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bypass procedure is utilized, VISIPHOR shall continue error correction <br />activity until a program correction or program patch is provided. <br />2.4.3. SEVERITY LEVEL THREE <br />Severity Level Three Definition: The Application Package Programs are <br />impaired to the extent that some non-critical functions are not operating. <br />Severity Level Three Response Time: VISIPHOR shall respond by <br />telephone to Customer within seventy-two (72) business hours of initial <br />notification to VISIPHOR. If the initial notification was not by <br />telephone or not during VISIPHOR business hours, this response time <br />shall start when the notification is received by Support personnel. <br />Severity Level Three Resolution Time: VISIPHOR shall provide its best <br />commercial efforts to initiate a resolution as soon as possible. In some <br />cases, a resolution may be delivered as part of a technological update or <br />release. <br />Severity Level Three Resolution: VISIPHOR shall provide <br />Technological Releases in the form of CD-ROM, diskette or electronic <br />file transfer. <br />2.5. VISIPHOR shall endeavor to assist with all inquiries made to Support personnel. <br />However, if the inquiry is not related to a problem with the Product, VISIPHOR shall be entitled <br />to charge the Customer on a time and materials basis at the rates set forth in Schedule B <br />(hereinafter "T&M"). In all circumstances, VISIPHOR shall advise the Customer in advance and <br />shall receive prior approval from the Customer prior to charging for T&M on any matter. <br />3. COMPENSATION <br />3.1. For the Support provided pursuant to this Agreement and all other services related to <br />the operation, maintenance and upgrades or customer modifications, the Customer shall pay <br />VISIPHOR the annual fee specified in Section 3.1.1 and Section 3.1.2. (the "Fees"). <br />3.1.1. There is no annual fee for Support and Maintenance in Year 1. <br />3.1.2. The annual fee for in Year 2 will be $56,750. <br />3.1.2.1.1 Fees for additional years (Y3-Y6) will be capped at an annual increase of <br />no more than 3%. <br />3.2. Customer shall have a right to off-set any and all payments in the event there is any <br />breach of this Agreement by VISIPHOR. VISIPHOR shall invoice the Customer for the Fee <br />annually in advance. All such invoices shall be payable within 30 days of the date of each such <br />invoice. <br />251-8 <br />