse
assemble, reverse compile or otherwise translate any Program. 




4.4   Distributed Features  


        Some Programs have certain features called "Distributed Features" which are designed to work with those Programs, called "Associated Programs". For each
Distributed Feature order we accept, you are authorized, under your license for the Program, to: 



	•
	make
one copy of the Distributed Feature and its documentation; and



	•
	distribute
the copy to, and use it on a Machine other than the Designated Machine of its Associated Program. 




        You
may use the copy on only one Machine at a time. Persons using a Machine located outside of your organization may use the copy only to access the Associated Program. 


4.5   Additional License Copies  


        You may order additional licenses for Programs. When we accept your order, we authorize you to make an additional copy of the Program (called an "Additional
License Copy") rather than shipping you another copy. 



        For
some Programs, we also offer a Distributed System License Option (called a "DSLO") license. This will usually be at a lower charge than the original license (called the "Basic
License"). When we 


15







 



accept
your order for a DSLO license we will authorize you to make an additional copy of the Program rather than shipping you another copy. In return for the lower charge, while under a DSLO license,
you agree to: 



	•
	have
a Basic License for the Program;



	•
	provide
problem documentation and receive Program Services, if any, only through the location of the Basic License; and



	•
	distribute
to, and install on the Designated Machine of the DSLO license, any release, correction or bypass which we provide for the Basic License. 




4.6   Program Testing  


        To help you decide if a Program meets your needs, we provide a testing period for certain Programs. The testing period for an eligible Program starts on its Date
of Installation. We will Inform you of the eligible Programs and their testing periods. The testing period applies only on your first order of a Program. 


        If
you decide not to keep the Program, you agree to provide us with a notice to end the license by the end of the testing period. In this event, we will give you a credit for any
applicable charges you may have paid. If we do not receive this notice, then the license will continue. 


4.7   Program Protection.  



        To protect both our interests, for each Program, you agree to: 



	•
	allow
access to it (if it is a data base) only to your employees;



	•
	ensure
that anyone who uses it (accessed either locally or remotely) does so only for reasons related to your authorized use and complies with our terms regarding Programs;
and



	•
	maintain
records of all copies and, if the Program is one for which you are required to provide Designated Machine identification to us, you agree to maintain records of the
location of all copies. 




4.8   Program Charges and Payment  


        Program charges may be: 



	•
	one-time
charges:



	•
	recurring
charges; or



	•
	a
combination of both (for example, a primary license charge with an annual license charge). 




        We
will send you an invoice, and you agree to pay it according to the payment terms stated in it. 



4.9   Variable Charge Programs  


        We assign Machines to groups according to their type and model. The charges for some Program licenses vary depending on the group to which the Designated Machine
belongs. We call these Programs "Variable Charge" Programs. Variable Charges include graduated charges and processor-based charges. 


        The
following applies to these licenses: 



	•
	if
you upgrade or downgrade the Designated Machine, you agree to promptly notify us of the date of the change; 



16













  



	•
	if
you change or upgrade a Designated Machine to a Machine in a higher group, you may incur a group upgrade charge or an increase in your recurring charge;



	•
	if
you change or downgrade the Designated Machine to a Machine in a lower group, lower recurring charges will apply to charges incurred on or after the date of the change
but no refund of one-time charges will be given; and



	•
	if
we reassign a Designated Machine to a Machine group with different charges, our price change terms In the General Terms section will apply; however, Programs with
one-time charges incurred before the change will not be affected. 




        We
will inform you if we change the assignment of Machines to different groups. 


4.10 Program Services  



        For warranted IBM Programs and selected other Programs, we provide Program Services at no additional charge. Details on Program Services are provided in the
Warranty section. 


4.11 Ending the License  


        You may end the license for a Program by giving us one month's written notice or at any time during the Program's testing period. For some Programs, we offer a
replacement Program for which you will have to pay only an upgrade charge. In return, you must end the license for the replaced Program. 


        If
you do not meet your obligations regarding the Programs, and we have given you written notice and reasonable time to comply, we may end any Program license. 



        Within
three months after a license is ended, you must destroy all copies of the Program, including those merged into other Programs. However, you may keep a copy of the Program
in your archives. 


4.12 Programs not Covered by this section  


        Certain Programs, such as personal computer Programs, are packaged with their own license agreements. These Programs are called "Program Packages" and are
licensed under the terms of the agreements provided with them and are not covered by this section. 



Section 5. ServicePlan Maintenance Services  


        This section contains the terms that apply to ServicePlan Maintenance Services which we provide under this Agreement. We will provide the Maintenance
Services for a Machine described in a Transaction Document. 


5.1   Description of Our Services  


        We offer the following kinds of Maintenance Services: 


        A.
IBM Machine Service 


        We
provide this service for an IBM Machine (except for an accessory) by restoring it to good working order. We also manage and install applicable engineering changes. 


        Our
machine service may include the repair or replacement of parts or the exchange of certain IBM Machines. Depending on the type of IBM Machine, we may also provide preventive
maintenance, which may include lubricating parts and making adjustments. The types of service are described in the General Terms section and more details are provided in a bulletin which is
available to you separately. 


17







 



        For
certain IBM Machines, we will provide additional services. These services may include: 



	•
	advice
and guidance about available corrections for installed IBM Programs; and



	•
	assistance
in identifying and resolving systems problems. 




        These
additional services are designed to help you minimize interruptions, resolve problems in your system operation and add products into your operation. For some of these services, you
agree to provide one or more technical coordinators to work with us. We will advise you when technical coordinators are required, and which IBM Machines are eligible for these additional services. 


        B.
Non-IBM Machine Service 


        We
also provide support for certain Non-IBM Machines. We will repair or replace parts or exchange the failing Non-IBM Machine with a replacement of equal or
greater function. If you do not accept the replacement, we will not try to repair the failing Non-IBM Machine further. 


        Maintenance
Services do not cover: 



	•
	accessories
and certain parts, such as frames and covers;



	•
	service
of a Machine damaged by misuse, accident, modification, unsuitable physical or operating environment, improper maintenance by you or failure caused by a product for
which we are not responsible. 




5.2   Warranty Options  


        During the warranty period of some Machines, you may select an enhanced type of service such as repairing a Machine at your location rather than our location.
This enhanced type of service is called a "Warranty Option". We will inform you of the applicable charges, the available types of service and hours of coverage. 


        If
the Machine has a warranty period of more than one year, the Warranty Option will expire at the end of the current warranty period. However, if the warranty period is one year or
less, the Warranty Option will expire one year from the date the warranty period began. After the Warranty Option ends, coverage will continue as described in the subsection called "Starting
Coverage". 


5.3   Charges and Payment  


        The amounts payable may be on a recurring basis (for example, monthly or annual maintenance charges). We will send you an invoice and you agree to pay according
to the payment terms stated in it. 


        We
will invoice minimum maintenance charges, minimum Warranty Option charges and charges for optional hours of coverage in advance for each Machine for the applicable invoice
period. 


        For
Machines which are also subject to usage charges (for example, certain printers and cheque sorting machines), you agree to provide us with a meter reading as of the last working day
of the period that is covered by the minimum maintenance charge. We invoice those charges following the period in which they apply. We invoice all other charges or credits when or after they are
incurred or earned. 


        We
will prorate recurring monthly charges based on a 30-day month. 


        For
selected Machines, we offer ServicePlan Financial Options which are described in Amendments. Under these Options, we reduce maintenance charges for selected Machines, based on your
agreement to assume additional specified responsibilities. When you select an Option, we will invoice you according to the terms stated in the applicable Amendment. 


18







 



5.4   Hours of Coverage  


        Maintenance Services we perform at your location may be available 24 hours each day, seven days each week for certain IBM Machines. For other
Machines, this same coverage may be available by a combination of base hours and additional optional hours of coverage which you select. Depending on the type of Machine, additional
charges may apply for optional hours of coverage. 


        Weekdays,
the base hours are from 7 a.m. to 6 p.m. and you may add optional hours that are the same each day. For weekends, since these hours do not apply,
you can obtain 24 hours of coverage for Saturday and/or Sunday, by selecting optional hours of coverage. Optional hours may be different for Saturday and Sunday but must cover the
same consecutive hours each day. We will advise you of the available optional hours. If you ask us to provide Maintenance Services outside of the base hours or your selected
optional hours of coverage, they will be charged on a per incident basis. 


        Maintenance
Services we perform at our service locations are available during their regular business hours. 


5.5   Starting Coverage  


        Maintenance Services coverage may be started in two ways: 


        A.
Automatic coverage 


        To
provide you with continuous maintenance protection for an IBM Machine after its warranty or Warranty Option ends, we will automatically continue coverage, unless you notify us
otherwise. We will advise you by sending you an invoice. If you do not wish to continue coverage, you must notify us
within thirty days of the date of the first invoice. The type of service will be the same as the services you have already selected for similar IBM Machines installed at your location. If you
have no similar machines, we will cover it under an IBM On-site type of service, from 7 a.m. to 6 p.m. on weekdays. Charges are those in effect when coverage begins. 


        B.
Coverage you select 


        You
may select the type of service and coverage from those available. Both of us must agree to the starting date of the coverage which will be shown on a Transaction Document. If the
Machine is not new, we may inspect it within one month after the starting date. If we find that it is not acceptable, you may request that we restore it, at an additional charge. Alternatively, you
may withdraw your service request. We will then refund any amounts you have paid. However, you will be charged for any services which you requested us to perform. 



5.6   Changing Service  


        You agree to notify us 15 days before you want to: 



	•
	change
the type of service; or



	•
	change
or select optional hours of coverage. 




5.7   Ending ServicePlan Maintenance Services  


        Either of us may end coverage for a Machine if the other does not comply with the applicable terms of this Agreement, provided that the one who is not Complying
is given written notice and reasonable time to do so. 


        You
may end coverage for a Machine either as described in the subsection titled "Starting Coverage" or by giving us one month's written notice: 



	•
	after
the Machine has been under this Agreement for six months; 



19







 



	•
	if
the Machine has been removed from your organization; or



	•
	on
the effective date of an increase in charges. 




        We
may end coverage for a Machine by giving you three months' written notice after the Machine has been under this Agreement for at least one year. 


        After
Maintenance Services are ended, we will give you a refund of any amount we owe you. 



Section 6. Project Services  


        The terms in this section apply to Services we provide under this Agreement in support of your project. Examples of Project Services are: 



	•
	system
integration, consulting, education, software development, general technical assistance; and



	•
	computer
room design and construction, customized software offerings and computer cabling and computer relocation. 






6.1   Statement of Work  


        When we accept your order, we agree to provide the Project Services described in a Transaction Document called a Statement of Work. A separate Statement of Work
must be signed by both of us for each project. The Statement of Work may include: 



	•
	a
description of the Project Services;



	•
	our
respective responsibilities;



	•
	an
estimated schedule;



	•
	applicable
charges; and



	•
	any
other applicable terms. 




        Both
of us agree to make reasonable efforts to carry out our respective responsibilities according to the estimated schedule. 



        We
or our subcontractors may provide Project Services to others which are similar to 


6.2   Changes to the Statement of Work  


6.3   Charges and Payment  


        You agree to pay charges according to the Statement of Work. We will send you an invoice and you agree to pay it according to the payment terms stated in it. 


        If
Project Services are ended before their completion, you agree to pay all charges: 



	•
	already
invoiced;



	•
	for
additional effort to perform Project Services before their termination; and



	•
	for
additional costs we incur because the Project Services ended. 




6.4   Personnel  


        Each of us agrees to: 



	•
	appoint
a representative for each Statement of Work;



	•
	promptly
notify the other in writing if our own representative is replaced; and 



20







 



	•
	supervise
and control our own personnel only. 




6.5   Information Exchange  


        Each of us, without restriction by the other, may use and license any ideas, concepts, know-how, inventions or techniques disclosed or developed by
either you or us in connection with any Statement of Work. 


6.6   Ending Project Services Early  


        The Statement of Work may include special rights to end Project Services before their completion. In addition, each of us may end Project Services by giving
notice to the other if the other breaches its obligations and does not remedy the breach within 30 days of receiving notice of the breach. 



        The
subsection titled "Charges and Payment" applies whenever Project Services are ended before their completion. 


7.     Glossary  



	Customer Set Up Machine	 	An IBM Machine that you set up according to our instructions.
	

Date of Installation	
 	

For a Machine:
	

 	
 	

•	
 	

for a Customer Set-Up Machine, the second business day after the end of its normal transit allowance period; we will allocate a reasonable transit allowance period.
	

 	
 	

•	
 	

for a Machine we install, the business day after the day we install it; if you defer installation, the Date of Installation is the day we make it available to you for installation.
	

 	
 	

For a Program:
	

 	
 	

•	
 	

ten days after we ship the Program; or
	

 	
 	

•	
 	

the date we accept your order for an Additional License or Distributed Feature.
	

Designated Machine	
 	

The Machine which you identify to us by type/model and serial (or plant order) number, on which you intend to use a Program for processing.
	

Machine	
 	

A machine and its features, model conversions and upgrades, elements and accessories or any combination of them.
	

 	
 	

•	
 	

An IBM Machine is a Machine bearing an IBM trademark or which we supply as IBM equipment.
	

 	
 	

•	
 	

A Non-IBM Machine is a Machine which does not bear an IBM trademark or which is not supplied as IBM equipment.
	 	 	 	 	 





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Product	
 	

A Machine or Program.
	

Program	
 	

Any of the following, including features and any whole or partial copies, or any combination of:
	

 	
 	

•	
 	

machine-readable instructions, the purpose of which is to cause a computer to execute a particular task or function;
	

 	
 	

•	
 	

a collection of machine-readable data, such as a data base; and
	

 	
 	

•	
 	

related materials in machine-readable or printed form, including documentation and listings.
	

 	
 	

Program does not include Licensed Internal Code or any of the above that results from a Service.
	

 	
 	

Program includes an IBM Program and a Non-IBM Program.
	

Service	
 	

A resource, assistance or offering which we make available to you, such as maintenance services, project services and leasing and financing.
	

Specifications	
 	

The document in which we provide information specific to a Product. For an IBM Machine, this document is labelled "Official Published Specifications". For a warranted IBM Program, it is labelled "License Program Specifications" or "License
Information".
	

Specified Operating Environment	
 	

The Machines and Programs with which a Program is designed to operate as described in the Specifications for the Program.




22