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HomeMy WebLinkAbout25C - FINANCE AND UTILITY SOFTWAREREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: MARCH 3, 2008 TITLE: AWARD CONTRACTS TO LAWSON SOFTWARE AND SYSTEMS & SOFTWARE, INC. FOR FINANCE AND UTILITY BILLING SOFTWARE i /, -~~~i TY MANAGER RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ^ As Recommended ^ As Amended ^ Ordinance on 1S` Reading ^ Ordinance on 2"d Reading ^ Implementing Resolution ^ Set Public Hearing For_ CONTINUED TO FILE NUMBER 1. Authorize the City Manager and Clerk of the Council to execute the attached agreements with Lawson Software and Systems & Software, Inc. not to exceed $5,705,176 subject to non-substantive changes approved by the City Manager and City Attorney. 2. Authorize the City Manager and Clerk of the Council to execute the attached amendment to the agreement with Government Finance Officers Association (GFOA) for project management advisory services in the amount of $195,000 for a maximum contract amount not to exceed $289,500, subject to non-substantive changes approved by the City Manager and City Attorney 3. Adopt a resolution authorizing the execution of a five-year lease purchase agreement with SunTrust Leasing Corporation for an amount not to exceed $5,069,000 at an interest rate of 2.96 percent. DISCUSSION One of the essential business processes of city government is financial and human resources management; including the primary functions of budgeting, accounting, personnel management, accounts receivable, accounts payable, utility billing, and purchasing. In the City of Santa Ana these central operations are currently handled in six separate stand- alone softwares, including the primary financial software. In addition, the primary financial software is housed on a mainframe computer that is over twenty years old. Due to a lack of interconnectivity and dated technology, much of the data must be managed manually, by use of Excel spreadsheets, Access programs, and paper files. The volume of information managed is not insignificant - an annual General Fund budget of approximately $209.8 million is itemized and documented; $40 million in accounts receivables are processed, including approximately 273,000 municipal utility service bills; over 44,000 water accounts are managed, more than 4500 purchase orders transacted; in 25C-1 Contract Award for Finance And Utility Billing Software March 3, 2008 Page 2 of 5 excess of 44,000 invoices paid; and over 200 new hires and employee terminations handled annually. As the volume of information increases, so does the demand for real time financial and personnel-related information, which currently requires countless staff hours to collect, interpret and distribute to those requiring the information, including the City Council and administration, other departments and the public. The age of the software, lack of program flexibility resulting from numerous new accounting regulations, and age of the mainframe causes delays and disruptions for staff. As a result, staff determined that the purchase and implementation of an integrated financial software system, offering a unified database for financial and human resource management, was critical. Three key goals for the new system were identified: 1) Consolidate data and reporting through an integrated software application. 2) Use technology to reduce inefficiencies. 3) Give management and employees access to data through comprehensive and intuitive solutions. To navigate the complex and dynamic world of enterprise software selection and contract negotiation, the City contracted with the Government Finance Officers Association (GFOA), a nonprofit, professional organization for government officials and finance practitioners. In the fall of 2006, GFOA held a series of meetings with staff from all departments to develop a comprehensive Request for Proposal (RFP). The RFP was posted on the City's website and sent to vendors in December 2006, and nine vendors submitted responses in January 2007. As an integrated financial and human resources management software impacts every City department, an evaluation team made up of 13 employees from across the organization were brought together to review the proposals. By the end of February 2007, the team had selected three vendors, Bi-Tech Sungard, Tyler Munis, and Lawson Software (partnering with Systems & Software, Inc. for utility billing), to provide demonstrations of their software. Utilizing a script drafted by GFOA, vendors were given an opportunity to demonstrate their product. Employees from all departments participated in the software demonstrations. Following each scripted demonstration, employees were invited to ask additional questions in a laboratory set up to further explore the functionality of the software. Based on the demonstrations, the evaluation team narrowed the search to two vendors, Tyler Munis and Lawson Software/Systems & Software, Inc. Over the next few months, the team sought clarifications from the two vendors, conducted extensive reference calls to other governmental 25C-2 Contract Award for Finance And Utility Billing Software March 3, 2008 Page 3 of 5 clients, and ultimately selected the Lawson/Systems & Software, Inc. partnered proposal for recommendation. The key consideration for the selection is the flexibility and capabilities of the software. The product provides the ability to access real time information, electronically manage business processes, simplify audit trails for all transactions, provide on-line access for customers, as well as provide employee self-service access to benefits and other personnel information. With input from GFOA, staff underwent contract negotiations to develop the Statement of Work (SOW) with Lawson/Systems & Software, Inc. from October 2007 through February 2008. The SOW outlines the implementation process, the responsibilities of the City and the vendors, and provides milestones for deliverables and payments. With Council approval, the software conversion project will launch on March 10, 2008 and is expected to be completed in approximately 22 months, with each module scheduled to begin and complete at varying times. The implementation requires the vendor and the City to each provide 50$ of the time and effort needed to make the project successful. To accommodate the workload associated with such a large project, staff recommends extending the GFOA contract for project management advisory services and hiring temporary help to provide backfill for identified full-time staff. This will allow staff to devote their energies to the proper development, testing and implementation of the software. As each module is introduced and a needs assessment is developed, needed backfill will be identified and agreements with qualified temporary employment agencies will be developed for Council approval. The length of each backfill assignment will be linked to the specific module implementation plan and timeline. Upon completion of the specific module, full-time staff will assume their normal functions. The total cost of the project encompasses software licenses; implementation and training costs; one-year annual maintenance for both Lawson Software and Systems & Software, Inc.; and a contingency of approximately 7~. Contingency funds will primarily address items that are unknown to both parties. The majority of the funds for the project will be lease financed through a master lease agreement with SunTrust Bank. 25C-3 Contract Award for Finance And Utility Billing Software March 3, 2008 Page 4 of 5 FISCAL IMPACT Funding for the acquisition and implementation of the finance and utility billing software will be generated through a master lease finance agreement. Funding for debt service and contingencies are available and will continue to be budgeted in the Information Technology Service fund (account no. 109-700-6661) and the Water Enterprise fund (account no. 64- 576-6900) . APPROVED AS TO FUNDS AND ACCOUNTS: James Ross Executive Director Public Works Agency Francisco Gutierrez Executive Director Finance & Management Services Agency 25C-4 END USER LICENSE AGREEMENT This End User License Agreement ("Agreement") is made and entered into as , 2008 ("Effective Date") by and between Systems & Software, Inc., a Vermont corporation with its principal offices at 401 Water Tower Circle, Colchester, Vermont 05446 ("S&S") and City of Santa Ana, 20 Civic Center Plaza, Santa Ana, California 92701 ("Customer"). BACKGROUND S&S has developed application software for use in the utilities industry; Customer desires to license from S&S certain software as described in Exhibit 1 and to purchase from S&S the third-party hardware components as described in Exhibit 1. In consideration of the mutual promises and covenants contained in this Agreement, the parties agree as follows: AGREEEMENT DEFINITIONS "Application Software" means the commercial off the shelf ("COTS") version of enQuestaTM software licensed to Customer pursuant to this Agreement. "Confidential Information" means, with respect to a party hereto, all information or material which (a) gives that party some competitive business advantage or the opportunity of obtaining such advantage, or (b) which is either (i) marked or identified as "Confidential," "Restricted," or "Proprietary Information" or other similar marking or identification, (ii) known by the parties to be considered confidential and proprietary, or (iii) from all the relevant circumstances should reasonably be assumed to be confidential and proprietary. Confidential Information includes Customer's individually identifiable customer information and also the Application Software and related Documentation all screen generator programs, program codes, routines, methods, designs or objects, new product features and functions, the performance of the Application Software, this Agreement, terms, conditions and information contained herein and the negotiations between the parties prior to execution of this Agreement. "Current Base System" means the version of the Application Software that has been commercially released by S&S as of the Effective Date and the related Documentation. "Customization" means the changing of any component of the S&S Current Base System during the original delivery and implementation period of the Application Software installed prior to the System Acceptance Date. "Delivery" means, delivery to Customer of the Information System (or components thereof) "Documentation" means (i) with respect to the Application Software, the standard user-oriented instructions and related materials for the operation of the Application Software in the form distributed by S&S generally to its customers, together with updates, modifications and enhancements thereto; and (ii) with respect to the System Equipment, the standard user-oriented instructions and related materials for the operation of the System Equipment in the form distributed by each applicable third party vendor generally to its customers, together with updates, modifications and enhancements thereto. "Hardware" means computer hardware. "Information System" means the composite of Hardware, Operating System Software, Application Software and Third Party Software provided by S&S. "Major Release" means the commercial release of a new version of the Application Software that is identified by a release number that is to the left of the first decimal point, such as 4.x, and that contains significant amounts of new or significantly enhanced functionality and/or major changes to the product's architecture or file structure. "Minor Release" means the commercial release of (i) a version of the Application Software that is identified by a release number that is to the right of the first decimal point, such as x.l; and /or (ii) a set of software corrections and system performance adjustments for the Application Software. "Operating System Software" means the third party computer operating system software described in Exhibit 1 that S&S delivers to Customer under this Agreement but which is subject to the license agreement provided by such third party unless otherwise specified. Systems & Software, Inc. Confidential 25C-5 "Peripherals" means all non-server related Hardware components including, without limitation, disk storage, workstations, printers, tape drives, modems. "Source Code" means computer code in high level, human readable language, including comments and documentation reasonably necessary to build and/or modify such code. "Support Services" means the software maintenance and support services to be provided by S&S as further described in Section 4 and in the S&S Software Maintenance & Support Guidelines, as such guidelines may be amended by S&S from time to time. "System Acceptance" means the date on which a module or group of interrelated modules of the Application Software is operating in a production environment processing actual Customer data with out a Level 1 defect as defined in the Statement of Work signed between the Customer and Lawson Software, Inc. ("Lawson")., and shall occur thirty (30) days after go-live unless a Level 1 defect extend the acceptance date. "System Equipment" means the Hardware, Peripherals, Operating System Software and Third Party Software. "Term" means perpetual unless the Agreement is terminated in accordance with Section 8(B). "Third-Party Software" means the computer software that is described in Exhibit 1 that S&S delivers to Customer under this Agreement but which is subject to the license agreement provided by such third party. For avoidance of doubt, this term does not include the Application Software. 2. FEES AND PAYMENT SCHEDULE A. Fees. S&S grants the licenses in this Agreement conditioned upon payment of the applicable license fee(s). License fees related to the Application Software shall be due and payable within 30 days of the Effective Date of this Agreement. Fees for Hardware and Third Party software shall be due and payable within 30 days of Delivery of said Hardware or Third Party software. Customer shall ensure that all such amounts are directly remitted to S&S. B. Invoices. All invoices submitted pursuant to this Agreement shall be due and payable within thirty days of receipt of invoice. All amounts listed in this Agreement or otherwise quoted by S&S are (i) in U.S. Dollars and shall be paid in U.S. Dollars; and (ii) do not include any applicable sales taxes, use taxes, duties or any similar assessments, and the Customer shall furnish a tax exemption certificate to S & S. Any amount payable pursuant to this Agreement and not paid within thirty (30) days after the relevant payment date for said amount shall be delinquent and shall bear interest at the rate of one and one half percent (1'/z%) (or, if less, the maximum legal rate) for each month or portion thereof it is delinquent. Customer shall ensure payment of all such interest, as well as all costs and reasonable attorneys' fees incurred by S&S in the collection of such delinquent sums. C. Additional Items. In the event S&S provides Customer with additional hardware, software and/or related services not specified in this Agreement, S&S shall be entitled to invoice Customer for such items pursuant to S&S' standard fees for such items or other mutually agreed upon amounts, and such invoiced amounts shall be due and payable in accordance with the terms set forth in this Section. 3. OWNERSHIP; LICENSE A. Ownershiy. S&S and its licensors shall have and retain sole and exclusive ownership of all right, title and interest in and to the Application Software, including ownership of all trade secrets and copyrights pertaining thereto, subject only to the license rights and privileges expressly granted to the Customer herein. Customer agrees that S&S and its licensors shall have sole ownership of all improvements and modifications made to the Application Software, including without limitation those made in connection with the Customization, regardless of whether such improvements and modifications are made by S&S alone or together with the Customer or third parties. Nothing in this Agreement shall be construed as a commitment of S&S to create improvements, modifications or future enhancements to the Application Software, other than those expressly specified in this Agreement. Upon request and without the necessity for further consideration, Customer shall take all necessary actions to assign ownership of the Application Software and Customizations to S&S. B. Hardware. Subject to all the terms and conditions of this Agreement, S&S agrees to sell and Customer agrees to purchase the Hardware specified in Exhibit 1. S&S shall arrange for Delivery of each unit of Hardware by common carrier at mutually agreeable time(s). Customer shall pay or reimburse S&S for all costs of Hardware shipping and transportation. At Customer's expense, S&S shall procure transit and casualty insurance for the replacement value of the Systems & Software, Inc. Confidential 25C-6 Hardware, covering the transportation of the Hardware by the common carrier to Customer's loading dock. Good and merchantable title and risk of loss in and to the Hardware shall pass to Customer upon Delivery. S&S reserves a security interest in each item of Hardware, and shall have all of the rights of a secured creditor under the Uniform Commercial Code with respect thereto. Such security interest shall be retained and may be enforced until Customer's payment obligations for the applicable item of Hardware shall have been fully discharged. Customer shall execute all financing statements required to perfect S&S' security interest, and if financing statements are filed, S&S shall execute a termination statement evidencing the discharge of such obligations in the event a financing statement is filed. C. License. In consideration of payment of the amounts set forth in Section 2, S&S grants to Customer a nonexclusive and nontransferable right and license to use the Application Software solely for Customer's internal business purposes in accordance with the provisions in this Agreement for the duration of the Term. Customer may use the Application Software on Hardware upgrades, additions or replacements; provided, however, the Customer must give S&S written notice in advance of any such change so as to permit S&S to provide support and to be aware from a licensing perspective of the numbers and types of Hardware on which the Application Software resides or is intended to reside. Customer agrees that it will not sell, assign, transfer, disclose, sublicense, or otherwise make the Application Software available to others without the prior written consent of S&S. Customer shall not create derivative works of the Application Software, meaning that the Customer shall not create any software or other works that are based upon the Application Software or recast, transform or adapt the Application Software in any manner. Customer shall not disassemble, decompile or "reverse engineer" the Application Software for any purpose. D. Additional License Terms. (i) Customer may prepare one copy of the Application Software for backup purposes only; provided that the backup copy may be used only during the term of the license and the copy shall be destroyed or returned to S&S upon termination of the license. Customer may prepare a reasonable number of copies of the Documentation for internal use only; provided that the copies of Documentation may be used only during the term of the license and the copies shall be destroyed or retumed to S&S upon termination of the license. All copies of the Application Software and Documentation must contain the proprietary notices appearing on the copies as initially furnished to Customer. Except as permitted in this paragraph, Customer shall not copy or otherwise reproduce the Application Software or the Documentation, in whole or in part, without the prior written consent of S&S. It should be further noted that the Customer shall be able to use this copy of the Application Software to backup either the production or training environments that will be installed as part of a separate arrangement with Lawson Software, Inc. ("Lawson") (ii) The Application Software is licensed in object code only. The Customer shall have no rights to the Source Code except as expressly specified in this Agreement. (iii) The Application Software is for use by the Customer in the current utility entity at the projected user level and the current Customer account volume (being the current number of metered or non-metered water, wastewater, electric, gas, rental, refuse and other customers) specified in Exhibit 1. The parties agree that, for purposes of this Agreement, Customer's current account volume is considered to be 47,500 accounts (the "Current Account Volume"). (iv) Customer agrees that, if the Customer experiences increases in its metered or non-metered account volumes over the Current Account Volume during the Term then additional Application Software license fees must be paid by Customer. The additional Application Software license fees for the period of twenty-four (24) months following the Effective Date of this Agreement shall be as specified in the Exhibit 1 and after such date the fees shall be subject to pricing at S&S' then-current fees. Maintenance fees for these additional Application Software licenses shall be subject to pricing at S&S' then-current rates. (v) Customer shall provide S&S with an annual report specifying the then current number of metered and non-metered customers. In addition, Customer shall promptly notify S&S of any increase in accounts due to growth other than growth of existing services in the ordinary course of business. S&S shall have the right, upon fifteen (15) days advance notice, to audit Customer's then current number of metered and non-metered customers once per calendar year. Customer shall provide S&S or its third party designee with all business records, documentation and system access necessary to conduct such an audit. (vi) The Application Software is for use by Customer at the current number of users as of the Effective Date and as specified in Exhibit 1. The parties agree that, for purposes of this Agreement, the Customer's current number of concurrent users is 39 (the "Current Number of Concurrent Users"). Additionally, the parties agree that, for purposes of this Agreement, the Customer's current number of licensed PC's is 129 (the "Current Number of Licensed PC's"). Systems & Software, Inc. Confidential 25C-7 Customer agrees that, if Customer expands the number of users beyond the Current Number of Concurrent Users or the Current Number of Licensed PC's, Customer shall pay an additional per user fee. The additional per user fee for the period of twelve (12) months following the Effective Date shall be as specified in Exhibit 1 and after such date the fee shall be subject to pricing at S&S' then-current fees. Customer shall provide S&S with an annual report specifying the then current number of users. (vii) The Application Software shall be used solely on the server environment described in Exhibit 1 or as otherwise agreed to in writing by S&S. Third Party Software use and limits, including with respect to the number of named or concurrent users, will be subject to the terms of each third party vendor's own license which will be entered into separately between Customer and each third party vendor. (viii) Customer shall take all reasonable steps to preserve the confidential and proprietary nature of the Application Software and Documentation. (ix) Customer shall limit access to the Application Software to employees, auditors, consultants and agents of Customer who need access to the Application Software in order for the Customer to use the Application Software as permitted herein. Customer shall inform all persons with access to the Application Software of the confidential and proprietary nature of the Application Software and of the restrictions set forth in Section 7 of this Agreement. (x) All Third Party Software is licensed to Customer solely and directly by the third party supplier of such software, not by S&S. Customer, therefore, acknowledges and agrees that, notwithstanding the Delivery to the Customer and Customer's payment to S&S for such software, Customer's rights, obligations and remedies regarding such software shall be determined solely and exclusively by the terms and conditions of Customer's agreements with the third party supplier of such software. (xi) The parties acknowledge and agree that (a) the Application Software may include embedded third party software components licensed by S&S for use in the Application Software; (b) the terms and conditions of Sections 3(C), 3(F), 3(G), 3(I) and 5 of this Agreement shall inure for such third party's benefit and (c) subject to the license and sublicense rights granted to S&S in connection with its use and distribution as part of the Application Software, the third party software owner retains right, title and interest in such software, including statutory enforcement rights in the event of infringement. 4. SUPPORT SERVICES A. S&S Sport Program. Beginning at Delivery, the Customer has the option to participate in the S&S Software Maintenance and Support Program ("S&S Support Program"). Participation in this Program is required to continue to receive support from S&S. The S&S Support Program is defined in Exhibit 2. S&S may modify the S&S Support Program from time to time. The Application Software and systems support services described herein will be invoiced on a prorated basis from Go-Live through the end of then-current calendar year and thereafter annually in-advance on a January through December calendar year basis. Customer's participation in the S&S Support Program shall automatically renew on an annual basis and shall be valid on a calendar year basis. In the event Customer wishes to cancel participation in the S&S Support Program, Customer must notify S&S in writing on or before September 30`h of the year preceding the year in which the Customer wishes to cancel participation. If Customer elects to discontinue its participation in the S&S Support Program, S&S shall be under no obligation to continue providing maintenance services past the period for which Customer has paid for enrollment in the S&S Support Program. B. Exclusions from Support Services. S&S shall not be required to perform corrective maintenance as part of its Support Services with respect to Application Software malfunctions caused by: (i) Customer's modifications to the Application Software unless performed at the direction of S&S; (ii) Customer's failure to use updates, enhancements or program error corrections; (iii) Failure to use the Application Software in accordance with this Agreement; or (iv) Actions beyond S&S' reasonable span of control with respect to Customer's actions which alter the turnkey implementation environment, or cause Hardware or Third Party Software malfunctions. C. Enrollment & Pricing. Customer agrees to begin participation in the S&S Support Program commencing at Go-Live. Applicable pricing for the S&S Support Program are set forth in Exhibit 1. For the year following the Effective Date of this Agreement, these prices shall increase by no more than 4%. For years 2-10 following the Effective Date of this Systems & Software, Inc. Confidential 25C-8 Agreement, these prices are subject to annual increase not to exceed CPI Index + 4% per annum. ("CPI Index" means the most recently published "Consumer Price Index for All Urban Consumers" as published monthly by the U.S. Department of Labor, Bureau of Labor Statistics. If the U.S. Department of Labor discontinues the publication of the CPI Index, or alters its publication in some other material manner, then the parties shall adopt a substitute index or procedure that reasonably reflects consumer price changes in the United States). The above cap on annual Maintenance Fee increases does not apply to any Products or users licensed after the Effective Date of this Agreement. D. Hardware Maintenance. Customer agrees that it will, following the applicable warranty period for the Hardware, enter into a maintenance contract for the Hardware from the vendor (via S&S), unless the Customer is utilizing its own Hardware. The Hardware warranty shall be effective upon the installation of the Hardware at Customer premises. Customer acknowledges and agrees that maintenance and service of the System Equipment is a matter between the manufacturer and Customer and that S&S its not obligated to service or maintain the System Equipment but will only act as a liaison with the manufacturer to arrange for maintenance and service on and cannot be a party to or responsible for the System Equipment's manufacturer's performance under the maintenance contract. Customer acknowledges and agrees that S&S shall not be liable to the Customer for damages of any type resulting from the failure of the System Equipment manufacturer to perform under the maintenance contract. S&S' limited Hardware maintenance support is described in Exhibit 2. E. Maior and Minor Releases. S&S shall provide Minor Releases to Customer as part of Support Services; provided, that Customer is participating in the S&S Support Program. S&S reserves the right to provide Major Releases to Customer pursuant to additional license terms, including the right to charge additional license fees. F. Termination of Support Services• Transition to New Vendor NDA Required from New Vendor (i) In the event that Customer elects to replace the Information System with another vendor's product, S&S will work with Customer to develop S&S' role in the transition. In order to protect the proprietary interests of S&S in the Application Software, Customer agrees that any replacement vendor shall have only such access to the Application Software as necessary to assist in the actual conversion. In the event a replacement vendor indicates that access to the Application Software is necessary to implement the actual conversion, the Customer shall deliver a notice to S&S, containing an explanation for the replacement vendor's need to access the Application Software, at least fifteen (15) days prior to allowing the replacement vendor access to the Application Software. S&S shall have the right, in its discretion, to have a representative of S&S present at the Customer's facility at all times when any replacement vendor has access to the Application Software. Customer will cooperate by providing S&S with scheduling information necessary to facilitate such presence. Any replacement vendor or other outside party required to assist in transition from the Application Software to another vendor shall execute a confidentiality and non-disclosure agreement in a form reasonably satisfactory to S&S, prior to the time said vendor or other third party has access to the Application Software. (ii) Customer shall provide written notice to S&S at least sixty (60) days in advance of the conversion. Customer and S&S shall develop a plan for services that the Customer desires in connection with a transition period to its new system. In the event the transition plan requires S&S to provide services in addition to its standard support services under this Agreement (and provided that S&S agrees to provide such services), Customer shall pay S&S for any such services in accordance with S&S' then-current hourly or other applicable rates. Customer shall be responsible to pay S&S under the then current Annual Maintenance and Support Contract through the end of the calendar year in which the conversion is completed; provided that, if the conversion is completed prior to June 30 of that year, S&S will prorate the fees for said final year in such manner to require the Customer's payment of six months rather than twelve months. S&S shall continue to support the Customer as outlined in the S&S Support Program through the transition period so long as the Customer continues to pay S&S the applicable fees and is not in material breach of this Agreement. 5. WARRANTIES; DISCLAIMERS; INDEMNIFICATION A. S&S warrants that all Application Software products delivered under this Agreement will perform in material compliance with the Documentation for the period ending ninety (90) days after System Acceptance (the "Warranty Period"). S&S further agrees to furnish promptly and without additional charge, all labor and parts necessary to remedy any such defect that occurs during the Warranty Period; provided that S&S must receive the notice of defect during the Warranty Period. Thereafter support of the Application Software will be performed under the S&S Support Program, provided that Customer is validly participating in the S&S Support Program and is current with all fees due to S&S in connection therewith. B. S&S agrees that, to the extent permitted, it will pass through to the Customer any and all warranties that S&S receives from any manufacturer or supplier of any of the System Equipment. In the event that any component of the Systems & Software, Inc. Confidential 25C-9 System Equipment has a defect in materials or workmanship or has an operating failure that occurs from normal use thereof, S&S shall use commercially reasonable efforts to work with the third-party supplier to provide a timely solution for the Customer. C. Customer acknowledges that any warranty provided by S&S is limited to the Application Software and used on the Customer's computer system listed in Exhibit 1. Customer further acknowledges that modifications made to the Application Software by Customer, and not at the direction of S&S, will void S&S' warranty of the Application Software, unless specifically stated otherwise in writing by S&S. Customer also acknowledges that S&S cannot be responsible for the Customer's use of third-party software or hardware products that are used or implemented in conjunction with S&S' Information System, including Third Party Software and Hardware, and such other systems and modules where S&S did not consult on, provide, or configure the systems. D. S&S represents and warrants that all Third Party Software product manufacturers, listed in the Budget Detail, have authorized S&S to grant licenses or sub-licenses to such software. E. S&S' obligation for breach of warranty shall include timely correction or replacement of the module or component of the Application Software that fails to conform to such warranty. In no event shall S&S be liable for any breach of warranty unless notice thereof is given to S&S by the Customer during the Warranty Period. F. UNDER NO CIRCUMSTANCES SHALL S&S BE LIABLE FOR ANY DIRECT, SPECIAL, INDIRECT, CONSEQUENTIAL, PUNITIVE OR INCIDENTAL DAMAGES OF ANY KIND INCLUDING, BUT NOT LIMITED TO, DAMAGES FOR LOSS OF PROFITS, WORK STOPPAGE, SYSTEM FAILURE OR MALFUNCTION, LOSS OF DATA OR ANY OTHER DAMAGES OR LOSSES IN CONNECTION WITH THE USE OF THE INFORMATION SYSTEM OR OTHERWISE, EVEN IF S&S HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THE FOREGOING LIMITATION SHALL NOT APPLY WITH RESPECT TO S&S' INDEMNIFICATION OBLIGATION SET FORTH IN SECTION 5(I) BELOW. G. To the extent permitted by applicable law, Customer's right to recover damages from S&S in connection with this Agreement, whether such damages are direct or indirect, in contract or in tort, for breach of warranties, failure to perform, infringement of intellectual property rights, loss of profits, special, incidental or other consequential damages arising from S&S' performance (or failure of performance) under this Agreement shall not exceed the total value of fees paid by Customer to S&S for the item of software or services giving rise to such liability. Nothing in this paragraph shall be construed as creating a right on the part of Customer to receive any indirect, special, incidental or consequential damages, except to the extent such damages are expressly mandated by statute. H. The warranties contained in this Section are in lieu of all other warranties, express or implied. S&S' express warranties shall not be enlarged, diminished or affected by, and no obligations or liabilities shall arise out of, S&S' rendering of technical or other advice or service in connection with the Third Party Software, Hardware and any other products. EXCEPT FOR THE WARRANTIES EXPRESSLY SET FORTH IN THIS AGREEMENT, S&S DISCLAIMS AND EXPRESSLY WAIVES ALL WARRANTIES, EXPRESS AND IMPLIED, INCLUDING WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE. CUSTOMER ACKNOWLEDGES THAT NO REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS AGREEMENT HAVE BEEN MADE WITH RESPECT TO THE GOODS OR SERVICES TO BE PROVIDED UNDER THIS AGREEMENT, AND THAT CUSTOMER HAS NOT RELIED ON ANY REPRESENTATION OR WARRANTY NOT EXPRESSLY SET OUT HEREIN. I. S&S Indemnity. In the event there is a third party claim alleging that Customer's use of the Application Software in accordance with this Agreement constitutes an infringement of a United States patent, copyright, or trade secret, S&S shall, at its expense, defend Customer and pay any final judgment against Customer or settlement agreed to by S&S on Customer's behalf; provided that Customer promptly notifies S&S of any such claim or proceeding and shall give S&S full and complete authority, information, and assistance to defend such claim or proceeding. S&S shall have sole control of the defense of any claim or proceeding and all negotiations for its compromise or settlement, provided that S&S shall consult with the Customer regarding any settlement of the claim. In the event that the Application Software product is finally held to be infringing and its use by the Customer is enjoined or S&S deems that it may be held to be infringing, S&S shall, at S&S' election: (1) procure for the Customer the right to continue use of the Application Software; or (2) modify or replace the Application Software so that it becomes non-infringing; or (3) in the event S&S determines that (1) or (2) is not commercially practicable, S&S may terminate the license with respect to the infringing module and refund or credit to Customer the license fees paid by Systems & Software, Inc. 6 Confidential 25C-10 Customer under this Agreement in connection with such module, less a pro rata credit for each full or partial month during which Customer used the module up to a ten (10) year period, and Customer shall return the original and all whole or partial copies of the module and related Documentation. S&S shall have no liability hereunder if the Customer has modified the Application Software in any manner without the prior written consent of S&S. The foregoing states S&S' entire liability, and the Customer's exclusive remedy, with respect to any claims of infringement of any copyright, patent, trade secret, or other property interest rights relating to the Information System, or any part thereof, or use thereof. J. Customer Indemnity. Customer agrees to indemnify, defend and hold harmless S&S, its directors and officers, and its employees and agents (collectively, the "S&S Indemnified Parties") from any and all claims, costs, expenses (including reasonable attorneys' fees), damages, liabilities or judgments, relating to injuries to persons or damage to property to the extent that the same arise out of the work or activities of Customer or its employees, subcontractors, or agents in connection with the Project. Notwithstanding the foregoing, Customer shall have no obligation under the foregoing sentence if the claim, cost or other item was due to the negligence of S&S or any of the other S&S Indemnified Parties. 6. SOURCE CODE ESCROW Upon Customer request throughout the Term, S&S shall supply a sealed Source Code tape for the Application Software (including any Upgrades) licensed hereunder. In such event, the sealed Source Code tape shall be provided to an escrow agent pursuant to an escrow agreement mutually agreeable to the parties. Customer shall be responsible for all fees payable to the escrow agent or otherwise incurred as a result of the escrow agreement. The escrow agreement shall specify that the Source Code may be made accessible to the Customer only in the event that S&S (a) whether directly or through a successor or affiliate, shall cease to be in the software business, (b) upon no less than sixty (60) days written notice (in addition to any notice requirement set forth in Section 8(B) refuses to fulfill its support obligations under this Agreement, or (c) should be declared bankrupt or insolvent by a court of competent jurisdiction. The Source Code supplied pursuant to this Section shall be subject to each and every restriction on use and disclosure set forth in this Agreement, and the Customer acknowledges that the Source Code and its associated documentation is the property of S&S and will use its best efforts to prevent unauthorized use or disclosure of the Source Code. CONFIDENTIALITY A. S&S and Customer shall each hold the other's Confidential Information in confidence. Neither party shall make the other's Confidential Information available in any form to any third party or use the other's Confidential Information for any purpose other than as specified in this Agreement. Information shall not constitute Confidential Information if it is publicly known or in the public domain through no breach of this Agreement by Customer or S&S. Neither party's obligations of non-disclosure and non-use shall extend to information that is required to be disclosed or requested in connection with any judicial or quasi judicial proceeding, including, but not limited to, any administrative proceedings or public records requests, provided the disclosing party shall give the other party reasonable notice of its intention to disclose information. B. This Agreement does not diminish, revoke or supersede any existing confidentiality, non-disclosure or similar agreement between the parties. The obligations of the parties set forth in this Section are in addition to the obligations of the parties set forth in any existing confidentiality, non-disclosure or similar agreement or otherwise arising under applicable law. In the event that this Section is in conflict with any provision of an existing agreement covering confidentiality or non-disclosure obligations, the provision that provides stronger protection to the disclosing party shall govern. S & S must identify proprietary information and will agree to confidentiality to the extent it doesn't conflict with California Public Records Law. To the extent that Customer receives a request for information related to S&S pursuant to California Public Records Law, Customer must notify S&S of said request immediately and S&S shall have the right to challenge said request in accordance with applicable provisions of the California Public Records Law prior to Customer's response to said request. 8. TERMINATION, CANCELLATION OR MODIFICATION Systems & Software, Inc. Confidential 25C-11 A. This Agreement shall automatically terminate, and the license granted hereunder shall be automatically revoked, at such time as (i) Customer ceases to use the Application Software; (ii) Customer breaches this Agreement in such manner that adversely impacts S&S' proprietary rights in the Application Software and fails to cure such breach upon notice pursuant to Section 8(B) below. B. This Agreement may not be canceled or modified except by the written mutual consent of both parties or as otherwise provided in this Agreement. If either party is in material breach of any of the terms and conditions of this Agreement, the aggrieved party shall give written notice thereof, including a reasonably detailed statement of the nature of such breach, to the breaching party. The breaching party will have thirty (30) days after notice is given to cure such breach or, if the breach cannot reasonably be cured within thirty (30) days, the breaching party shall provide a written estimate of the time needed to cure such breach, shall commence to cure such breach within ten (10) days of notice from the aggrieved party and shall diligently continue to prosecute such cure to completion. If the breaching party fails to cure, commence to cure in a timely manner, or diligently prosecute such cure to completion, the aggrieved party, at its option, shall be entitled to terminate this Agreement or suspend its performance under the Agreement for as long as the breach remains uncorrected, and avail itself of any and all remedies available under this Agreement. C. Upon termination of this Agreement, Customer shall cease use of the Application Software and return to S&S or destroy all copies of the Application Software and all Documentation in the Customer's possession or under its control. Within ten (10) days after termination of this Agreement, Customer shall send written confirmation to S&S, by first class certified mail, return receipt requested, that Customer (i) has completed such destruction or return of the Application Software and Documentation; (ii) has not permitted any improper disclosure, use of, or access to the Application Software or Documentation; and (iii) acknowledges and agrees that Customer remains bound by the confidentiality provisions set forth in Section 7 of this Agreement. Customer agrees that S&S shall have the right to disable the Application Software upon the termination of this Agreement; provided that S&S shall not disable the Application Software if the Customer is contesting the termination of this Agreement in good faith and Customer continues to pay all fees required by this Agreement and any future agreements when due. In the event that the Customer contests the termination in good faith, the parties shall use their best efforts to promptly resolve the dispute. SEVERABILITY In the event that a court of competent jurisdiction holds that a particular provision or requirement of this Agreement is in violation of any applicable law, each such provision or requirement shall be enforced only to the extent it is not in violation of such law or is not otherwise unenforceable and all other provisions and requirements of this Agreement shall remain in full force and effect. 10. DISPUTE RESOLUTION In the event of a dispute under this Agreement (except any dispute involving confidentiality or infringement, in which case the non-breaching party is not barred from directly pursuing any legal remedy available to it, including litigation), S&S and Customer agree that they will work together in good faith in the following manner: first, to resolve the matter internally by discussions among the persons who are responsible for the particular issue; second, to resolve the matter internally by discussions among the executives of the parties; and third, if the first two methods are not successful, to attempt to resolve the dispute by means of mediation. Except as otherwise stated in this Section, any dispute, issue, conflict, or controversy arising from, under or in relation to this Agreement which cannot otherwise be resolved by the parties shall be subject to mediation. The mediation shall occur at a location in the State of California (or another mutually agreeable state) agreed to by the parties. The mediation shall be conducted by an impartial mediator who has experience with computer software contract disputes and who is acceptable to both parties. The parties shall engage in mediation in good faith and use commercially reasonable efforts to resolve their dispute via mediation. If, after using such efforts, the parties have not resolved their dispute, either party may, at its option, resort to litigation. The mediation will commence upon 90 days' written notice of a demand for mediation or such other date agreed to by the parties. If one party unilaterally refuses to commence mediation within said time frame, the other party shall no longer be bound to mediation and may, at its option, initiate litigation. Each party shall be responsible for its own attorneys' fees and all costs of mediation shall be borne equally by the parties. 11. FORCE MAJEURE Systems & Software, Inc. Confidential 25C-12 Neither party shall be responsible for delays or failures in performance resulting from major substantive acts beyond the control of such party. Such acts shall include, for example, but not be limited to, acts of God, riots, acts of war, epidemics, governmental regulations superimposed after the fact, earthquakes or other natural disasters. 12. NOTICES; PARTY REPRESENTATIVES All notices required or permitted to be given hereunder shall be in writing and shall be delivered in hand or sent by first-class mail, postage prepaid, or by a nationally recognized overnight courier, to the parties at the following addresses or other such address or addresses as to which a party shall have notified the other party in accordance with this Section: If to S&S: If to Customer: Systems & Software, Inc. City of Santa Ana 401 Water Tower Circle 20 Civic Center Plaza Colchester, Vermont 05446 Santa Ana, CA 92701 Attention: Jerry Ford Attention: shall act as representatives of the Customer, and Jerry Ford shall act as representative of S&S with respect to this Agreement. These persons shall have the authority to transmit instructions, receive information, interpret and define policies and make decisions with respect to this Agreement. Additional and substitute representatives of S&S and the Customer may be added by written notice of one party to the other. 13. INDEPENDENT CONTRACTORS The relationship of the parties is that of independent contractors, and nothing herein shall be construed to create a partnership, joint venture, franchise, employment, or agency relationship between the parties. Neither party shall have any authority to enter into agreements on behalf of the other or to bind or obligate the other in any manner. 14. NAMING THE CUSTOMER AS A REFERENCE; PRESS RELEASE Customer agrees that S&S may, at its option, name Customer as a reference for prospective customers and identify Customer as a customer for S&S' promotional purposes, including without limitation in press releases, on S&S' web site, and in presentations to prospective customers. Customer agrees to permit S&S to conduct demonstrations of the Application Software for prospective S&S customers at the Customer's offices; provided that S&S shall provide reasonable notice to Customer in advance and shall coordinate with Customer to ensure that the demonstration does not disrupt Customer's business. 15. COVERING LAW; NRISDICTION; VENUE This Agreement shall be governed by the laws of the State of California, without giving effect to the principles of conflicts of laws. 16. ENTIRE AGREEMENT This Agreement, including the Exhibits attached hereto, constitutes the entire agreement between the parties with respect to the Information System. Accordingly, all prior agreements, representations, statements, negotiations and undertakings are hereby superseded, except as otherwise specified in Section 7(B) above. 17. BINDING EFFECT; ASSIGNMENT This Agreement shall be binding upon and inure to the benefit of S&S and the Customer and their permitted successors and assigns. Neither party may assign this Agreement or any right or interest under this Agreement, nor delegate any work or obligation to be performed hereunder, without the other party's prior written consent. Notwithstanding the foregoing, either party may assign this Agreement to its successor, without the other party's consent, in the event of a sale of substantially all of its assets or in the event of a merger pursuant to which substantially all of its assets are transferred to the surviving entity, as long as said successor assumes all liabilities and obligations hereunder. Systems & Software, Inc. Confidential 25C-13 18. COUNTERPARTS This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original document, but all of which counterparts shall together constitute one and the same instrument. 19. EXHIBITS The following Exhibits, attached hereto and incorporated herein by reference, form a part of this Agreement: Exhibit 1 -Budget Detail/Notes Exhibit 2 - S&S Software Maintenance & Support Guidelines IN WITNESS WHEREOF, the parties hereto have executed this Agreement the date and year first above written. Systems & Software, Inc. By: Title: CITY OF SANTA ANA DAVID N. REAM City Manager ATTEST: PATRICIA E. HEALY Clerk of the Council APPROVED AS TO FORM: JOSEPH W.FLETCHER City Attorney ~, By: ~ ~ ,', , ~ CT_~ ~' Systems & Software, Inc. ,aura Sheedy Assistant City Attorney 10 Confidential 25C-14 Exhibit 1 Budget C?et~ai{ & Additional Notes Note 1> As stated in paragraph 3(D)(iv) of the End User License Agreement, additional accounts above and beyond the Current Account Volume are chargeable as follows: Maximum Account Volume: Type of Account # of Accounts Water 47, 500 Additional Metered Accounts Additional Charge* - 2,500 $0.00 per account 2,501 10,000 $3.00 per account 10,001 15,000 $2.85 per account 15,001 25,000 $2.70 per account 25,001 + $2.55 er account "Charge is a one-time per account charge for all accounts greater than the Maximum Account Volume listed above. Maintenance fees will be cha rged for incremental accounts at then-current rates. Note 2> As stated in paragraph 3(D)(vi) of the ISA, additional users above and beyond the Current Number of Concurrent Users can be purchased in packs of 10 for $3,000 and additional users above and beyond the Current Number of Licensed PC's can be purchased in packs of 10 for $2,325. Additional maintenance fees will be charged for for these additional users at then-current rates. Proi7c~icta:-v & C'c~nfi ~1~;tia1 Pa~;~u 1 25C-15 Systems & Software, Inc. Systems & Software Systems & Software Support Program General Guidelines Effective January 1, 2008 Systems & Software CONFIDENTIAL Page 1 25C-16 40l Water Tower Circle Colchester, VT 05446 ty~~_~n-_s, E~rriar~c_4 ~,i~ti-aro ~~t p: 802-655-4400 f: 802-655-4401 2/14/2008 Systems 2008 Systems & Software Support Program Guidelines & Software Executive Summary of Services Provided Beginning on January 1, 2008, the following services and guidelines apply to the Systems & Software Support Program. If you have any questions related to the following information, please call the dedicated Help line at 1-800- 655-8810. Application Support Help Desk support for general application inquiries and issues Representatives in S&S office from 8:OOam EST through S:OOpm (customer local time) Monday through Friday 24x7 critical issue coverage available off hours (available option) Time and priority commitments for response to operational critical issues Commitment to quality and timely issue resolution Automated case management via TTP (TestTrack Pro issue resolution software) Escalation path for issue resolution Technical Support Telephone advisory assistance with routine system management functions Remote log-in support for troubleshooting issues with layered products and operating system software that are related to the documented capability of S&S applications System analysis, performance analysis, and capacity planning analysis to monitor the customer system (additional charges may apply for certain of these seroices)* Technical configuration & performance assistance including hardware details such as processors, memory, disk and tape drives provided as requested (additional charges may apply for certain of these services)" * Services that may require additional charges are those that are not generally applicable to the core operations of enQuestaT"". These may include, but are not limited to, such services as City-wide capacity planning services and configuration of non-enQuestaTM' services. Third-Party Software First-line diagnostic support for third-party vendors with whom S&S is associated or whose products are integrated within enQuestaT"' Update Support Fixes, error corrections, patches or corrected procedures for the supported versions of enQuestaT"' and its component level software Periodic product version releases or upgrades (including base enhancements). Education Periodic educational seminars (Webcasts) including regulatory updates Online documentation available through the customer portal Access to product documentation, training course catalogs and schedules, and User Forum information Attendance, training and hospitality events at no cost (no registration fee) for customer employees at customer user conferences, when held Utilization Ability to utilize the enQuestaTM' business application, based on: Number of metered, non-metered and monthly billed transactions Number of services provided by your utility 401 Water Tower Circle Colchester, VT 05446 Systems' ~~+'w Stir unand~c~ltu-;arc .i}et & SOftWare p 802 655-4400 f: 802-655-4401 CONFIDENTIAL /~ ~ ~=~ ~ 2!14/2008 2008 Systems & Software Support Program Guidelines Systems " & Software Volume and complexity of implemented business concepts Number of users and operators (including ad-hoc query, IVR & IWR) Number of total access points Number and complexity of interfaces Further Detail of Services Provided The Systems & Software Support Program provides coverage for and is inclusive of the items listed below: Authorization to receive support services forlicensed products from Systems & Software for the calendar year, January through December 2008. 2. Access to new releases of the licensed enQuestaT"" business application, when such application software becomes generally available and a separate upgrade engagement has been established between S&S and the customer. This support criteria applies to the originally licensed application software itself; newly developed modules or applications, and the range of systems support services associated with deploying production enQuestaT"" software, are handled under a separate contract or amendment. Additional services may include migrating from one version of enQuestaT"" to another, performing assurance testing, performing interface testing, training customers on new versions of the application software, or purchasing additional hardware or third-party software products. 3. Fixes, error corrections, or corrective procedures for the supported versions of enQuestaT"" (the current version and the most recent release just prior to the current version of the application). Depending on the nature and cause of these errors, certain additional charges may apply for these services. 4. The cost ofinedia, postage, mailing, telephone, modem, and Internet supportto distribute or support existing or new releases. S&S asks that media used to distribute updates, corrections, or new releases are returned to S&S upon loading said object code. 5. New documentation or Meta data (Knowledgei3ase/ Catalog/ enQuesta Query Layer (eQL)/ data dictionary detail), as made available by module. S&S understands that due to the customized nature of the various applications for customers and the speed with which refresh updates or new releases are developed and/ or deployed, customers may not always have documentation that exactly applies to the version they are running. Customer practices show, and S&S's expectation is, that customers rely onthe on-line help text and guidelines, and/ or call the Customer Support Desk for clarification and verification. Module documentation and Meta data information is now deployed only via S&S's customer website, at www.systemsandsoftware.net!customer. 6. CIS-based customer letter generation reflects the need to support the integration of enQuestaT"' applications, such as Work Orders, Customer Service Orders, Customer Letter Correspondence, or Cross Connections, to an associated tool. S&S will assist customers with selected letter or Work Order/ Customer Service Order document maintenance. Creation and maintenance of these documents is the responsibility of the customer. Support related to items that are normally charged but are minor in nature may be waived solely at the discretion of S&S. These might include restoring processes and/ or data that were corrupted due to operator error, minor changes to a bill print format, etc. These will be judged based upon the magnitude of the work to be performed and the frequency of occurrence. 401 Water Tower Circle Colchester, VT 05446 Systems tki+w~ sy~c~r°>>3n ~_ '[~, u~, ,_ & Software p: got-65s-44uo f: 802-655-4401 CONFIDENTIAL w~~=~ w 2/14/2008 Systems 2008 Systems & Software Support Program Guidelines & Software 8. Attendance, training and hospitality events at no cost (no registration fee) for Customer Users at Customer User Conferences, when held. Travel, lodging, meals, and other associated fees would be at the customer's expense. Due to the market and competitive nature of the S&S enQuestaT"" products, non-customer personnel may attend only upon written request, and S&S reserves the right to refuse attendance at customer conferences to non-customer attendees. A fee of $2,500 per day per non-customer attendee will apply, if such non- customers are authorized to attend. In some cases, customers may be required to sign non-disclosure statements at such events. 9. Periodic Training Classes are scheduled to be conducted online via WebEx. These educational offerings can be used to update and refresh user personnel from your organization in the use of popular modules and processes that have an appeal to the largest number of customers such as Navigation, Billing, Credit & Collections, Work Orders, etc. S&S will take input from Executive/ User Forums, Customer Listening visits, surveys, and requests made through our Customer Service Department, website, and account representatives. 10. Periodic informational announcements or newsletters covering new announcements, enQuestaT"' enhancements, hardware and third-party software issues, vendor relationships, new technologies ortechnical considerations, new product announcements, and other related topics. 11. Access to the latest levels certain third-party products including of Cognos' Impromptu and/or PowerPlay (both for database customers), Cognos' ReportNet solution, Micro Focus' Server Express Runtime Licenses (assuming the initial upgrade to Server Express was paid under separate contract), enQuestaT"" client or middleware components, IQ character for AIX (non-database customers), or IBM's UniData database products, or other third-party software products or vendor products which are invoiced as part of the S&S Support Program, or as these products become available from the respective vendors. Deployment or training services for such are handled separately under a time and materials basis. 12. Technical Assistance is available by request. These services include but are not limited to system and application configuration, performance analysis, and certain other hardware, operating system and database related services. These services are subject to additional charges on a time and material basis at the discretion of your Account Manager, if applicable. Systems " & Software CONFIDENTIAL 2 5 ~ =19 401 Water Tower Circle Colchester, VT 05446 ~~k_g 5~~ cm_ira5c~l€YC.ttrc iict. p: 802 655-4400 f: 802-655-4401 2/14/2008 Systems 2008 Systems & Software Support Program Guidelines & Software Certain Systems & Software Support Program Guidelines Under the Systems & Software Support Program, customers will receive unlimited daytime phone, modem, Internet, email and fax support for areas related to the operation of all licensed enQuestaT"' modules under the supported version (i.e., the current version and the most recent release just prior to the current version of the application) and, more specifically, for the business processes/ features which are accommodated by enQuestaT"" applications that are already in production use as enabled through working with S&S, during an initial orsubsequent engagement. enQuestaT"' applications may have the capacity or inherent functionality to serve many business orcustomer-specific functions that may not be in production use within your organization. If an organization decides at a later date to make use of a new feature or business process, this would be clearly defined as "new" work which would be supported under a separate time and materials based contract, not "how-to" support for an existing business process. This support is limited to operators who have been trained by S&S personnel or other certified trainers under "Train the Trained', "Train the Key PersonneP', or "Train the Super Users" concepts, and who have ownership for and a clear understanding of the applications and issues for which they are requesting support on the current enQuestaT"" release. Support activity via the Customer Support Desk from new personnel will indicate the actual capabilities or level of training new personnel have received. This information will be shared with customers and, if necessary, related services will be contracted for separately at rates indicated in this agreement. Inbound phone support initiated from our dedicated support line, 1-800-655-8810 would generally entail a''/2 hour call or less (this duration certainly may vary). Faxes, phone calls ore-mails which result in extended, or even multi-hour, phone conversations or work effort would be handled separately on a time and material contract basis. Possible examp-es would be: several analysts' subsequently providing "x" number of hours assisting with implementation of "new" work (such as discussion! implementation of new Work Order types, a modified General Ledger Chart of Accounts, or implementation of a new business process that the application supports (but which is not in production mode}, such as ACH, an AMR solution, or a new interface). Other examples may include but are not limited to: fixing incorrect operator procedures, training new or existing staff over the phone, assistance with balancing or bookkeeping, setting up training databases and training operators, performing work or services for organizations whose key individuals are out of the office, writing custom scripts or programs to resolve customer issues not caused by enQuestaT"", and other support items of this nature. This scope of work would clearly be defined as "implementation of new business processes" or "consulting outside of `how-to' telephone support". Ad-hoc report writing with third-party tools such as Cognos ReportNet or Cognos Impromptu is the responsibility of the customer. This includes creation of reports and all subsequent modifications including those resulting from changes in versions of enQuestaTM' or the third-party reporting tool. To facilitate this process, S&S will maintain the KnowledgeBase/ Catalog/ Meta data/ eQU data dictionaries and provide support for general questions. It is highly recommended that organizations appoint a core group of persons to become entirely familiarwith all aspects of the enQuestaT"' applications and the KnowledgeBase/ Catalog/ Meta data/eQU data dictionaries, such that these individuals become subject-matter experts within the organization. Systems & Software CONFIDENTIAL ~ ~~ =~ 0 401 Water Tower Circle Colchester, VT 05446 +uw,sti~t.,m~and5c~lt~eare i~et p: 802-655-4400 f: 802-655-4401 2/ 14/2008 Systems 2008 Systems & Software Support Program Guidelines & Software 3. CIS-based customer letter generation and Work Order/ Customer Service order printing reflects the need to support the integration of enQuestaT"" applications, such as Work Orders, Customer Service Orders, Customer Letter Correspondence, or Cross Connections, to an associated tool. S&S will under this support contract assist customers with routine letter or document maintenance. Work on a magnitude of documents or wholesale change out of business logic or text with regard to Work Order design/ templates would be handled under separate engagement. Customers are encouraged to use S&S services under this contract to keep customer letters up to date, unless customers have chosen to "certify" a member of their organization to modify/ update customer-related correspondence functions. Telephone Customer Support Desk support services and hours of availability are weekdays from 8:OOam to 5:OOpm, customer local time, excluding Holidays and other posted exceptions, unless other specific contractual arrangements have been made with your organization. 24x7 pager support is offered for selected contractual situations; pager support reflects coverage for enQuestaT'" related emergency situations only. Unless covered under a separate arrangement, support provided outside these hours will be invoiced at the off-hours support service rate as referenced in item 6 under this heading. 5. Items excluded from this plan include: training of new operators; consulting, hardware or site planning and infrastructure support; Value Added software support (for applications other than those referenced in paragraph 9 of this section.); Hardware Maintenance; or any topics generally considered "new business". These professional services would be billed separately under a separate time and materials based agreement. Also excluded from this plan are Windows and other PC desktop systems support; communications or infrastructure support; support of situations which reflect your use ofthird-party vendors overwhich S&S has no direct responsibility, such as bill-print houses, banks, AMR vendors, or other such third-parties. S&S supports these other types of situations on a time and material fee basis at the discretion of the Account Manager, if applicable. For the vast majority of technical orthird-party situations which arise, S&S believes this method to be the fairest way to support customers in areas over which S&S has little, if any, responsibility or systematic controls. 6. Outside of Systems Support Services covered under the S&S Support Program as reflected herein, alf other Systems Support Services in 2008 will be invoiced at the following rates: Service Type Rate per Hour Custom Programming & Business Process Consulting $213 On-Call Pager Support $135 Other Services $135 These services are provided subject to aminimum %2 -hour charge. Off-hours (5pm-8am, or holiday/ weekend) support will be invoiced at $240 per hour, minimum 1-hour charge. Involvement of other vendors, whose services may be required, in concert with or outside of work with S&S, shall invoice directly or through S&S at their own rates. An example would be billable services through IBM Corporation, for AIX SupportLine or ConsultLine charges. Given that the range of systems support services generally reflects multiple S&S parties performing work prior to, during, and after the "face to face" customer engagement, daily rates orper-student charges may apply for some ranges of support services, including training classes. These shall be determined at the time of 401 Water Tower Circle Colchester, VT 05446 :, Systems " www Sti~t~~h.5ar e~~lty_art iict & SOftWdre p: 802-655-4400 f: 802-655-4401 CONFIDENTIAL ~~ ~.~ge=~ ~ 2/14/2008 Systems ° 2008 Systems & Software Support Program Guidelines & Software contracting and are subject to change at any time, depending on the scenario or the value-ad proposition to the customer. All other enQuestaT"" or non-enQuestaT"'-related support services, preparation time, consulting, analysis, travel, or telephone and modem support issues will be invoiced on a time and material basis as incurred. Every attempt shall be made by the Customer and S&S to understand, scope, define and have customer acceptance for work scope under an estimated time and materials engagement prior to work commencing. Issues that S&S determines require extended support or support ofthird-parties for resolutions to customer issues will in some cases be turned over to the appropriate third-party. (IBM AIX Support, for example, may be contracted on behalf of customers to conduct performance-tuning testing on their pSeries servers). Areas identified as those which would best be handled bythird-parties will, time permitting and assuming a customer representative is available who has ownership for the issue, be discussed with customers prior to arranging the service. 8. Administration: Customers are responsible for ensuring supported staff members are aware of these policies and procedures. A request for support from a customer assumes an understanding on the part of the customer of said policies and procedures. b. S&S asks that customers appoint a key individual (or select, core group of key individuals) to receive all support calls/ requests from S&S in order to eliminate duplicate calls and/ or faxes or e-mails. The Customer Support Desk format relies upon an initial contact being made with a detailed description of the issue being submitted, with specific backup material being faxed or e-mailed (using the attached Customer Support Request Form). All customers have been sent soft copies of the attached form, which is the preferred method of issue submission to S&S. Calls into S&S are not necessary if the Customer Support Request Form has been filled out thoroughly. This form may be filled out soft copy and emailed, or may be faxed. The preferred method of submission to S&S is by e-mailing your request to our dedicated inbox: Support(cr~,systemsandsoftware net with any appropriate attachments to help us triage the issue. S&S' objective is to ensure that customers be fully satisfied at all levels of the interaction, each and every time customers engage S&S. Unless there is already an open work order which was correctly initiated via the Customer Support Desk, correspondence sent to specific support individuals will NOT be forwarded to the Customer Support Desk for logging. With the objective being quick, correct and efficient resolution to customer issues, resulting in high levels of customer satisfaction, customers must submit all correspondence to the Customer Support Desk, not specific staff. Send your support issues to fax: 802- 655-6570 or a-mail: Suoporl a.systemsandsoftware net which is the only authorized "support" email address; please do not forward correspondence to individual email addresses, even if those personnel may be part of the Customer Support Desk staff group. We ask for your assistance in not circumventing the routing and support system; this is in place to ensure that all customer issues are logged and tracked centrally, and is essential in ensuring a high level of customer satisfaction. We thank you in advance for your cooperation so that we may efficiently serve your organization. c. Questions related to invoices outside of the S&S Support Program should be addressed in writing to the S&S Finance & Accounting Department within 10 business days of receipt of invoice in order that 30-day accounting cycles may be accommodated. Invoices are payable upon receipt. 401 Water Tower Circle Systems Colchester, VT 05446 + & Software ~ .:a;,.s~~,ts,ina.tr~~t ltu-are,,:Ict so - p: t-bss aaoo CONFIDENTIAL f: 802-655-4401 w ~~ _ w w 2/14/2008 2008 Systems & Software Support Program Guidelines Systems & Software Verbal or written requests for changes or enhancements to application software which is in production use by your organization are not considered "support" items and therefore should not be requested via telephone from support personnel via the Customer Support Desk. Such "need' enhancements or custom requests must be in writing using the Software Request Form, which can be downloaded from our customer web site, at www systemsandsoftware.neUeustomer. Please mail orfax all hand-written Software Request Forms to the Customer Support Desk, or submit the request form electronically via our website. Once received, they will be routed to the appropriate parties. If your organization is more than one release level behind the most recent enQuestaT"'version, again note that only in the most critical of situations is S&S likely to accept the custom request. Having migrated to the most recent level of the enQuestaT'" application assures customers that S&S is likely to accommodate business change requests. This process should be used judiciously to the extent that incoming requests should be "signed off' by the appropriate parties at the customer location in order to maintain control and understanding of the enhancements or custom modifications that have been requested. S&S requests that in cases of specific custom requests (modification; customization; new features; new interfaces; and enhancements to subcontracted solutions) from a customer, the entire written scope of such request accompany the inquiry. A work order will be created such that S&S can log the request and pursue the engagement on behalf of the customer. S&S shall then validate the written scope document. Ascertaining and validating work scope can consume a significant percentage of the overall engagement and is a critical factor in ensuring overall customer satisfaction with any such custom engagement. Engagements shall in some cases be forwarded just to scope work; the actual work, if accepted, would be handled under separate engagement. If new functionality has been developed due to an approved contract from the customer, the customer will be notified when the enhancement(s) are ready to be viewed in their Train environment. From notification, customers will have 10 working days to test and approve the new functionality and respond back to S&S via the Account Manager, if applicable. If S&S does not receive a response back from the customer within the 10 day timeframe, additional testing and setup fees may apply to requested changes. New functionality will not be deployed to the Production environment until changes are formally approved in writing by the customer. f. Support plans shall continue to be modified in order to support customer requests and feedback. g. Customers are required to have a broadband Internet connection (cable, T1 or higher) and that S&S be given inbound Internet access (from S&S to customer) via a Cisco 3002 IPSEC VPN or similar device that S&S will configure, in order to access servers on the customer premises that relate to access to or support of enQuestaT"". Minimal firewall entries will be needed to allow a connection to S&S's Cisco router. S&S can also connect to a qualified Cisco device that is on the customer's existing IAN. Currently S&S uses and supports IPSEC 3DES with 168-bit encryption with NAT supported. The ability for S&S to use this technology in support of customer installations will alleviate risk associated with slow, asynchronous modem access to customer's IBM pSeries or Dell PowerEdge servers. In summary, broadband access is required for enQuestaT"" customers and is requested for all other customers. NOTE: Given the number and diversity of customers requiring support from S&S, each with varying networking infrastructure, support of software-based VPN clients is not a viable replacement for these suggested access methodologies. 401 Water Tower Circle Colchester, VT 05446 S terns ~~-r~-`a 5}~ ~rri~r~~ c ltr~arc,lc_[_ & $Oftware p. 802-655-4400 f: 802-655-4401 CONFIDENTIAL w ~ ~g= $,~ w 2/ ] 4/2008 systems 2008 Systems & Software Support Program Guidelines a Software If Customer is on the supported version (the current version and the most recent release just prior to the current version of the application), corrective fixes will be delivered to the Customer via a scheduled Maintenance Release. Customers will receive Release Notes and Customers are responsible for testing corrective fixes within a scheduled window before S&S will move the Maintenance Release into Production. In order to ensure that the enQuestaTM' system is kept up-to-date with enhancements and bug fixes, Customers are strongly encouraged to install the then-current Maintenance Release' made available by S&S at least once per quarter. If a Maintenance Release has been made available generally by S&S that addresses a particular issue and a Customer subsequently contacts the S&S Help Desk regarding this issue but has not installed the applicable Maintenance Release, Customer will be required to install the Maintenance Release prior to assistance by S&S. If a Customer declines to install said Maintenance Release to remedy the issue, S&S reserves the right to charge the Customer on a time and material basis atthen-current rates for effort incurred to resolve the issue. * Customer may need to install previously released Maintenance Releases prior to installing the then- current Maintenance Release in order to bring the Customer's environment to the most current level. 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Ba _ ~ ~ ~ F T v - - I ~ I ~ i 3 25C-34 y~ S ~_ 3 ~y b C ~9 d b b 8 2 N U K f Q W Q LL N O 3 J O a rc ~ i `c~ o ~ O U m w O Q rc ~ ~ € 0 r r ~ ~ ~ ~ W ~ w 3 €T' m -" a _ > x o ~ ~ a m < ~ a u °a ° v m J ¢ `s"$ 25C-35 ~~~ LAWSON SOFTWARE CUSTOMER AGREEMENT MASTER TERMS AND CONDITIONS Customer Name: City of Santa Ana Address: 20 Civic Center Plaza, 8'" Floor City: Santa Ana State/Zip or Province/Postal Code: CA 92701 Country: USA These Lawson Software Customer Agreement Master Terms and Conditions ("Lawson Master Terms and Conditions") are entered into by each respective Lawson Group company named below and in each Order Form and the customer entity named above and in each Order Form, and is effective as of the latest date signed below after all Parties have signed. The entire Lawson Software Customer Agreement includes these Lawson Master Terms and Conditions, and each Order Form, Statement of Work and other written agreement entered into by Customer and any Lawson Group company at any time in the future and which refers to these Lawson Master Terms and Conditions (collectively, the "Agreement"). The initial Agreement must be signed below, and may be signed in counterpart and delivered by fax, pdf or other means that displays the original or a copy of the signatures. Any subsequent Order Form or Statement of Work may be signed and delivered in the same manner or as described in that Order Form or Statement of Work. The Agreement contains the complete agreement with Customer concerning any products, software, maintenance or services provided by any Lawson Group company. IN WITNESS WHEREOF, the parties hereto have executed this Lawson Software Customer Agreement Master Terms and Conditions on the date set forth below. For LAWSON SOFTWARE AMERICAS, INC. CITY OF SANTA ANA (Authorized Signature) DAVID N. REAM City Manager (Printed Name) -------------- (Date) (Title) ATTEST: (Date) PATRICIA E. HEALY Clerk of the Council APPROVED AS TO FORM: JOSEPH W.FLETCHER City Attorney ~1-~-~-~ ------- /Laura Sheerly Assistant City Attorney ~' ~~; ,. . 25C-36 ~a.>..>:;r ~o4:,rr-~=e C+;stc .~f:r ;-~~ gee^~~:~ . R.`as:t:~ i'r;r:,~s a~~d ,r:jc, :ion, y The following Lawson Master Terms and Conditions supplement and govern 1.23 each Order Form, Statement of Work and other written agreement entered into at any time by Customer and any Lawson Group company at any time on or after the effective date of these Lawson Master Terms and Conditions: 1. Definitions. The following defined terms are in addition to the definitions contained in each applicable Order Form or Statement of Work: 1.1 "Agreement' or "Lawson Software Customer Agreement" means these Lawson Software Customer Agreement Master Terms and Conditions and each Order Form, Statement of Work and other written agreement entered into by Customer and any Lawson Group company at any time in the future and which refers to these Lawson Master Terms and Conditions. 1.2 "Cure Period" means the period of time after notice from Customer, reasonably required for Lawson to cure a breach in accordance with Lawson's then current standard Maintenance or Services practices. 1.3 "Customer" collectively means the customer entity that has signed these Lawson Master Terms and Conditions and each Specified Customer (if different) identrfied in each respective Order Form or Statement of Work. 1.4 "Documentation" means all help screens, or other documentation describing the operation of the Software described in an Order Form, which are delivered (in printed or electronic form) with the Software by Lawson or a Third Party, any subsequent updates and new Releases of that documentation provided to the Specified Customer listed in that Order Form by Lawson under Maintenance or by a Third Party, and any copies of that documentation. Documentation excludes all advertising, marketing materials, requests for proposal, proposals, demonstration materials and other promotional information. 1.5 "Escrow Agreement" means the separate escrow agreement, 'rf any, entered into by the escrow agent appointed by Lawson. 1.6 "Extended Maintenance" is defined in Section 4.2(b) below. 1.7 "Initial Maintenance Period" means the initial period of Maintenance specified in an applicable Order Fonn. 1.8 "Intellectual Property Rights" means all copyrights, patent rights, confidentiality rights, trade secret rights and trademark rights now known or created in the future. 1.9 "Lawson" means each respective Lawson Group company that has entered into the Agreement with Customer. 1.10 "Lawson Competitor° means a developer, licensor or provider of software or services that directly competes with the then current Products or Services provided by Lawson Group. 1.11 "Lawson Documentation" means the Documentation for the Lawson Products. 1.12 "Lawson Group" means Lawson Software, Inc. and each of its direct and indirect subsidiaries. 1.13 "Lawson Partner' means each entity that is then currently appointed as a "Lawson Partner" by any Lawson Group company. 1.14 "Lawson-Maintained Products° means the unmodified Products or Limited Offering that are specified as "LMP" in an applicable Order Form while eligible for Maintenance under Section 4 below. 1.15 "Lawson Product" means each Product described in an Order Form, excluding Third Party Products. 1.16 "License" is defined in Section 2 below. 1.17 "License Term" means a perpetual period of time, unless a shorter term is specified in the applicable Order Form or the License is terminated pursuant to the Agreement. 1.18 "Limited Offering" means software, maintenance and/or services that are designated as "LO" in an Order Form. An Order Form may exclude a Limited Offering from the definition of a Product, Maintenance andlor Service under the Agreement. 1.19 "Mainstream Maintenance" is defined in Section 4.2(a) below. 1.20 "Maintenance" means the maintenance and support services described in Section 4 below and in the then current Support Operations Handbook and purchased for the Lawson-Maintained Products listed in an Order Fonn by the Specified Customer listed in that Order Form, excluding any Limited Offering maintenance or support that is listed in an Order Form as not being "Maintenance." 1.21 "Maintenance Period" means: (a) the Initial Maintenance Period or (b) any renewal period of Maintenance under Section 5 below or under the applicable Order Form. 1.22 "Maximum Use Designations" means the user limitation defined and shown in the Order Form applicable to the Products, Services or Service Deliverables. v istamer Master "TLC`s ^ior;?, Arr,einiIX: 1.24 1.25 "New Products" means new software and documentation that Lawson Group elects to make generally available to customers separate from other products and which contain new application software or technology. "Order Form" means a Product Order Form ("POF"), a Services Order Form ("SOF"), Statement of Work or other order form entered into by Lawson and the applicable Specified Customer at any time and referring to these Lawson Master Terms and Conditions. Each Order Form pertains only to the Specified Customer identified in that Order Form. "Party" means Lawson or Customer, and "Parties" means Lawson and Customer. 1.26 "Products" means the Software and Documentation. 1.27 "Product Warranty" is defined in Section 7.1 below. 1.28 "Release" means the edition of aLawson-Maintained Product after it has been made generally available by Lawson. 1.29 "Service" means training, implementation, consulting, Service Deliverables, subscription or other services provided by Lawson under the Agreement, excluding Maintenance and any Limited Offering (unless otherwise stated in an Order Form). 1.30 "Service Deliverable" means any tool, training materials or other non- Product item described in the applicable Order Form or Statement of Work as a "Service Deliverable" for delivery to the Specffied Customer ident~ed in that Order Form or Statement of Work. 1.31 "Services Wartanty" is defined in Section 7.2 below. 1.32 "Software" means the software and media described in a POF (in source code and/or object code as specified in a POF), any repairs, replacements, upgrades, updates, enhancements and new Releases provided by Lawson to Customer under applicable Maintenance for that same Software or provided by a Third Party to Customer, and any copies of that code, excluding any Limited Offering software that is listed in an Order Form as not being a "Product." 1.33 "Specified Customer" means the customer identified in an Order Form or Statement of Work and which is either (a) the same customer entity that signed these Lawson Master Terms and Conditions or (b) a customer which is affiliated with the customer entity that signed these Lawson Master Terms and Conditions. 1.34 "Statement of Work" or "SOW" means the portion of the Agreement that describes the Services to be performed by Lawson for the Specfied Customer ident~ed in that Statement of Work and that describes one or more of the following: the main responsibilities of the parties, estimated time schedule for completion of project, project scope and organization, change order process, and other project requirements. 1.35 "Support Operations Handbook" means the Lawson-prepared document that describes the respective types and levels of maintenance and support available for purchase by the applicable Specked Customer for the Lawson-Maintained Products, as amended by Lawson from time to time. 1.36 "Taxes" means any value-added, sales, use, excise, goods and services, withholding taxes, duties or other taxes, interest and penalties that are levied or assessed by a governmental authority because of the Agreement, excluding: (a) taxes for which Customer provides Lawson a valid tax exemption or resale certificate, (b) taxes based on Lawson Group's net income and (c) interest and penalties caused by Lawson Group and not Customer. 1.37 "Third Party" means the applicable owner or supplier of a Third Party Product. 1.38 "Third Party Product" means each Product owned by a third party and designated as a separate "Third Party Product° in a POF and delivered to the applicable Specified Customer under the Agreement, excluding third party Products that are designated in that POF as embedded or included with a Product that is proprietary to Lawson. 1.39 "User^ means employees of the applicable Specified Customer or other natural persons who are authorized by that Specified Customer to use the Products, Services Deliverables and Limited Offerings for the internal business of that Specified Customer, subject to the Agreement. 2. License Granted. Subject to the Agreement, when a Lawson Group company and a Specified Customer sign an Order Form, that Lawson Group company hereby grants to only the Specffied Customer identified in that Order Form, throughout the License Term, anon-transferable and non-exclusive license to that Specified Customer to use and allow that Specified Customer's Users to use the respective Products, Service Deliverables and Limited Offerings identified in that Order Form for up to the Maximum Use Designations idenfrfied in that Order Form and only for the internal business of that Specified Customer ("License"). Page ~ a` C3 25C-37 2.1 Installation and Use. 2.1.1 Unless otherwise authorized by Lawson in writing, only the applicable Specified Customer, Lawson Group or a Lawson Partner retained by that Specified Customer, may install or host the Products, upgrades, enhancements and new Releases of the Products, Service Deliverables and Specified Customer modifications of the Lawson Products and Service Deliverables listed in the Order Form identifying that Specified Customer. 2.1.2 The Specified Customer identified in an Order Form or Statement of Work may use the Products and Services Deliverables listed in that Order Form or Statement of Work only in accordance with the Documentation. 2.1.3 Customer must obtain applicable Third Party approval before granting a Lawson Partner or third party permission to install, use or host Third Party Products on that Lawson Partner's or third party's hardware platform. 2.1.4 The License does not allow a Specified Customer identified in an Order Form to use source code unless the source code has been delivered to that Specified Customer under either (a) that Order Form or (b) a separate Escrow Agreement entered into by that Specified Customer. The applicable License governs the use of any source code. The Escrow Agreement governs the use of any source code delivered under that Escrow Agreement. 2.2 Software and Documentation Copies. 2.2.1 The Specified Customer identified in an Order Form may copy the Software listed in that Order Form only for backup and archival purposes. 2.2.2 During the Maintenance Period and upon request and for a nominal handling charge, Lawson will provide additional copies of the Lawson Products listed in an OrcJer Form (subject to the Maximum Use Designations shown in that Order Form) to the Specified Customer identified in that Order Form. 2.2.3 Customer may copy the Lawson Documentation and Service Deliverables only for use with the applicable Software under the License. 2.2.4 Customer may not copy Documentation for Third Party Products unless permitted by the applicable Third Party. 2.2.5 Customer must retain and include on each copy of the Products and Service Deliverables, all titles, trademarks, and copyright and restricted rights notices and Customer will document the number of copies. 2.3 Third Party Products Sublicensed by Lawson. 2.3.1 Third Party Products sublicensed by Lawson may be used only with the Products and the operating system/database shown in the applicable Order Form. 2.3.2 Customer is responsible for licensing and paying for additional third party products that may be required for use of upgrades, enhancements or new Releases of the Lawson-Maintained Products. 2.3.3 If the reseller agreement terminates between Lawson and a Third Party for any Third Party Products listed in an Order Form: (a) the Specified Customer identified in that Order Form may continue to use those Third Party Products under the License for the License Term and (b) that Third Party will continue to be a third party beneficiary to the Agreement and may enforce its rights under the Agreement as the licensor of the applicable Third Party Product sublicensed by Lawson to that Specified Customer. 2.4 Modifications and Ownership. 2.4.1 Customer may modify the Lawson Products and Service Deliverables only to the extent permitted under an Order Form or described in the Documentation for those Products. The Lawson Products listed in an Order Form may be used by the Specified Customer identified in that Order Form or by Lawson Partners retained by that Specked Customer to develop and use (for only the internal business of that Specified Customer) Software interfaces. Subject to the License, Lawson and its Third Parties will continue to own all Intellectual Property Rights for the Products, Services, Service Deliverables and any modifications of the respective Products or Service Deliverables. Unless authorized by separate agreement, Customer will not modify Third Party Products. 2.4.2 The Agreement and Customer will not restrict Lawson Group's or its Third Parties' independent development, use or licensing of any type of software. 2.4.3 If an Order Form lists a Product for development and test use only, the Specified Customer identified in that Order Form may use that Product for development and testing but not for production (unless that Specified Customer has licensed that Product separately for production use). 2.5 Restrictions. 2.5.1 The Specified Customer identified in an Order Form may not transfer, rent, lease, redistribute or re-license the Products or Service Deliverables or use the Products or Service Deliverables listed in that Order Form to provide data processing, outsourcing, service bureau, hosting services or training to third parties. Customer will not disassemble, decompile, decode or reverse engineer the Software, except as expressly permitted by applicable law. 2.5.2 Only employees of Customer may attend Lawson training. 2.5.3 Customer shall not directly or indirectly export the Products or Service Deliverables from the country of initial delivery by Lawson without the prior written authorization of Lawson and compliance with applicable laws and regulations. 2.5.4 The restrictions in the Agreement concerning the use, confidentiality and export of the Products and Service Deliverables extend to any updates, upgrades, enhancements, Releases, or support materials related to the Products or Service Deliverables, and provided by Lawson or its Third Parties. 2.5.5 Customer shall comply with applicable laws when using any Products, Services, Service Deliverables or Limited Offerings. 2.5.6 Each Specified Customer is responsible for compliance with the Agreement by each of its Users. 2.6 Country Versions. The Products licensed to the Specified Customer identified in an Order Form are the country version of the Products only for the country(s) listed in that Order Form. That Specified Customer may, upon written request and payment of the applicable fees, license other then-currently available country versions of the Products under the then current terms and conditions. Lawson is not obligated to modify or develop software to meet any requirements of any country or jurisdiction. 2.7 Verifications. 2.7.1 If requested by Lawson, Customer will inform Lawson each calendar year of the countries where the licensed Products are located and used. 2.7.2 The Maximum Use Designations for each Product licensed under the Agreement are set out in the applicable Order Form. 2.7.3 Customer acknowledges that some Products may contain software that will monitor the actual users and prohibit unauthorized use of the Software. 2.7.4 After reasonable notice and request (and no more than once per calendar year): (a) the Specified Customer ident~ed in an Order Form will provide Lawson a verification of that Specified Customer's compliance with the Maximum Use Designations listed in that Order Form and (b) Lawson, its Third Parties or their representatives may inspect the location where the Products listed in that Order Form are installed to verify compliance with the Agreement, provided the inspection is during normal business hours, complies with that Specified Customer's confidentiality and security policies, and does not unreasonably interfere with that Specified Customers business. 2.7.5 The Specified Customer will promptly: (a) notify Lawson if it becomes aware that it has exceeded the Maximum Use Designations listed in an Order Form for that Specified Customer and (b) pay Lawson the then current list price for those additional Maximum Use Designations plus applicable Taxes. 2.7.6 If Lawson learns that the Specified Customer has exceeded the Maximum Use Designations listed in an Order Form for that Specfed Customer, and that customer has not previously paid Lawson for that overage under Section 2.7.5 above, after notice from Lawson that Specified Customer will promptly pay Lawson: (a) the then current list price for those additional Maximum Use Designations plus a 25% surcharge of that amount, plus applicable Taxes and (b) the reasonable costs of conducting the verification under Section 2.7.4 if the Maximum Use Designations were exceeded by more than 5%. 2.7.7 Customer will not be entitled to a reduction or refund of any fees because the number of actual users is less than the Maximum Use Designations. 3. Delivery and Installation. 3.1 Lawson will promptly deliver to the Specified Customer identified in an Order Form one copy of the Products listed in that Order Form. Title to any delivered goods passes at place of shipment (subject to the License), unless prohibited by applicable law. 3.2 Except as otherwise agreed in an Order Form, Customer is responsible, at Customer's expense, for installation of the Software and Service Deliverables, User training, data conversion, implementation and other services. 4. Maintenance. 4.1 During the Maintenance Period, Lawson will directly or indirectly provide to the Specified Customer identified in an Order Form 25C-38 a:~; >c,i ,~., :,.a'e vaS:c:...~ ;3 f, .,t %~s~ T ro~ <+~ c, ~ :!;,ns Maintenance for the Lawson-Maintained Products listed in that 5.2 Order Form. Unless otherwise stated in that Order Form, and based on the type and level of Maintenance purchased, Maintenance v~ill include the following: a) make available to the Specified Customer identified in that Order Form general technical information and assistance with problem determination, isolation, verification and resolution during the hours specified in the then current Support 5.3 Operations Handbook; b) correct programming errors in the Lawson-Maintained Products listed in that Order Form to comply with the Product Warranty under Section 7.1 below and allow the Lawson-Maintained Products, when properly installed and configured (if not installed and configured by Lawson), to operate materially and substantially as described in the Documentation for those Products, by providing that Specked Customer a program patch, update, new Release, or instructions for avoiding the error, as determined by Lawson; and c) provide that Specified Customer updates and new Releases of the same Lawson-Maintained Products listed in that Order Form when generally made available by Lawson for installation and use by that Specked Customer under the Agreement. New Products require a separate Order Form and are not provided as a new Release or as part of Maintenance for other Products. 4.2 4.3 4.4 4.5 4.6 4.7 4.8 5. During each respective Maintenance Period, Lawson will provide Maintenance for: a) each Release of aLawson-Maintained Product for at least 36 months after general availability of that Release ("Mainstream Maintenance"); and b) each Release of aLawson-Maintained Product for at least an additional 24 months after termination of Mainstream Maintenance ("Extended Maintenance"). Extended Maintenance is subject to an additional Maintenance fee, and may exclude updates. Lawson will publish on its support website the scheduled termination date for Maintenance of each Release that has a scheduled termination date. Lawson will not materially degrade its Maintenance practices during the Maintenance Period. Customer may elect to purchase at Customer's expense from the applicable Third Party available support for the Third Party Products specified in an Order Form or Support Operations Handbook as not maintained or supported by Lawson ("No LM°). Unless otherwise described in an applicable Order Form, Lawson does not maintain or support Service Deliverables or Products mod~ed outside of Maintenance provided by Lawson. Lawson Maintenance requires that: a) Customer uses an Internet browser with access to the World Wide Web and an e-mail address to obtain Lawson Maintenance; b) only persons trained by aLawson-certified trainer may access Lawson Maintenance; c) Customer provides Lawson reasonably available information and technical assistance; d) he Products must be properly installed; e) Customer complies wRh the Support Operations Handbook; f)the Specified Customer for the Lawson-Maintained Products listed in an Order Forth uses those Products only on the operating systemldatabase and in the technical environment shown in that Order Forth or applicable Documentation; and g) Customer uses the Products in accordance with the Documentation. ff Lawson reasonably determines that a Customer-reported problem is (1) not caused by the Lawson-Maintained Products, (2) due to Customer's modfication of the Products or noncompliance with the Documentation or the then current Support Operations Handbook, or (3) due to Customer's Zack of training on the functionality or use of the Products, and Lawson is reasonably able to correct the problem at Customers request, then Customer will reimburse Lawson for handling that problem at Lawson's then current rates. Maintenance Renewal and Reinstatement. 5.1 Before each renewal date of the Maintenance Period, Lawson will provide to the Specified Customer for the Lawson-Maintained Products listed in an Order Form an invoice for the Maintenance fees for those Products for that renewal period, plus applicable Taxes. st~-' -s Master i3Ca ~-h~ .ti,~1.r~tir~t: 5.4 6. 6.1 6.2 6.3 6.4 6.5 7. 7.1 7.1.1 7.1.2 7.1.3 7.2 7.3 After the Initial Maintenance Period (unless otherwise stated in an Order Form), Maintenance for the Lawson-Maintained Products will automatically renew for successive one year Maintenance Periods so long as Lawson makes that Maintenance available to its customers, unless the Specified Customer identified in the Order Form for those Products or Lawson notifies each other of non- renewal before the renewal date. Lawson may consolidate the renewal date for Maintenance Periods under one or mare Order Forms into one Maintenance renewal date each year for Customer. If Customer has prepaid Maintenance fees as of the consolidated Maintenance renewal date, Lawson will credit the unearned portion of the prepaid Maintenance fees as part of the renewal Maintenance fees due on the next consolidated Maintenance renewal date. If Maintenance has terminated and Customer and Lawson desire to reinstate Maintenance, Lawson will promptly reinstate available Maintenance 'rf Customer pays Lawson: (a) all outstanding invoices, (b) the Maintenance fees for the next Maintenance Period, and (c) a "Reinstatement Fee" equal to 2°h of the then current list price for the Lawson-Maintained Products for each month not under Maintenance. Services. Except as otherwise agreed in an applicable Order Form, all Services will be on a time and materials basis at Lawson's then current rates (the "Services Fees°) plus applicable Taxes, payable within 30 days after invoice date. The Services will be performed in the manner and under the terms described in the relevant Statement(s) of Work. Lawson will select the personnel and provide the Services directly or through a subcontractor, and may reassign personnel 'rf reassignment does not materially impede the performance or schedule of Services. Except as otherwise agreed in an applicable Order Form, the Specified Customer identified in an Order Form will reimburse Lawson for reasonable travel and out-of-pocket expenses incurred when rendering on-site Services, Maintenance or Product Warranty services for any Products listed in that Order Form. Customer may elect to purchase installation, implementation and other available Services directly from Lawson or a Lawson Partner. Warranties. Product Waranty. At the time of delivery of the Products listed in an Order Forth, Lawson warrants that (the "Product Warranty°): Media. The media for those Products as provided by Lawson will be free of defects; Viruses. Before delivery of those Products by Lawson, Lawson will have used up-to-date, commercially available virus scanning and cleaning, and will not have, based on the results of that scanning and cleaning, delivered to the Specified Customer identified in that Order Form Products containing any computer viruses, time bombs, harmful and malicious data, or other undocumented programs which inhibit Product use; and Functionality. Those Products will include the functionality described in the Documentation for those Products. Services Warranty. Lawson warants that at the time of Services delivery, the Services will be provided by trained personnel and in a professional manner using commercially reasonable efforts. THE WARRANTIES REFERENCED IN THE AGREEMENT ARE MADE SOLELY BY LAWSON AND ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Lawson does not warrant that the Products, Services, Service Deliverables or Limited Offerings are free of nonmaterial defects or will meet the specific requirements or needs of Customer's business (whether or not those requirements and needs are known to Lawson). 8. Customer's Remedies. 8.1 Customer's exclusive remedies for Lawson Group's breach of the Product Warranty or a Maintenance default are as follows: a) Lawson will provide Maintenance (if purchased by Customer) to repair, replace or furnish an upgrade of the Lawson-Maintained Products to enable those Products or upgrade of those Products to comply with the Product Warranty and Section 4 above; and b) if Lawson does not comply wRh Section 8.1 (a) above within the Cure Period, Customer may recover direct damages for the Lawson-Maintained Products subject to the damage claim, including up to a refund of the License fees or Maintenance Fees paid by Customer to Lawson for those Products, subject to the time periods and limitations described in Section 15 below. `-'<t~u <e cf ~7 25C-39 Jr` 82 Customer's exclusive remedies for breach of the Services Warranty or a Services default are as follows: a) Lawson will re-perform those Services at no additional charge within the Cure Period; and b) if Lawson does not complete that re-performance within the Cure Period, Customer may recover direct damages, including up to a refund of the Services Fees paid by Customer to Lawson for those Services not re-performed and timely cured, subject to the limitations described in Section 15 below. 11 2 9. Lawson's Remedies. 9.1 Upon request, Customer will provide Lawson sufficient financial information to enable Lawson to determine Customer's creditworthiness. Lawson may withhold delivery of any Products or Services pending credit approval by Lawson. 9.2 Lawson may suspend or terminate Maintenance and/or Services at any time if all Lawson invoices, that are then due and payable, are not paid within 15 days after notice of late payment. 9.3 Late payments will bear interest at the lesser of 8% per annum or the maximum annual rate allowed by applicable law. 9.4 Lawson may terminate the License, the Agreement or any Order Form if any undisputed invoices are not paid by Customer within 15 days after notice of late payment or if Customer does not cure any other material breach of the Agreement within 90 days after notice of breach. c) gives Lawson all available non-privileged information reasonably requested by Lawson concerning the suit or claim; d) does not make any admissions that prejudice, or might prejudice the defense; and e) has used the Products in compliance with the Agreement, complies with this Section 11 and reasonably cooperates with Lawson in the defense (Lawson will reimburse Customers reasonable out-of-pocket costs of that requested cooperation). Customer may also retain legal counsel to participate in the defense of a claim under this Section 11. Lawson will reimburse Customer for the reasonable fees and expenses of Customer's legal counsel only if Lawson fails to continue to retain legal counsel as required by this Section 11. 11.3 If the Products or Service Deliverables are held or are reasonably believed by Lawson to infringe under this Section 11, Lawson will at its expense and to the extent commercially reasonable, modify or replace the applicable Products or Service Deliverables to be non- infringing and with similar functionality, or obtain permission for Customer to continue using the Products and Service Deliverables under the License. 11.4 9.5 Lawson may immediately terminate the Agreement or portion of the Agreement to the extent that it becomes illegal for the Lawson 11.5 Group to conduct business with Customer. 9.6 Customer will promptly destroy or return to Lawson all Products and Service Deliverables if the License and the Agreement terminate as described in Sections 9 or 17.2 (Third Party Products must be returned to Lawson upon termination of the License). 10. Confidentiallnformation. 10.1 "Confidential Information" means object code, source code and benchmark tests for the Products and Service Deliverables, Limited Offering software, pricing, non-standard Lawson contract terms, Customer financial information, data and all other information reasonably believed to be confidential, but excludes: a) information made available to the general public without restriction by the disclosing Party or by an authorized third party; b) information known to the receiving Party independent of disclosures by the disclosing Party; c) information independently developed by the receiving Party without access to or use of the disdosing Party's Confidential Information; or d) information that the receiving Party may be required to disdose pursuant to a valid and enforceable subpoena or other lawful process. The receiving Party will immediately notify the disclosing Party of any obligations to disclose under this Section 10.1 (d) so that the disclosing Party can appear and protect its interests. Customers Confidential Information also excludes any new features or functionality suggested by Customer for the Products or Service Deliverables. 10.2 The Parties will use reasonable efforts to keep each other's Confidential Information secret and will use that information only to fuffill the rights and obligations under the Agreement. 10.3 Either Party may disclose in confidence the other Party's Confidential Information on a need-to-know basis to other persons, and the Party making that disclosure will be responsible for that person's compliance with the Agreement. 10.4 The Parties will have the right of injunctive relief to maintain compliance with this Section 10 and prevent unauthorized disclosure, use or export of the Products, Service Deliverables, Limited Offerings or other Confidential Information. 11. Infringement Indemnity and Remedies. 11.6 Lawson will have no obligations or liability for any suit or claim of infringement based on Customers use of a superseded or Customer-altered Release of the Products or Service Deliverable to the extent that the obligation or liability would have been avoided by the use of a then current Release of the Products or Service Deliverable which Lawson provides to Customer. If Lawson determines that the remedies in this Section 11 are not commercially and reasonably possible and a court orders or is reasonably likely to order Lawson to terminate the Agreement to the extent it relates to the infringing Product or Service Deliverable: a) Lawson will pay Customer, as Customer's sde and exclusive remedy against Lawson (other than indemnification by Lawson under this Section 11) an amount equal to the License fee paid under the Agreement for the infringing Product and Service Deliverable and any other Product(s) and Service Deliverable(s) that become substantially unusable because of the infringement less the cumulative depreciation of those Products and Service Deliverables based on a six (6) year straight line depreciation commencing one (1) year after the initial date of the License for those Products and Service Deliverables; and b) Customer will cease to use and will return to Lawson such Product(s) and Service Deliverable(s). Customer will reasonably cooperate with Lawson to mitigate infringement damages. 72. Insurance. While Lawson is rendering any on-site Maintenance or Services, Lawson will maintain comprehensive general liability insurance for bodily injury and damage to tangible property, with coverage of at least $1,000,000 USD per occurrence, with a general aggregate limit of at least $2,000,000 USD. 13. No Hire of Certain Lawson Employees. Customer agrees that until one year after the later of (a) the termination of the Maintenance Period or (b) the completion of Services, Customer will not hire, employ, retain (directly or indirectly), or contract for services directly with any current employee of the Lawson Group who is or has been working in any capacity with Customer, and whose services have been invoiced to Customer, without receiving prior written consent from Lawson. If Customer violates this Section 13, Customer agrees to pay to Lawson as liquidated damages a fee of 100% of such Lawson employee's annual compensation in effect at the time of such employee's severance of employment with Lawson, as evidenced by a copy of such employee's most recent payroll record. 74. 14.1 11.1 Lawson will, at its expense, retain legal counsel and defend any 14.2 suit or claim brought against Customer and will indemnrfy Customer against any third party damage claims that the Products 15 or Service Deliverables as licensed and delivered by Lawson infringe any third party's Intellectual Property Rights, only if 15.1 Customer: a) promptly notifies Lawson after Customer learns of the suit or claim, and no delay by Customer in providing that notice materially prejudices the rights of Lawson; b) gives Lawson authority to defend or settle the suit or claim (provided that Lawson does not agree to any settlement that 15 2 materially prejudices Customer); _~ P~1<strr r~ t~~,. .. ... .c~ mil .- r _{;d E' . . Force Majeure. Neither Party will be in default of its obligations under the Agreement or liable to the other for any noncompliance arising from causes beyond the reasonable control of the Party, including, without limitation, fires, floods, natural disasters, communication failures and other equipment or telecommunication problems. Each Party will use reasonable efforts to resolve promptly any type of force majeure event described in Section 14.1. Limitations of Liability. In no event will Lawson, Lawson Group, Third Parties or Customer be liable for indirect, incidental, punitive, exemplary, special or consequential damages, or damages for loss of profits, revenue, data or use, incurred by either Party, whether in contract or tort, even if the other Party has been advised of the possibility of such damages. Neither Party will seek or apply for such damages. Other than indemnification by Lawson for third party claims under Section 11 above or bodily injury or direct damage to real ~"+. ~ ~ ; 6 25C-40 ~:a:a+>vr'..> .~ ,;i,'-; C.;ar...i.., ~.r ;rnrr asii Ti- :ns 2 c _.::€:~r~s or tangible personal property to the extent caused by 19.2 Other communications may be delivered by fax, a-mail or other Lawson's gross negligence, Lawson, Lawson Group and its written means. Third Parties' aggregate and cumulative liability for damages 20. General. to Customer: a) for the Products, the Product Warranty or Maintenance, 20.1 All services provided by Lawson will be provided as an independent whether in contract or tort, will be limited to actual direct contractor, and neither Party will be, or represent itself to be, the legal representative or fiduciary of the agent franchisee franchiser money damages in an amount not to exceed: (1) , , , other Party. theLicense fees paid by Customer to Lawson for the Products subject to the damage claim if Customer notifies 20.2 The Agreement may be amended only in writing signed by the Lawson of the claim wkhin one year after the date of the Parties, except that Lawson may upon notice to Customer and earliest Order Form for those Products or (2) the most without Customer's signature, amend an Order Form to correct recent annual Maintenance fees paid by Customer to errors without increasing the License fees or Services rates. Lawson for the Products subject to the damage claim if 20.3 The Agreement contains the complete agreement with Customer Customer notifies Lawson of the claim more than one year concerning any products, software, maintenance or services after the date of the earliest Order Form for those Products provided by any Lawson Group company. The Agreement subject to the damage claim; supersedes all purchase orders, prior agreements, representations, b) for the Services and Services Warranty, whether in statements, requests for proposal, proposals, negotiations, contract or tort, will be limited to actual direct money understandings and undertakings concerning any products, damages in an amount not to exceed the Services Fees software, maintenance, service, Service Deliverable or Limited paid by Customer to Lawson for the Services subject to the Offering. damage claim during the one year period prior to Customer 20.4 The Agreement will commence into force on the date that Lawson notifying Lawson of the claim; and signs the Agreement and will continue in force until the Parties agree c) for any Limited Offering, whether in contract or tort, will be otherwise or the Agreement is terminated in writing in accordance limited to actual direct money damages in an amount not with the provisions of the Agreement. to exceed any fees paid by Customer to Lawson for that 20.5 Sections 1, 7.3, 9, 10, 11, 13, 14, 15, 17, 19, 20, 21 and 22, and the Limted Offering during the one year period prior to provisions of the Agreement concerning protection of Intellectual Customer notifying Lawson of the claim. Property Rights, will survive any termination or expiration of the 15.3 The limitations of liability in Section 15 apply to Lawson Group Agreement. in the aggregate and are not additive among each Lawson 21. Governing Law and Dispute Resolution. Group company. 4 15 The Parties will each use reasonable efforts to mitigate their 21.1 The Agreement is governed by Minnesota law (without regard to . damages. conflicts of laws principles). All of the terms of the Agreement shall be enforceable to the full extent allowed by Minnesota law. If 15.5 Section 15 describes the agreed allocation of risk. Minnesota law changes in any manner contrary to the express terms 16 Unless an Order Form specifies delivery of Source Code Escrow of the Agreement, those changes will not govern the Agreement to . . source code for a Product, all Products will be provided in object the extent that those changes can be lawfully waived by contract. code only to the Specified Customer identified in an Order From. 21.2 Promptly after the written request of either Party, each of the Parties During the Maintenance Period, the Specified Customer identified will appoint a designated representative to meet promptly in person in an Order Form may elect to become a beneficiary under the or by telephone to attempt to resolve in good faith any dispute applicable Escrow Agreement between Lawson Group and its concerning Lawson's invoices, the Products, Maintenance, Services, escrow agent for the Lawson Products delivered by Lawson in a Limited Offering or the Agreement. If the designated object code only under that Order Form (excluding Third Party representatives do not resolve the dispute, then either Party may Products) by: (1) signing the applicable acceptance form provided request that an officer of Lawson and an officer of Customer meet by Lawson and (2) paying the escrow agent all initial and renewal promptly in person or by telephone to review and attempt to resolve escrow fees. The License and the Escrow Agreement govern any the dispute in good faith. Product source code provided to Customer under the Escrow 21.3 Unless prohibited by applicable law, Lawson and Customer each Agreement. waive their right to a trial by jury for any disputes between the 17. 1 17 Assignment. Customer may not assign the License or the Agreement, or transfer 21.4 Parties. No litigation, arbitration or other action relating to the Products, ' . any rights or obligations under the Agreement. s invoices or the Maintenance, Services, Limited Offering, Lawson Agreement may be brought: (a) 'rf the injured Party has not 17.2 If a Lawson Competitor acquires a controlling interest in the capital participated or agreed to participate in the meetings described in stock or assets of Customer or Customer's successor, Lawson may Section 21.2 above or (b) if the cause of action has been known by elect to terminate the Agreement upon notice to Customer and the injured Party more than 2 years. shall have no refund obligations to Customer. 21.5 Each Party will pay (without reimbursement) its own legal fees and 17.3 Lawson Group may transfer the right to receive payments under expenses incurred in any dispute. the Agreement. 21.6 The Parties must comply with this Section 21 for any dispute. 17.4 Lawson Group may transfer the Agreement in connection with a merger, reorganization, sale or transfer of all or substantially all of 22. United States Government Restricted Rights. If the Products or " " the assets of Lawson Group or its applicable operating subsidiary U.S ) Service Deliverables are acquired by or for the United States ( or division. Government or by a U.S. Government prime contractor or 17.5 Any assignment or transfer in violation of this Section 17 is void. subcontractor (at any Her), then the U.S. Government's rights in the Products and Service Deliverables will be only as set forth in the 18 Publicity. Agreement. This Section 22 is in accordance with 48 CFR 227.7201 . through 227.7202-4 (for Department of Defense (DOD) acquisitions) 18.1 Either Party may (in any presentations, press release, advertising and with 48 CFR 2.101 and 12.212 (for non-DOD acquisitions), and or publicly-disseminated materials) refer to the other Party, to the other applicable sections of the U.S. Code of Federal Regulations Products and Services acquired by Customer, or to background then in effect. information, including, for example: Lawson competitors and competing products considered by Customer, net value of the Agreement, and Customer business needs and reasons for (End of Lawson Software Customer selecting Lawson and the Products. Agreement Master Terms and Conditions] 18.2 Pricing and non-standard Lawson contract terms will remain confidential under Section 10 above. 19. Notices. 19.1 All notices required under the Agreement must be in writing and delivered electronically or by other method providing for proof of delivery, to the attention of the Party's president or managing director, at the address on the applicable Order Form (unless a different recipient or address has been designated by notice to the other Party). _,stcrr:~: relz<ster ~ ~c _ r;;., ..nm;E:~.<<t 25C-41 . ~ v ~ ~ ~ ~ v ~ ~ ~ ~ b CTI Ul Ul CT7 Vl CSl Ul U1 Ul W N --~ O O O O O O O O O O O O O N 07 ~ O CJ1 ~ W N O O O O - O O O O O O O O O O ~ ~ ~ ~ n ~ ~ ~ ~ `G ~ ~ O .G ~ `G ' 171 ~ cn cn ~ a cn ~ v, . -o T C `Q C 0 ~ ~ o ~ - ~ ~ ~ ~ ~ n ~ ~ ~~ ~ "~ v - v ~ a ~~ ~ in~ D ~ ~W~ ~ ~ ~ ° ~ ~ ~ ~ r ~ ~ cn -a vi ~ c ~ ~ - ~, n. • -- ~ c ~ n ~ ~ - ~ Y o ~ cn ~ ~, m ~ ~ ~ ~- 1 1 ~ ~ G' v ~ m m ~ ~ c v< Q m m m v D ' n 3 m ~ ~ ~ ~ fl- fl- cn m ~ ~ ~ m C ~ ~ ~ ~' ~ < D ~ ~ _ ~ ~ o - ~ a. n~ -o y . - ~ ~. ~ p' _* c ~ ~ ~ ~ `~ v `~ '~ m ~,~ ~~~ ~ ~ m oo ~ a o z . ~ ~.~ ~ ~ ~ . ~ ~~ ' ° ~ ~ ° ~ N ~ ~ ° ~ o 0 0 N ~ -~ ~ ~ ~ lD ~ Q ~ o ~' ~ D m -~ a m ~ c -°o v ~~ r a ~ v v - -~ ~ ~ ~ m ~ a o < ni m ~ ~ ,~ O ~ cn v °' • °- m ~ ,~ o x ' ~ ~ c ~ ~ v -n -n -n -n -n -n -n -n -n ~ '~l . 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U U N O- . v O C O _ U O C 'p N ~+ ~ Q O ~ >' n > N O . ~ ~ ~ ~ p (6 _ • C J c ~ Q ~ L ; O ~ ~ i O N ~ >, to ~ ~ O "O ~ ~ ~ V C C ~ Q ~ 0 m ~ ~~ N C O ~ T O (6 ~ Q p U U a ~ ' N cn ~ Q ; ° '~ ~ ! ~~ i- m ~ ~ ~ ~_ i ~ ~ u ~ o c L c C ~ Q ~ (Q "~ ~ aL ~ ~ Q ~ ~ ff~ //( V > ~ (d o Q ~ , ~ ~ m z cv cn c O ~a -o Q a~ cq o U ~ a~ cn~ a~ ~ ~ N a • O O N O M O ~ O ~ O CO O I~ O O O O O O O r r r N M <` O N <'`> N N N N N N N N N M M M M V ? ~ ~ ~ O ~ O ~ O ~ O r d O r ' ~T O r ~ O V O r d O ' ~ O ~ O r ~ O r O r O r O r ~ r a . d a a a ~ n. a a s n . a . ~ a ADDENDUM TO LAWSON SOFTWARE CUSTOMER AGREEMENT MASTER TERMS AND CONDITIONS This Addendum ("Addendum") modifies the Lawson Software Customer Agreement Master Terms and Conditions (the "Agreement") entered into between Lawson Software Americas, Inc. ("Lawson"} and the undersigned Customer, and is effective as of the date signed by Lawson. All of the capitalized terms not otherwise defined in this Addendum have the same respective meanings as contained in the Agreement. The following sections replace the respective sections contained in the Agreement, or add additional section(s) to the Agreement. The sections of the Agreement that are not expressly modified or replaced by this Addendum shall remain in effect pursuant to their terms. Section 1.1 of the Agreement is deleted and replaced in its entirety with the following: "Agreement" or "Lawson Software Customer Agreement" means these Lawson Software Customer Agreement Master Terms and Conditions, each Order Form, Statement of Work and other written agreement entered into by Customer and any Lawson Group company at any time in the future and which refers to these Lawson Master Terms and Condition, and, subject to Section 32 below, each of the following documents which are attached to this Agreement: Exhibit A. Functional and Technical Requirements Exhibit B. Lawson's Response to Request for Proposal Exhibit C. City of Santa Ana ERP Request for Proposal Exhibit D. City of Santa Ana Request for Clarification dated August 13, 2007 (as amended) Exhibit E. City of Santa Ana Request for Clarification dated June 27, 2007 (as amended) Section 1.13 of the Agreement is deleted and replaced in its entirety with the following: "Lawson Partner" means each entity that is then currently appointed as a "Lawson Partner" by any Lawson Group company. Customer will be licensing directly from Systems & Software Inc. ("S&S") some third party software, which transaction is not part of this Agreement. However, as part of the first Statement of Work that is executed concurrently with this Customer Agreement, Lawson will be subcontracting some Services to S&S. For the avoidance of doubt, even if Lawson terminates its subcontractor agreement with S&S, the City's License to the Products licensed under this Agreement will not be affected as a result of such termination. Section 2.4.1 of the Agreement is deleted and replaced in its entirety with the following: Customer may modify the Lawson Products and Service Deliverables only to the extent permitted under an Order Form or described in the Documentation for those Products. The Lawson Products listed in an Order Form may be used by the Specified Customer identified in that Order Form or by Lawson Partners retained by that Specified Customer to develop and use (for only the internal business of that Specified Customer) Software interfaces. For the avoidance of doubt, the Specified Customer may use the Lawson Products to develop and use Software interfaces for their intemal business purposes. Subject to the License, Lawson and its Third Parties will continue to own all Intellectual Property Rights for the Products, Services, Service Deliverables and any modifications of the respective Products or Service Deliverables. Unless authorized by separate agreement, Customer will not modify Third Party Products. Section 2.5.2 of the Agreement is deleted and replaced in its entirety with the following: Only employees of Customer may attend Lawson training. Contractors of Customer may attend training by obtaining Lawson's prior written approval, such approval to not be unreasonably withheld. However, should any Lawson-approved contractor become a competitor of Lawson for any products or services, Lawson may revoke such approval. Section 2.7.6 of the Agreement is deleted and replaced in its entirety with the following: Santa Ana License Add 08Feb2008final.doc Page 1 of 8 25C-58 Customer acknowledges that some Products may contain software that will monitor the actual users and prohibit unauthorized use of the Software. Customer will promptly notify Lawson if Customer becomes aware that Customer Group has exceeded the Maximum Use Designations. If that notice or the verification under this Section 2.7.6 discloses that Customer Group has exceeded the Maximum Use Designations, Customer will promptly pay Lawson for the verified number of additional users based on the following. If Customer Group exceeds the Maximum Use Designations during the twenty-four (24) month period from the Effective Date of this Agreement, pricing for any additional users will based on the pricing for those users as stated on the Product Order Form to this Agreement for purposes of this Section 2.7.6 only. If Customer Group exceeds the maximum Use Designations after twenty-four (24) months from the Effective Date of this Agreement, pricing for any additional users will be based on Lawson's list price for those additional users. The following Section shall be added to the Agreement as Section 2.8: 2.8 Platform Exchange. During the Maintenance Period, Lawson shall fulfill Customer's request to exchange the Lawson-Maintained Products that are Lawson Products in each applicable Product Order Form for other available Lawson-owned software products that have pricing, features and functionality substantially similar to those Products licensed by Customer (as reasonably determined by Lawson). Lawson will fulfill Customer's requests in accordance with this Section free of charge at least two (2) times; thereafter Lawson may charge Customer a nominal handling charge, not to exceed $500 for each request. Section 3.1 of the Agreement is deleted and replaced in its entirety with the following: Lawson will promptly deliver to the Specified Customer identified in an Order Form one copy of the Products listed in that Order Form. Title to any Products that are electronically downloadable passes at place of shipment (subject to the License), unless prohibited by applicable law. Title to any Products that must be physically delivered passes at place of delivery (FOB destination, prepaid and allowed), subject to the License, unless prohibited by applicable law. Section 3.2 of the Agreement is deleted and replaced in its entirety with the following: Except as otherwise agreed in an Order Form or Statement of Work, Customer is responsible, at Customer's expense, for installation of the Software and Service Deliverables, User training, data conversion, implementation and other services. Section 4.4 of the Agreement is deleted and replaced in its entirety with the following: Lawson reserves the right to make changes to Maintenance practices during the Maintenance Period, but will not materially or substantially lower the level of Maintenance provided to Customer during the Maintenance Period. Section 4.8 of the Agreement is deleted and replaced in its entirety with the following: If Lawson reasonably determines that aCustomer-reported problem is (1) not caused by the Lawson- Maintained Products, (2) due to Customer Group's modification of the Products or noncompliance with the Documentation or the then-current Support Operations Handbook, or (3) due to Customer's lack of training on the functionality or use of the Products, and Lawson is reasonably able to correct the problem at Customer's request, then Customer will reimburse Lawson for handling that problem on a time and material basis, at the rates listed in the Statement of Work for a period of twenty-four (24) months after the Effective Date of the Agreement; thereafter, Customer will reimburse Lawson at Lawson's then current list prices. Section 6.1 of the Agreement is deleted and replaced in its entirety with the following: Except as otherwise agreed in an applicable Order Form or Statement of Work, all Services will be on a time and materials basis at Lawson's then-current rates (the "Services Fees") plus applicable Taxes, payable within 30 days after invoice date. The following Section shalt be added to the Agreement as Section 6.3.1 Santa Ana License Add 08Feb2008final.doc Page 2 of 8 25C-59 6.3.1 Subcontractors. Lawson shall not subcontract the Services to be provided by it under this Agreement, and no subcontracting of the Services to be provided under this Agreement or any right or interest therein by Lawson shall be effective, without the prior written consent by Customer of such subcontract, which consent will not be unreasonably withheld. In the event of any subcontract, LAW SON shall remain primarily liable for all of its obligations under this Agreement. Upon request, Lawson can obtain lien waivers from subcontractors performing Services for Customer under the Agreement. For the avoidance of doubt, Lawson will not be required to obtain Customer's approval if Lawson merely uses Lawson-certified personnel that are not Lawson employees to perform Services. The following Section shall be added to the Agreement as Section 7.1.4: 7.1.4 Functionality Warranty. Lawson warrants that, for a period of 24 months after the Effective Date of the Agreement, the applicable Lawson-Maintained Products shall operate in accordance with their Functional and Technical Requirements attached hereto as Exhibit A. This warranty applies only to those Lawson-Maintained Products actually licensed by Customer and only to the release of the Products initially delivered under the Product Order Form executed in conjunction with this Agreement. The following Section shall be added to the Agreement as Section 10.5: Except for the categories set forth in Section 10.1, no information or document that Lawson provides to Customer in connection with this Agreement will be deemed Confidential Information unless it is marked as "confidential" or "proprietary" and constitutes material, which under applicable law, is not of public record. In the event that a request is made under the state's Open Records Law or other applicable law for any of Lawson's Confidential Information, Customer will promptly provide Lawson notice of the request for information so that Lawson may promptly avail itself of any opportunities to establish reasons why the information should be withheld prior to disclosing such Confidential Information. Section 11.1(b) of the Agreement is deleted and replaced in its entirety with the following: gives Lawson authority to defend or settle the suit or claim provided that Lawson does not agree to any settlement that materially prejudices Customer Group, provided that Lawson will consult with Customer regarding the defense, Section 11.1(d) of the Agreement is deleted and replaced in its entirety with the following does not make or allow Customer Group to make any admissions that prejudice, or might prejudice the defense, except as maybe elicited during lawful judicial process; and Section 11.5(a) of the Agreement is deleted and replaced in its entirety with the following: Lawson will pay Customer, as Customer's sole and exclusive remedy against Lawson (other than indemnification by Lawson under this Section 11) an amount equal to the License fee paid under the Agreement for the infringing Product and Service Deliverable and any other Product(s) and Service Deliverable(s) that become substantially unusable because of the infringement less the cumulative depreciation of those Products and Service Deliverables based on a ten (10) year straight line depreciation commencing one (1) year after the initial date of the License for those Products and Service Deliverables; and Section 12 of the Agreement is deleted and replaced in its entirety with the following: 12. Insurance. Lawson will carry the following amounts and types of insurance in conjunction with the work performed under this contract. 1. Worker's Compensation......... Within limits required by the State of California 2. Employer's Liability......$1,000,000.00 each accident 3. Commercial Automobile Liability .$1,000,000.00 Combined Single Limit 4. Commercial General Liability , $1,000,000.00 per occurrence, and naming the City, its officers, employees and agents as additional insureds) and shall include, but not be limited to protection a against claims arising from bodily and personal injury, including death resulting therefrom and damage Santa Ana License Add 08Feb2008final.doc Page 3 of 8 25C-60 to property, resulting from any act or occurrence arising out of Lawson's operations in the performance of this Agreement. 5. Professional Liability (Errors & Omissions) insurance, with a combined single limit of not less that $1,000,000.00 per claim. Certificates of insurance shall be placed on file with the Customer's Clerk's Office prior to beginning performance. Section 13 of the Agreement is deleted and replaced in its entirety with the following: Both Parties shall not directly solicit, during the period of this contract or any extensions to it, any professional personnel who are also in the employ of the other Party and who are providing services involving this contract or services similar in nature to the scope of this contract to such Party. Furthermore, both Parties shall not directly solicit, during the period of this contract or any extensions to it, any employee of the other Party who has participated in the making of this contract until at least one year after his/her termination of employment with such Party. The following Section shall be added to the Agreement as Section 17.6: Assignment. Lawson shall not assign, sublet or transfer or otherwise dispose of its interest in this Agreement without the prior written consent of Customer. Notwithstanding the foregoing, Lawson may, upon prompt written notice to the Customer but without Customer's consent, assign all of Lawson's rights and obligations under this Agreement in connection with a merger, reorganization, sale or transfer of substantially all of the capital stock or assets of Lawson or its applicable operating division. Section 18.2 of the Agreement is deleted in its entirety. Section 21.1 of the Agreement is deleted and replaced in its entirety with the following: The Agreement is governed by the laws of the State of California. Notwithstanding the foregoing, the parties understand and agree to be bound by the terms and conditions of this Agreement and each waive their rights to the extent permitted by applicable law in any case where the terms of this Agreement and the laws of the State of California are in conflict. If the laws of the State of California changes in any manner contrary to the express terms of the Agreement, those changes will not govern the Agreement to the extent that those changes can be lawfully waived by contract. Section 21.2 of the Agreement is deleted and replaced in its entirety with the following: In the event of any dispute or disagreement between the parties which does not require immediate legal relief, whether with respect to the interpretation of any provision of the Agreement, or with respect to the performance of either party hereto, each of the parties will have their respective Project Managers meet for the purpose of endeavoring to resolve such dispute or negotiate for an adjustment to such provision. If a resolution to such dispute does not occur during such meeting or within three business days thereafter, the parties agree to elevate the dispute to a meeting of Lawson's Practice Director or the Customer's Executive Director of Finance. If a resolution to such dispute does not occur during such meeting or within three business days thereafter, the parties agree to elevate the dispute to the Vice President level of LAWSON and the City Manager or his designee of the City. If either of the representatives at this level concludes, after a good faith attempt to resolve the dispute, that amicable resolution through continued negotiation of the matter at issue does not appear likely, the parties may seek any other legal means necessary. In order to constitute a good faith attempt under this Section, the aggrieved Party must give the other Party a minimum of thirty (30) days from the start of the informal dispute resolution process before seeking other legal action. The following Section shall be added to the Agreement as Section 23: Injury, Property, or Other Damage. Lawson shall be responsible for all finally adjudicated damages resulting from third party claims, actions and suits for personal injury and damage to real or tangible personal property due to, or resulting from, the negligent acts or omissions of Lawson, its employees, Santa Ana License Add 08Feb2008final.doc Page 4 of 8 25C-61 agents, and/or subcontractors in connection with this agreement. Lawson agrees to defend, indemnify and hold harmless Customer and its respective officers, employees and agents from and against such claims, actions and suits and will defend Customer and its respective officers, employees and agents, at its own cost and at no cost to Customer, in any such suit, action or claim, including appeals, for personal injury to, or death of, any person, or loss or damage to real or tangible personal property arising out of, or resulting from, the negligent acts of Lawson. These indemnification provisions are for the protection of Customer and its respective officers, employees and agents only and shall not establish, of themselves, any liability to third parties. The provisions of this section shall survive the termination of this agreement. The following Section shall be added to the Agreement as Section 24: No Termination or Suspension of Services. Except as set forth in this section below, and even if any problem or other dispute arises between the parties and regardless of whether or not it requires at any time the use of the dispute resolution procedures described above, in no event shall LAWSON suspend or terminate the provision of Services to the Customer or perform any action resulting from any dispute that prevents, impedes, or reduces in any way the provision of Services or the Customer's ability to conduct its activities, unless: (i) authority to do so is granted by the Customer or conferred by a court of competent jurisdiction; or (ii) the Project Term of this Agreement has been terminated; or (iii) Customer and Lawson are unable to agree on a mutually approved project plan (iv) the parties have participated in good faith negotiations to resolve the dispute pursuant to the Dispute Resolution process set forth in the Customer Agreement; (v) or Customer has failed to pay LAWSON undisputed invoices that are past due in excess of fifteen (15) days after receiving notice from LAWSON of such delinquency. In the event that Customer fails to make such full payment within said 15-day period, LAWSON shall grant to Customer an additional 15 days to render full payment provided that Customer requests such additional 15 days. Notwithstanding the foregoing, Lawson may suspend the performance of Services if the City fails to perform their tasks or complete their deliverables as described in this SOW until such time as those tasks or deliverables are completed by the City. The following Section shall be added to the Agreement as Section 25: No waiver by either party of any breach or violation of any covenant, term, condition, or provision of this Agreement or of the provisions of any ordinance or law, shall be construed to waive any other term, covenant, condition, provisions, ordinance or law, or of any subsequent breach or violation of the same. The acceptance by either party of any fee or other money which may become due hereunder will not be deemed to be a waiver of any proceeding breach or violation by the other party of any term, covenant, condition or provision of this Agreement or of any applicable law or ordinance. The following Section shall be added to the Agreement as Section 26: 26. Non-appropriation. If Customer should not appropriate or otherwise make available funds sufficient to purchase, lease, operate or maintain the products set forth in this Agreement, or other means of performing the same functions of such products, Customer may unilaterally terminate this Agreement only upon thirty (30) days written notice to Lawson. Upon termination, Customer shall remit payment for all products and services delivered to Customer and all expenses incurred by Lawson prior to Lawson's receipt of the termination notice. The following Section shall be added to the Agreement as Section 27: 27.1 Termination for Cause 27.1.1 Termination for Cause by Customer. Customer may, subject to the clause titled "Force Majeure," by written notice of default to Lawson, terminate the Agreement, a Services Order Form or Statement of Work in whole or in part if LAWSON fails to: (i) Maintain the staffing levels as outlined in the Statement of Work, deliver the Service Deliverables or to perform the Services within the time specified in the Agreement or any amendment thereto; (ii) Make progress, so that the lack of progress endangers performance of this Agreement; or Santa Ana License Add 08Feb2008final.doc Page 5 of 8 25C-62 (iii) Perform or observe any of the other provisions of this Agreement, if Lawson does not cure such failure within a reasonable period of time after receiving written notice from Customer. Notwithstanding the foregoing, Customer's right to terminate this Agreement may only be exercised if Lawson does not cure such failure within a reasonable period of time after receiving written notice from Customer. 27.1.2 Termination for Cause by Lawson. Lawson may, subject to the clause titled "Force Majeure, "by written notice of default to Customer, terminate the Agreement, a Services Order Form or Statement of Work in whole or in part if Customer fails to: (i)Perform the tasks outlined in the Statement of Work, provide the staffing levels outlined in the Statement of Work, and maintain the timelines specified in the Agreement or any amendments thereto; (ii)Fail to make timely payments as described in this Agreement; or (iii) Perform any of the other provisions of this Agreement. Lawson's right to terminate this Agreement may be exercised if the failure constitutes a material breach of this Agreement and if Customer does not cure such failure within a reasonable period of time after receiving written notice from Lawson. 27.2 Party Obligations. If any Statement of Work or Services Order Form is terminated for cause, Customer may require Lawson to deliver to Customer, as directed by the Customer, any: (i) completed Service Deliverables; (ii) Partially completed Service Deliverables; related to the terminated portion of this Agreement; and (iii) any plans, working papers, forms, documentation formats, etc. created as part of the Services and necessary for understanding the Service Deliverables. Upon direction of the Customer, Lawson shall also protect and preserve property in its possession in which the Customer has an interest. Customer shall pay Agreement prices for completed services rendered and expenses incurred prior to the date of termination. Failure to agree will constitute a dispute under the Dispute Resolution clause. 27.3 Remedies. If, after termination, it is determined by a final ruling in accordance with the Dispute Resolution Clause that Lawson was not in default, the rights and obligations of the parties shall be the same as if the termination had been issued for the convenience of Customer. 27.4 Termination for Convenience. A Statement of Work or Services Order Form may be terminated in whole or in part, by Customer in accordance with this Section whenever it is determined that such termination is in the best interest of Customer, which termination shall be effective at 11:59 p.m. on the intended date of termination (the "Termination Date°), after the Customer shall have delivered to Lawson a notice specifying the extent to which provision of Services under the Agreement are terminated ("Notice of Termination for Convenience"), and the date upon which such termination will become effective, which shall not be less than 30 days from the date of notice. 27.4.1 Obligations. After receipt of a Notice of Termination for Convenience, and except as directed by Customer, Lawson shall promptly proceed with the following obligations, as applicable, regardless of any delay in determining or adjusting any amounts due under this clause. Lawson shall: (i) Stop work as specified in the Notice of Termination for Convenience; and (ii) Place no further subcontracts for materials, Services, or facilities, except as necessary to complete any continuing portion of the Agreement; and (iii) Terminate all subcontracts to the extent they relate to the work terminated; and (iv) Settle all outstanding liabilities and termination settlement proposals arising from the termination of subcontracts. 27.4.2 Remedies. In the event of all or any partial termination of a Services Order Form or Statement of Work under this Section, Lawson shall be entitled to the unpaid compensation for Services actually rendered, and expenses incurred, up to and including the applicable Termination Date, on a time and materials basis, at an hourly rate not to exceed the rate set forth in the Services Order Form or Statement of Work, for each of Lawson's personnel that performed the unpaid Services in connection with the Services Deliverables that were delivered and the tasks that were performed under the Services Order Form or Statement of Work. Customer shall also return any sums held back as retainage from the compensation previously paid to Lawson within 30 days of the termination date. If within sixty (60) days following the Termination Date, the parties have not agreed upon the amount of Services rendered as of the Termination Date or the amount of such additional payments, then the issue will be treated as a dispute under this Agreement. The following Section shall be added to the Agreement as Section 28: Santa Ana License Add 08Feb2008final.doc Page 6 of 8 25C-63 28. The Lawson Project Manager agrees to advise Customer of all complaints regarding the Project made by Customer's employees that are made known to the Project Manager. Customer has the discretion to reasonably require Lawson, at Customer's expense, to participate in any review, appeal, fair hearing or litigation involving issues related to this contract. The following Section shall be added to the Agreement as Section 29: 29. Nondiscrimination and Workplace Safety: The Contractor agrees to abide by all federal, state and local laws, rules and regulations prohibiting discrimination in employment and controlling workplace safety. Any violations of applicable laws, rules and regulations may result in termination of this contract. The following Section shall be added to the Agreement as Section 30: 30. Retention of Records: Unless Customer specifies in writing a shorter period of time, Lawson agrees to preserve and make available all of its applicable books, documents, papers, records and other evidence involving transactions related to this contract for a period of five (5) years from the date of the expiration or termination of this contract. Matters involving litigation shall be kept for one (1) year following the termination of litigation, including all appeals, if the litigation exceeds five (5) years. Lawson agrees that authorized federal and state representatives, including but not limited to, personnel of the using department; independent auditors acting on behalf of Customer and/or federal agencies shall have access to and the right to examine records during the contract period and during the five (5) year post-contract period. Delivery of and access to the records shall be at reasonable times at Lawson's premises, and at no cost to Customer. The following Section shall be added to the Agreement as Section 31: Prime Contractor. Lawson will act as the prime contractor for all work described under the initial Statement of Work. The following Section shall be added to the Agreement as Section 32: 32. The following documents shall be attached to the Agreement: Exhibit A. Functional and Technical Requirements Exhibit B. Lawson's Response to Request for Proposal Exhibit C. City of Santa Ana ERP Request for Proposal Exhibit D. City of Santa Ana Request for Clarification dated August 13, 2007 (as amended) Exhibit E. City of Santa Ana Request for Clarification dated June 27, 2007 (as amended) 32.1 The Lawson Software Customer Agreement, and any amendments thereto will take precedence over Exhibits B, C, D, and E. Lawson's Response to Request for Proposal shall take precedence over the City of Santa Ana ERP Request for Proposal. 32.2 Exhibit A shall supersede all functional and technical business requirements contained in Exhibits B, C, D and E in their entirety. 32.3 Any Product screen shots contained in Exhibits B, C, D or E will be deemed deleted in their entirety and not made part of this Agreement. 32.4 Sections 7 and 8 of Exhibit B are deemed superseded in their entirety by the initial Statement of Work attached to this Agreement. The following Sections and/or questions contained in Exhibit E are deemed superseded in their entirety by the initial Statement of Work attached to this Agreement: Section I, question 3; Section III -Timeline/Staffing Plan, questions 2 through 5; the entirety of Section III -Project Responsibilities; the entirety of Section III -Training Strategy/Plan; Section III -Report Writing Workflows, question 2 and Testing question 1; and the entirety of Section III -Technical Development. 32.5 As part of Exhibits A, B, D, and E Lawson proposed partnering with several third parties for additional products and/or services in response to Customer's Request for Proposal. During the Agreement process, the Parties have decided to only use the following third party products and services as part of the Agreement Santa Ana License Add 08Feb2008final.doc Page 7 of 8 25C-64 Systems & Software, Inc. ("S&S"). All other references to third parties that are contained in Exhibits A, B, D, and E are deemed deleted in their entirety and not made part of this Agreement. Notwithstanding the foregoing, Customer will be licensing some third party software separately from S&S, which was proposed as part of Exhibit B. S&S intends to include their responses to the City of Santa Ana ERP Request for Proposal functional and technical requirements in the license agreement between Customer and S&S. Therefore, Customer agrees that Lawson will not include or warrant S&S' responses to these functional and technical responses as part of this Agreement. IN WITNESS WHEREOF, the parties hereto have executed this Addendum to Lawson Software Customer Agreement Master Terms and Conditions on the date set forth below. For LAWSON SOFTWARE AMERICAS, INC. CITY OF SANTA ANA ------------------ (Authorized Signature) DAVID N. REAM City Manager (Printed Name) (Title) (Date) (Date) ATTEST: PATRICIA E. HEALY Clerk of the Council APPROVED AS TO FORM: JOSEPH W.FLETCHER City Attorney -Laura Sheedy Assistant City orney Santa Ana License Add 08Feb2008final.doc Page 8 of 8 25C-65 LAWS ~~N LAWSON PERFORMANCE MANAGEMENT TalentView® SUBSCRIPTION SERVICE ORDER FORM Lawson Software Customer Agreement This Subscription Service Order Form ("Order Form") is part of the Lawson Software Customer Agreement and is governed by the Lawson Master Terms and Conditions listed below, and is entered into by the Lawson Group company(s) named below and the "Specified Customer" named below (collectively "the Parties"), and is effective as of the date signed by Lawson ("Effective Date"). Specified Customer acknowledges that it has a copy of and is bound by the Lawson Master Terms and Conditions. The definitions in Section 7 below supplement the definitions in the Lawson Master Terms and Conditions. If any terms of this Order Form conflict with the Lawson Master Terms and Conditions, this Order Form governs that conflict for only the Specified Customer and the Subscription Service and Products provided under this Order Form. Specified Customer Entity Name: City of Santa Ana Client ID: Address: 20 Civic Center Plaza 8'~ Floor City: Santa Ana State/Zip or Province/Postal Code: CA 92701 Country: USA 1. Subscription Service. The "Subscription Service" includes (a) the Term License and Maintenance for the software Product and (b) software and data hosting and related hosting services. 2. Term License and Scope of Use. During the "Initial Subscription Period" defined in Section 3 below and any renewal of the subscription period under Section 3 below (each, a "Subscription Period"): (a) Lawson shall provide and Specified Customer shall purchase the Subscription Service listed in the Schedule(s) to this Order Form, (b) Lawson will provide the Subscription Service using the "Products" listed in that Schedule, including Maintenance for those Products and (c) Lawson grants to Specified Customer a non-exclusive, non-transferable term license for Specified Customer to access and use those Products on a remote basis as part of the Subscription Service, only for the internal business of Specified Customer and within the Maximum Use Designations listed in the Schedule(s) to this Order Form (the "Term License"). 3. Initial Subscription Period and Subscription Period Renewal. The "Initial Subscription Period" starts on the Effective Date and continues for multiple years until the end of the Initial Subscription Period identified in the Schedule(s) to this Order Form. After the Initial Subscription Period, the Subscription Service will automatically renew for successive one year Subscription Periods so long as Lawson makes the Subscription Service available to its customers generally, unless Specified Customer provides written notice of termination to Lawson at least 60 days before the next renewal date. If Lawson receives a timely notice of termination, the Subscription Period will end without further renewal at the end of the then current Subscription Period. Lawson may elect to consolidate the renewal date and prorate the renewal fees so that the Subscription Period renews on the same date each year for customers who purchase the Subscription Service. 4. Subscription Service Fees and Payment. The "Subscription Service Fees" listed in the Schedule(s) to this Order Form include the aggregate fees for the Subscription Service for the Initial Subscription Period. After the Effective Date of this Order Form and before each subsequent year of the Initial Subscription Period, Lawson shall invoice each net annual installment amount of the Subscription Service Fees in advance. Specified Customer shall pay Lawson each net annual installment amount of the Subscription Service Fees, plus applicable Taxes, within 30 days after the date of invoice. Before each renewal of the Subscription Period, Lawson will invoice Specified Customer for the then current Subscription Service Fees for the renewal period, payable in full at least 30 days before the renewal date. 5. Changes to Number of Employees. Specified Customer shall promptly notify Lawson of any increase to the Number of Employees (as defined below) that exceeds the Maximum Use Designation(s) listed on the attached Schedule(s). The notice shall include the increase in the number of employees and the date that Specified Customer exceeded or expects to exceed the maximum Number of Employees. Lawson reserves the right to increase the Subscription Service Fees for the then current Subscription Period if the Number of Employees of Specified Customer increases by the lesser of 5% or 100 employees, which will be effective as of the date Specified Customer exceeds the maximum Number of Employees. During any Subscription Period, Specified Customer shall not be entitled to a refund, credit or decrease in the Subscription Service Fees for that Subscription Period due to a decrease in the Number of Employees. Lawson Performance Management Order Form OSSep2007 Page 1of3 25C-66 6. Specified Customer Content. All data and other content submitted or generated by or for the Specified Customer when using the Subscription Service (the "Specified Customer Content") will remain the sole property of the Specified Customer during and after each Subscription Period. Lawson will not disclose or use the Specified Customer Content for any purpose other than to provide the Subscription Service and comply with the Agreement. Specified Customer grants to Lawson the right to use, copy, store, transmit and display Specified Customer Content solely to the extent necessary to provide the Subscription Service to Specified Customer. Upon termination of the Subscription Service and payment of all Lawson invoices by Specified Customer, Lawson will provide or make available to Specified Customer the then current Specified Customer Content in Lawson's possession. Any available conversions of that data or other available termination assistance will be on a time and materials basis at Lawson's then current rates. 7. Associated Services. Lawson will provide configuration, training and other available consulting related to the Subscription Service for an additional fee under a separate Services Order Form between Lawson and Specified Customer. 8. Order Form Definitions and Maximum Use Designation. The following respective definitions and Maximum Use Designations supplement the definitions contained in the Lawson Master Terms and Conditions: 8.1 "Number of Employees" means the number of active employees of Specified Customer Group. 8.2 The following definitions are interchangeable in any prior document that is part of the Lawson Software Customer Agreement: (a) "Client" and "Specified Customer," (b) "Support" and "Maintenance" and (c) "LSP" and "LMP" (Lawson Maintained Product). IN WITNESS WHEREOF, the parties hereto have executed this Subscription Service Order Form on the date set forth below. For LAWSON SOFTWARE AMERICAS, INC. CITY OF SANTA ANA (Authorized Signature) DAVID N. REAM City Manager (Printed Name) (Title) (Date) (Date) ATTEST: PATRICIA E. HEALY Clerk of the Council APPROVED AS TO FORM: JOSEPH W.FLETCHER City Attorney L i , , ~L,aura Sheedy ~ Assistant City At4tirney Number of Schedules Attached to this Order Form: 1 SCHEDULE 1: PRODUCT LISTING TalentView® is a registered trademark of Personnel Decisions International Corporation. Lawson Pertormance Management Order Farm 10oct2007 25C-67 Page 2of 3 LAWSON PERFORMANCE MANAGEMENT TalentView® SCHEDULE1 to Subscription Service Order Form Specified Customer Entity Name: City of Santa Ana Address: 20 Civic Center Plaza 8th Floor City: Santa Ana State/Zip or Province/Postal Code: CA 92701 Country: USA 1. Initial Subscription Period: 1 vear• commencing on the Effective Date. 2. Maximum Use Designation: Number of Employees of Specified Customer Group 500. 3. Subscription Service: Description of Sys Maintenance Annual Amount of Subscription Service & Products Accessed ID Type Subscriptigri Service Fels for Initi I Sub crl lion Pe Lawson Performance Management /TalentView® (Includes Third Party Product) pMGT LMP $37,500 ProcessFlow Solution for Lawson Performance Management (Included in PMGT Product) PFPM LMP N/C Subtotal $37,500 Payment Terms: Specified Customer shall pay L h awson eac net annual installment amount of the Total Net Annual Amount of Subscription Service Fees, plus applicable Taxes, Subscription Service Fees Payable for within 30 days after the date of invoice. the Initial Subscription Period (plus $$37,500 applicable Taxes) TalentView® is a registered trademark of Personnel Decisions International Corporation. Lawson Pertormance Management Order Form 10oct2007 Page 3of 3 25C-68 25C-69 ADDENDUM TO LAWSON SOFTWARE LICENSE AGREEMENT This Addendum ("Addendum"), effective as of the date signed by Lawson, modifies all prior Lawson software license agreements and any amendments thereto (collectively, the "Agreement") entered into between Lawson Software Americas, Inc. d/b/a/ Lawson Software and its predecessor, and the undersigned Client. All of the capitalized terms not otherwise defined in this Addendum have the same respective meanings as contained in the Agreement. The following sections replace the respective sections contained in the Agreement, or add additional section(s) to the Agreement (for those section number(s) not contained in the original Agreement). The sections of the Agreement that are not expressly modified or replaced by this Addendum shall remain in effect pursuant to their terms. 1. "Failover" means the process by which the applications licensed for use on a production server are simultaneously installed and loaded into memory on another server (the "Failover Server") for the sole purpose of providing a backup system on the Failover Server should the production server become inoperable. 2. "Disaster Recovery" means the process by which the applications licensed for use on a production server may be installed and operated on another server (the "Disaster Recovery Server") for the sole purpose of providing a backup system on the Disaster Recovery Server should the production server become inoperable. This Addendum applies to: select one [ ]Failover [ x ] Disaster Recovery Authorization For Failover/Disaster Recovery: For Failover or Disaster Recovery purposes only, Client shall be authorized to use the Products under the Agreement and the Products licensed below from and provided by Lawson, (collectively, the "Backup Copies"), at no additional License Fee. The Backup Copies will (i) be installed on only one server, such server to be identified as a "Failover Server" or "Disaster Recovery Server', as the case may be, (ii) not be used concurrently with production or development copies of the Products, except for testing the Failover or Disaster Recovery servers, (iii) other than in the event the primary production system becomes unavailable, not be used for (a) production purposes, (b) load-sharing, or (c) testing purposes [other than as permitted in subsection (ii) above]; and (iv) be subject to the Support provisions under the Agreement. The rights granted herein shall terminate automatically should Client cease using the Backup Copies only for the purposes described herein. Upon such termination, Client will (i) remove the Backup Copies from the Failover Server or the Disaster Recovery Server, as the case may be, within five (5) days of such termination; (ii) destroy the Backup Copies and related Documentation, and any copies thereof; and (iii) within ten (10) days of termination, certify in a writing, signed by an authorized signatory of Client, that such action has been taken. Except as provided above, all other terms of the Agreement that govern the production copy(s) of the Products, shall also apply to the Backup Copies. As provided for in the Agreement, the Client will be charged a nominal production and delivery fee for each additional copy of the Products delivered to Client. Failover/Disaster Recove Site Under The Addendum: Address Hardware Platform Serial Number Operating System & Release Level Media Database 20 Civic Center Plaza, Santa Ana CA 92701 HP Win CD SQL Product Group Sys Users Maximum Servers Support License Code Type Fee Micro Focus NETEx ress Com filer MNC 1 N/A LMP-REQ'D N/C Micro Focus NETEx ress Runtime MNX 110 1 LMP-REQ'D N/C NOTE: Micro Focus Products (a) to be used for load-sharing or for testing purposes [other than as permitted in subsection (ii) above] must be purchased separately, and (b) licensed under this Addendum may be used to compile the applications or apply updates to the a lications onl Burin a Failover or Disaster Recove event. "Same number of Users that are licensed for the production server. Santa Ana DisasterRecovery 14Dec2007.doc June132006 Page 1 of 2 25C-70 IN WITNESS WHEREOF, the parties hereto have executed this Addendum to Lawson Software License Agreement on the date set forth below. For LAWSON SOFTWARE AMERICAS, INC. CITY OF SANTA ANA (Authorized Signature) DAVID N. REAM City Manager (Printed Name) (Date) (Title) ATTEST: (Date) PATRICIA E. HEALY Clerk of the Council APPROVED AS TO FORM: JOSEPH W. FLETCHER City Attorney //: __-.L.i.t..__ Laura Sheec~y Assistant City Attor y Santa Ana DisasterRecovery 14Dec2007.doc June132006 Page 2 of 2 25C-71 PRODUCT ORDER FORM TO LAWSON SOFTWARE CUSTOMER AGREEMENT This Product Order Form ("Product Order Form") modifies the Master Terms and Conditions ("T&C's") which supplements and governs each Order Form to the Lawson Software Customer Agreement ("Agreement") entered into between Lawson Software Americas, Inc., and its predecessor ("Lawson") and the undersigned Customer, and is effective as of the date signed by Lawson. All of the capitalized terms not otherwise defined in this Product Order Form have the same respective meanings as contained in this Agreement. The following sections replace the respective sections contained in the T&C's, or add additional section(s) to the T&C's (for those section number(s) not contained in the original T&C's). The sections of the T&C's that are not expressly modified or replaced by this Product Order Form shall remain in effect pursuant to their terms. Authorization For Training Server Copy: For development and/or testing purposes only and at no additional License Fee, Customer shall be authorized, depending on Customer's selection as indicated below, either (i) one additional copy of; or (ii) the access codes related to; the server portion of the Lawson-owned Products under the Agreement. For the purposes of this Product Order Form, Training Copy shall refer to such "additional copy" or such "access codes", as the case may be. The Training Copy (i) shall be installed on only one server, such server to be identified as the "Training Server" herein, (ii) shall not be used for any production purposes, (iii) shall be deployed against a database that is separate from any production database, and (iv) shall be subject to the Maintenance Categories set forth in the Agreement. Notwithstanding the provisions of the Agreement and this Product Order Form thereto, access to such Training Copy's software shall be limited to a total of ten (10) concurrent Training users per Product Group or Product Suite licensed under the Agreement, and the number of such Training users shall not be counted in the Number of Concurrent Users as set forth in the Agreement. Signify Customer's desire to receive an additional copy of the server portion of the Lawson-owned Products under the Agreement by checking this box ~. As provided in the Agreement, Customer shall be charged a nominal fee for delivery of such copy. Trainin Server Site Under The Product Order Form: Address Hardware Serial Operating System Media Database Platform Number & Release Level 20 Civic Center Plaza, Santa Ana CA 92701 HP Win CD SQL The following Products shall be added under the Agreement and shall be restricted to use with only the Training Server: Product Group Sys Code Concurrent Maximum Maintenance License Users Servers Category Fee Micro Focus NetExpress Compiler MNC 1 N/A LSP-REQ'D $3,700.00 NetExpress Application Runtime MNX 10 1 LSP-REQ'D $1,300.00 PAYMENT TERMS License Fee Total $5,000.00 100% due 30 days from Invoice date TOTAL FEES PAYABLE * $5,000.00 TRAINING SERVER POF UNIX Windows Santa Ana TrainingOrderFrom 14Dec2007.doc Page 1 of 1 15March2007 25C-72 IN WITNESS WHEREOF, the parties hereto have executed this Product Order Form to Lawson Software Customer Agreement on the date set forth below For LAWSON SOFTWARE AMERICAS, INC. (Authorized Signature) (Printed Name) (Title) (Date) TRAINING SERVER POF UNIX Windows CITY OF SANTA ANA DAVID N. REAM City Manager (Date) ATTEST: PATRICIA E. HEALY Clerk of the Council APPROVED AS TO FORM: JOSEPH W.FLETCHER City Attorney sy: - L'aura Sheedy Assistant City Attorne}~ Santa Ana TrainingOrderFrom 14Dec2007.doc Page 2 of 1 15March2007 25C-73 PRODUCT ORDER FORM TO LAWSON SOFTWARE CUSTOMER AGREEMENT This Product Order Form ("Product Order Form") modifies the Master Terms and Conditions ("T&C's") which supplements and governs each Order Form to the Lawson Software Customer Agreement ("Agreement") entered into between Lawson Software Americas, Inc., and its predecessor ("Lawson") and the undersigned Customer, and is effective as of the date signed by Lawson. All of the capitalized terms not otherwise defined in this Product Order Form have the same respective meanings as contained in this Agreement. The following sections replace the respective sections contained in the T&C's, or add additional section(s) to the T&C's (for those section number(s) not contained in the original T&C's). The sections of the T&C's that are not expressly modified or replaced by this Product Order Form shall remain in effect pursuant to their terms. Authorization For DevelopmentlTest Server Copy: For development and/or testing purposes only and at no additional License Fee, Customer shall be authorized, depending on Customer's selection as indicated below, either (i) one additional copy of; or (ii) the access codes related to; the server portion of the Lawson-owned Products under the Agreement. For the purposes of this Product Order Form, Development/Test Copy shall refer to such "additional copy" or such "access codes", as the case may be. The Development/Test Copy (i) shall be installed on only one server, such server to be identified as the "Development/Test Server" herein, (ii) shall not be used for any production purposes, (iii) shall be deployed against a database that is separate from any production database, and (iv) shall be subject to the Maintenance Categories set forth in the Agreement. Notwithstanding the provisions of the Agreement and this Product Order Form thereto, access to such Development/Test Copy's software shall be limited to a total of ten (10) concurrent development/test users per Product Group or Product Suite licensed under the Agreement, and the number of such development/test users shall not be counted in the Number of Concurrent Users as set forth in the Agreement. Signify Customer's desire to receive an additional copy of the server portion of the Lawson-owned Products under the Agreement by checking this box ^. As provided in the Agreement, Customer shall be charged a nominal fee for delivery of such copy. Develo mentffest Server Site Under The Product Order Form: Address Hardware Platform Serial Number Operating System 8~ Release Level Media Database 20 Civic Center Plaza, Santa Ana CA 92701 HP Win CD SQL The following Products shall be added under the Agreement and shall be rest ricted to use with only the Development/Test Server: Product Group Sys Code Concurrent Maximum Maintenance License Users Micro Focus NetExpress Compiler MNC 1 Servers Category ' Fee NetExpress Application Runtime MNX 10 N/A 1 LSP-REO D ' $3,700.00 LSP-REQ D $1,300.00 PAYMENT TERMS 100% due 30 days from Invoice date License Fee Total $5,000.00 TOTAL FEES PAYABLE * $5,000.00 DEVELOPMENT/TESTSERYER POF UNIX Windows SantaAnaTestOrderForm 14Dec2007.doc Page 1 of 1 15March2007 25C-74 IN WITNESS WHEREOF, the parties hereto have executed this Product Order Form to Lawson Software Customer Agreement on the date set forth below. For LAWSON SOFTWARE AMERICAS, INC. (Authorized Signature) (Printed Name) (Title) (Date) CITY OF SANTA ANA DAVID N. REAM City Manager (Date) ATTEST: PATRICIA E. HEALY Clerk of the Council APPROVED AS TO FORM: JOSEPH W.FLETCHER City Attorney Laura Sheedy Assistant City Attorney DEVELOPMENT/TEST SERVER POF UNIX Windows SantagnaTestOrderForm 14Dec2007.doc Page 2 of 1 15March2007 25C-75 SECOND AMENDMENT TO CONSULTING SERVICES AGREEMENT THIS SECOND AMENDMENT TO AGREEMENT is entered into on March 3, 2008, by and between Government Finance Officers Association of the United States and Canada, an Illinois not-for-profit corporation ("GFOA") and the City of Santa Ana, a charter city and municipal corporation of the State of California ("City"). RECITALS: A. The parties entered into Agreement #A-2006-174, dated July 5, 2006, (hereinafter "said Agreement") by which GFOA has provided consulting and negotiation services in relation to City's procurement of a new enterprise system supporting the City's finance, human resources, payroll and utility billing functionalities. B. The City has approved the purchase of an enterprise system and desires GFOA's project management services for the installation and integration of the system Citywide. WHEREFORE, in consideration of the covenants contained in said Agreement, and subject to all the terms and conditions of said Agreement, except those amended in this Second Amendment to Agreement, the parties agree as follows: 1. Section III. A., SERVICES, shall be deleted in its entirety and replaced with the following: "A. General Scone: GFOA has provided System Selection and Contract Negotiating services as described in Exhibit A to said Agreement. GFOA shall provide Project Management services as requested by the City Project Manager, in relation to the implementation of the Lawson financial management system, as set forth in Exhibit A-1, attached hereto and incorporated by reference." 2. Section VII, COMPENSATION OF CONSULTANT, shall be deleted in its entirety and replaced with the following: "For those services associated with System Selection and Contract Negotiating, GFOA shall be paid as set forth in Exhibit A to said Agreement. The total amount to be provided for such services shall not exceed $94,500. For services associated with Project Management, including advisory and quality assurance services in the Lawson implementation, GFOA shall be paid on an hourly basis as set forth in Exhibit A-1. The total amount to be provided for such project management services shall not exceed $195,000. The total amount to be paid for all services provided by GFOA in relation to the selection and implementation of the ftnancial services system, shall not exceed $289,500." 25C-76 3. Anew paragraph, C, shall be added to Section IX, INDEMNIFICATION, LIMITATION ON LIABILITY, shall be added to read in full as follows: "The City recognizes that GFOA's role is to provide information, analysis and advisory services. As such, GFOA bears no responsibility for the performance of the software, hardware, or implementation service suppliers." 4. Except as hereinabove amended, all terms and conditions of said Agreement shall remain in full force and effect. IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment to Agreement on the date and year first written above. ATTEST: CITY OF SANTA ANA PATRICIA E. HEALY DAVID N. REAM Clerk of the Council City Manager APPROVED AS TO FORM: JOSEPH W. FLETCHER City Attorney By: GOVERNMENT FINANCE OFFICERS ASSOCIATION Laura Sheedy Assistant City Attorney (Name) (Title) 25C-77 EXHIBIT A-I THE RESEARCH AND CONSULTINCz CENTER GOVERNMENT FINANCE OFFICERS ASSOCIATION February 2008 Note: This is a proposal developed by the GFOA Research and Consulting Center to the City of Santa Ana, CA. All information herein is confidential and proprietary to GFOA. Upon request by GFOA, all materials submitted as part of this proposal must be returned or destroyed. 25C-78 G~ THE RESEARCH AND CONSULTING CENTER GOVERNMENT FINANCE OFFICERS ASSOCIATION February 13, 2008 Ms. Pamela Arends-King Assistant Director of Finance and Management Services City of Santa Ana 20 Civic Center Plaza, 8`h Floor Santa Ana, CA 92701 Dear Ms. Arends-King: The Government Finance Officers Association (GFOA) is pleased to present our proposal to the City of Santa Ana for ERP Advisory Services as you implement the new Lawson software. GFOA has extensive experience in this area and believe we can bring real value and success to your project. Our consulting approach is tailored to fit the unique needs of the City. GFOA staff brings the expertise gained from our work with over 200 jurisdictions, including State, County, local governments, and special districts and combines this with a facilitative methodology that keeps the project on-track. We have prepared some financial estimates based on our initial discussions, but the total scope of the project will be modified to fit your requirements during each phase of the implementation. We very much look forward to the opportunity to work with you on this project. If there are any questions, please contact: Barry McMeekin, Consulting Practice Manager, at (312) 339-1510 or Nadeen Biddinger at (312) 498-3027 Sincerely, ~~ (/ Anne Spray Kinney Director, Research and Consulting Center 25C-79 Table of Contents Scope of Services ......................................................Section I Basic Qualifications & Experience ..................................Section II Pricing ....................................................................Section III 25C-80 I. Scope of Services Background GFOA has recently completed a project assisting the City of Santa Ana with the release of a Request For Proposal for an integrated ERP system. GFOA also provided the City with selection and contract negotiation services. The City has now requested that GFOA submit a proposal to provide advisory or quality assurance services during the implementation of the ERP Project. Selection of the implementation software and vendor is complete and the project is scheduled to kick off in March 2008 GFOA's expertise in the areas of municipal finance and government enterprise technology and our objectivity and familiarity with the City of Santa Ana make us uniquely qualified and capable of providing the requested oversight, which could include project management advisory services, issue resolution and review of project deliverables. GFOA will assure compliance with contractual requirements in a manner that meets the needs of the City and maximizes the potential for project success. Definition of Phase. This phase begins with the activities that surround implementation of the Lawson ERP software and ends with the completion of a post- implementation review. GFOA will provide quality review and assist the City's Project Manager with administering the implementation of the ERP solution. GFOA will provide independent oversight and quality assurance services for the duration of the project. Capabilities. A project oversight role with GFOA will enable the City to leverage the presence that GFOA has in the public sector technology industry and will provide the City access to our nationwide membership network. These factors enable our clients to extract a greater degree of cooperation and performance from software and implementation firms. The City has engaged Lawson to implement the ERP system, and they are also pursuing business across GFOA's client base and membership network. Consequently, no other organization can provide the type of service we are proposing and, at the same time, exercise the leverage that GFOA can bring. Few other firms, moreover, would be truly independent in project oversight because many of them are allies of or engage in business activities with ERP software and implementation firms, albeit in other areas. By contrast, GFOA has no ties to ERP software and services firms. Also GFOA has provided comparable services as those in this proposal at several projects with similar functional solutions utilizing similar implementation methodologies. In addition, since GFOA assisted the City in development of a detailed Statement of Work, we are uniquely qualified to ensure that the requirements and assumptions of the SOW remain on target and are subsequently delivered. 25C-81 Description of Tasks. Following are descriptions of the types of project advisory and quality review activities that we propose to perform as part of the engagement to ensure effective project execution: 1. Work Plan Development, Analysis and Tracking. Development, analysis and tracking of the project work plan are key components of developing an effective project structure and project management. GFOA will review the proposed project plan that makes the most effective use of your organization's resources. Our prior experience will help you assess the logic and comprehensiveness of the plan as it is created, finalized, and maintained. Too often we have found project plans that have been developed without the customer in mind. For example, dependencies have not been outlined; insufficient review time has been allocated for deliverables; or not enough detail is provided in the plan. GFOA will work with your Project Manager and Technical Manager as well as the Lawson Project Manager to ensure an acceptable project plan. Once the base project plan is complete, GFOA will work with the Project Managers to identify key milestones where GFOA consultants will review activities completed to-date and review any potential project risks. We usually recommend reviewing activities at the beginning and end of the project preparation phase; the beginning, middle, and ending of the design phase; the beginning of the training phase; the beginning and ending of the test phase; the beginning of the deployment phase; and the beginning of the support phase. The GFOA's review process should then be added to the base project plan. Essentially, GFOA's role is to provide an "early warning mechanism," to your Project Manager at various points in the implementation process by carefully tracking the progress of activities within the project plan. 2. Implementation Plan Management. Development of a thorough implementation plan is an important component to the development of an effective project structure. Furthermore, throughout a complex enterprise system installation, implementation plans must be revised and appropriate controls must be present as part of effective project management to minimize deviations from the timeline and/or budget. GFOA can work with the Lawson and City project managers to monitor project status, resolve project scope and approach issues, and provide input on improving the logic of the overall plan. We would also keep the vendor on-track with the overall objectives of the organization as established in the contract agreements. 3. Review of Implementation Deliverables. Implementation vendors often require clients to "signoff' before proceeding to the next step as part of project management. Our review of all project deliverables, if needed, will ensure contract compliance, verify that the deliverable is complete and consistent with the scope of work and functionality documented in the contract, includes acceptable content, and meets your organization's standards of quality. GFOA is able to provide you with analysis of information to increase your confidence in approving deliverables. 4. Business Process Design. Vendors typically prepare a "to-be" design document that outlines how the software will be configured to meet your organization's needs. The new designs often require changes in business processes that need to be documented sufficiently. This responsibility typically falls within project management. GFOA recommends that the design processes incorporate business process maps and descriptions of the new changes. This ensures that the logic of the design has been reviewed appropriately. To augment the implementation process, GFOA also recommends that test scripts and functionaUtechnical requirements be mapped to each step on the business process map. That way, the appropriate test scripts can be 25C-82 applied to any future process changes. GFOA consultants would be working with the Project Managers to achieve this process. 5. Interface/Customization Identification Assistance. Although GFOA strives to ensure most interfaces be identified before the contract signing, it is almost inevitable that a few customizations or interfaces will be required during implementation. As part of the contract negotiations process, GFOA documented a process for identifying, assessing, and implementing unidentified interfaces and customizations that may be required. This process was included in the implementation services contract or the statement of work. As part of our project advisory services, GFOA consultants will rely on this process to assess any customizations and new interfaces. Our task in this process would assist your Project Managers with determining whether or not an interface or customization is warranted; assist your Project Managers in ensuring that the proper procedures are being followed (e.g., update business designs; develop/review functional and technical specifications, update test scripts, and user acceptance). 6. Testing and Training Support. Lawson should provide a testing and training strategy as part of their overall implementation methodology. GFOA consultants, if needed, will assist the implementer and City project managers in assessing the testing plans (e.g., unit, integration, user acceptance, etc.), test scripts and required resources to complete testing within the required timeframes. GFOA consultants will also assist the project managers in assessing the "Super User" training and end-user training strategies. As part of this assessment, GFOA consultants will assist in the review of training documents and will work with project managers to identify which personnel should attend the different types of training classes. 7. Issue Resolution. As a major source of recommended practices in governmental accounting and budgeting, GFOA will serve as a mechanism for issue resolution. Too often implementation vendors and government staff have difficulty sorting out the wisdom of process changes which adds unnecessary delays to the implementation timeline and raises project costs. If the functionality of the software is to be maximized, issues must be resolved on a timely basis. Our network of finance officers is a unique resource for validating leading-edge business practices. GFOA would be available to provide an independent source of advice to facilitate prompt issue resolution. 8. Post Project Review. Certain tasks will be repeated when upgrades/patches are applied or when a major system upgrade is required. To prepare for these events, GFOA Consultants will work with the Project Managers to conduct a "Lessons Learned" meeting upon completion of the project. Our consultants will document the results of the meeting and submit them to your Project Managers. (Please note: GFOA recommends that some "Lessons Learned" meetings take place during implementation. For example, a "lessons learned" meeting conducted immediately after the completion of the earliest test scripts may facilitate the completion of the overall testing process.) GFOA will also conduct a post go live review of the system that compares production business processes to the system configuration documents and analyzes whether the system requirements have been addressed in full. 9. Other Implementation Services. Periodically, GFOA is asked to provide other types of services to clients during implementation. Some of these services have included augmenting client resources for budget design and chart of account design, project management assistance, 25C-83 and participating in Steering Committee meetings to provide independent analysis of issues. These services are typically provided on a time and materials basis or through a bucket of hours. Deliverables: Project Management Advisory Services Points of Staff Input and Review. GFOA staff will maintain regular and frequent communication with City staff throughout the management of the implementation project. GFOA staff will conduct reviews of the following documents, if needed, or bring staff on-site if requested. 1. Work Plan Development 2. Finalization of ERP Design 3. Finalization of Testing Plan 4. Post Project Review City staff will be provided with an opportunity to raise issues or ask questions during regularly scheduled project update conference calls and GFOA staff will respond quickly to any questions or issues that arise outside of the regular meeting schedule. As we have discussed previously, under the proposed arrangement, utilization of GFOA services will be at the sole discretion of the City and its project manager. We believe that we can add value to the City project in any of the above tasks regardless of the final mixture. We would however expect to work with the City to develop scheduled tasks that allow the GFOA to maintain continuity and consistency throughout the project. Timeframe. This phase will begin once the Lawson ERP project begins and is tentatively scheduled to last fourteen months and end after the implementation of the Financials, Procurement and enQuesta about March 31, 2009. 25C-84 II. Basic Qualifications & Experience GFOA's years of research and consulting experience (helping over 100 clients implement ERP systems) and close contact with our membership network has enabled us to develop an approach and methodology that streamlines the technology planning and procurement process and improves cost effectiveness. Through our work with city and county governments, school districts, and other public sector entities, we are familiar with nearly every software system available. GFOA conducts reference checks and research on public sector software and implementation firms and utilizes this knowledge to benefit member clients. Further, GFOA staff attends the public sector user conferences of all of the major software vendors to stay abreast on product enhancements. Unlike many for profit technology advisory firms, GFOA focuses exclusively on public sector clients. We have developed a library of best practices, RFP's, and software contracts from jurisdictions that enhance our advisory capability. And, based on our extensive experience assisting public sector entities procure, implement and utilize new systems, GFOA knows what constitutes a fair price for software and implementation services as well as understands the trade- offs between forcing lower prices and the quality of the implementation. The team proposed has extensive experience in managing municipal ERP implementation projects. Team members have conducted research related to enterprise resource planning systems, written extensively on the subject for national journals and periodicals, and provided consulting to over 50 cities and counties across the nation and Canada. The combination of research and hands-on consulting translates into savings for our clients because we have developed a knowledge base to improve the effectiveness of system procurement decisions. Our team has significant experience in conducting needs assessments, developing business requirements, facilitating procurement of enterprise systems for some of the largest (Chicago IL; Cook City IL; Los Angeles City CA) and smallest (Redlands CA; Columbia SC; Summit City CO) public sector organizations in the United States and completing a variety of management consulting initiatives. Barry McMeekin, Consulting Practice Manager, would serve as Engagement Manager, Nadeen Biddinger, Senior Manager, would be the Project Manager and John Ruggini, Senior Consultant, would provide Quality Assurance. We believe that GFOA's resources and highly qualified professionals represent the most comprehensive knowledge and experience for this type of work in the public sector. A summary of the experience for each of the proposed project team members follows. 25C-85 III. Pricing A. Project Budget The time and cost related to project management advisory services vary considerably based upon a variety of factors that cannot be accurately predicted in advance. As a result, GFOA is proposing to bill the City on an hourly basis for work actually performed. Because of strong project management strengths in the City, it is difficult for GFOA to prepare an estimate of the costs involved. At the City's request GFOA estimated a maximum of two full days on-site each week during the fourteen-month engagement. Often times this much on-site may not be required, and the City would only be invoiced for actual costs. When work is done off-site the costs would be less as described below. The maximum cost of on-site work each week (a Monday and Tuesday, or a Tuesday and Wednesday) would be $195,000. Payment and Contractual Terms. GFOA will invoice the City on a monthly basis. The City will be billed an hourly rate of $185 per hour plus a $40 per hour travel loading rate for all work effort incurred on-site. 25C-86 ASSUMPTIONS AND TIMELINE Engagement Assumptions General Assumptions ^ The proposal assumes that the contract will be completed within the timeframe of the implementation schedule accepted as part of the implementation services vendor agreement. ^ Your organization's staff will be reasonably available for interviews and will participate in the project as agreed upon and appropriate. Your organization agrees not to cancel meetings once established (which would raise our travel costs). ^ GFOA's liability and indemnification under any agreement reached with your organization will be limited to the extent of fees paid by insurance coverage currently in force. This limitation applies to all exposures under this engagement. The contract with your organization must also include the following language in the same section as the limitation on liability: "The City recognizes that GFOA's role is to provide information, analysis and advisory services. As such, GFOA bears no responsibility for the performance of the software, hardware, or implementation service suppliers." GFOA assumes that workdays will incur at 8 hours of billable time per day when on-site. However, we will work to fit your work schedule, and will only bill for the hours worked, both on and off site, during this engagement. ^ GFOA will be provided access to the ERP implementation effort in a remote fashion, including the project team network. This access will be the same as that afforded to the implementation team on-site. It will also include access to the proprietary tools used by the project team members for implementation of the ERP application. ^ GFOA will participate in Steering Committee meetings if site work is coincident with meeting times. ^ When performing work on-site, GFOA staff will be provided appropriate office workspace and access to copiers, printers, fax machines, and miscellaneous office supplies. 25C-87 RESOLUTION NO. 2008-XXX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA AUTHORIZING THE EXECUTION OF CERTAIN LEASE FINANCING DOCUMENTS AND RELATED INSTRUMENTS AND DETERMINING OTHER MATTERS IN CONNECTION THEREWITH Iss02/26/08 BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS FOLLOWS: Section 1. The City Council of the City of Santa Ana hereby finds, determines and declares as follows: A. The City proposes to finance up to five million, sixty-nine thousand dollars ($5,069,000), of that certain computer software system which will provide a comprehensive financial accounting/management system to integrate City financial responsibilities (the "Equipment"). B. The City has solicited proposals from commercial leasing firms in connection therewith and determined that SunTrust Equipment Finance & Leasing Corp (the "Lessor"), has provided the proposal most advantageous to the City, a copy of which is attached hereto (the "Proposal"). C. It is in the public interest and for the public benefit that the City authorize and direct execution of a lease agreement with Lessor and certain other financing documents in connection therewith. Section 2. The City Council of the City of Santa Ana hereby approves the terms of the Proposal submitted by Lessor. Section 3. The City Council of the City of Santa Ana authorizes the City Manager and Clerk of the Council to execute acknowledge and deliver: (a) a lease agreement, by and between SunTrust Equipment Finance & Leasing Corp, as Lessor, and the City as Lessee (the "Lease Agreement") the terms of which shall be consistent with the Proposal; (b) if required, an escrow agreement, by and between the City and SunTrust Bank as escrow agent, relating to the receipt, investment and disbursement of moneys paid by the Lessor to the City under the Lease Agreement. Resolution No. 2008-XXX 25C-88 Page 1 of 4 (c) such other schedules, exhibits, attachments, certificates, or ancillary documents reasonably related to the Lease Agreement, collectively, the "Financing Documents", necessary to consummate the transaction contemplated by this resolution. Section 4. The City Manager or the Executive Director of Finance and Management Services is hereby appointed as agent for the City of Santa Ana to review, execute and deliver any and all Financing Documents including but not limited to, agreements, amendments, applications, invoices, financing statements and payment requests necessary for the completion of the financing and acquisition of the Equipment. Section 5. Pursuant to Section 265(b) of the Internal Revenue Code of 1986, as amended (the "Code"), City hereby designates the Lease as a "qualified tax-exempt obligation" for purposes of Section 265 (b)(3) of the Code. Section 6. This Resolution shall take effect immediately upon its adoption by the City Council, and the Clerk of the Council shall attest to and certify the vote adopting this Resolution. ADOPTED this day of 2008. Miguel A. Pulido Mayor APPROVED AS TO FORM: Joseph W. Fletcher, City Attorney By: Laura Sheedy Assistant City Attorney AYES: NOES: ABSTAIN: NOT PRESENT: Councilmembers Councilmembers Councilmembers Councilmembers 25C-89 Resolution No. 2008-XXX Page 2 of 4 CERTIFICATE OF ATTESTATION AND ORIGINALITY I, PATRICIA E. HEALY, Clerk of the Council, do hereby attest to and certify the attached Resolution No. 2008-XXX to be the original resolution adopted by the City Council of the City of Santa Ana on XX Date: Patricia E. Healy Clerk of the Council City of Santa Ana Resolution No. 2008-XXX 2~C_90 Page 3 of 4 Proposal for Lease-Purchase Financing LESSEE City of Santa Ana, a charter city and municipal corporation organized and existing under the Constitution and laws of the State of California LESSOR SunTrust Leasing Corporation TYPE OF FINANCING Master Lease Agreement. Said Agreement shall be net lease arrangement whereby Lessee is responsible for all costs of operation, maintenance, insurance and taxes. MAXIMUM AMOUNT LEASED $5,069,000.00 MAXIMUM INTEREST RATE 2.96% MAXIMUM TERM 5 Years PAYMENT TERMS Semi-Annual payment of $549,070.63 LEGAL TITLE Title to the software will be in the name of Lessee. Lessor will be granted a security interest or lien on all collateral being financed. Resolution No. 2008-XXX 25C-91 Page 4 of 4 25C-92