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HomeMy WebLinkAbout2003-204 RESOLUTION NO. 2003-204 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AUTHORIZING THE CITY CLERK TO ENTER INTO A PROFESSIONAL SERVICES AGREEMENT, SOFTWARE LICENSE AGREEMENT, AND SOFTWARE MAINTENANCE AGREEMENT WITH PROGRESSIVE SOLUTIONS, INC. TO INSTALL LICENSETRACKTM AND CA$HIERCENTRAUM SOFTWARE TO REPLACE THE BUSINESS REGISTRATION DIVISION'S LICENSING SYSTEM AND TO PROVIDE REVENUE ENHANCEMENT SERVICES. BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS: SECTION 1. That Progressive Solutions, Inc. is the sole source for acquisition and implementation of the LicenseTrack™ and Ca$hierCentral™ software. Pursuant to this determination, the City Clerk is hereby authorized to enter into an agreement with Progressive Solutions, Inc. for the acquisition of LicenseTrack ™ and Ca$hierCentraJTM software and for revenue enhancement services. SECTION 2. The authorization to execute the above referenced agreement order is rescinded if it is not executed within ninety (90) days of the passage of this resolution. III III III III III III III III III I ~-- ~ 2003-204 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AUTHORIZING THE CITY CLERK TO ENTER INTO A PROFESSIONAL SERVICES AGREEMENT, SOFTWARE LICENSE AGREEMENT, AND SOFTWARE MAINTENANCE AGREEMENT WITH PROGRESSIVE SOLUTIONS, INC. TO INSTALL LICENSETRACKTM AND CA$HIERCENTRAUM SOFTWARE TO REPLACE THE BUSINESS REGISTRATION DIVISION'S LICENSING SYSTEM AND TO PROVIDE REVENUE ENHANCEMENT SERVICES. I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and Common Council of the City of San Bernardino at a joint reg. meeting thereof, held on the 21st day of July Council Members: AYES ESTRADA X LIEN X MCGINNIS X DERRY X - SUAREZ X ANDERSON X MCCAMMACK X ,2003, by the following vote, to wit: NAYS ABSTAIN ABSENT f&c Ju~ ela;JJ b c The foregoing resolution is hereby ap~ed is 2003. Gordon McGinnis, Mayor Pro Tern City of San Bernardino Approved as to Form and legal content: JAMES F. PENMAN, City Attorney By: 2003-204 PROGRESSIVE SOLUTION~ POBox 783 Brea, California 92822-0783 (7/4)67/-/597 Telephone (7/4)67/-/904 Facsimile July 2, 2003 Ms. Cindy Buechter City of San Bernardino 300 N "0" Street San Bernardino, CA 92418 Dear Ms. Buechter, Enclosed is a budgetary quotation for LicenseTrack" for Windows@ and Ca$hierCentral for Windows@. LicenseTrack'" Components LicenseTrack . for Windows'" Software License Fee including testing configuration & set up Conversion of all convertible records (estimate) Three days of onsite training Software Maintenance until the start of the next fiscal year Tota/lnstalled Software Cost CashierCentral Components Ca$hierCentral for Windows'" Software License Fee including testing configuration & set up (2-Workstations) Two days of setup & training Cash Drawer (4)($650+$50.38 tax) Cash Receipt Printer (2) ($795+$61.61 tax) Software Maintenance until the start of the next fiscal year Total Installed Software Costs Tax SQL Server Software Software Installation & Configuration Total Software License Fees, Installation and Configuration Annual Software Maintenance Fees BeQinninQ Julv 1, 2004 License Track" Ca$hierCentral Total Annual Maintenance Fees $22,500.00 $7,000.00 $3,000.00 Included $32,500.00 $9,000.00 $2,000.00 $1,300.00 $1,590.00 Included $13,890.00 $223.98 $46,613.98 $250.00 $46,863.98 $8,800.00 $1,200.00 $10,000.00 Expenses identified in the services agreement such as postage or auditor lodging will be billed separately and are not included in the above budgetary quotations. Thank you for the opportunity to be of service. Respectfully Submitted. ft., /( tI~ Glenn R. Vodhanel Innovative Software / Outstanding Service .4I1aeAfJlf/rr A 2003-204 Progressive Solutions@' Proposal for Business Licensing & Revenue Enhancement Services for the City of San Bernardino Progressive Solutions@ Glenn R. Vodhanel P.O. Box 783 Brea, California 92822 (714) 671-1597 2003-204 PROGRESSIVE SOLUTIONS, INC. P.O. Box 783 Brea, California 92822-0783 (714) 671-1597 Telephone (714) 671-1904 facsimile City of San Bernardino Ms. Cindy Buechter, Revenue Manager 300 N "D" Street San Bernardino, CA 92418 May 13, 2003 Dear Ms. Buechter, Thank you for the opportunity to respond to your request for information. Please allow me to introduce our company and services. The Company. Progressive Solutions, Inc., a California corporation, located in the City of Brea, has assisted cities with their data processing and revenue enhancement needs since 1979. The Company currently has twenty cities and water districts (Utility Billing) as clients and offers several products and services. Purpose. The Company's mission is to provide the finest software and services available anywhere. We are unique in the marketplace for three reasons: y The energies we devote to serve our clients are beyond compare, y Close attention to clients' needs, and y Availability of our resident experts. Project Goals: To partner with municipal staff so that they may understand and apply revenue enhancement methodologies and best utilize revenue information and enhancement services. We will install our LicenseTrack@-business licensing software and fund the software via revenue recovery. Using this approach, costs will be reduced, revenues will increase, and staff productivity will improve. In short, we facilitate citizen compliance with municipal tax ordinances. In so doing, the City recovers revenue to which they have been due. The City (with an improved financial position) becomes better able to provide service to their citizens. In the following pages you will find an Executive Summary and a Services Agreement. lfwe may be of any additional assistance, please do not hesitate to contact us. Respectfully Submitted, jL ~ tloIiJ Glenn R. Vodhanel 2003-204 PROFESSIONAL SERVICES AGREEMENT EXECUTIVE SUMMARY BACKGROUND The City of San Bernardino's (City's) current business license operations are run with limited staffing using software that was outdated 10 years ago. In the search to make licensing operations more efficient, City staff reviewed several software applications and identified Progressive Solutions@, as the vendor who would best meet the City's needs. As City budgets and funding remain tight, discussions resulted in an offering which would provide updated business license software as part of an entire revenue enhancement package. With limited staffing and outdated software, City staff could not possibly implement a state of the art revenue enhancement function. Upon appropriate authorization, PSI fully expects to find additional revenue for the City that City staff and efforts of the existing revenue enhancement vendor have been unable to find. In this package, ill! risk is assumed by PSI. No budgetary commitment by the City is required! PSI offers general revenue audit & review services for: ~ Transient Occupancy Tax; ~ Business License Tax; ~ Property Tax; ~ Documentary Transfer Tax ~ SaleslUse Tax; ~ Franchise Fees The revenue enhancement package for the City covers: ~ Business License Audits ~ Business License & Cashiering Software Licenses and implementation ~ Transient Occupancy Tax Audits ~ Use of cross referencing capabilities of the PSI Business License software to identify & notify non compliant businesses using AB63, AB990 and other data. The proposal provides an opportunity for PSI to be compensated exclusively for additional revenue brought to the City as a result of audits andlor use of the cross reference capabilities provided via the business license software. Contingent Fee Considerations ~ The City deducts prior software or service fees paid from revenues received prior to the calculation of any contingent fees. For example, software installation and support fees paid to PSI will be deducted frorn the recovery(s) prior to the calculation of any applicable contingent fee: Example: Revenue Enhancement Recovery $40,000 Less software/service fee paid $10,000 Contingent Basis $30,000 Contingent fee percentage 12.5% Contingent fee to PSI $3,750 ~ PSI's contingent fee for identifying erroneous and non reporting businesses is 12.5% of newly recovered revenue; compared to a fee of 20% to 25% charged by traditional audit firms. Once again these contingency fees are onlv calculated after costs associated with the program have been recovered. Identification of new revenue sources is performed via the provided business license software in conjunction with data sources available only to the City (such as AB63 and AB990) as well as other public and private data sources. ~ Due the increased efficiency provided by the new business license software, more reviews may be completed by City staff thereby reducing contingency fees paid out at the Page 1 2003-204 PROFESSIONAL SERVICES AGREEMENT 20-25% rate. (Staff training and assistance will result in more corrections being done at the 12.5% rate and also more corrections from new sources of misallocated situs sales tax, misallocated situs, use tax and misallocated non-situs sales and use taxes.) Sales and Use Tax History In the mid 1950's, the City of San Bernardino (City), by Council Resolution adopted the Bradley Burns Act authorizing the State Board of Equalization (SBE) to administer the City's 1% local share of sales and use taxes. A consequence of the Bradley Burns adoption was, and still is, the loss of the City's ability to perform financial or performance audits on the local 1 % share of taxpayer sales and use tax allocations. On monthly reports the SBE provides the City with data showing those taxpayers that have registered with the SBE & have identified the City of San Bernardino as a business location. Put another way, the SBE reports to the City only those taxpayers that actually allocate to and register to the City. The reports do not provide information for evaluating taxpayer and SBE accuracy. For example, the reports do not assist in the City in identifying taxpayers that should, but are not, allocating sales tax to the City. In 1978, California Cities started using sales tax audit firms to assist the Cities in receiving all of the sales tax for which they were entitled pursuant to the Bradley Burns Act. The City currently contracts with MBIA, who focuses on activities which result in "audits" of local allocations made to Cities by the SBE. They discover errors made by the SBE andlor the taxpayer and obtain a correction of the error, all on behalf of the City. When a misallocation is discovered, the audit firm notifies the SBE of the error. The SBE either corrects its mistake, or instructs the taxpayer to correct its allocation procedures in the case of taxpayer error. In some cases the audit firm directly contacts the taxpayer and requests that the taxpayer correct its internal procedures andlor practices. The audit cycle is complete when the City's quarterly SBE allocation report shows the "corrected" amount by taxpayer name and registration number. The City then pays to the audit firm a fee based on a percentage of the corrected amount of sales tax revenue that the City receives as a result of the audit firm's efforts. Due to a lack of information, Cities are unable to exercise control over the firms' role, processes or procedures. Many cities develop their own detection and correction programs. The efficacy of these programs generally depends on City staffing and expertise. Nevertheless, cities with their own programs generally contract with an audit firm to serve as a backup to their efforts. Consequently, the City and their primary audit firm often compete for discovery and subsequent correction of misallocations. The audit firms, because of their singular focus on audits, have developed very effective discovery programs, therebv minimizina the results of Citv or third partv efforts. The professional services & software which comprise this agreement are provided as a backstop audit program to services currently provided by another vendor. It is fully understood and agreed that in order for PSI to claim Realized Benefits that written documentation of each individual errorlomission must be related to taxpayer andlor responsible intermediary (i.e. state, board of equalization, utility provider, etc) at least one full calendar quarter prior to location by the other vendor. PSI will provide a mechanism for flagging vendor identified accounts. In the event of a conflict, CITY, upon presentation to PSI of evidence of the conflict will receive credit for all amounts paid to PSI which result from the conflict(s). Audit firms also provide sales tax information services to their City clients. These information services, which normally include a database, related software and hard copy reports, are based on portions of the raw data provided to the Cities by the SBE. The audit firms obtain the SBE data and transform it into certain formats for presentation to Cities. They may also average Page 2 2003-204 PROFESSIONAL SERVICES AGREEMENT revenue over a 12 month period to compensate for fluctuations in a business's payments to the SBE andlor misallocations that may occur. Comparative data, of a non-confidential nature, is also provided. However, the information provided to clients does not include data which allows a City to fully evaluate the effectiveness of the SBE, the taxpayer or audit firms. PROPOSED SERVICES Service Objectives To provide the City with the ability to: :.- Increase revenues and reduce related costs. :.- Proactively identify opportunities to maximize general revenue through audit and detection activities :.- More effectively manage general revenues Service Methodology PSI will collaboratively work with City staff to: :.- Identify and pursue erroneouslnon reporting businesses :.- Correct sales tax misallocations resulting from cross checks performed via the business license software. :.- Proactively identify and implement opportunities to ensure that businesses maximize the allocation of sales and use tax to the City :.- Provide the SBE with misallocation corrections, and follow-through to ensure the corrections are made. :.- Provide assistance as needed to help the City maximize its transient occupancy, business, sales, use and other tax revenues. An important element of each of these activities will be the sharing of information and knowledge between PSI and City staff. Scope of Service: :.- Implementation of the business license software :.- Transient Occupancy Audits :.- Business License Audits :.- Cross checks using the business license software and available data. Available Data: :.- AB63 provides cities enrolled in the program to receive electronic data about taxpayers who filed a schedule C with their state income tax report. (This program is for cities only. Consultants may not request this data.) :.- AB990 provides the statewide registration file of all active sellers' permits to cities. Two benefits accrue to cities: a) identification of sellers not in compliance with the City's business license ordinances and b) identification of unregistered sellers in the City who should be reporting sales tax. :.- Other electronic data such as yellow page listings, fictitious business filings, etc. Service Results By implementing this agreement, City will: obtain state of the art software, improve efficiency (thereby reducing City costs) and increase Citv revenues. Page 3 2003-204 PROFESSIONAL SERVICES AGREEMENT BETWEEN THE CITY OF SAN BERNARDINO AND PROGRESSIVE SOLUTIONS, INC THIS AGREEMENT is made and entered into this day of 2003, by and between the CITY OF SAN BERNARDINO, a municipal corporation, hereinafter referred to as "CITY", and Progressive Solutions, Inc., a California Corporation, hereinafter referred to as "PSI". RECITALS WHEREAS, the CITY desires to obtain professional services to augment CITY's revenue enhancement and information efforts; and WHEREAS, PSI has the necessary professional expertise and skill to perform such services. NOW, THEREFORE, the purpose of this AGREEMENT is to retain PSI as a consultant to CITY to perform those services specified in SECTION 1 of this AGREEMENT. THE PARTIES HEREBY AGREE AS FOLLOWS: SECTION 1 SCOPE OF SERVICES. PSI shall assist CITY staff in implementing the CITY's revenue enhancement and information efforts. To that end, PSI shall, uoon direction of the City Clerk or designee: . Collaborate with CITY staff to identify service priorities. . Implement state of the art--business license/cashiering software . Perform Transient Occupancy Audits . Perform Business License Audits . Perform cross checks using business license software and available data. . With CITY staff prepare documentation or electronic transmission data for submittal to SBE to correct misallocations, and follow-through to ensure that the SBE makes the corrections. . Augment CITY staff's knowledge of existing information systems and related data in order to generate additional "audit leads" for both allocation and noncompliance situations. . PSI is exoected to expand the opportunities for both CITY and PSI to realize additional benefits from the other General Fund Revenues and Taxes. Each opportunity is to be approved by CITY designee in writing. Generally, PSI shall: . Meet with CITY staff to affirm service objectives, scope and procedures, schedule meetings and plan logistical matters. . Represent the CITY for the purposes of examining agreements and records related to the scope of this AGREEMENT. . Develop compliance audit target lists with staff, which maximize the benefits to the CITY. . Meet with designated CITY officials as necessary to review findings and recommendations. . Provide monthly project status reports to CITY. PSI will at CITY's written request, assist CITY on an "as-needed" basis by providing technical support on contract issues, tax issues and questions regarding estimated revenue on proposed projects, revenue-sharing negotiations, budget projections, software systems, available audit Page 4 2003-204 PROFESSIONAL SERVICES AGREEMENT programs, development disposition and development agreements and in other related areas as questions arise. CITY may at its sole discretion assign to PSI additional, specific work in addition to the described services (I.e. small claims representation). Compensation for additional work assignments shall be mutually agreed upon by means of a written letter agreement. PSI is expected to expand opportunities for both CITY and PSI to realize additional Revenue. Each opportunity and PSI's compensation shall be approved by CITY in writinq prior to its implementation. Software license and maintenance fees documented in the Software license and Maintenance Agreements, which are incorporated by reference herein, meals, lodging, postage and costs of data obtained to identify non compliant businesses & individuals will be reimbursed and paid to PSI from revenue recovered as a result of this agreement. All other normal and reasonable expenses shall be paid by PSI. SECTION 2 TERM OF AGREEMENT. The term of this AGREEMENT shall be from 2003 to June 30, 2007, inclusive, subject to the provisions of SECTION 11 of this AGREEMENT. SECTION 3 SCHEDULE OF PERFORMANCE. PSI shall commence work under this AGREEMENT within 10 days of execution of this AGREEMENT. The estimated time for completion of the work to be performed by PSI under the AGREEMENT is June 30, 2007. The CITY, subsequent to June 30, 2007, may at its sole discretion renew this Agreement on an annual basis. Time is of the essence in this AGREEMENT. SECTION 4 COMPENSATION AND PAYMENT As CITY budgets and funding remain tight, this agreement provides business license software as part of backstop revenue enhancement services. As this agreement requires no budget commitment by the CITY, gJj risk is absorbed by PSI. CITY agrees to pay to PSI, compensation for and in consideration of the timely and faithful performance and completion of all services set forth in this AGREEMENT: 1. (a) A Contingent Fee for Realized Benefits that are realized by the CITY due to PSI's efforts, use of the cross referencing or BOE reporting capabilities of the licensed business license software. Said software will facilitate follow-up notice processing. Realized Benefits shall mean increased accounts receivable (excluding uncollectible accounts) to the CITY due to non- payment and underpayment of a tax (including tax levy), recovery of tax payments made on exempt purchases, reduction of prior, current and future accounts payable and the reduction of future liabilities. When the terms of the municipal code in effect clearly require payment to the CITY, should CITY elect to waive or exempt such payment for any reason, the City Clerk will have 14 days from notification of realized benefits identified to modify the amount due. In such case the contingency fee due to PSI shall be based upon the amount due determined by the City Clerk. Otherwise the contingency fee due to PSI shall be based upon the amount due per the municipal code. The contingent payment shall be due and payable upon the date of the decision. (b) The Contingent Fee shall be paid on actual Realized Benefits from deficiency recoveries from eligible prior periods (plus associated charges for penalties and interest). Said recoveries include amounts recovered, refunded, credited, or any other consideration received by the CITY Page 5 2003-204 PROFESSIONAL SERVICES AGREEMENT in lieu or as a result of audits, licensed software or other PSI provided service. When PSI's audits, licensed software or other PSI provided service result in the detection and correction of errorslomissions that the CITY and PSI mutually agree will produce ongoing (rather than one time) benefits, PSI's compensation shall be based upon Realized Benefits to the CITY during the first twelve consecutive quarters following correction. Transient Occupancy, Business License and other Audits shall be considered to be "one time" recoveries with Realized Benefits which cover the audited periods (2 years back plus the current year). Newlv identified businesses shall be considered to be ongoing recoveries. (c) Payment for Realized Benefits shall require an invoice from PSI stating the nature of CITY'S Realized Benefits (including taxpayer business license account numbers) and CITY approval for each Realized Benefit. 2. 100% of the Realized Benefits shall apply toward the cost of the business licensing software license, annual software support and expenses. For all funds recovered (Realized Benefits) in excess of the cost of the software, support costs and expenses, PSI shall be paid the Contingent Fee of 12.5% of Realized Benefits. In the event that costs are not fully recovered within the first year, Realized Benefits in subsequent years will be applied to any remaining balances. 3. These professional services as well as the licensed software are provided as a backstop audit program to services currently provided by another vendor. It is fully understood and agreed that in order for PSI to claim Realized Benefits that written documentation of each individual errorlomission must be related to taxpayer andlor responsible intermediary (i.e. state, board of equalization, utility provider, etc) at least one full calendar quarter prior to location by the other vendor. PSI agrees to facilitate attachment of a digital facsimile of such correspondence to each account record including the correspondence creationlmailing date. In addition, PSI will provide a mechanism for flagging vendor identified accounts. In the event of a conflict, CITY, upon presentation to PSI of evidence of the conflict will receive credit for all amounts paid to PSI which result from the conflict(s). SECTION 5 CITY'S OBLIGATIONS To facilitate Revenue Enhancement audits andlor optimal utilization of the automated cross referencing capabilities available within the business licensing software, the CITY agrees to support PSI by providing or arranging to provide (to the best of its ability): . Letters of introduction (as mutually deemed necessary) . Venues for inviting targeted businesses for question & answer sessions regarding scheduled audits. . Requests for information (as required) from third parties (such as the state, county, trash & utility companies, etc.) In the event that recovery funds are not adequate to fund acquisition of AB63 data, for the first year, PSI agrees to forward funds to city for payment of AB63 data within 7 days from presentation of an invoice for such data. Said funds shall not exceed $1,500 and shall be reimbursed to PSI from Realized Benefits. . Codes & ordinances covering each tax authorized by the CITY. . Staff time required to obtain, import and process state franchise tax (AB63) andlor state board of equalization (AB990) data into the licensed business licensing system. With regard to Realized Benefit and Contingent Fees, the CITY agrees to: . Arrange for invoicing responsible parties via the business licensing system for Realized Benefits resulting from PSI's software or this service within 15 days of notification and . Notify PSI of receipt of payment within 5 days of payment (Or allow PSI internet access to such data) so that PSI may invoice the CITY. Page 6 2003-204 PROFESSIONAL SERVICES AGREEMENT . Notify PSI within 5 days (Or allow PSI internet access to such data) from the date Realized Benefits including, but not limited to, increased accounts receivable (including tax levy), reduction of prior, current and future accounts payable and the reduction of future liabilities take effect to the CITY's benefit. . Provide PSI with all relevant information and progress reports received related to the above Realized Benefits and payment. (Or allow PSI internet access to such data) . Payment of PSI's invoice shall be made to PSI within 30 days from receipt of PSI's invoice. SECTION 6 INDEPENDENT CONTACTOR. It is understood and agreed that PSI, in the performance of the work and services agreed to be performed by PSI, shall act as and be an independent contractor and not an agent or employee of CITY; and as an independent contractor, PSI shall obtain no rights to retirement benefits or other benefits which accrue to the CITY's employees, and PSI hereby expressly waives any claim it may have to any such rights. SECTION 7 ASSIGNABILITY. The parties agree that the expertise and experience of PSI are material considerations for this AGREEMENT. PSI shall not assign or transfer any interest in this AGREEMENT nor the performance of any of PSI's obligations hereunder, without the prior written consent of CITY, and any attempt by PSI to so assign this AGREEMENT or any rights, duties or obligations arising hereunder shall be void and of no effect. SECTION 8 INDEMNIFICATION. PSI shall defend, indemnify and hold harmless CITY, its officers, employees and agent against any claim, loss of liability arising out of or resulting in any way from work performed under this AGREEMENT due to willful or negligent acts (active or passive) or omissions by PSI, employees or agents. The acceptance of said services and duties by CITY shall not operate as a waiver of such right of indemnification. This provision shall survive termination, completion or expiration of this AGREEMENT. Said sums shall include, in the event of legal action, court costs, expense of litigation and reasonable attorneys fees. The costs, salary and expenses of the CITY Attorney and members of his office in enforcing the AGREEMENT on behalf of the CITY shall be considered "attorneys fees" for the purposes of this paragraph. SECTION 9 INSURANCE REQUIREMENTS. PSI, at PSI's sole cost and expense, shall procure and maintain for the duration of this AGREEMENT insurance against claims for injuries to persons or damages to property which may arise from, or in connection with, the performance of the services hereunder by PSI, its agents, representatives or employees. Said policy shall have at least a combined single limit of $1,000,000 for bodily injury and property damage. PSI shall provide CITY with a copy of certificate of such insurance. SECTION 10 NONDISCRIMINATION. PSI shall not discriminate, in any way, against any person on the basis of age, sex, race, color, creed or national origin in connection with or related to the performance of this AGREEMENT. SECTION 11 TERMINATION. Page 7 2003-204 PROFESSIONAL SERVICES AGREEMENT A. CITY and PSI shall have the right to terminate this AGREEMENT, without cause, by giving not less than thirty (30) days written notice of termination. B. If PSI fails to perform any of its material obligations under this AGREEMENT, in addition to all other remedies provided by law, CITY may terminate this AGREEMENT immediately upon written notice. C. The City Clerk is empowered to terminate this AGREEMENT on behalf of the CITY. D. In the event of termination, PSI shall deliver to CITY copies of all reports, documents, and other work performed by PSI under this AGREEMENT, and upon receipt thereof, CITY shall pay PSI for services performed and reimbursable expenses incurred to the date of termination in accordance with the terms and conditions of Section 4 hereto. E. Because the services performed by PSI prior to termination may result in CITY's receipt of revenue after termination and because this receipt of revenue entitles PSI to payment from the CITY even after expiration of contract or termination, CITY agrees to provide to PSI subseauent to expiration or termination of this AGREEMENT such information as is necessary to enable PSI to calculate the compensation due to PSI as a result of this receipt of revenue by the CITY, and PSI shall maintain the confidentiality of this information as required by the AGREEMENT. In light of Revenue and Taxation Code Section 7056, PSI shall be deemed "under contract" subsequent to expiration of contract or receipt of notice of termination from the CITY for the sole and limited purpose of enabling PSI to have access to said information to calculate compensation. SECTION 12 GOVERNING LAW. CITY and PSI agree that the law governing this AGREEMENT shall be that of the State of California. SECTION 13 COMPLIANCE WITH LAWS. PSI shall comply with all applicable laws, ordinances, codes and regulations of the federal, state and local governments. SECTION 14 CONFIDENTIAL INFORMATION. All data, documents, discussions or other information developed or received by or for PSI in performance of this AGREEMENT are confidential and not to be disclosed to any person except as authorized by CITY, or as required by law. PSI agrees to be bound by all covenants contained in the attached "CERTIFICATE OF CONFIDENTIALITY". SECTION 15 WAIVER. PSI agrees that waiver by CITY for any breach or violation of any term or condition of this AGREEMENT shall not be deemed to be a waiver of any other term or condition contained herein or a waiver of any subsequent breach or violation of the same or any other term or condition. The acceptance by CITY of the performance of any work or services by PSI shall not be deemed to be a waiver of any term or condition of this AGREEMENT. SECTION 16 PSI's BOOKS AND RECORDS. Page 8 2003-204 PROFESSIONAL SERVICES AGREEMENT A. PSI shall maintain any and all ledgers, books of accounts, invoices, vouchers, canceled checks, and other records or documents evidencing or relating to charges for services, or expenditures, and disbursements, charged to CITY for a minimum period of three (3) years, or for any longer period required by law, from the date of final payment to PSI pursuant to this AGREEMENT. B. PSI shall maintain all documents and records which demonstrate performance under this AGREEMENT for a minimum period of three (3) years, or for any longer period required by law, from the date of termination, completion or expiration of this AGREEMENT. C. Any records or documents required to be maintained pursuant to this AGREEMENT shall be made available for inspection or audit, at any time during regular business hours, upon written request by the City Attorney, City Clerk, or a designated representative of any of these officers. Copies of any such documents shall be provided to CITY for inspection at City Hall when it is practical to do so. Otherwise, unless an alternative is mutually agreed upon, the records shall be available at PSI's address indicated for receipt of notices in the AGREEMENT. D. Where CITY has reason to believe that such records or documents may be lost or discarded due to dissolution, disbandment or cessation of PSI's business, CITY may, by written request by any of the corporate officers, require that copies of all written records pertaining to CITY be provided to CITY within 10 days from the date of the written request. E. Any information contained in, or derived from, States Sales and Use Tax records furnished by the State Board of Equalization of State Franchise Tax Board are and shall remain the sole property of the CITY. SECTION 17 NOTICES. All notices and other communications required or permitted to be given under this AGREEMENT shall be in writing and shall be personally served or mailed, postage prepaid and return receipt requested, addressed to the respective parties as follows: CITY: City Clerk of the City of San Bernardino PSI: Progressive Solutions, Inc 300 N "D" Street P.O. Box 783 San Bernardino, CA 92418 Brea, CA 92822 Notices shall be deemed effective on the date personally delivered or, if mailed, three (3) days after deposit in the mail. SECTION 18 PRIOR AGREEMENTS AND AMENDMENTS. This AGREEMENT, including all Exhibits attached hereto, represent the entire understanding of the parties as to those matters contained herein. No prior oral or written understanding shall be of any force or effect with respect to those matters covered hereunder. This AGREEMENT may only be modified by a written amendment duly executed by the parties to this AGREEMENT. EXECUTED as of the day and year first above stated. CITY OF SAN BERNARDINO BY:C4.~ ,Jj.~ PROGRESSIVE S~LU!ION~ By: ~ f( I/~I f~ Page 9 Title: Date: ~ M 2003-204 PROFESSIONAL SERVICES AGREEMENT ~ ;d} ').. de3 Title: f~ Date: '1jJ.1/0:r Page 10 2003-204 CERTIFICATE OF CONFIDENTIALITY The following conditions specified in Section 7056 (b), (1) of the State of California Revenue and Taxation Code are hereby made part of this AGREEMENT entered into by and between CITY and PSI: A. PSI is authorized by this AGREEMENT to examine sales and use tax records of the State Board of Equalization provided to CITY pursuant to contract under the Bradley-Burns Uniform Sales and Use Tax Law. B. PSI is required to disclose information contained in or derived from those sales and use tax records only to an officer or employee of CITY who is authorized by resolution of the City Council to examine the information. C. PSI is prohibited from performing consulting services for any retailer doing business in CITY during the term of this AGREEMENT. D. PSI is prohibited from retaining the information contained in, or derived from, those sales and use tax records after the AGREEMENT has expired. Information obtained by examination of Board records shall be used only for purposes related to collection of local sales and use taxes or for other governmental functions of CITY as set forth by resolution adopted pursuant to Section 7056 (b) of the California Revenue and Taxation Code. The resolution shall designate PSI as a person authorized to examine sales and use tax records and shall certify that this AGREEMENT meets the requirements set forth above in Section 7056 (b) (1) of the California Revenue and Taxation Code. PSI hereby certifies that any and all information utilized in the conduct of work performed is to be utilized only for this purposes authorized by CITY and by the Bradley-Burns Uniform Local Sales and Use Tax Law. PROGRESSIVE SOLUTION~ By: ft I!. t/~ Title: Date: President 6/24/2003 Page 11 1- 2003-204 SOFTWARE MAINTENANCE AGREEMENT I. INTROOUCTION. Progressive Solutions, Incorporated, a California corporation herein after referred to as "Licensor" and City of San Bernardino, a municipal corporation, herein after referred to as "Licensee" agree to the following teons and conditions. II. NATURE AND DURATION OF SUPPORT. Licensor is in the business of providing software support services; Licensee desires to obtain software support services fOf the Licensed software specified in section V. This Agreement provides for service only during normal business hours and shall expire at 5:00 PM Pacific Standard Time on 06/3012004 unless renewed as set forth below. Licensor reserves the right to prorate the software support fee and provide more or less than onc year of coverage so that subsequent Software Maintenance Agreements expire on June 30lh. Unless written notice of tennination has been provided by Licensee to Licensor no later than 30 days prior to expiration of this support services agreement, this Agreement shall automatically renew for an additional year at the support rate in effect at that time. III. LICENSEE'S RIGHTS AND OBLIGATIONS a) Licensee during the term of this Software Maintenance Agreement hereinafter referred to as 'Software Support', will designate one employee as a primary contact for each software system. Additional contacts may be designated up to the number defined under Section V. These 'Software Support' contacts should know the system, use the system, and be responsible for the results of the system. These persons shall also provide the initial interface with Licensor's support personnel, accept software updates and arrange for software update installation. Licensee accepts and understands that if software upgrades are not installed within six (6) months from receipt or within six (6) months from the release date whichever is earlier, Licensor will be under no obligation to continue any 'Software Support' services. b) Licensee agrees to implement corrections to known software problems, which have been identified as necessary by Licensor. Failure to implement those identified software corrections shall relieve Licensor from any and all 'Software Support' responsibilities. In such event, any subsequent services will only be provided on an emergency time and materia]sbasis. c) Licensee agrees to provide Licensor with access to the licensed software and data for the sole purpose of providing technical support. As a result, Licensee agrees a) to maintain a working connection to the internet, b) to pennit access through any router/firewall of at least one Licensor static IP address or to permit a Virtual Private Network-VPN connection to Licensee's network and c) to allow access to a technical support requestor's workstation via Microsoftll's Netmeeting@, pcANYWHERE@ or Citrix). In addition, Licensee agrees that all designated workstations shall meet the following minimum requirements: Pentium 400mh or faster processor, Windows 95/98/MEINT/2000/2003 or XP, and completed installation of (licensed software, Netmeeting@, PCAnywhere@, Microsoft@ Access'll and/or Microsoftll SQL tools). Remote access for technical support is not available via modem. In the event Licensor dcems such remote access necessary, Licensor shall request confirmation that required access (one of the options listed above) is available. Upon receipt of such confirmation, Licensor shall attempt remote access. If remote access is not functional despite Licensee's confirmation of functional remote access, Licensor shall provide remote access verification services free of charge for one time during each annual agreement. Should Licensee require remote access verification serviccs in excess of the one free service, Licensee will request approval for payment prior to providing remote access verification. The remote access verification fee compensates Licensor for assistance in setting up and verifying remote access operation. In the event remote access is not and will not be available in the course of Licensor's attempts to provide 'Software Support' services, Licensee understands that Licensor's ability to provide support will be severely limited. Should Licensee desire emergency support, on-site support services are available at Licensor's current support rate plus expenses for each partial or full day required to provide 'Software Support' services. d) Licensee understands and acknowledges that network pcrformance is solely the responsibility of Licensee. Should any questions arise as to whether a performance issue is software or network related, Licensee agrees to isolate the appropriate workstations and servers on one hub or switch and to test the Licensed software in an environment totally separate from any and all other network communications. Requests for performance troubleshooting in which Licensor collects factual data and subsequently presents a determination that perfonnance issue(s) is/are network related will be billed at the rates in effect at the time of service. e) Licensee assumes any and all responsibility and liability for I) any modification to the Licensed software and/or database structure not made by Licensor and 2) any modification to the Licensee's data which is not made by Licensor or the Licensed software. If, after providing corrective maintenance, Licensor detennines that an error condition is not a licensed software error or that the error condition results from either condition I or 2 above, Licensee agrees to pay Licensor for the reasonable services so provided at the rates in effect at the time of service plus reasonable expenses. IV. LICENSOR'S RIGHTS AND OBLIGATIONS (a) During the term of this agreement, Licensor shall provide Licensee with unlimited telephone support services relating to software fixes and the dissemination of workaround solutions. In addition, Licensor shall provide Licensee with any updates andlor minor enhancements to Licensed software, which may become available from Licensor without additional charge. For multi-user Licenses, Licensor will send one copy of the digital media (the licensed application) per release cycle to Licensee's designated representative. This person will distribute copies of the Licensed software to those responsible for any additional Licensed computer systems. (b) During the term of this agreement, Licensor shall provide Licensee with limited voice, facsimile, internet, and mail communications as appropriate for training related support. Training support is defined as providing information to current and prospective users of the Licensed software on operational or functional aspects defined in the current user documentation. This support shall be provided to the person designated by Licensee (or an alternate in the absence of the designated caller). The designee shall know the Licensed software, use the Licensed software and be responsible for the results of their efforts. Training related support in excess of fifteen (15) minutes per call will be billed at the rate in effect at the time of service. Prior to and as a condition of Licensor's right to bill for training services, Licensor shall inform AGSOFTMT(1.5) Page 1 2003-204 SOFTWARE MAINTENANCE AGREEMENT Licensee that the free training support is over and that any additional training will be billable. Licensor reserves the right to limit the number and the duration of these communications. (c) Nothing contained in this Agreement shall be construed to obligate Licensor to provide any services whatsoever subsequent to the expiration of this Agreement or any subsequent renewals of this Agreement. Upon expiration of this Agreement, Licensee may purchase continued 'Software Support' services on an annual basis. The price(s) specified in section V is (are) the current price(s) for 'Software Support' services. Licensor reserves the right to change the annual software support fee at any time. Until 6/30/07, any such rate change shall not excced 10%. Licensor agrees to provide at least 30 days prior written notification prior to implementation of any fee change. Any fee change shall not be effective until the first day of any annual extension. V, SUPPORT FEES AND PAYMENTS Payment for 'Software Support' services will be made in accord with the tenus specified in the Professional Services Agreement for Revenue Enhancement Services which is incorporated by reference herein. Licensed Software Annual SW1l1ort Fee Prorated Fee LicenseTrack™ Software 10 User License $8,800 Ca$hierCentral Software License .2 Renister $1,200 VI. GENERAL PROVISIONS (a) The Licensed software is subject to design and operational changes to allow for the use of new technologies and to correct known bugs as they are brought to the attention of the Licensor, either by the Licensor's own qualily.control mechanisms or by the Licensee. (b) Licensee acknowledges that the Licensed software is of such complexity that it may have inherent defects and agrees that as Licensor's sole liability for such inherent defects and as Licensee's sole remedy for such inherent defects, Licensor will provide, during the tenu of this Agreement, all reasonable maintenance services to correct documented programming or documentation errors reported by Licensee which Licensor's diagnosis indicates are caused by a defect in an unaltered version of the delivered Licensed software. (c) Licensee acknowledges that annual software maintenance is designed to ensure quality support for all users of both Licensed software and fonus designed, created and/or maintained by Licensor as part of the released software. Licensor utilizes Seagate's Crystal Report Writer™ to create most reports and forms. To ensure maximum flexibility, customers are provided with the option to design, create and maintain additional fonns, mailings, and/or reports. Licensor's annual software maintenance does not include the provision of technical support for user written customized Crvstal Reoorts™. However, Licensor is pleased to offer support on a cost per incident basis. (d) All documentation, programming and/or modifications shall be delivered via remote telecommunications from Licensor's place of business, to or through the Licensee's computer. Licensor shall not provide Licensee with possession of any tangible persona] property such as storage media. Licensee shall reimburse Licensor for any state and or local requirements, which Licensor must meet or obtain to provide services under this Agreement (e.g. business licenses, additional insured statements, sales tax etc.). (e) This Agreement and any written modifications, amendments or addenda, executed pursuant to this Agreement constitute the entire agreement between the parties and supersede all negotiations and other proposals, oral or written, and all previous and current negotiations and other communications between the parties. The obligations set forth in this Agreement shall be construed in accordance with and governed by the laws of the State of California. This Agreement may be signed in several counterparts, each of which shall be deemed an original. (f) Any controversy or claim arising out of or relating to this Agreement or the breach thcreof, may be settled by arbitration, if agreeable to both parties in accordance with the rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. (g) Any change or revision to the tenus and conditions hereof shall be made by written amendment and shall be executed by persons authorized to do so by the respective parties. No changes in specifications, requested or suggested by either party, shall be made except by written agreement of both parties. VII. EXECUTION Effective this .2./J day of ~ (J Licensee: ,2003 Licensor: Progressive Solutions@ POBox 783 Brea CA 92822-0783 City of San Bernardino 300 North 'D' Street San Bernardino CA 92418 iy:~ /1_ (j~ Authorized Representative (714) 671-1597 lJ,~ ('jOy) 3flf-,3"O()'L/ Phone Number (Type or Print) AGSOFTMT(1.5) Pagel 2003-204 SOFTWARE LICENSE AGREEMENT I. INTRODUCTION Progressive Solutions, Incorporated, a California corporation herein after referred to as 'Licensor' and City of San Bernardino, a municipal corporation, herein after referred to as 'Licensee' agree to the following terms and conditions. II. NATURE AND DURATION OF LICENSE a. Licensor hereby grants and Licensee accepts a non-exclusive and non-transferable license to use Licensor's database structure and corresponding software for the product(s) listed in section XII using Microsoft" SOL Server" as the data base engine. Licenses for SOL software are not included in this license agreement, but may be purchased separately via purchase order. b. Except as otherwise provided in Section XI(d), the term of this License commences upon the date on which Licensor first delivers Licensed software to Licensee, and ends upon expiration of either the attached Software Maintenance Agreement or subsequent renewals of the Software Maintenance Agreement which are incorporated by reference herein. Upon expiration or termination of the Professional Services Agreement for Revenue Enhancement Services or subsequent renewals of the Professional Services Agreement for Revenue Enhancement Services which are also incorporated by reference herein, the license for all Revenue Enhancement features contained within LicenseTrack will also end. c. Licensor agrees that Licensee may install the Licensed software or any part or module thereof, on any number of computers: however, Licensee agrees that no more than the number of users specified in section XII will concurrently access said software. Licensee acknowledges that in order to use Licensed software products for day to day operations by more than the number of users specified in section XII, Licensee must obtain a software License upgrade from Licensor. Licensee further acknowledges that technical assistance may be required for the Licensed software to function as a result of hardware changes/migration. III. OWNERSHIP AND TITLE a. Title, including but not limited to all rights in Licensor's patents, copyrights, trademarks, proprietary information and trade secrets shall remain vested in Licensor. No title to or ownership of the object code, reference material, or any of its parts, is hereby transferred to Licensee. Licensee's rights shall at all times be subject to the patents, copyrights, trademarks, proprietary information, trade secrets and use restrictions contained in this Agreement. Any additions, modifications or enhancements made by Licensee or by a third party on Licensee's behalf shall not create any rights to the Licensed software and shall not relieve Licensee of its obligation to protect the proprietary nature of the Licensed software. b. Licensee agrees that additions, modifications or enhancements to the Licensed software which may be developed for Licensee through the reimbursed or unreimbursed efforts of Licensor's employees or agents, whether or not in conjunction with Licensee's employees or agents, shall be the exclusive property of Licensor. Licensee shall have no title, ownership, right to royalty or income or any other ownership rights in such additions, modifications, andlor enhancements. c. Title, ownership and control of Licensee's data shall be retained by Licensee. IV. LIMITED WARRANTY a. Licensor warrants that it has developed, owns, andlor possesses all rights and interests in the Licensed software necessary to enter into this Agreement. AGSOFTWR(2.6) Page 1 2003-204 SOFTWARE LICENSE AGREEMENT b. Except as expressly stated herein, Licensor makes no warranties, express or implied, concerning the products covered by this Agreement, including all warranties of merchantability and fitness for a particular purpose. c. While Licensee maintains a Software Maintenance Agreement, herein after referred to as 'Software Support', Licensor warrants the Licensed software shall materially conform to the specifications contained in the accompanying written materials and execute under Microsoft Windows" 95, 98, ME, NT, 2000, 2003 & XP. The initial 'Software Support' period shall commence on the date the software is delivered to Licensee. V. LIMITATION OF LIABILITY a. Licensee acknowledges that the Licensed software is of such complexity that it may have inherent defects and agrees that as Licensor's sole liability and as Licensee's sole remedy, Licensor will provide, while Licensee maintains 'Software Support', all reasonable software maintenance services to correct documented programming or documentation errors reported by Licensee which Licensor's diagnosis indicates are caused by a defect in an unaltered version of the delivered Licensed software. Licensee assumes any and all responsibility and liability for 1) any modification to the Licensed software and/or database structure not made by Licensor and 2) any modification to the Licensee's data which is not made by Licensor or the Licensed software. If, after providing corrective maintenance, Licensor determines that an error condition is not a Licensed software error or that the error condition results from either condition 1 or 2 above, Licensee agrees to pay Licensor for the reasonable services so provided at the rates in effect at the time of service plus reasonable expenses. b. Licensee agrees that Licensor shall not be responsible for any loss or damage to Licensee, its customers, or any third parties caused by failure of the products furnished hereunder to function. c. In no event shall Licensor be liable for any special, indirect, incidental, or consequential damages to the full extent such may be disclaimed by law, arising out of or relating to this Agreement or the Licensed software, whether or not Licensor has knowledge of the circumstances surrounding such damages. In addition, Licensor's liability to Licensee for direct damages arising out of or relating to this Agreement or the Licensed software shall in no event exceed the amounts actually paid by Licensee toward the License fee set forth in section XII. VI. INDEMNIFICATION Licensee agrees to indemnify and hold Licensor harmless against any and all loss or damage in any way arising out of or in connection with products furnished hereunder, or by any failure of the products to function, in whole or in part. Licensor assures the Licensee that, to the best of its knowledge, the information and services to be supplied by it pursuant to this Agreement do not infringe upon any patent, copyright, or trade secret. In the event any legal proceedings are brought against the Licensee claiming that any information or services of Licensor constitute an infringement of a patent, copyright, or trade secret, Licensor agrees to defend at its sole cost and expense including attorney fees, any such legal proceedings against Licensee and to indemnify and hold Licensee harmless from any damages incurred or awarded as the result of settlement or judgment against the Licensee, provided Licensee gives Licensor prompt written notice within thirty (30) days from Licensee receipt of actual notice of any such claim or of the institution of any such claims against it and further cooperates completely with Licensor in providing all necessary authority, information, and reasonable assistance to enable Licensor, at its option, to settle or defend such claims. Licensor has no other express or implied warranty of non. infringement or liability for infringement or any damages there from. AGSOFTWR(2.6) Page 2 2003-204 SOFTWARE LICENSE AGREEMENT VII. LICENSEE'S RIGHTS AND OBLIGATIONS a. All material comprising the Licensed software furnished to Licensee shall carry notices of Licensor's proprietary, trade secrets and copyrights printed on all reference material supplied and affixed to each media container. b. Licensee will preserve the confidential nature of the Licensed software and will not make copies of the Licensed software andlor related media, including partial copies or updated versions thereof, except for internal reference, archive or backup purposes. c. Because of the confidential nature of the software and any accompanying documentation supplied under this Agreement, it is agreed that the Licensee will not sell, give, or lease the software or any of the confidential information or capabilities of the provided software to any other firm or person or group without the express written approval of Licensor, and Licensee will further use its best efforts to maintain the security thereof. Upon termination of usage, Licensee agrees to acknowledge destruction of, or to return the software and all related material. Licensee agrees that the software furnished by Licensor and all copies and versions thereof made by the Licensee are and shall remain the sole property of Licensor. Licensee agrees to include Licensor's proprietary notice on all copies, in whole or in part, and in any form made by the Licensee except copies made for back-up purposes. It is agreed, however, that such information and capabilities which Licensee can show to be in its possession prior to receipt of any disclosure by Licensor shall not be subject to the provisions of this paragraph. d. Customization of the Licensed software shall be limited to modifications and enhancements that will not limit Licensor's ability to support the product through standard releases. e. Licensee will designate one employee as a primary contact for each software system. This software support contact should be one who has been trained on the system, uses the system, and is responsible for the results of the system. This person shall also provide the initial interface with Licensor's support personnel, accept software updates and arrange for software update installation. f. Licensee agrees to implement those corrections to known software problems that have been identified as necessary by Licensor. Failure to implement those identified software corrections shall relieve Licensor from any and all 'Software Support' responsibilities. In the event Licensee fails to implement identified software corrections, any subsequent services will only be provided on an emergency time and materials basis. g. Licensee agrees to provide Licensor with access to the Licensed software and data for the sole purpose of providing technical support. As a result, Licensee agrees a) to maintain a working connection to the internet, b) to permit access through any routerlfirewall of at least one Licensor static IP address or to permit a Virtual Private Network-VPN connection to Licensee's network and c) to allow access to a technical support requestor's workstation via Microsoft@'s Netmeeting@, pcANYWHERE" or Citrix as specified in the Software Maintenance Agreement. In addition, Licensee agrees that all designated workstations shall meet the following minimum requirements: Pentium 400 or faster processor, Windows@ 95/98/ME/NT/2000 or XP, and completed installation of (licensed software, Netmeeting@, PCAnywhere@, Microsoft" Access@ and/or Microsoft@ SOL tools). Remote access for technical support is not available via modem. h. Licensee understands and acknowledges that network performance is solely the responsibility of Licensee. Should any questions arise as to whether a performance issue is software or network related, Licensee agrees to isolate the appropriate workstations and servers on one hub or switch and to test the Licensed software in an environment totally separate from any and all other network communications. Requests for performance troubleshooting (such as speed and network connection issues) in which Licensor receives prior written authorization to collect factuai data AGSOFTWR(2.6) Page 3 2003-204 SOFTWARE LICENSE AGREEMENT and subsequently presents a determination that performance issue(s) islare network related will be billed at the rates in effect at the time of service. i. Upon expiration pursuant to section II or demand by Licensor made pursuant to section X hereof, Licensee shall discontinue use of Licensor's software and at Licensee's expense, shall return the system reference materials by delivering them or causing them to be delivered, within ten (10) days after such expiration or written demand, in the same condition as when delivered to Licensee, reasonable wear and tear excepted, to Licensor at Licensor's then current address. VIII. LICENSOR'S RIGHTS AND OBLIGATIONS a. While Licensee maintains 'Software Support', Licensor shall provide Licensee with any updates and minor enhancements to Licensed software which may become available from Licensor as provided for in the corresponding Support Maintenance Agreement. b. While Licensee maintains 'Software Support', Licensor shall provide the Licensee with voice, facsimile, modem, and mail communications as provided for in the corresponding Support Maintenance Agreement. c. Nothing contained in this Agreement shail be construed to obligate Licensor to provide any services whatsoever to any Licensee who fails to maintain 'Software Support. IX. LICENSE FEES AND PAYMENTS a. All fees will be paid from funds recovered under the Professional Services Agreement for Revenue Enhancement Services. Licensee is authorized to use the Licensed software by no more than the number of users specified in section XII while a Professional Services Agreement for Revenue Enhancement Services is in effect andlor the software license and maintenance fees have been paid. b. In the event that subsequent to the execution of this Agreement additional software is desired, the notice referencing this Agreement from Licensee to Licensor will serve as an addendum to this Agreement and ail provisions of this Agreement will apply for the requested products or services. To avoid confiicting terms arising out of the integration of this Agreement, resulting purchase orders, letters and confirmation, the parties agree that the terms agreed to herein shall not be subject to change by either party unless both parties consent to the proposed change in writing. Should any confiict arise with any other unilateral writings of either party, this Agreement will govern. c. All documentation, programming and/or modifications shall be delivered via remote telecommunications from Licensor's place of business, to or through the Licensee's computer. Licensor shall not provide Licensee with possession of any tangible personal property such as storage media. Unless otherwise stated, all fees are exclusive of state and local use, sales, property (ad valorem) and similar taxes. Such taxes, when applicable, will appear as separate items on Licensor's invoice. In addition, Licensee shail reimburse Licensor for any state or locai requirements which Licensor must obtain to provide services (i.e. business licenses, additional insured certificates, etc.). d. Hardware and Licensed software shall be deemed accepted by Licensee upon a) receipt of hardware and/or Licensed software and b) delivery of a signed acceptance statement to Licensor or continued and successful use by Licensee of the hardware and/or software for 30 consecutive business days in the ordinary course of business. Payment for software modifications required as a condition of software acceptance shall be due no later than fifteen (15) days from the date of execution of this Agreement. Any expenses billable to the Licensee will be limited to customary reasonable travel, ground transportation or rental auto fees, lodging, and meal expenses and will be billed as incurred and due on a 3D-day net basis. No expenses will be billable to Licensee without Licensee's prior approval except as specified in section V-a. AGSOFTWR(2.6) Page 4 2003-204 SOFTWARE LICENSE AGREEMENT X. DEFAULT a. In the event licensee fails to comply with its obligation to make payments due hereunder or Licensee fails to exercise due care with regard to its obligations under this Agreement, and has not remedied such default within 30 days from the date of written notice by Licensor, then Licensor shali be entitled to terminate this Agreement and Licensee shall immediately discontinue use of software and return the software and all related copies, modifications or versions thereof. b. In the event of default, Licensor shall be entitled to exercise anyone or more of these remedies: (1) Upon 30 days written notice Licensor may terminate this Agreement and accelerate all amounts due and unpaid hereunder such that all amounts will become immediately due and payable; (2) Licensor may allow the Licensed software to expire without demand or notice. without court order or other process of law, and without liability to Licensee for any damages occasioned by such expiration of the Licensed software; (3) Licensor may pursue any other remedy available at law or in equity. including injunctive relief. XI. GENERAL PROVISIONS a. This Agreement and any written modifications, amendments or addendum executed pursuant to this Agreement, constitute the entire agreement between the parties and supercede all negotiations and other proposals, oral or written, and all previous and current negotiations and other communications between the parties. The obligations set forth in this Agreement shall survive termination of this Agreement and shall be construed in accordance with and governed by the laws of the State of California. This Agreement may be signed in severai counterparts, each of which shall be deemed an original. b. Waiver of strict performance of any provision of this Agreement shall not be deemed a waiver nor shall it prejudice the waiving party's right to require strict performance of the same provision or any other provision in the future unless such waiver has rendered future performance commercialiy impossible. c. Neither this A9reement, nor any rights or obligations hereunder, may be assigned to any third party without the prior written consent of the other party. Such consent shall not be unreasonably withheld. d. All of the respective duties and obligations of the parties hereunder shali be binding on their respective successors and assigns, and any corporate or other entities with which they may merge or consolidate. Should 'Software Support' cease to be offered, the term of this software license shall become perpetual. e. All notices, including notice of termination provided for hereunder, shall be delivered to that party in writing at the respective party's address indicated on the following page. Notice shall be sufficient if sent by first class mail; such notice shall be deemed to have been received by addressee seventy-two (72) hours after deposit thereof in the United States mail. f. Any controversy or claim arising out of or relating to this Agreement or the breach thereof, may be settled by arbitration, if agreeable to both parties, in accordance with the rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. g. Any change or revision to the terms and conditions hereof shall be made by written amendment and shall be executed by persons authorized to do so by the respective parties. No changes in specifications. requested or suggested by either party, shall be made except by written agreement of both parties. AGSOFTWR(2.6) Page 5 I 2003-204 . , SOFTWARE LICENSE AGREEMENT h. In the event that anyone or more of the provisions contained in this Agreement should be found to be invalid, illegal, or unenforceable in any aspect, the validity, legality, and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby. XII. LICENSED SOFTWARE Product Name LicenseTrack™ Software 10 User License Ca$hierCentral Software License .2 Re ister License Fee and Proposed Hardware $22,500 $9,000 XIII. EXECUTION Effective this ), I,,;t- day of #- ,2003 Licensor: Licensee: PROGRESSIVE SOLUTIONS, INC. POBOX 783 BREA CA 92822-0783 CITY OF SAN BERNARDINO 300 NORTH '0' STREET SAN BERNARDINO CA 92418 ~.~ /l. tla!L./ Authorized Representative (714) 671-1597 ~lJ.~ Authorized Representative ( 707) -..d2J../~S/tl2/ Phone Number (Type or Print) AGSOFTWR(2.6) Page 6