Charges for use of IBM SmartCloud Application Services (SCAS) are set forth below.

Workload Service

WS Service Instance (WS)

For each WS Service Instance ordered from the Cloud Web Portal, a monthly usage charge applies as follows based upon the size option selected:

Workload Service Options

For each WS Service ordered from the WS Controller the following usage charges apply based upon the Workload Service options selected.

1. Virtual Application Patterns

Charges below for virtual application pattern usage are inclusive of all charges for usage of VM Instance computing resources, Service Component Software, and other Services options consumed by each Workload Instance deployed using such pattern in the form made available. If Customer alters or extends the pattern, additional usage charges may apply. PAYG and BYOL software use options are as defined in the Service Description.

*Use of a virtual application pattern indicated with the bring you own license (BYOL) software use option requires Customer to separately acquire and maintain the number Entitlements as specified at http://www.ibm.com/software/lotus/passportadvantage/licensing_for_IBM_Cloud.html under IBM’s International Passport Advantage (“PA”) program for the selected virtual application pattern usage in addition to the applicable usage charge. Customer may use such Entitlements only toward the use of the corresponding Workload Service option.

2. Shared Services

Charges below for usage of Shared Service patterns are inclusive of all charges for VM Instance computing resources, Service Component Software, and other Services options consumed by each Workload Instance using such patterns.

3. Virtual System Patterns

Charges for usage of virtual system patterns will consist of the then current charges specified in this Charges Schedule for VM Instance compute resources and all other Services options consumed by Workload Instances deployed using such virtual system patterns, including the charges set forth in the PAYG Software – Virtual Images section below for all selected Service Component Software identified as a SmartCloud Application Services Virtual Image.

4. Private Patterns

Use of any Services options provisioned with or consumed by private patterns Customer develops and deploys using the Workload Service will be charged at the rates specified in this Charges Schedule for any such Services option.

Collaborative Lifecycle Management Service

Charges for usage of each CLMS Service Instance are as follows:

Charges for usage of Service Component Software will depend on the use option selected.

PAYG Software - Images

For pay as you go ("PAYG") use option, the following per hour usage charges apply for each PAYG Software that is an Image provisioned on a VM Instance configuration:

PAYG Software - Bundles

There are currently no software bundles with pay as you go (PAYG) use option.

BYOL, Pre-Release and DUO Service Component Software

There is no charge for BYOL, DUO or Pre-Release Service Component Software use options. If a Customer uses Service Component Software under a use option for which it does not have proper Entitlements or for which it is not eligible, IBM reserves the right to charge Customer the per hour charge for PAYG Service Component Software for such Service Component Software or require Customer to pay amounts equal to the charges for proper Entitlements or for required eligibility.

The usage charges for a VM Instance includes charges for virtual compute resources and charges for a SCE Operating System if one is selected to be provisioned with the VM Instance. VM Instance usage charges will depend on whether Customer selected to use the Services on a reserved capacity or unreserved capacity basis.

Preferred Pricing for Reserved Capacity

For Reserved Capacity Packages, the following charges apply:

1. a monthly recurring charge that will be an amount equal to the number of reserved capacity units ordered times the following reserved capacity unit monthly charge for the selected commitment period:

and;

2. a per hour usage charge for each VM Instance provisioned within the capacity limitations of the Reserved Capacity Package as follows*:

*Usage in excess of the Reserved Capacity Package limitation will be charged at the above preferred reserved capacity per hour usage charge rates until IBM provides notice that such excess usage will be charged at the unreserved capacity per hour usage charge rates set forth below. IBM will provide at least 30 days notice.

Pricing for unreserved Capacity

Without a reserved capacity package, the per hour usage charges apply for each VM Instance provisioned as follows:

Persistent Storage

For persistent storage, for both persistent storage blocks and for Private Image storage, the following charges apply:

1. a usage charge for the number of gigabytes (GBs) ordered in each persistent storage block or for the number of GB used for each Private Image storage (rounded to next whole GB) as follows:

and;

2. a usage charge for the number of storage input and output access requests* for both persistent storage blocks and for Private Image storage applies as follows:

*There will be no charge for storage input and output access requests for saving Private Images, until IBM provides notice that such storage input and output access requests will be charged for at the rates in the table in item 2. IBM will provide at least 30 days notice.

For Internet data transfer, the following usage charges per gigabyte (GB) inbound and outbound data transfer apply based upon the monthly aggregated data transfer amount as follows:

*There will be no charge for Internet data transfer until IBM provides notice that such Internet data transfer will be charged for at the rates in the table above. IBM will provide at least 30 days notice.

Reserved IP Addresses

For each reserved IP address ordered and available for use, whether assigned or unassigned to a VM Instance or a Service Instance, the following per hour charge applies:

Optional Private VLAN and VPN Services:

Private VLAN

For each Private VLAN ordered (maximum five per Cloud Data Center), a one time charge to set up and configure the Private VLAN is due upon acceptance of Customer's order.

VPN Services

For each VPN environment (VPNE) ordered (maximum one per Cloud Data Center), in addition to charges for Private VLANs as set forth above, the following charges apply:

1. a one time charge for setting up and configuring the VPNE is due upon acceptance of Customer's order as follows:

and;

2. a per hour usage charge applies for each VPNE as follows:

Changes to existing Private VLAN or VPN Services

For each request to change an existing Private VLAN and/or VPNE within a Cloud Data Center a one time charge is due upon IBM's acceptance of Customer's change request order, as follows:

Optional Premium Support Services

For premium support Services, the monthly charge will be the greater of i) the minimum monthly charge of $77.00; or ii) an amount equal to 5% of all other charges due for Services (excluding charges for any one-time charges and charges for PAYG Images or PAYG Bundles specified in the Service Component Software charges section above) used during the month as invoiced by IBM.

Optional Advanced Premium Support Services

For advanced premium support Services, the monthly charge will be the greater of i) the minimum monthly charge of $1,026.00; or ii) an amount equal to 10% of all other charges due for Services (excluding charges for any one-time charges and charges for PAYG Images or PAYG Bundles specified in the Service Component Software charges section above) used during the month as invoiced by IBM.

Optional SCE Operating System Support

The optional operating system support charges will be included in any calculation of the Premium Support Services or Advanced Premium Services specified above.