Managed Services Agreement

Standard Terms

These Standard Terms govern Customer’s access to and use of the Managed Services and constitute a binding contract between Customer and ibmc. Customer’s use of any Managed Services is at all times subject to the terms and conditions outlined in these Standard Terms, which incorporate by reference all other terms and conditions governing Customer’s use of the Managed Services, as described in the Contract Terms.

1. Managed Services.
   • Services. During the Term of this Agreement, ibmc will use reasonable efforts to provide to Customer the Managed Services.
   • Changes. ibmc reserves the right, in its sole discretion, to make any changes to the Managed Services that it deems necessary or useful to: (i) maintain or enhance: (A) the quality or delivery of ibmc’s services to its customers, (B) the competitive strength of or market for ibmc’s services, or (C) the Managed Services’ cost efficiency or performance; or (ii) comply with applicable law.
   • Third-Party Software. Customer understands that certain Managed Services provided hereunder may include Third-Party Software, and Customer acknowledges and agrees that Customer’s right to access and use such Third-Party Software is subject to all applicable restrictions and limitations on the rights granted to ibmc under the License Agreement, and nothing in this Agreement will be construed to grant to Customer any rights beyond those that ibmc has the right to grant to Customer pursuant to the License Agreement. As between Licensor, ibmc and Customer, Licensor retains all right, title, and interest in and to the Third-Party Software. For purposes of this Agreement, Customer’s right to use any Third-Party Software hereunder during the Term shall be deemed granted under a non-exclusive and non-transferable right and sublicense, without the right to grant further sublicenses, to access and use the Third-Party Software.
   • Professional Services. ibmc will perform certain Professional Services in connection with the commencement of the Managed Services and as described in the applicable Statement of Work, with such Professional Services to be performed as part of the Managed Services Fee. Customer may purchase additional Professional Services as described in a Product Specification or a Statement of Work. The fees and payment terms for such additional Professional Services will be set forth in the applicable Product Specification or Statement of Work. Professional Services may include, but are not limited to, training in the use of the Products, consulting services analyzing and addressing Customer’s needs, moving of Equipment, and development of custom application programs and custom modifications to standard Software.
2. Delivery; Installation.
   • Configuration. Following execution of the Agreement, ibmc will configure the Products in accordance with Customer’s document and business processing needs and the Product Specification.
   • Pre-Delivery. Prior to the Delivery Date, the installation site will be prepared by Customer at Customer’s expense in accordance with ibmc’s standard installation instructions and environmental requirements, which includes installation of a dedicated power outlet required for operation of the Equipment. If the Equipment is being connected to a local area network, ibmc is responsible for installing the network and connecting the Equipment to the local area network.
   • Delivery. ibmc shall deliver the Products to Customer’s designated site (the "Delivery Point") on the Delivery Date. The Managed Services Fee includes all standard shipping charges and insurance costs for delivery of the Products by ibmc to Customer’s site.
   • Assembly and Installation.
     • Equipment. Following delivery of the Equipment to the Delivery Point, ibmc (or its authorized agent) will uncrate and unpack the Equipment, assemble the Equipment and connect the Equipment to peripherals, the power source and communication and other utilities, ensure the Equipment is properly powering on, and perform ibmc’s standard diagnostic tests on the Equipment ("Equipment Assembly and Installation") pursuant to the Product Specification.
     • Software. ibmc (or its authorized agent) will install the Software on the Equipment and perform ibmc’s standard diagnostic tests on the Software (the "Software Installation," and together with the Equipment Assembly and Installation, "Installation") pursuant to the Product Specification.
     • Installation Acknowledgment Form. ibmc (or its authorized agent) shall notify Customer when Installation has been successfully completed and shall obtain an authorized customer signature and date on ibmc’s Hardware and Software Installation Acknowledgement Form. If Installation by ibmc is prohibited by local law, union agreement, or otherwise, ibmc will supervise the Installation by the party designated by Customer, and Customer will bear any additional costs occasioned thereby.
   • Integration. On or after the Installation Date, during ibmc’s normal working hours, ibmc (or its authorized agent) shall perform the necessary services to configure the Products to meet Customer’s functional requirements and to integrate the Products with Customer’s operating system pursuant to the Product Specification.
3. Operation; Support Services.
   • Operation. Customer acknowledges and agrees that the Products provided to Customer under the Managed Services are, and shall remain, the exclusive property of ibmc, and Customer shall have no right, title or interest therein or thereto except as expressly set forth in this Agreement. The Equipment shall remain personal property even though installed in or attached to real property. Customer shall not remove the Products from Customer’s address specified on the Contract Terms. Customer shall allow ibmc to enter Customer’s premises at all reasonable times to locate and inspect the state and condition of the Products. Customer shall, at its expense, keep and maintain the Equipment in a good state of repair, reasonable wear and tear excepted, and shall use the Products only for their intended purpose and follow ibmc's instructions regarding the use and maintenance of the Products including, without limitation, maintaining the insurance coverage required by these Standard Terms.
   • No Rental. Customer may not rent, lease, lend, or provide commercial services with the Products to any other entity; provided, however, Customer may use the Products to perform services on behalf of and for the benefit of third parties, so long as (i) such use of the Products is limited to use by Customer and occurs on Customer’s premises, (ii) no third parties have access to the Products, (iii) Customer does not make any copies of the Software for such purpose, and (iv) any such third party has signed a confidentiality agreement with Customer that protects ibmc’s Confidential Information. Customer acknowledges and agrees that any and all Losses incurred by ibmc arising out of or resulting from any Third-Party Claim arising out of or occurring in connection with Customer's use of the Products to perform services on behalf of and for the benefit of third parties shall constitute Losses incurred by ibmc arising out of or resulting from any Third-Party Claim under the "Customer Indemnification" provision set forth in the General Terms.
   • Support Services. ibmc will provide Customer with the Support Services as part of the Managed Services.
4. Managed Service Fees.
   • Fees. In consideration of Customer’s right to use the Managed Services during the Term, Customer shall pay ibmc the Managed Services Fee as set forth in the Product Specification in advance, with the first Managed Services Fee payment due and payable prior to ibmc’s shipment of the Products for delivery to the Delivery Point. Thereafter, the annual Managed Services Fee shall be payable on the anniversary date of the Delivery Date; provided, however, if Customer authorizes ibmc to automatically deduct the annual Managed Services Fee from Customer’s bank account or credit card account, Customer may pay the annual Managed Services Fee on a quarterly basis, with each payment (i) equal to one-quarter of the Managed Services Fee and (ii) due and payable on or prior to commencement of the next quarter, with the first quarter commencing on the Delivery Date and each subsequent quarter commencing three (3) months after the commencement of the prior quarter. The Managed Services Fee is payable without any set-off, offset, abatement, or deduction whatsoever.
   • Discounts; Surcharges. If Customer pays the entire annual Managed Services Fee in advance, Customer will be entitled to deduct three percent (3%) from the remittance relating to such Managed Services Fee. If Customer does not (i) pay the entire annual Managed Services Fee in advance or (ii) authorize ibmc to automatically deduct the Managed Services Fee from Customer’s bank account or credit card account, Customer will be subject to an additional surcharge of one percent (1%) of the annual Managed Services Fee.
   • Payment Terms. Customer shall make all payments hereunder in Canadian dollars on or before the due date set forth in the Product Specification. All Managed Service Fees and other payments to be made to ibmc hereunder are payable to ibmc at the address set forth on the Contract Terms. If Customer fails to make any payment when due, Customer shall pay interest on all late payments at the highest lawful rate (up to a maximum of one and one half percent (1.5%) per month (eighteen percent (18%) per annum)). Customer shall reimburse ibmc for all costs incurred in collecting any late payments, including, without limitation, attorneys’ fees, court costs, and collection agency fees. Payment of any late charge does not excuse Customer of any default under this Agreement.
   • Holdover Fees. If, by the Holdover Date, Customer does not return the Products to ibmc in the condition required by these Standard Terms, Customer shall continue to comply with all the terms and conditions of this Agreement, including the obligation to pay Holdover Fees, in substitution for the Managed Services Fee and not as a penalty, prorated daily for each day from the Holdover Date until the date on which Customer returns such Products to ibmc in the manner required by these Standard Terms. Customer shall not construe its payment of Holdover Fees as ibmc’s (i) waiver of Customer’s failure to perform any obligation under this Agreement; or (ii) assent to any renewal of this Agreement.
5. The Managed Services Fee and other amounts payable by Customer under this Agreement shall be exclusive of all applicable HST and other sales, use and excise taxes, and any other similar taxes, duties and charges of any kind imposed by any governmental authority on any amounts payable by Customer. Customer shall be responsible for all such taxes, charges, and costs; provided, that Customer shall not be responsible for any taxes imposed on, or with respect to, ibmc’s income, revenues, gross receipts, personnel or real or personal property or other assets.
6. Return of Products.
   • Obligation to Return Equipment and Software. Upon expiration of the Term or earlier termination of this Agreement, Customer shall cooperate with ibmc, including (i) providing ibmc with access to Customer’s premises; and (ii) permitting ibmc to (A) deinstall, inspect, and properly pack the Equipment in accordance with ibmc’s standard procedures; and (B) ship the Products, at ibmc’s cost and expense, to a location specified by ibmc.
   • Condition of Equipment Upon Return. Customer shall cause the Equipment returned for any reason under this Agreement to (i) be free and clear of all liens (other than liens of ibmc) and rights of third parties; and (ii) be in the same condition as when delivered to Customer, reasonable wear and tear excepted, such condition to be assessed in ibmc's reasonable sole discretion.
7. Insurance. During the Term of this Agreement, Customer shall, at its own expense, maintain and carry for each item of Equipment insurance against loss, theft, and damage in an insured amount equal to the full replacement value of such item of Equipment, as determined by ibmc, with financially sound and reputable insurers. On or prior to the Effective Date of this Agreement and, thereafter, upon ibmc’s request, Customer shall provide ibmc with a certificate of insurance from Customer’s insurer evidencing the insurance coverage specified in this Agreement. The certificate of insurance shall name ibmc as an additional insured and as loss payee. Customer shall provide ibmc with thirty (30) days’ advance written notice in the event of a cancellation or material change in Customer’s insurance policy. Except where prohibited by law, Customer shall require its insurer to waive all rights of subrogation against ibmc’s insurers and ibmc.
8. Term and Termination.
   • Initial Term. The initial term of this Agreement commences on the Delivery Date and, unless terminated earlier pursuant to this Agreement’s express provisions, will continue for the term set forth in the Product Specification (the "Initial Term"). Provided Customer is not in default under any of its obligations under this Agreement, upon expiration of the Initial Term, this Agreement will automatically renew for successive twelve (12) month terms unless earlier terminated pursuant to this Agreement’s express provisions or either Party gives the other Party written notice of non-renewal at least ninety (90) days prior to the expiration of the then-current term (each a "Renewal Term" and together with the Initial Term, the "Term"). In addition to any remedies that may be provided in this Agreement, if Customer is in default of any of the terms and conditions of this Agreement, ibmc and its agents, at Customer’s risk, cost, and expense, may take possession of any Product wherever it may be located, without demand or notice, without any court order or other process of law, and without liability to Customer for any damages occasioned by such action.
   • Renewal Term. Each Renewal Term will be on the same terms and conditions as are set forth in this Agreement except that the Managed Services Fee payable by Customer during each Renewal Term may be increased by ibmc in accordance with its standard pricing policies. ibmc will provide Customer with a quote for the Managed Services Fee payable by Customer during each Renewal Term at least one hundred twenty (120) days prior to the expiration of the then-current Term.
   • In addition to any other express termination right set forth in this Agreement (each of the following shall constitute "for cause" termination):
     • ibmc may terminate this Agreement with immediate effect upon written notice to Customer, if Customer: (A) fails to pay any amount when due hereunder and such failure continues for ten (10) days after Customer’s receipt of written notice of nonpayment; (B) breaches any of its obligations in the Use Restrictions of the Software License Terms; or (C) breaches any of its obligations in the Confidentiality Terms;
     • either Party may terminate this Agreement with immediate effect upon written notice to the other Party, if the other Party breaches this Agreement, and such breach: (A) is incapable of cure; or (B) being capable of cure, remains uncured thirty (30) days after the non-breaching Party provides the breaching Party with written notice of such breach and intent to terminate; or
     • either Party may terminate this Agreement with immediate effect upon written notice to the other Party, if the other Party: (A) is dissolved or liquidated or takes any corporate action for such purpose; (B) becomes insolvent or is generally unable to pay, or fails to pay, its debts as they become due; (C) files or has filed against it, a petition for voluntary or involuntary bankruptcy or otherwise becomes subject, voluntarily or involuntarily, to any proceeding under any domestic or foreign bankruptcy or insolvency law; (D) makes or seeks to make a general assignment for the benefit of its creditors; or (E) applies for or has appointed a receiver, trustee, custodian, or similar agent appointed by order of any court of competent jurisdiction to take charge of or sell any material portion of its property or business.
   • Effect of Expiration or Termination.
     • Customer does not acquire any ownership rights in the Products and has no option to purchase or license the same pursuant to the terms of this Agreement. Upon expiration or earlier termination of this Agreement for any reason, (A) the License granted under the Software License Terms will terminate and, without limiting Customer’s obligations under the Confidentiality Terms, Customer shall immediately cease use of the Managed Services and shall delete, destroy or return, as instructed by ibmc, all copies of the Software and Documentation and certify in writing to ibmc that the Software and Documentation has been deleted or destroyed, as applicable, and return the Equipment to ibmc in accordance with the terms of these Standard Terms; and (B) ibmc will immediately cease providing any Managed Services to Customer. No expiration or termination of this Agreement will affect Customer’s obligation to pay all Managed Service Fees that have become due before such expiration or termination or entitle Customer to any refund. Customer’s rights under this Agreement will automatically terminate upon expiration of or earlier termination of this Agreement.
     • If (A) Customer terminates this Agreement for any reason other than a Non-Triggering Termination Event or (B) ibmc terminates this Agreement for cause (each, a "Triggering Termination Event"), Customer shall pay to ibmc the Early Termination Fee. Notwithstanding the foregoing, Customer shall not be subject to an Early Termination Fee if, upon termination of this Agreement, Customer enters into another agreement with ibmc for the purchase of new Equipment or the license of new Software. A "Non-Triggering Termination Event" shall mean (x) Customer’s termination of this Agreement for cause; or (y) Customer’s election not to renew this Agreement.
   • Early Termination Fee. Upon the effective date of termination of this Agreement for a Triggering Termination Event, Customer shall pay to ibmc an Early Termination Fee, which fee the Parties agree (i) is a reasonable and genuine pre-estimate of the damages ibmc will incur as a result of such early termination, including winding down the Managed Services and transitioning ibmc employees and agents; and (ii) represents liquidated damages and not a penalty. Customer waives any right it may have to raise as a defense that such liquidated damages are excessive or punitive.

[END OF STANDARD TERMS]