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HomeMy WebLinkAbout22-Police Department ORIGINAL CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION Dept: Police Department Subject: Resolution of the City of San Bernardino authorizing an amendment to the Lease and Services Agreement with Nestor Traffic Systems, Incotporated. From: Michael A. Billdt, Chief of Police Date: January 5,2009 M/CC DATE: January 20,2009 Synopsis of Previous Council Action: 5-4-2006 5-4-2006 Resolution No. 2008-135 - Contract Expansion Amendment with Nestor Traffic Systems. Motion to set a public hearing for April 7, 2008 to authorize an amendment to the Lease and Services Agreement with Nestor Systems, Inc. Resolution No. 2005-107 - Contract with Nestor Traffic Systems Resolution No. 2005-107 A - Contract with Cal- Trans for State Signal Access 4-21-2008 3-24-2008 Recommended Motion: Adopt Resolution. ~~ MIrnAEL A. BILLDT, o-JIEF OF POLICE Contact person: Captain Theodis Henson Phone: 384-5609 Supporting data attached: Yes Staff Report/Resolution Ward: All FUNDING REQUIREMENTS: Amount: None Source: Finance Council Notes: &d 2-009- 7 Agenda Item No. 2-" I, 20,6" CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION Staff Report Subiect Resolution of the City of San Bemardino authorizing an amendment to the Lease and Services Agreement with Nestor Traffic Systems, Incorporated. Background On May 4, 2005, the Mayor and Common Council approved Resolution No. 2005-107, authorizing a Lease and Services Agreement with Nestor Traffic Systems, Inc., for a Traffic Signal Violation System. The goal of this program is to improve our traffic safety program to reduce the number of tratTlc accidents caused by red light violations. We do this by following the Federal Highway Administration's (FHA) suggestion to train against aggressive driving habits and inattention by using red light camera systems as a force multiplier to enforce red light laws. Exhibit A ofthc Lease specified that video monitoring systems would monitor a minimum of eight (8) approaches at the following four (4) intersections selected by mutual agreement of City and Nestor. On April 21, 2008, the Mayor and Common Council approved Resolution No. 2008- 135 that amended the Lease and Services Agreement with Nestor Traffic Systems, Inc., to include seven new enforcement locations and add supporting staff to the Police Department's Traffic Bureau. On November 21, 2008, the Appellate Division of the Orange County Superior Court issued a local (Orange County) decision voiding the contract between the City of Fullerton, Califomia, and Nestor Traffic Systems, Inc., because of a "cost neutral" clause in their Lease and Services Agreement. In their decision, (Orange County Superior Court Case 30-2008-93057), Judge Robert J. Moss reversed the local tratTlc court's conviction on a Red Light Camera Enforcement System citation because of a cost neutral clause allowing the City of Fullerton and Nestor Traffic Systems, Inc., to negotiate down on the cost of the services agreement. Currently, the Orange County Superior Court decision applies only to their jurisdiction. However, the same "cost neutral" language exists in our Lease and Services Agreement with Nestor Traffic Systems, Inc. The ruling could be used by a San Bemardino County Superior Court judge to invalidate our agreement and halt our Red Light Camera Video Enforcement safety project. It is recommended that the City of San Bernardino and Nestor TratTle Systems amend the existing contract by removing the "cost neutral" paragraph. The removal of this paragraph is justiticd for two reasons. First, the "cost neutral" adjustment feature has never been used by the City of San Bernardino. In the spirit of California Vehicle Code Section 21455, the City has never looked to lower costs of this safety project based on the number of citations issues or the amount of revenue produced by the project. Second, while not tested at the State level. the decision of the Orange County Superior Court suggests that removing the option provides another safeguard against inappropriate actions by our system vendor (Nestor Traffic Systems). Financial Impact None. This is a no cost change to the existing contract. Recommendations Adopt Resolution. 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 NO. RESOLlTIO'i OF THE CITY OF SAN BERNARDINO AUTHORIZING AN AMEl'iD'\IENT TO THE LEASE AND SERVICES AGREEMENT WITH NESTOR TRAFFIC SYSTEMS, Il"CORPORA TED. BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDll'\O AS FOLLOWS: SECTION 1: The Mayor of San Bernardino is hereby authorized and directed to e"ecute the "Amendment to Agreement" of the Tramc Signal Violation Video-Enforcement System Lease and Seryices Agreement approyed May 4. 2005. with Nestor Traffic Systems. a copy of \\hich is attached as bhibit "A". and incorporated herein by reference. All other terms and conditions of the Lease and Seryices Agreement will remain in etIect and unchanged. SECTION 2: This amendment shall not take effect or become operative until fully signed and e"ecuted by the parties and no party shall be obligated hereunder until the time of such full ewcution. No oral agreements. amendments. modifications or waivers are intended or authorized and shall not be implied from any act or course of conduct of any party. SECTION 4: This Resolution is rescinded if the parties to the contract fail to e"ecute it \\ithin si"ty (60) days of the passage of this Resolution. 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 RESOLUTlO,," :"10. RESOLL'TlO:"l OF THE CITY OF SAN BER.c'lARDINO AUTHORIZING A:'i A:\IE:"ID:\IE:"IT TO THE LEASE AND SERVICES AGREEMENT WITH NESTOR TRAFFIC SYSTDIS. I:"ICORPORATED. I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and Coml11on Council of the City of San Bernardino at a meeting thereof, held on the day of . 2009. by the following vote. to wit: Council 'v!embers: AYES NAYS ABST AIN ABSENT ESTR.....D..... BAXTER BRI:\KER VACA:\T KELLEY JOH:\SO:\ \KCAM\1ACK Rachel G. Clark. City Clerk The foregoing Resolution is hereby approved this day of ,2009. Patrick 1. Morris. Mayor City of San Bernardino Appro,'ed as to Forn1: 1-. ,I es F. Penman. City Attorney 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 AMENDMENT TO AGREEMENT This Amendment to Agreement is entered this day of ,2009 by and between Nestor Traffic Systems, Inc., ("Nestor") and the City of San Bernardino ("Municipality"). RECITALS Whereas, on May 4, 2005, the Municipality and Nestor entered into a written contract entitled "Traffic Signal Violation Video-Enforcement Agreement ("Original Agreement") for the installation and assistance in the administration and operation of traffic video monitoring systems; and Whereas, on April 21, 2008, the Agreement was amended in writing by Municipality and Nestor ( Agreement as amended is hereinafter referred to as "Agreement"); and Whereas, Nestor and Municipality have agreed to amend the Agreement to address concerns created by an adverse legal interpretation of paragraph 4.3 of the Agreement. Now, therefore, in consideration of the mutual covenants contained in the Agreement, Nestor and Municipality agree as follows: 1. Section 3.3 of the Agreement is hereby amended by deleting therefrom the reference to Section 4.3 of the Agreement. 2. Section 4.3 of the Agreement is hereby amended by deleting the language of that Section from the Agreement in its entirety. That section shall now read "Deleted." 3. All other provisions of the Agreement are reaffirmed as originally adopted. III III III III AMENDMENT TO AGREEMENT 1'\ \\'IT'\ESS THEREOF, the parties hereto have executed this Amendment to Agreement on the day and date tirst above written, Dated: ,2009, Dated: .2009. ATTEST: Rachel Clark, City Clerk Appro"ed as to Form: Penman. City ,.\ttol11ey II Nestor Traftic Systems Inc. By: Clarence Davis, President and CEO CITY OF SAN BERNARDINO. By: 'vlark F. Weinberg, City 'vtanager FILED Sl,PERIQR COURT OF CAUFORNIA COUNTY OF ORANGE CENTRAL JUSTICE CENTER 2 APPELLATE DIVISION SUPERIOR COURT OF CALIFORNIA l_flV 2 1 2008 3 COUNTY OF ORANGE ALAN CARLfWoIlIioCcut BY G GAlON 4 5 I THE PEOPLE OF THE STATE 6 ,OF CALIFORNIA, 7 8 I 9 I Plaintiff and Respondent, vs. 10 11 FRANCO, 12 13 Defendant and Appellant. 14 I' ) ) ) ) ) ) ) ) ) I I ) ) ) ) Case No. 30.2008.93057 JUDGMENT ON APPEAL from the SUPERIOR COURT COUNTY OF ORANGE NORTH JUSTICE CENTER HON. ALLEN KELLEY STONE, COMMISSIONER 15 Appellant contends evidence from the City of Fullerton's Automated 16 Enforcement System was inadmissible because the City's contract with the camera 17 operator contains a provision tying payment to the operator to revenue generated 18 by the system. This court agrees, and orders the judgment reversed. 19 Vehicle Code section 21455.5{g) provides that a contract between a 20 governmental agency and a manufacturer or supplier of automated enforcement 21 equipment may not include a provision for payment of compensation to the 22 manufacturer or supplier based on the number of citations generated or 23 I, percentage of revenue generated as a result of use of the equipment. The purpose 24 II of the statute is to avoid an incentive to the camera operator, as a neutral evaluator 25 I of evidence, to increase the number of citations issued and paid through use of the 26 equipment. 27 The contract at issue provides for payment of a flat monthly fee, but also 28 provides that service fees can be negotiated "down or up, but not to exceed" the monthly rate "if it is determined that fees paid to NTS exceed net program revenues being realized." The provision that fees can be negotiated "up," is 2 meaningless in light of the provision that fees are "not to exceed" the stated 3 monthly rate. However, the possibility that fees could be negotiated "down" if it is 4 determined fees paid to NTS exceed "net program revenues being realized," 5 indirectly ties fees to NTS to the amount of revenue generated from the program. If 6 insufficient revenue is generated to cover the monthly fee, the fee could be 7 "negotiated down." As such, NTS has an incentive to ensure sufficient revenues 8 are generated to cover the monthly fee. I 9 Because the City's contract with NTS violated Vehicle Code section 10 21455.5(g), the trial court erred in admitting evidence from the automated 11 enforcement system. The judgment of the trial court is reversed, with instructions to dismiss the 12 :: I 15 i 16 17 18 19 20 21 22 23 24 25 26 27 , 28 I citation. People v. Kriss (1979) 96 Cal.App.3d 913, 921. Because the judgment is reversed for the reason discussed above, this court need not consider the other arguments raised by appellant. Presiding Judge NESTOR TR-\FFIC SYSTEi\lS, I:"iC. MFNICIPALITY OF SA.'J BERl'lARDI:-IO, CALIFORNIA TR-\FFIC SIGNAL VIOLATION VIDEO-ENFORCEME:"iT SYSTEM LEASE & SERVICES AGREEMENT This AGREEMENT (the "Agreement") made this _ day of May, 2005 by and between Nestor Traffic Systems, Inc., a Delaware corporation having a place of business at 400 Massasoit Avenue, Suite 200, East Providence, RI 02914 ("Nestor"), and the City of San Bernardino, a municipal corporation of the State of California, having an address of 300 North D Street, San Bernardino, CA 92418 (the "Municipality" and together with Nestor, the "Parties" and each singularly a "Party"). WHEREAS, the Municipality has issued a request for proposals dated January 12,2005 (the "Request for Propos,ls"); WHEREAS, Nestor submitted on February 8, 2005, a Proposal (the "Proposal") in response to the Request for Proposals; and WHEREAS, the Parties desire to enter into this Agreement, whereby Nestor will (i) install and assist the Municipality in the administration and operation of a traffic signal violation detection system (the "System") at the intersections located within the Municipality indicated on Exhibit A attached to this Agreement, and provide to the Municipality the services (the "Services"), all as more fully described on Exhibit A, and (ii) in connection with the Services, license certain software and lease certain equipment to the Municipality; and WHEREAS, on April 18,2005, the City Council duly set a public hearing to be held on May 2,2005, pursuant to Section 21455.6 of the Vehicle Code, by giving notice by publication in a newspaper of general circulation, to consider entering into an agreement with Nestor Traffic Systems, Inc. for a Traffic Signal Violation Video-Enforcement Systems; and WHEREAS, on May 2, 2005, the City Council held a public hearing pursuant to Section 21455.6 of the Vehicle Code to consider entering into an agreement with Nestor Traffic Systems, Inc., for a Traffic Signal Violation Video-Enforcement Systems, and all persons who wished to speak, were provided to do so at the public heanng. NOW, THEREFORE, the Parties, intendmg to be legally bound, agree as follows: I. SER\1CES 1.1 Nestor shall provide to the Municipality the Services, as more fully described in Exhibit A. If and to the extent set forth in Exhibits A, B, and C, the Services shall include: (i) the equipment (the "Equipment") and software (the "Software") to be supplied and installed by Nestor in accordance wlth Exhibit A; (ii) citation preparation processes that assist the Municipality in complying with current applicable law; NYCOCS;293379.8 (iii) training of Municipality personnel involved with the operation of the System andlor the disposition of citations; and (IV) other support services for the System. 1.2 If and to the extent the Municipality has or obtains during the Term (as hereinafter defined) custody, possession or control over any of the Equipment or Software, the Municipality agrees: (i) such Sofrn;are, if manufactured by Nestor, is supplied under the license set forth in Exhibit B (the "L,cense") to which the MUnicipality agrees; (Ii) such Software, If manufactured by third parties, is supplied under third-party licenses accompanying the Software, which licenses the Municipality acknowledges receiving and to which it hereby agrees; and (iii) such Equipment is supplied under the lease terms set forth in Exhibit C (the "Lease") to which the Municipality hereby agrees. 1.3 The Municipality understands and agrees that (i) Nestor may subcontract with third parties for the provision or installation of part or parts of the System or Services and (il) installation of the System requires the Municipality's cooperatIOn and compliance with Nestor's instructions (including but not limited to Municipality's provision of the personnel, equipment, engineering plans, and other resources as described in Exhibit A or as otherwise reasonably requested by Nestor) and access by Nestor (or such third parties) to Municipality premises and systems and the Municipality agrees to provide all of the foregoing to Nestor. The Municipality further agrees that the estimated dates of installation and activation of the System set forth in Exhibit A (or incorporated therein) are subject to conditions beyond the control of Nestor and are not guaranteed. 1.4 The Municipality understands and agrees that the System will be owned by Nestor (or its deSIgnees). The Municipality agrees to reimburse Nestor for costs incurred to repair any damage to the System caused by the Municipality or any of the Municipality's employee's, agents, or independent contractors (other than Nestor). The Municipality agrees that it will use its best efforts to assist Nestor to identify and obtain compensation from any third-party who is responSible for damage to the System or any part thereof. 1.5 If and to the extent this Agreement incorporates by reference any proviSIon of the Request for Proposals or the Proposal, such provision shall be deemed a part of this Agreement. Nevertheless, if there is any conflict among the terms and conditions of this Agreement and those of any such provision or prmlsions so incorporated by reference. this Agreement shall govern over both the Proposal and the Request for Proposals and the Proposal shall govern over the Request for Proposals. 1.6 Nestor is acting hereunder as an independent contractor and not as an agent or employee of the Municipality. Nestor shall not represent or otherwise hold out itself or any of its dIrectors, officers, partners, employees, or agents to be an agent or employee of the Municipality. 2. TER:VI The initial term of this Agreement, the License and the Lease shall begin upon the date of thiS Agreement and shall continue until the fifth (5th) anniversary of the Installation Date (the "Initial Term"). Thereafter, this Agreement and the License may be extended by up to two thirty-six month terms, with negotiated modifications (the "Renewal Term" and together with the Initial Term, the "Term"). The "Installation Date" shall be the latest date that the System becomes installed and operational at any of the N'fOOCS: 2931379.8 2 intersections descnbed in Sections 1.1 or 1.2 of Exhibit A. 3. TEIUlINATIO:'\ A:'iD EXPIRUION 3.1 ThiS Agreement may be terminated by either Party if the other Party defaults in the perfoIl11ance of any obligation under this Agreement and such default continues for more than thirty (30) days after notice thereof to the defaulting Party. 3.2 Except as prohibited by court of competent jurisdiction, or by "mtten agreement of the parties, upon termination or expiration of this Agreement, the Municipality shall immediately cease using the Software and the Equipment In its possession, custody or control and shall (a)(i) immediately deliver to Nestor such Equipment and (ii) Immediately deliver to Nestor or irretrievably destroy, or cause to be so delivered or destroyed, any and all copies of the Software in whatever form and any written or other materials relating to the Software in the Municipality's possession, custody or control and within thirty (30) days deliver to Nestor a certificatIOn thereof or (b) allow Nestor access to the system(s) on which the Software is loaded and grant permission to Nestor to remove the Equipment and Software. 3.3 Termination or expiration of this Agreement shall not relieve the Municipality of any obligation to pay fees or other amounts due or accrued prior to such installation or termination. This Se,ction 3,3, as well as Sections 3,2,4.3, 6.2, 6,), 6.4, 7 and 9 of this Agreement, Sections 4, 7, 8 and 9 (but only to the extent Section 9 corresponds to Sections of the Agreement which survive) of the License and Sections 3, 4, 5, 6, 7 and 9 (but only to the extent Section 9 corresponds to Sections of the Agreement which survive) of the Lease shall survive any expiration or termination of this Agreement, the License or the Lease. 3.4 Notwithstanding anj1hing to the contrary contained herein, or in the License or the Lease, but except as provided in the last sentence of Section 3,), the License and the Lease shall terminate upon the termination or expiration of this Agreement. 4. FEES A:'iD PAnIENT 4.1 The Municipality shall pay Nestor a monthly fee equal to a.) $975.00 for each Installed Approach for the installed equipment in accordance with the Lease Agreement attached as Exhibit C hereto, and b.) $4,040,00 for each Installed Approach for the Services and Software as described In Exhibits A & B hereto. 4.2 "Installed Approach" shall mean a signalized direction of travel on an individual access road or street to any intersection that is monitored by the System. If and to the extent that (I) an Installed Approach subject to a Monthly Fee is not capable of detectmg violations or (2) NTS is unable to print and/or mail Citations, in either case, for more than three (3) consecutive business days in any calendar month as a result of system malfunctions not caused by Municipality or an event described in Section 9,9 of the Agreement (collectively and each individually, an "Event"), NTS will allow a credit against the monthly fee for Services and Software for such Installed Approach for that month equal to: such Installed Approach's monthly fee for Services and Software multiplied by: (a) the total number of days the approach was incapable of detecting violations, and/or printing and mailing Citations (as applicable) in the month as a result oftlie Event, divided by (b) thirty (30) days. N'fDOCS:293873.8 3 4.3 This program will be operated as a safety program. In addition, most communities regularly look for ways to create efficiencies and control spending. For these reasons, NTS will perform an initial annual financi.1 review of the program, and every six months after the first annual review, and agrees to renegotiate its service fees (down or up. but not to exceed the service fees in Section 4.1) if it is determined that program- operating costs exceed net program revenues being realized. If the parties are unable to agree on a renegotiated fee, the City will have the right to terminate the agreement. 4.4 In the event of termination of this Agreement due to a breach by the Municipality, the termination and cancellation fee for each Installed Approach shall equal the product of (a) $975.00 multiplied by (b) the Remaining Term. The "Remaining Term" shall equal sixty (60) minus the number of whole months from the date that the Installed Approach in question became operational to the date of termination. 4.5 Payment of all fees and other charges owed pursuant to this Agreement is due within ninety (90) days after invoice date. Invoices will be sent to the Municipality at: The City of San Bernardino Ann: Finance Director 300 North "D" Street San Bernardino, CA 92418 4.6 At the time of execution of this Agreement, it is the understanding of the parties that Nestor's services provided hereunder are not subject to federal or state excise, sales, use, property, or other similar [axes or charges. The Municipality agrees to reimburse Nestor for any such tax or charge if charged against Nestor. If incurred, such taxes or charges may be invoiced at any time. 5. Responsibilities of the Municipality 5.1 The Municipality shall provide Nestor with such "as built" drawings in AutoCad electronic fonnat as Nestor, in Nestor's reasonable discretion, may require for the preparation of drawings for the installation of the System and shall approve Nestor's engineering drawings without unusual or unreasonable cost or <lelay. 5.2 The Municipality shall not levy any permit fees or, if municipal ordinance requires the assessment of fees, the Municipality shall waive or be responsible for such fees associated with the installation of the System. 5.3 Subject to the Municipality's right of prosecutoria! discretion, the Municipality shall diligently prosecute each citation and defend any challenge in any COllrt to the use of the System or validity of its results and/or tile use of the U.S. Mails to deliver the citation. Nestor may, at its own expense, intervene in any proceeding challenging the use of the System or validity of its results and/or use of the U.S. Mails to deliver the citation. 5.4 The Municipality shall provide all necessary electrical connections at the roadside and pay for power required by the System. 5.5 To allow for proper operation of the System, the Municipality shall provide Nestor with advance written notice of any modifications proposed to intersections, including traffic signal operations, after installation of a System. In the event any such intersection modification requires a material change to the System, the Municipality shall pay the costs reasonably incurred by Nestor to adapt the affected Installed NYDCX:S: 293879.8 4 Approach(es) to make such Installed Approach(es) compatible therewith. Notwithstanding the above, Nestor makes no guarantee that it will be able to make any such adaptation. In addition, Nestor does not, and will not, make recommendations or otherwise manage the configuration or operation of the intersection traffic light system. 5.6 The Municipality shall provide such assistance as may be required for Nestor to obtain any information and approvals from the Court(s), other governmental instrumentalities, or entities necessary or desirable for Nestor to provide the Senices. 5.7 During the term of this Agreement, except as expressly permitted by this Agreement the Municipality shall not use the System, or allow the System's use by a third party, without the prior written permission of Nestor. 6. LIMITED WARR.\.NTY AND LI)lITATION ON DAMAGES 6.1 Nestor warrants that the System's functionality will confonn in all material respects to the description of the System set forth on Exhibit A. This warranty does not apply if the Municipality has failed to make all payments to Nestor required by this Agreement or as set forth in, and is subject to the conditions of, Section 6.4. 6.2 Except as specifically provided herein, the services and system are not error free and are being provided "as is" without warranty of any kind and Nestor hereby disclaims all other warranties, whether express or implied, oral or written, with respect to the services and system, including, without limitation, all implied warranties of accuracy, merchantability or fitness for any particular purpose and all warranties implied from any course of dealing or usage of trade. Municipality acknowledges that except as expressly provided herein no other warranties have been made to Municipality by or on behalf of Nestor or otherwise form the basis for the bargain between the Parties. 6.3 Regardless of whether any remedy set forth herein fails of its essential purpose, in no event will Nestor be liable to the Municipality for indirect, incidental, consequential, special, punitive or other similar damages (including damages for loss of information, profits, or savings, or business interruption) arising out of the system, the services or the use or inability to use the system or the services. In no event will Nestor be liable to Municipality for any reason for any amount in excess of the fees actually paid by Municipality to Nestor in accordance with Sections 4.1 or 4.2 during the twelve months immediately preceding the event(s) or circumstance(s) giving rise to Nestor's liability to Municipality. 6.4 The Municipality acknowledges and agrees that: (a) The System may not detect every red light violation; (b) Since the System may flag as a violation conduct that is in fact not a violation, the output of the System will require review, analysis and approval by personnel appropriately qualified and authorized by the Municipality under applicable law prior to the issuance of any citation; (c) The System may not detect every event for which it is desirable to recommend extension of the red light phase, if such feature is used; (d) The System has no control over, and relies on the proper functioning of Municipality supplied equipment for signal light changes; (e) The warranty set forth in section 6.1 is not intended to, and shall not, be construed as a warranty of NYDOCS 293879.8 C J the level of performance of the System; (f) The proper functioning of the System requires the Municipality's full and complete compliance with the Systems' operating instructions, which it hereby agrees to do; and (g) The 1vlunicipality shall be responsible for the configuration and/or operation of all intersection traffic light systems and Nestor shall have no liability or obligations with respect thereto. 7. L'iDEMNITY 7.1 Nestor agrees to indemnify, defend, and hold harmless the Municipality from any claim of damages (including the payment of reasonable attorneys' fees) by a third party arising solely from either (a) a finding that the System infringes any validly issued United States patent or (b) Nestor's negligence, provided that such claim of damages is not attributable to (i) any act or omission set forth in Section 7.2 or (ii) any third- party software or other third-party products used with, required for use of, or supplied under their own names with or as part of the System. If, as a final result of any litigation of which Nestor is obligated to indemnifY, the use of the System by Municipality is prevented, in whole or in part, by an injunction, Nestor's sole obligation to the Municipality as a result of such injunction shall be, at Nestor's option, either to (i) replace such part as has been enjoined, or (ii) procure a license for Nestor or the Municipality to use same, or (iii) remove same at no additional cost to the Municipality and terminate this Agreement. The rights of the Municipality seeking protection under this Section 7 shall be conditioned upon (i) the Municipality notifying Nestor promptly upon receipt of the claim or action for which protection is sought (but the failure to do so shall not relieve Nestor of its obligations under this Section 7 unless it is, and then only to the that extent it is materially prejudiced thereby) and (ii) the Municipality's full cooperation with Nestor in the settlement or defense of such claim or action at no cost to the Municipality (except for reasonable out-of-pocket traveling expenses). Such cooperation shall include, but not be limited to, the Municipality providing access for, and permission to, Nestor for the purpose of the replacement of such part or parts of System as Nestor may deem necessary or desirable. The Municipality may participate in the defense of any matter through counsel of its own choice and at its own expense provided that Nestor shall remain in, and responsible for, control of the matter. 7.2 Anything to the contrary notwithstanding, Nestor assumes no obligation or liability for, and the Municipality will be responsible for any claim of damages (including the payment of reasonable attorneys' fees) by a third party arising from or related to (i) Nestor's compliance with any designs, specifications, or instructions of the Municipality, (ii) any modification of the System made by the Municipality, (iii) the negligence or intentional act of Municipality, (iv) failure of the Municipality to use the System in the manner described by Nestor, (v) the failure to function properly of any hardware, software or equipment of any kind used by, in or on behalf of the Municipality (other than that supplied by Nestor), (vi) the review and analysis of the System data output by Municipality personnel for citation preparation, (vii) the Municipality's use and/or administration of the System and/or any traffic signal, and (viii) an allegation regarding the permissibility under the law of the use of photo citation systems or the System. The rights of Nestor seeking protection under this Section 7 shall be conditioned upon (i) Nestor notifying the Municipality promptly upon receipt of the claim or action for which protection is sought (but the failure to do so shall not relieve the Municipality of its obligations under this Section 7 unless it is, and then only to the that extent it is materially prejudiced thereby) and (ii) the Nestor's full cooperation with the Municipality in the settlement or defense of such claim or action at no cost to Nestor (except for reasonable out-of-pocket traveling expenses). Nestor may participate in the defense of any matter through counsel of its own choice and at its own expense provided that the Municipality shall remain in, and responsible for, control of the matter. 7.3 This Section 7 states the entire liability and obligation and the exclusive remedy of the Parties with respect to any actions or claims (i) of alleged infringement relating to or arising out of the subject matter NYOGCS:293819.8 6 ofihis Agreement or (ii) otherwise the subject of this paragraph. 8. INSUR~NCE Nestor shall obtain, and represents that it has obtained, and will maintain insurance for itself and, as applicable, its employees and the Municipality as follows: a. Comprehensive general liability insurance with a combined single limit of $1,000,000 per occurrence; b. \Vorkers Compensation as required by applicable state law; and c. Comprehensive Automobile Liability Insurance for all owned, non-owned and hired automobiles and other vehicles used by Nestor with a minimum $1,000,000 per occurrence combined single limit bodily injury and property damage. All insurance required by express provision of this Agreement shall be carried only in responsible insurance companies licensed to do business in the State of California and shall name as additional insured the Municipality, its elected officials, officers, employees, agents and representatives. Nestor will furnish. Municipality with Certificates of Insurance and applicable endorsements for all such policies promptly upon receipt of them. Nestor may effect for its own account insurance not required under this Agreement. The Municipality is self insured for its exposures under the program. 9. MISCELLANEOUS 9.1 Except as specifically provided in this Agreement, this Agreement may not be assigned, nor may performance be delegated, by either Party without the express written consent of the other Party, except that Nestor may assign or otherwise encumber this Agreement (a) for the purpose of financing the costs of the System contemplated to be implemented hereby, (b) to any entity owned or controlled by Nestor or (c) to any third party that acquires all or substantially all of Nestor's business relating to the System. 9.2 The headings and captions used in this Agreement and the Exhibits are for convenience only and are not to be used in the interpretation of this Agreement. 9.3 The failure of either Party to require performance of any provision of this Agreement shall not affect the right to subsequently require the performance of such provision or any other provision of this Agreement. The waiver of either Party of a breach of any provision shall not be taken or held to be a waiver of any subsequent breach of that provision or any subsequent breach of any other provision of this Agreement. 9.4 If any covenant or provision of this Agreement is, or is determined to be, invalid, illegal or unenforceable, all remaining covenants and provisions of this Agreement shall nevertheless remain in full force and effect, and no covenant or provision of this Agreement shall be deemed to be dependent upon any covenant or provision so determined to be invalid, illegal or unenforceable unless otherwise expressly provided for herein. 9.5 This Agreement has been entered into, delivered and is to be governed by, construed, interpreted and enforced in accordance with the laws of the State of California. Any dispute, controversy, or claim arising out of or in relation to this agreement, or any breach or alleged breach of this agreement, as between the parties shall be resolved in the Superior Court of the State of California, County of San Bernardino. NYDCCS: 293879.8 7 9.6 Exceptas set forth in this Agreement and the Exhibits hereto, no representation, statement, understanding or agreement, whether written or oral, has been made and. there has been no reliance on anything done, said or any assumption in law or fact with respect to this Agreement for the duration, tennination or renewal of this Agreement other than as expressly set forth in thIS Agreement and there has been no reliance upon anything so done or saId that in any IVay tends to change or modifY the tenns or subject matter of this Agreement or to prevent this Agreement from becoming effective. This Agreement supersedes any agreements and understandings, whether written or oral, entered into by the Parties hereto prior to the effective date of this Agreement. 9.7 This Agreement may be modified or amended from time to time by the Parties, provided, however, that no modIfication or amendment hereto shall be effective unless it is stated in wTiting, specifically refers to thIS Agreement and is executed on behalf of both Parties hereto. 9.8 Except as otherwise specified, all notices, payments and reports hereunder shall be deemed given and in effect as of the date of mailing or transmission, as the case may be, when sent by next day delivery or courier service, postage pre-paid), or three days after the date of mailing when sent by first class mail, postage pre-paid, addressed in all such cases to the Parties as set forth in the preamble to this Agreement directed in each case to the PresIdent of Nestor or the Finance Director at the Municipality or to such other addresses as the Parties may from time to time give written notice of as herein provided. 9.9 Except for the obligation to make any payment of money, neither Party shall be liable to the other for failure or de lay in meeting any obligations hereunder which anses in whole or in part from causes which are unforeseen by, or beyond the control of, such Party, including without limitation, ~cts of God or of a public enemy, acts of the Government (other than the Municipality in the case of the Municipality) in either its sovereign or contractual capacity, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, acts or omissions of subcontractors and other third-parties and unusually severe weather. When any such circumstance(s) exist, Nestor shall have the right, in its sole discretion, to allocate its available production, deliveries, services, supplies and other resources among any and all buyers (whether or not including the Municipality), as well as among departments and affiliates of Nestor, without any liability to the Municipality. / / / / / / / / / / / / NYDCCS:293879.8 8 IN WITNESS WHEREOF, the Parties hereto have set their hands by their duly authorized representatives as of the day and year first above written. Nestor Traffic Systems, Inc. J~)le~ Nigel P. Hebbom President & CEO By: Nt!fii e : Title: .'.:~ dl! Valles ayor, City of San Bernardino ---- Approved as to form and legal content: JAc'v!ES F. PE?-<').lAN City Attorney t;' !.e..,.~ NYDOCS:2938-:'9.8 9 Exhibit A SER\1CES Nestor shall provide the Municipality with the following Services, each of which is more fully described below: I. Site Installation Plannmg; Design and Equipment Installation 2. User Training and Support 3. Citation PreparatIOn and Processing Services 4. Maintenance and Support 5. Public Education Campaign 6. Expert Witness Testimony and Court Training 7. Violation Review Station 8. Reporting 9. Meetings I. Site Installation Planning. Design and Equipment Installation 1.1 The Svstem. Video monitoring systems shall be installed initially, monitoring a minimum of eight (8) approaches at up to four (4) intersections to be designated in writing by mutual agreement of City and Nestor. Additional video monitoring systems may be added at the option of the Municipality. The System shall be comprised of equipment capable of monitoring the following traffic approaches at the following intersections: Intersections TBD Approaches Enforced TBD .1.2 Substitution or Addition of an Intersection. . If Nestor or the Municipality determines that one or more of the above intersections is not for any reason appropriate for the System (and such determination is made at least fifteen (1 S) days prior to the commencement of installation of the System at any such '. intersection), then alternate intersection(s) may be substituted by written consent oflhe Municipality and Nestor. After the commencement of installation activities, the Parties may mutually agree to relocate any existing and operating System for an individual intersection to an alternate location (to be mutually agreed to by the Municipality and Nestor) in the event that the number of citations issued at the intersection is less than one hundred and twenty (120) citations per Installed Approach at that intersection per month, averaged over a three month or longer period. 1.3 Timeframe for Installation of the SYstem. The above intersectIons will be installed and activated in phases in accordance with an Implementation Plan to be mutually agreed to by Nestor and the Municipality. Nestor shall install the System in accordance with the schedule set forth in the Implementation Plan. The Municipality agrees that the estimated dates of installation and activation of the System set forth in the Implementation Plan are subject to conditions beyond the control of Nestor and are not guaranteed. 1.4 Installation/Ownership of the Svstem. Nestor will procure, install and provide support of traffic signal violation detection equipment (computer hardware, software, cameras, camera housing and mounts, communications equipment and roadside controller cabinets) as specified in the Proposal at each of the NYDOCS: 2939,9. 8 10 designated intersections provided for above. As between Nestor and the Municipality, all components for the System will remain the property of Nestor. 1.5 InstallatIOn 1.5.1 Nestor shall submit plans and specifications to the Municipality for review and approval, which revIew and approval will not be unreasonably withheld, delayed or conditioned. Nestor shall provIde at least three sets of drawings of the wiring for the System cirCUitry. 1.5.2 If commercially reasonable and if capacity exists, all wiring shall be internal to equipment (not exposed) and underground in eXisting traffic signal conduits, except where required to directly interface with the traffic signals and electrical service. Separate conduits or overhead wiring may be used by Nestor if existing conduit(s) are at capacity. If existing conduits are used, the MuniCipality will not unreasonably withhold, delay or condition consent to such use. 1.5.3 The System shall be electrically isolated from the traffic signal system using industry- standard practice and methods. In the event that Nestor and the Municipality cannot agree on the method of isolation, the Municipality shall procure, at its ovm expense, such equipment or means to accomplish the isolation or to meet the requirements of such. 1.5.4 The System may be mounted on or utilize support of existing traffic signal poles, arms or other intersection structures where possible, subject to Municipality review and approval, such review and approval not to be unreasonably withheld, delayed or conditioned. 1.5.5 The System poles, foundations and new infrastructure, as required, shall conform to applicable law. The Municipality shall be solely responsible for remediation that may be required with respect to such poles, foundations and new infrastructure if such remedIation is required due to conditions not caused by Nestor. 1.5.6 Nestor shall notify the Municipality at least 48 hours prior to interfacing with traffic signal equipment. Nestor shall be responsible for installing all its wiring into Municipality cabinets. 1.5.7 To the maximum extent permitted by law, the Municipality shall waive any permit and licensing fees for any System construction and installation, and to the extent such fees are not waivable, Municipality shall reimburse Nestor for such fees. Nestor shall apply for any and all permits that may be reqUired from the California department of Transportation (CALTRANS) relating to installation of the System at intersections requiring such permits. 1.6 Production of Video Files. Nestor shall produce digital video files of red light violations, capable of identifying vehicles traveling through the intersection during the red light phase. The violation video shall capture a view of the traffic signal from the direction in which the driver is approaching, the approaching vehicle as viewed from the intersection, an image of the driver, and a front and rear view of the vehicle's license plates. 1.7 Restoration of Intersections. Upon termination or expiration of the Agreement, Nestor will use commercially reasonable efforts to remove the System and restore the affected public facilities including returning the intersections to their original condition; provided, however, that Nestor shall not be required to remove any conduit, in-ground fixture, underground wiring or other infrastructure that will require excavation or demolition, which shall become the property of the Municipality upon termination. All costs incurred by Nestor thereby will be the responsibility of Nestor. NYDOCS:293879.3 11 2. User Training and Supoort. 2.1 Traininl! of Municipality Personnel. After System installation, Nestor will provide up to eight (8) hours of training for up to ten (10) persons at t'.vo (2) sessions at the Municipality's facilities to acquaint Municipality personnel with System operation. Training shall consist of instructIOnal and operational training as well as hands-on equipment exercises with an instructor. All necessary training materials and documentation will be provided by Nestor. If the Municipality requests additional courses or training. Nestor will provide these on a fully cost reimbursable basis. 3. Citation Preoaration and Processinl! Services 3.1 Citation Preparation and Processing. Nestor will process approved violations utilizing a computerized traffic citation program ("Citation Composer"). In processing violations, Nestor shall print and mail citation forms. Nestor shall pay all mailing and postage costs, and such other miscellaneous costs and expenses as may be reasonably necessary to issue a citation and deliver it by U.S. mail. To the extent required by applicable law, Nestor will obtain a certification of mailing issued by the Post Office. Notwithstanding anything to the contrary in the foregoing provisions of this Section 3.1, Nestor will not process nor support any citations not captured by the System and/or approved by the Municipality. 3.1.1 Mailing of Citations. Citations shall be mailed to the violator as soon as is practical after being approved by the Municipality and transmitted to the processing center (managed by Nestor or such third party, to whom Nestor has delegated such operation, on behalf of the Municipality) but-in no event later than the time required by law. The form of citation shall be subject to the approval of the Municipality, which approval may not be unreasonably delayed, conditioned or withheld. 3.1.2 Cooperation With Police and the Courts. Nestor shall cooperate with the Municipality's Police Department and the Courts in the issuance of violations. Nestor shall submit mutually agreed information necessary to issue violation notices to the Police Department. All citations shall be reviewed and approved by the Municipality's Police Department prior to mailing. In addition, Nestor will cooperate with the Courts to set up the necessary communications and procedures that will enable Nestor to send delinquent notices to those registered owners/drivers for whom such notices are appropriate. 3.2 Access to Drivers License Information. To the extent Nestor is able, Nestor shall access directly the drivers license information and the registered owner residence address from the State department that regulates the use and operation of motor vehicles (the "DMV"). If Nestor is unable to access such information, Nestor shall provide the license plate number of violators to the Municipality, which will provide such information to Nestor within a reasonable period oftime. 3.3 Numbering Svstem. Nestor, in coordination with the Courts, will develop and implement an independent numbering system for automated red light citations. 3.4 Transmission of Information. Nestor will do\mload all citation information via an electronic file into the Court database not later than twenty four (24) hours after mailing of the citation. Nestor shall maintain a documented chain of custody for all electronIcally transmitted information while the information is under Nestor's control. 3.5 Customer Service. Nestor will provide an automated customer service telephone number to the public. Customer Service Representatives will be available Monday through Friday, from 9:00 a.m. to 5:00 p.m. local time (of the Municipality), excluding holidays, in order to schedule violation video viewing appointments for the Police Department and to answer basic questions regarding the Municipality's program. NYDOCS:293879.8 12 4. Maintenance 4.1 Maintenance of Svstem. Except as provided herein, Nestor shall Maintain the System (as defined below); proVIded however, that Nestor shall not be responsible for any maintenance, repair or replacement required as a result of (i) the negligence or intentIOnal act of the Municipality, its employees, agents or Independent contractors (other than Nestor) and/or (ii) any equipment or sofrware not provided by Nestor. Nestor shall mamtatn a maintenance log that documents all service issues. To "Maintain the System" shall mean to keep the System in such a state of operatIon such that the System's functlOnalir; conforms in all matenal respects to the description of the System set forth in this Exhibit. 4.2 EqulOment Checks. Nestor shall perform remote camera and PC equipment checks on a daily basis to confirm proper operation of computers, cameras and communications network. Routine in-field camera equIpment mspection will be done as needed. 5. Publ1c Education Campal[11 5.1 Publ1c Awareness ProlITam. Nestor shall assist the Municipality with a Public Awareness Program. Such assistance shall consist of: a) Reasonable assistance for a media event to launch the community education program b) A reasonable amount of training for a Municipality staffed speaker's bureau c) The production of warning signs (as described in section 5.2) for installation by Municipality d) Preparation of warning notices to violators for the first 30 days of the program e) A toll-free customer service hotline as described in section 3.5 5.2 Wammg Signs. Nestor shall provide one (I) warning sign per Installed Approach. The signs shall be in compliance with applicable law. The Municipality will be responsible for installation and Nestor will recommend appropriate installation locations. 6. Expert Witness Testimonv and Court Training 6.1 Expert Witness Testimonv. Nestor will provide expert witness testimony, as reasonably necessary, to testify regarding the accuracy and technical operation of the System. 6.2 Court Training. Nestor will conduct a one-day workshop-orientation session for Court judges (and/or their designees), other appropriate court officials and the Municipality prosecutor. 7. Violation Review Station 7.1 Provision of Equipment. Nestor will provide one (I) laptop workstation, printer, and connectivity (which shall remain the property of Nestor) to be used by the Municipality for citation approval, violation video viewing appointments and court hearings. 8. Reporting 8.1 Weekly Report Nestor shall provide a weekly report to the l\!unicipality's Police Department and the Court during the Warning Period. The report shall include the number of violations recorded per Installed Approach. NYDCCS:293879.3 13 8.2 Monthlv Reoort. Nestor shall submit to the Municipality a Monthly Report on projecCresults within thirty (30) days of the end of each calendar month. To the extent reasonably co.mmercially practical, the Monthly Report shall indude information for each violation recorded by the System as well as the following items: a) Number of vio13l1ons recorded bJ Number of non-Issued violatIons c) Breakdown of reasons for non-Issuance d) Number of citatIons issued e) Court heanngs scheduled and held f) Number of calls for information gJ Number of violation video viewing appointments scheduled 8.3 Additional Reoorts or Information. Any other reports and information are not part of the Agreement and the preparation and delivery of any other such reports or informal1on may result in additional fees. 8.4 Database. Nestor shall maintain a database with the following information (if available to Nestor) per violation: a) Location, date and time b) Number of seconds of red trafiic signal c) Type ofvio13tion dJ Vehicle description including license plate state and number eJ Applicable vehicle code section violated f) Citation prepared or reason for not preparing cital10n g) Registered vehicle owner's name and address, driver's license number and related information required to prepare cital10ns where violation is made by a driver other than registered owner (AffIdavit of Non-Liability) h) Status ofcital1on (outstanding, cancelled, reissued, paId, bail forfeited, traffic school, warrants issued, etc.) 9. MeetinQs Nestor representative(s) shall be made reasonably available to meet with the Police Department. and other representatives of the Municipality as determmed by the Municipality, on a bi-weekly baSIS during program implementation and at a minimum on a monthly basis once the program is fully operational. Subject to approval and agreement by both parties, telephonic or other acceptable means may be used to conduct such meetings. N'{OOCS: 29387 9. g 14 10. Additional Services (at the Municioalitv's request): a) CrossingGuard VIP Program - Nestor will generate a video-based analysis of an intersection designed to evaluate the frequency of red-light violations for up to four approaches at the targeted mtersectlOn. The Video media will contain up to 16 hours of VIP mom to ring assuming the equipment remains installed at the intersectIOn during the course of mOnitoring, but nor to exceed three consecutIve calendar days. A report summarizing the results, along with the media generated will be prOVIded to the Munlcipaltty. The VIP Program Fee is $850 for each mtersectlOn approach evaluated and Includes 16 hours of evaluation. Additional16-hour evaluation blocks may be ordered at 50% of the VIP Program Fee for each block, assuming equipment remains installed at the mtersection between blocks. The VIP Program Fee for an intersection is due upon ordering the service. If the Municipality selects the intersectIOn for a full CrossmgGuard System installation wi thin one month of delivery of the VIP report, Nestor will allow a credit equal to 100% of the intersection's VIP Program Fee paid against the ll1Jtial TIcket Processmg Fees charged for the intersection. To order a CrossingGuard VIP analysis, the Municipality should provide a 'Hilten request for the analysis to Nestor, including a description of the intersection(s) selected, and a check for the ordered VIP Program Fee. b) CollIsion Avoidance services and connections, no additional cost. c) Intersection Video Monitoring Services uhlizing current fixed overview camera positions, or dedicated camera subject to customer control, fee to be determined. NYDCCS:2938i9.8 15 EXHIBIT B LICE;\"SE AGREE;\IENT FOR CROSSI."GGUARD SOFTWARE This License Agreement (the "License") is a legal agreement ber\veen you (the contracting counter- party in an agreement (the "Agreement") to which a copy of this License is attached as an Exhibit) and Nestor, Inc. ("Nestor") for the Nestor software product identified above, which includes computer software and may include associated media, printed materials, and "online" or electronic documentatIOn (the "SOFTWARE PRODUCT"). The SOFTWARE PRODUCT also mcludes any updates and supplements to the original SOFTWARE PRODUCT prOVided to you by Nestor. Any software provided along with the SOFTWARE PRODUCT thar is associated wIth a separare license agreement is licensed to you under the terms of that license agreement. By execullon of the Agreement, you have agreed to be bound by the terms of this License. Such agreement by you is a express condition to your ability to use the SOFTWARE PRODUCT. 1. GRANT OF LICENSE. The SOFTWARE PRODUCT is licensed, not sold. This License grants you only the following rights: You may install and use one copy of the SOFTWARE PRODUCT on a single computer, includmg a workstation, terminal or other digital electronic device ("COMPUTER"). You may also store or install a copy of the SOFTWARE PRODUCT on a storage device, such as a network server, used only to install or run the SOFTWARE PRODUCT on your other COMPUTERS over an internal network; however, you must acquire and dedicate a license for each separate COMPUTER on or from which the SOFTWARE PRODUCT is installed, used, accessed, displayed or run. A license for the SOFTWARE PRODUCT may not be shared or used concurrently on different COMPUTERS. 2. DESCRIPTION OF OTHER RIGHTS AND LIMIT A nONS. You may not reverse engineer, decompile, or disassemble the SOFTWARE PRODUCT, except and only to the extent that such activity is expressly pemlitted by applicable law notwithstanding this limitation. The SOFTWARE PRODUCT is licensed as a single product. Its component parts may not be separated for use on more than one computer. You may not rent, lease, transfer or lend the SOFTWARE PRODUCT. This License does not grant you any rights in connection with any trademarks or service marks of Nestor. Without prejudice to any other rights, Nestor may terminate this License if you fail to comply with the terms and conditions of this License. In such event, you must destroy all copies of the SOFTWARE PRODUCT and all of its component parts. . 3. SUPPORT SERVICES AND UPGRADES. Nestor may provide you with support services related to the SOFTWARE PRODUCT ("Support Services"). Use of Support Services is governed by the Agreement. Any supplemental software code provided to you as part of the Support Services shall be considered part of the SOFTWARE PRODUCT and subject to the ternlS and conditions of this License. With respect to technical information you provide to Nestor as part of the Support Services, Nestor may use such informallon for its business purposes, including for product support and development. Nestor w,ill not utilize such technical information in a form that personally identifies you. If the SOFTWARE PRODUCT is labeled as an upgrade, you must 1:e properly licensed to use a product identified by Nestor as being eligible for the upgrade in order to use the SOfTWARE PRODUCT. A SOFTWARE PRODUCT labeled as an upgrade replaces and/or supplemenlS the product that formed the basis for your eltgibility for the upgrade. You may use the resulting upgraded ]1"oduct only in accordance with the terms of this License. If the SOFTWARE PRODUCT is an upgrade of a component of a package of software programs that you licensed as a single product, the SOFTW AItE PRODUCT may be used and transferred only as part of that single product package and may not be separated for use on more than one computer. 4. COP"rlUGHT. All title and intellectual property rights in and to the SOFTWARE PRODUCT N".:'DOC3: 293.H9 _ 9 16 (indudi,,!! but not limited to any images, photographs, animations, video, audio, music, text, and "applets" incorponted into the SOFTWARE PRODUCT), the accompanying printed materials, and any copies of the. SOFTWARE PRODUCT are owned by Nestor or Its suppliers. All title and intellectual property rights in and to the contttlt which may be accessed through use of the SOFTWARE PRODUCT is the property of the respective conknt ,",vner and may be protected by applicable copyright or other intellectual property laws and treaties. This 'Lic:nse grants you no rights to use such content. All rights not expressly granted are reserved by Nestor. 5. Dl'.-\L-l\lEDl-\ SOFTWARE. You may receive the SOFTWARE PRODUCT in more than one med ium. Regardless of the type or size of medium you receive, you may use only one medIUm that is approprine for your single computer. You may 'not use or install the other medium on another computer. You may not loan, rent, lease, lend or otherwise transfer the other medium to another user. . 6. BACKUP COPY. After installation of one copy of the SOFTW!\RE PRODUCT pursuant to this License, JOU may keep the original media on which the SOFTWARE PRODUCT was provided by Nestor solely for backup or archival purposes. If the original media is required to use the SOFTWARE PRODUCT on the COlvIPUTER, you may make one copy of the SOFTWARE PRODUCT solely for backup or archival purposes. Except as expressly provided in this License, you may not otherwise make copies of the SOFTWARE PRODUCT or the printed materials accompanying the SOFTWARE PRODUCT. 7. US. GOVERN1"fENT RESTRiCTED RiGHTS. If you are acquiring the SOFTWARE PRODUCT (includir.g the related documentation) on behalf of any part of the United States Government, the following provi.sio" apply The SOFTWARE PRODUCT and documentation are prOVided with RESTRiCTED RiGHTS. The SO; TW ARE PRODUCT is deemed to be "commercial software" and "commercial computer software documentation," respectively, pursuant to OF AR Section 227.7202 and FAR 12.212, as applicable. Any use, modi.fication, reproduction, release, performance, display or disclosure of the SOFTWARE PRODUCT (including the related documentation) by the U.S. Government or any of its agencies shall be governed solely by the terns of thiS License and shall be prohibited except to the extent expressly permitted by the tenns of this License. Manufacturer is Nestor; its address is set forth in the Agreement. 8. COMPLL"u'\[CE WITH LAW !\NIl EXPORT RESTRiCTIONS. You represent and agree that you do not intend to and will not use, disseminate or transfer in any way the SOFTWARE PRODUCT in violation of any applicable law, rule or regulation of the United States, or any State of the United States or any foreign coun.try of applicable jurisdiction. Without limiting the foregoing, you agree that you will not exportQr re-export the SOFTWARE PRODUCT to any country, person, entity or end user subject to U.S. export restrictions. You specifically agree not to export or re-export the SOFTWARE PRODUCT: (i) to any country to which the U.S. has embargoed or restricted the export of goods or services, which currently include, but are not necessarily limited to Cuba, Iran, Iraq, Libya, North Korea, Sudan and Syria, or to any national of any such country, wherever located, who mtends to transmit or transport the products back to such country; (ii) to any end-user whoyou know or have reason to know will utilize the SOFTWARE PRODUCT or portion thereof in the design, development or production of nuclear, chemical or biological weapons; or (iii) to any end-user who has been prohibited from participating in U.S. export transactions by any federal agency of the U.S. government. 9. OTHER PROVISIONS. Sections 2. 3, 6, 7 and 9 of the Agreement are hereby incorporated by reference as if herein set forth in full. N'fDCCS:293B,9,8 17 EXHIBIT C LEASE AGREE:\IENT FOR CROSSINGGl'ARD SYSTEM This Lease Agreement (the "Lease") is part of an agreement (the "Agreement") (to which a copy of thIS Lease is attached as an Exhiblt) between the Municipality and Nestor. The Parties hereto agree as follows: I. LEASE. Nestor hereby leases to Municipality and Municipaltty hereby leases from Nestor, SlbJect to the terms and condltions of this Lease, the such items of System equipment (together with all attachments, replacements, parts, addltions, substitutions, repairs, accessions and accessories incorporated therem and/or affixed thereto, the "EquIpment") that Municipality obtains possession, custody or control pursuant to the Agreement. 2 USE AND LOCATION. The Equipment shall be used and operated by Municipality only in connection with the operation of the Sys:em by qualtfied employees of Municipality and in accordance with all '9plicable operating instructions, and applicable governmental laws, rules and regulations. Municipality shall not plrt with control or possession of the Equipment without Nestor's prior \vritten consent. 3. COi'iDlTlON. Municipality shall keep the Equipment in good condition and working order, crdinary wear and tear from proper use excepted. Municipality shall not make any alteratIOns, additions or inprovements to the Equipment without Nestor's prior written consent unless such alterations, additions or improvements do not impair the commercial value or the originally intended function or use of the Equipment and ",e readily removable without causing material damage to such Equipment so as to return the Equipment to its criginal state, less ordinary wear and tear. Any alteration, addition or improvement not removed prior to the return of the Equipment shall without further action become the property of Nestor, provided, however, that any a',terations, addItIOns and improvements which would reduce the value of the Equipment must be removed prior to ue return of such Equipment. 4. RETIJRN. Upon the expiration or earlier termination of the Agreement, Municipality shall return tlIe Equipment in the same condition as when delivered to Municipality, ordinary wear and tear excepted, to Nestor at the location specified by Nestor. 5. OWNERSHIP. LIENS. The Equipment is and shall at all times be the property of Nestor. Municipality agrees to take all action necessary or reasonably requested by Nestor to ensure that the Equipment si1all be and remain personal property. Nothing in this Lease, the Agreement or any Exhibit shall be construed as conveying to Municipality any interest in the Equipment other than its interest as a Municipality. If at any time a...ring the term hereof, Nestor supplies Municipality with labels, plates or other markings evidencing ovmership, 9'cUlity or other interest therein, MunicipalIty shall affix and keep the same displayed on the Equipment. Municipality shall, at its expense, keep the Equipment free and clear of all liens, charges, claims and other encumbrances. 6. NO tvlUNICIPALITY SUBLEASE: ASSIGNMENT. l\lUl'HCIPALITY SHALL NOT ASSIGN OR IN A;."'Y "VA Y DISPOSE OR OTHER"'lSE RELINQUISH POSSESSION OR CONTROL OF ALL OR PART OF ITS RIGHTS OR OBLIGATIONS UNDER TillS LEASE OR ENTER Il';TO AJ."IY SUB-LEASE OF ALL OR ANY PART OF THE EQUPMENT '''lTHOUT THE PRIOR WRITTEN CONSENT OF NESTOR. 7. FINANCING STATEMENTS: FURTHER ASSURANCES. Nestor and Municipality intend this tansaction to be a leasing transaction mly, but to the extent, at any time or from time to time, this Lease is JYDOCS;293879.8 18 construed to be a transaction intended as security, Nestor retains and Municipality hereby grants a security interest in all the EqUipment, the proceeds of any sale, assignment, lease or sublease thereof, any insurance proceeds, and ar.y other rights of MuniCIpality in and to the Equipment, this Lease andior their proceeds. Municipality, at the request of Nestor and at MunicipalIty's expense, agrees to execute and deliver to Nestor any financing statements, fIxture fihngs or other Instruments necessary for perfecting the interests and title of ~estor in the Equipment, and MUnlclpallty agrees that Nestor may. in Nestor's sole discretion, file a copy of the Agreement, this Lease and any Exh,bits in lieu of a financmg statement. Municipality agrees, at I'estor's expense, to promptly execute and deliver such further documents and take any and all other action reasonably requested by Nestor from time to tIme, for the purpose of fully effectuating the intent and purposes of this Lease, and to protect the mterests of Nestor, its successors and permiaed assignees. 8 OTHER PROVISIONS. SectIOns 2, 3, 6, 7 and 9 of the Agreement are hereby incorporated by reference as If herein set forth in full. WWCCS:23JS'?9.o 19