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HomeMy WebLinkAbout2006 CON Progressive Solutions - SoftwareSOFTWARE LICENSE & SERVICES AGREEMENT I. INTRODUCTION Progressive Solutions®, Incorporated, a California corporation herein after referred to as 'Licensor' and City of National City, a municipal corporation, herein after referred to as 'Licensee' agree to the following terms and conditions. 'Software Maintenance' refers to Exhibit A: (Software Maintenance Agreement) which is incorporated by reference herein. 'Requirements' refers to those requirements identified in Exhibit B: (Requirements/ Prerequisites) which is incorporated by reference herein. 'Revenue Enhancement' refers to Exhibit C: (Revenue Enhancement Agreement) which is incorporated by reference herein. 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 IX using Microsoft® SQL Server® as the data base engine. Licenses for SQL software are not included in this agreement unless listed as 3rd party deliverables in Section IX. Only authorized Sub -agencies as specified in Section IX and Licensee are authorized to use the Licensed software, data structures & documentation on Licensee's premises for the purpose of supporting the internal business practices. No other right or use is permitted under this Agreement. 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 the attached Software Maintenance Agreement or subsequent renewals of the Software Maintenance Agreement which are incorporated by reference herein. 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 IX 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 IX, 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, and/or enhancements. c. Title, ownership and control of Licensee's data shall be retained by Licensee. AGSOFTWR(2.6) Page 1 SOFTWARE LICENSE & SERVICES AGREEMENT IV. LIMITED WARRANTY a. Licensor warrants that it has developed, owns, and/or possesses all rights and interests in the Licensed software necessary to enter into this 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. While Licensor generally works as fast as Licensee will allow and can provide an estimated go live date, unless Licensee has purchased a PSI Guaranteed Time Frame Implementation, Licensor cannot guarantee a go live date as part of this agreement. A guaranteed or estimated go live date may only be provided once Licensee provides Licensor with the required items identified in Exhibit B-Requirements/Prerequisites (such as an executed agreement, initial payment, access to Licensee's network, etc.) for each Licensed product. 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' NT, 2000, 2003 & XP. The initial 'Software Support' period shall commence on the date the software Licensee has been accepted by Licensee as described in Section IX(e). 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 IX. VI. INDEMNIFICATION As Licensee acknowledges its duty to monitor ongoing operations, 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 due to the sole negligence or willful misconduct of Licensee. 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 AGSOFTWR(2.6) Page 2 SOFTWARE LICENSE & SERVICES AGREEMENT 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. VII. LICENSEES RIGHTS AND OBLIGATIONS a. All material comprising the Licensed software furnished to Licensee may carry notices of Licensor's proprietary, trade secrets and copyrights printed on reports, letters, documents and reference material supplied. Licensee agrees not to remove or obscure such notices in any production or reproduction. b. Licensee will preserve the confidential nature of the Licensed software and related media and will not make copies, including partial copies or updated versions thereof, except for internal reference, archive or backup purposes. Licensee agrees to conscientiously ensure the existence of functional daily backups for at least the last 10 business days and shall not remove or disable any SQL agent or backup plan initiated by PSI without both notification to PSI and at least monthly testing of any subsequently implemented alternate backup plan. If the backup plan is altered or disabled without notification to PSI, and there is a resulting data loss, an additional charge may be incurred for requested data recovery services. 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 relate information about 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. 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. Upon termination of usage, Licensee agrees to extract Licensee's data via any readily available tools and to provide written acknowledgement confirming destruction of all database/structure, software and related electronic forms. Licensee agrees that the software/components furnished by Licensor and all copies and versions thereof made by the Licensee are and shall remain the sole property of Licensor. 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. Training for users, managers and other personnel prior to going live is essential for efficient operation of the Licensed software. Licensee will designate one employee as a primary contact for each Licensed software application. The designee must have been trained on the Licensed software. This primary support contact should be one who both 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 and shall test/verify all configurations including but not limited to: general ledger accounts, rates, rate types billing & charge groups. In addition, they will accept software updates and arrange for software update installation. Should additional training services be required, they may be scheduled at the rates in effect at the time of service. Such training is neither available nor appropriate via customer support lines. f Should Licensee purchase conversion services for any product, Licensee acknowledges that is Licensee's responsibility to provide complete migration data to Licensor in a consistent computer readable format (with understandable field labels which clearly identify the field contents), to notify Licensor that the data is available or has been provided & to promptly review the AGSOFTWR(2.6) Page 3 SOFTWARE LICENSE & SERVICES AGREEMENT g. subsequently converted data. In addition Licensee agrees to notify Licensor of any data/configuration issues relating to a converted product. Licensee's review period (for each product conversion) shall begin upon Licensee's receipt of the 1s` converted data and shall end upon Licensee's submission of data for the 2"d/final conversion. While any previously submitted data issues are expected to have been corrected, Licensee is responsible for immediately verifying the requested corrections have been made and providing Licensor prior to the go live date with a written acknowledgment that Licensee has completed their review and accepted the data as converted by Licensor. Licensor desires to provide Licensee with a prompt, high quality data conversion. Neither Licensee & Licensor wish to incur additional time, effort &/or costs for Licensor to get staff back up to speed with Licensee's migration. Consequently, should Licensee's delay cause the period from Licensor's transfer of the converted data to the go live date to exceed 30 days, Licensee acknowledges that an additional conversion services fee equal to 50% of the original conversion amount shall be due. If after the software/data is live Licensee identifies data issues that were available for identification in the 1$' converted data Licensor shall provide Licensee with a quote for additional conversion services (if any) and Licensee shall provide written approval for Licensor to provide the quoted services. Licensee agrees that addition of migration data (such as additional records or tables not originally provided) or changes to the format of the migration data may result in a delay of product implementation and shall result in additional charges for the conversion. Software corrections are defined as: Licensor software updates as well as specified operating system patches. Licensee agrees to implement software corrections that have been identified as necessary by Licensor and to ensure that the requirements identified in Exhibit B: (Requirements) are met by all machines intended to execute the Licensed software. Failure to implement those identified software corrections or to maintain the specified requirements shall relieve Licensor from any and all 'Software Support' responsibilities relating to any Licensee reported issue(s) that the Licensor correction(s) was/were offered to address. In the event Licensee fails to implement identified software corrections, any subsequent services relating to the Licensee reported issue(s) will only be provided on an emergency time and materials basis. Unlike the business models of other providers where products become obsolete, Licensor continually improves the software and offers upgrades which are included with software maintenance. It is highly recommended that staff receive additional training at least every 5 years so staff may benefit from and be able to take full advantage of the accumulated new features. h. 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 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 Licensor's "Share desktop facility", Microsoft®'s Netmeeting , pcANYWHERE® or Citrix as specified in the Software Maintenance Agreement. In addition, Licensee agrees that designated workstations shall meet the minimum software requirements: Windows® (NT/2000/2003 or XP) & completed installation of: the licensed software, Microsoft® SQL tools & remote access software such as: VPN, Netmeeting® or PCAnywheree. To minimize Licensee costs, to eliminate any requirement for manual update of validation and/or zip plus four codes, to allow for other on line validations (such as contractor's license, sales tax permit, pet microchip owner information retrieval etc.) and to maximize uptime of zip plus four & Licensed software validations, the Licensed software should optimally be configured for internet access to the designated PSI internet address. Consequently users of the Licensed software may periodically obtain the latest zip plus four data and validation codes. Absent this configuration, to obtain automated zip plus four (4) functionality, Licensee must purchase a zip plus four data subscription and designate staff to install such zip plus four updates every three (3) months. Failure to promptly update zip plus four (4) data will cause disruption of the zip plus four (4) functionality. Furthermore absent Internet access, any other possible automated validations are reduced to manual processes. AGSOFTWR(2.6) Page 4 SOFTWARE LICENSE & SERVICES AGREEMENT 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 direct staff, a Licensee retained consultant or Licensor (at Licensee's cost) to evaluate network/software performance. Such network evaluation shall utilize "Network Sniffer" or equivalent tools to facilitate generation of quantitative results. Licensee agrees to request & incorporate Licensor's recommendations in the network evaluation work plan. Licensee further agrees to transmit the results of such work to Licensor for review and to withhold publication of such results until after implementation of all Licensor recommendations. Requests of Licensor for performance troubleshooting (such as speed and network connection issues) in which Licensor receives prior written authorization to collect factual data and subsequently presents a determination that performance issue(s) is/are network related will be billed at the rates in effect at the time of service. k. Upon expiration pursuant to section II or demand by Licensor made pursuant to section X hereof, Licensee shall discontinue use of Licensor's database/structure, software & related electronic forms. VIII. LICENSORS RIGHTS AND OBLIGATIONS a. While Licensee maintains 'Software Support', Licensor shall provide Licensee with any updates and minor enhancements to Licensed software, data or data structures which may become available from Licensor as provided for in the corresponding Support Maintenance Agreement. In the course of Licensor providing Licensee with 'Software Support', Licensor may install updates and minor enhancements to Licensed software, data or data structures. 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 shall be construed to obligate Licensor to provide any services whatsoever to any Licensee who fails to maintain 'Software Support. d. Insurance. It is understood that Licensor is expected to complete most if not all on -site technical support within 2 months from the signing of this agreement. No less than 90 days from completion of the on -site portion of this agreement, Licensor will remove the Licensee as an additional insured from its insurance policies. Thereafter, Licensor agrees to maintain the agreed upon insurance coverage and to furnish Licensee with certificates of insurance evidencing the required coverages upon request. On or before beginning any of the services or work called for by any term of this Agreement, Licensor, at its own cost and expense, shall carry, maintain for the duration of the Agreement, and provide proof thereof that is acceptable to Licensee for the insurance specified in subsections (a) through (c) below with insurers and under forms of insurance satisfactory in all respects to Licensee. Licensor shall not allow any subcontractor to commence work on any subcontract until all insurance required of the Licensor has also been obtained for the subcontractor. 1. Workers' Compensation. Statutory Workers' Compensation Insurance and Employer's Liability Insurance for any and all persons employed directly or indirectly by Licensor shall be provided with limits not less than one million dollars ($1,000,000). In the alternative, Licensor may rely on a self-insurance program to meet these requirements so long as the program of self-insurance complies fully with the provisions of the California Labor Code. 2. Commercial General and Automobile Liability. Licensor, at Licensor's own expense, shall maintain commercial general and automobile liability insurance for the period covered by this Agreement in an amount not less than one million dollars ($1,000,000) per occurrence, combined single limit coverage for risks associated with the work contemplated by this Agreement. AGSOFTWR(2.6) Page 5 SOFTWARE LICENSE & SERVICES AGREEMENT 3. Each of the following shall be included in the insurance coverage or added as an endorsement to the policy: Licensee, its officers, employees, agents, and volunteers are to be covered as additional insureds as respects each of the following: liability arising out of activities performed by or on behalf of Licensor, including the insured's general supervision of Licensor; products and completed operations of Licensor; premises owned, occupied or used by Licensor; or automobiles owned, leased, hired, or borrowed by Licensor. The coverage shall contain no special limitations on the scope of protection afforded to Licensee, its officers, employees, agents or volunteers. 4. The insurance shall cover on an occurrence or an accident basis, and not on a claims made basis. 5. Any failure of Licensor to comply with reporting provisions of the policy shall not affect coverage provided to Licensee and its officers, employees, agents, and volunteers. 6. Insurance is to be placed with California -admitted insurers with AMBest's rating of no less than AVII. 7. Notice of cancellation or non -renewal must be received by Licensee at least thirty (30) days prior to such change. 8. Deductibles and Self -Insured Retentions. Licensor shall disclose the self -insured retentions and deductibles before beginning any of the services or work called for by any term of this Agreement. During the period covered by this Agreement, upon written notice to the Licensee Attorney, Licensor may increase such deductibles or self -insured retentions with respect to Licensee, its officers, employees, agents, and volunteers. 9. Notice of Reduction in Coverage. In the event that any coverage required under this section of the Agreement is reduced, limited, or materially affected in any other manner, Licensor shall provide written notice to Licensee at Licensor's earliest possible opportunity and in no case later than five (5) days after Licensor is notified of the Change in coverage. 10. If Licensor fails to provide or maintain any insurance policies or policy endorsements to the extent and within the time herein required, Licensee may, at its sole option: (i) Order Licensor to stop work under this Agreement, withhold any payment which becomes due to Licensor hereunder, or both stop work and withhold payment, until Licensor demonstrates compliance with the requirements thereof; (ii) Terminate this Agreement. Exercise of either remedy listed above is the sole and exclusive remedy for Licensor's failure to maintain insurance or to secure appropriate endorsements. IX. LICENSE FEES AND PAYMENTS a. Payment of the License fee authorizes use of the Licensed software by no more than the number of users specified below: Software (Utilizes/Requires Microsoft SQL licenses) Concurrent Licenses License Fee LicenseTrackT"' PetTrackTM BuildingTrackTM(includes CodeTrackTTM, ParcelTrackT"" & PermitTrackTM) Package License Discount Credit Card Connector Web Interface(each module)with PSI package 4 Users 4 Users 4 Users $17,000 $5,000 $35,000 ($4,000) $1,000 $8,500 Read only Users Unlimited Included Professional Services Units Extended Cost LicenseTrackTM Discounted conversion of all convertible records from $11,000 AGSOFTWR(2.6) Page 6 SOFTWARE LICENSE & SERVICES AGREEMENT PetTrackTM BuildingTrackTM data provided by city(package price) Discounted turnkey off -site configuration(package price) Discounted training(package price) $7,000 $7,400 Requested Modifications LicenseTrackTM PetTrackT" BuildingTrackT"" None None None Forms & Letters to be Customized* LicenseTrackTM PetTrackTM BuildingTrackT" Renewal, Delinquent, Underpayment & License Renewal, Delinquent, Underpayment & License Custom Letters Included Total Professional Services $25,400 Project Grand Total $87,900 * Whenever form or letter customization is quoted, unless otherwise specified, Licensee may expect Licensor to modify Licensor's standard formslformats'to accommodate Licensee's names, addresses, phone numbers, text, emblems, logos, and bank account numbers, etc. (List price $600) Deviations from Licensor's standard formats (such as creation of one or more entirely new forms) require additional effort and will be billed at Licensor's standard hourly rates. **Maintenance will be billed in May and will be due July 1st, 2007 . Travel expenses will be billed at our actual cost and limited to customary reasonable travel, ground transportation or auto rental fees, lodging and meal per diem expenses. 3rd Party Deliverables: Any required or desired hardware, software, and communications products not specifically included in the following table are Licensee's responsibility. This configuration represents Licensor's recommended products, and the cost is an estimate only, as the prices of the third -party vendors are subject to change without Licensor's approval. Also, Licensee understands that Licensor may decide to change this recommendation if Licensor believes a new solution is better suited for the proposed installation. Should this recommendation changes, Licensor will notify Licensee as soon as practical. Licensor makes no warranty, whether expressed or implied, regarding the components listed below and shall not be responsible for servicing such components. The components shall be subject only to manufacturers' warranties, if any. Su 3rd Party Products (Prices do not include sales tax) Cost Crystal Reports(run-time) $0.00 Application(s) authorized for use by specified sub -agency Sub -Agency LicenseTrackT"^ PetTrackTM BuildingTrackT" None None None b. All consultant service is billed portal to portal and subject to such minimum response charges as may then be in effect. c. Charges for additional support services will be invoiced to Client at the hourly rate (minimum of four (4) hours) in effect at the time of service and shall be payable thirty (30) working days from receipt of invoice. Consultant will submit invoices which reflect the date of service, staff -hours expended and a description of the services rendered. d. 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 all provisions of this Agreement will apply for the requested products or services. To avoid conflicting 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 conflict arise with any other unilateral writings of either party, this Agreement will govern. AGSOFTWR(2.6) Page 7 / SOFTWARE LICENSE & SERVICES AGREEMENT All documentation, programming and/or modifications shall be delivered via remote telecommunications from Licensors 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 shall reimburse Licensor for any state or local requirements which Licensor must obtain to provide services (i.e. additional insured certificates, etc.). Licensor shall obtain any necessary City business tax certificate prior to commencement of any work authorized by this Agreement at Licensor's expense, and shall maintain such certificate through the term of the Software Maintenance Agreement. e. Licensed software and Licensor supplied Hardware 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. f. 50% of the Software License fee will be billed upon execution of this Software & Services Agreement and due 15-days from date of invoice. Payment for services will be invoiced as stated below and due on a 15-day net basis from date of invoice. Payment milestones will include: ➢ Execution of Software License Agreement (50%) ➢ Acceptance of Software will trigger invoice for all remaining balances due in 30 days 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 shall be entitled to terminate this Agreement and Licensee shall immediately discontinue use of database/structure, software and related electronic forms. In addition, Licensee shall provide Licensor with written confirmation that previously licensed components have been erased and copies are no longer on Licensee's computer or backup tapes per section VII(c). Licensee agrees that failure to provide a 'Statement of Destruction' within 30 days from discontinuation of software use shall result in a $1,000 charge for each subsequent 7 day period until such statement has been provided. Licensor agrees to transmit a 'Statement of Destruction' to Licensee with a reminder that a 'Statement of Destruction' must be provided to Licensor prior to Licensor assessment of charges authorized by this section. b. In the event of default, Licensor shall be entitled to exercise any one 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. Xl. 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 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 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 several 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 AGSOFTWR(2.6) Page 8 SOFTWARE LICENSE & SERVICES AGREEMENT XII. EXECUTION Effective this 21st Licensor: PROGRESSIVE SOLUTIONS® P O BOX 783 BREA CA 92822-0783 Authorized Representative (714) 671-1597 Title: President day of November , 2006 Licensee: CITY OF NATIONAL CITY 1243 NATIONAL CITY BLVD. NATIONAL CITY CA 91950-4397 Authorized Representative Ron Morrieon, Mayor (619 ) 336-4526 Phone Number (Type or Print) Approved as to form: George H. Eiser, III, City Attorney Attest by: Michael R. Dalla, City Clerk AGSOFTWR(2.6) Page 10 SOFTWARE LICENSE & SERVICES AGREEMENT any other provision in the future unless such waiver has rendered future performance commercially impossible. c. Except in the event of a merger or substantial sale of assets, neither this Agreement, 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 shall 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 providing an email containing the same notification has been sent to the designated contact. 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. h. In the event that any one 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. i. During the term of the relationship between Licensee and Licensor ("Services Period"), and for a consecutive one (1) year period following termination of Services for any reason, whether voluntary or involuntary (the "Post Services Period"), Client shall not directly or indirectly, or by action in concert with others, induce or influence, or seek to induce or influence, any employee, agent, independent consultant, or other business affiliate of Licensor ("Consultant Associate") to terminate his/her relationship with Licensor. j• Licensee acknowledges that should he violate any of the covenants contained in this Agreement, it will be difficult to determine the resulting damages to Licensor and, in addition to any other remedies Licensor may have, Licensor shall be entitled to temporary and permanent injunctive relief without the necessity of proving actual damages, or posting bond. k. To compensate Licensor for his investment of time training said Consultant Associate (as that term is defined above) and to Compensate Licensor for having to retrain a new Consultant Associate, Licensee agrees that for every Consultant Associate who Licensee retains as a consultant for the duration of this agreement & the Post Service Periods, Licensee shall pay Licensor 50% of all gross moneys spent for services with said Consultant Associate during the first year following termination of the relationship. For each Consultant Associate that Licensee retains as an employee, Licensee agrees to pay Licensor a fee equal to 50% of the solicited Consultant Associates' first year salary. AGSOFTWR(2.6) Page 9 EXHIBIT A: SOFTWARE MAINTENANCE d) 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 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 Licensor's share desktop facility, Microsoft®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 98/ME/NT/2000/2003 or XP, and completed installation of (licensed software, Netmeeting®, PCAnywhere®, Microsoft® Access® and/or Microsoft® SQL tools). In the event Licensor deems 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 services 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. e) To minimize Licensee costs, to eliminate any requirement for manual update of validation and/or zip plus four codes, to allow for other on line validations (such as contractor's license, sales tax permit, pet microchip owner information retrieval etc.) and to maximize uptime of zip plus four & Licensed software validations, the Licensed software should optimally be configured for internet access to the designated PSI Internet address. Consequently users of the Licensed software may periodically obtain the latest zip plus four data and validation codes. Absent this configuration, to obtain automated zip plus four (4) functionality, Licensee must purchase a zip plus four (4) data subscription and designate staff to install such zip plus four updates every three (3) months. Failure to promptly update zip plus four data will cause disruption of the zip plus four (4) functionality. Furthermore absent internet access, any other possible automated validations are reduced to manual processes. f) 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 direct staff, a Licensee retained consultant or Licensor (at Licensee's cost) to evaluate network/software performance. Such network evaluation shall utilize "Network Sniffer" or equivalent tools to facilitate generation of quantitative results. Licensee agrees to request & incorporate Licensor's recommendations in the network evaluation work plan. Licensee further agrees to transmit the results of such work to Licensor for review and to withhold publication of such results until after implementation of all Licensor recommendations. Requests of Licensor for performance troubleshooting (such as speed and network connection issues) in which Licensor receives prior written authorization to collect factual data and subsequently presents a determination that performance issue(s) is/are network related will be billed at the rates in effect at the time of service. g) 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. Licensee agrees to allow 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. Upon expiration pursuant to section II or demand by Licensor made pursuant to the default provisions of the. corresponding Software License Agreement, Licensee shall discontinue use of Licensor's database/structure, software & related electronic forms. In addition, Licensee shall provide Licensor with written confirmation that previously licensed components have been erased and copies are no longer on Licensee's computer or backup tapes. Licensee agrees that failure to provide a 'Statement of Destruction' within 30 days from discontinuation of software use shall result in a $1,000 charge for each subsequent 7 day period until such statement has been provided. AGSOFTMT(2.5) Page 2 EXHIBIT A: SOFTWARE MAINTENANCE AGREEMENT I. INTRODUCTION. Progressive Solutions®, a California corporation herein after referred to as "Licensor" and City of National City, a municipal corporation, herein after referred to as "Licensee" agree to the following terms and conditions. II. NATURE AND DURATION OF SUPPORT. Licensor is in the business of providing software support services. Software support services are intended to facilitate smooth & efficient ongoing operations of the Licensed software. Licensee desires to obtain software support services for the Licensed software specified in section V. This Agreement provides for service only during normal business hours (8am to 5pm PST) and shall expire at 5:00 PM Pacific Standard Time on June 30, 2007 unless renewed as set forth below. Support outside of normal business hours is available for purchase. Requests for service for which the intended result is of negligible operational benefit are not available free of additional charge under this software support agreement. (i.e. Changing the name of a server (absent a hardware upgrade) which consequently results in the need to reinstall/verify the SQL data base software, the operating system, the Licensed software and to update every client machine which run the Licensed software.) Licensees that purchase after hours support will be provided with the appropriate contact information. Licensor reserves the right to prorate the software support fee and provide more or less than one year of coverage so that subsequent Software Maintenance Agreements expire on June 30th. Unless written notice of termination 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 each year thereafter for an additional year at the support rate in effect at that time. In the event Licensee drops coverage of any module/product and later requests to reinstate the same module/product, Licensee agrees to pay all support fees for the lapsed period(s). III. LICENSEE'S RIGHTS AND OBLIGATIONS a) Training for users, managers and other personnel is essential for efficient operation of the Licensed software. Licensee will designate one employee as a primary contact for each Licensed software application. The designee must have been trained on the Licensed software. This primary support contact should be one who both 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. Should training services be required, they may be scheduled at the rates in effect at the time of service. Such training is neither available nor appropriate via customer support lines. 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) Software corrections are defined as: Licensor software updates as well as specified operating system patches. Licensee agrees to implement software corrections that have been identified as necessary by Licensor and to ensure that the requirements identified in Exhibit B: (Requirements) are met by all machines intended to execute the Licensed software. Failure to implement those identified software corrections or to maintain the specified requirements shall relieve Licensor from any and all 'Software Support' responsibilities relating to any Licensee reported issue(s) that the Licensor correction(s) was/were offered to address. In the event Licensee fails to implement identified software corrections, any subsequent services relating to the Licensee reported issue(s) will only be provided on an emergency time and materials basis. Unlike the business models of other providers where products become obsolete, Licensor continually improves the software and offers upgrades which are included with software maintenance. It is highly recommended that staff receive additional training at least every 5 years so staff may benefit from and be able to take full advantage of the accumulated new features. c) Licensee will preserve the confidential nature of the Licensed software and related media and will not make copies, including partial copies or updated versions thereof, except for internal reference, archive or backup purposes. Licensee agrees to conscientiously ensure the existence of functional daily backups for at least the last 10 business days and shall not remove or disable any SQL agent or backup plan initiated by PSI without both notification to PSI and at least monthly testing of any subsequently implemented alternate backup plan. If the backup plan is altered or disabled without notification to PSI, and there is a resulting data loss, an additional charge may be incurred for requested data recovery services. AGSOFTMT(2.5) Page 1 EXHIBIT A: SOFTWARE MAINTENANCE 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 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. VII. EXECUTION Effective this 21st Licensor: Progressive Solutions® P 0 Box 783 Brea CA 92822-0783 Athorized Representative (714) 671-1597 day of November , 2006 Licensee: City of National City 1243 National City Blvd. Nation ity CA 91950-4397 Authorized Representative Ron Morrison, Mayor ( 619 ) 336-4526 Phone Number (Type or Print) AGSOFTMT(2.5) Page 2 EXHIBIT A: SOFTWARE MAINTENANCE AGREEMENT 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 and/or minor enhancements to Licensed software, data or data structures, which may become available from Licensor without additional charge. Furthermore, in the course of Licensor providing Licensee with support services, upon direction, Licensor may install (or instruct Licensee on installation of) the above mentioned updates and minor enhancements to Licensed software, data or data structures. (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 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. 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 is due in advance. 'Software Support' services will not be provided until such advance payment has been received Licensed Software Annual Support Fee Prorated Fee LicenseTrackTm- 4 Users PetTrackTM- 4 Users BuildingTrackTM- 4 Users LicenseTrackTM Web Renewal $3,700 $2,200 $4,500 $1,000 $0.00 $0.00 $0.00 $0.00 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 quality -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 term 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 forms 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 forms, mailings, and/or reports. Licensor's annual software maintenance does not include the provision of technical support for user written customized Crustal Reports. 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 personal property such as storage media. Licensee shall reimburse Licensor for any state and or local requirements, which Licensor must meet or AGSOFTMT(2.5) Page 3 A v EXHIBIT C: REVENUE RECOVERY SOFTWARE & PROFESSIONAL SERVICES AGREEMENT 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 upon request. 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. A. CITY and PSI shall have the right to terminate this AGREEMENT, without cause, by giving not Tess than thirty (30) days written notice of termination. B. If PSI or CITY fail to perform any of its material obligations under this AGREEMENT, in addition to all other remedies provided by law, either party may terminate this AGREEMENT immediately upon written notice. C. The Finance Director 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 software and 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 subsequent 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". Page 6 EXHIBIT C: REVENUE RECOVERY SOFTWARE & PROFESSIONAL SERVICES AGREEMENT of future liabilities within 5 days from the date the benefits take effect or from receipt of notification whichever is first (Or allow PSI internet access to such data). o All other relevant information and progress reports received related to the above REALIZED BENEFITS and payment. (Or allow PSI internet access to such data) o Any proposed change in municipal law which has the potential to impact this agreement at least 60 days prior to implementation of the change. PSI will then reserve the right to either reaffirm or renegotiate the terms of this agreement. ■ Make payment to PSI: o Within 24 hours of decisions by the Finance Director to modify amounts due from audits or other findings. In such cases, CONTINGENT FEES resulting from any modified amounts shall become NON CONTINGENT. o Within 14 days from receipt of PSI's invoice for NON CONTINGENT expenses. City agrees that payment shall not be delayed even if no funds have been recovered. o Within 14 days from receipt of PSI's invoice for CONTINGENT expenses which do not exceed the aggregate revenue recovered under this agreement or any subsequent agreements. o Within 30 days from receipt of PSI's invoice for contingent RECURRING recoveries. 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 CITY 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 attorney's 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 Page 5 EXHIBIT C: REVENUE RECOVERY SOFTWARE & PROFESSIONAL SERVICES AGREEMENT be due and payable upon the date of the decision. Otherwise the contingency fee due to PSI shall be based upon the amount(s) due per the submitted PSI report of findings. Audit related contingency fees will be calculated from the report of findings and invoiced to CITY no earlier than 14 days from presentation of audit report(s) to CITY staff for their review. In the event PSI findings are found to be invalid by an administrative or judicial proceeding, PSI will revise said findings and credit CITY with any CONTINGENT FEES paid. 1) CITY agrees to pay CONTINGENT FEES to PSI from recoveries of REALIZED BENEFITS such as deficiencies 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 in lieu or as a result of audits, licensed software or other PSI provided service. 2) CONTINGENT FEE CALCULATIONS: When PSI's audits, licensed software or other PSI provided services result in the detection and correction of errors/omissions 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 plus revenue recovered during the first twelve consecutive quarters following correction. 100% of the REALIZED BENEFITS shall apply toward reimbursable costs and NON CONTINGENT expenses. For all funds recovered (REALIZED BENEFITS) in excess of the cost of the software, support costs and NON CONTINGENT expenses, CITY shall pay PSI a 15% Contingent Fee of REALIZED BENEFITS. In the event that software, support and expense costs are not fully recovered within the first year, REALIZED BENEFITS in subsequent years will be applied to any remaining balances. SECTION 5 CITY'S OBLIGATIONS To facilitate revenue recovery via audits and/or 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 and protocol for inviting businesses for question & answer sessions, hearings and/or appeals regarding scheduled audits. • Requests for information (as required for revenue recovery purposes) from third parties (such as the state, county, trash & utility companies, etc.) • Codes & ordinances covering each tax recovery effort authorized by the CITY. • Resources for obtaining state franchise tax (AB63) and/or state board of equalization (AB990) data. • Resources for importing and processing AB63 & AB990 data to affect revenue recovery. With regard to REALIZED BENEFITS and CONTINGENT FEES, the CITY agrees to: • With the exception of waiving penalties to facilitate timely revenue recovery, City agrees as a rule to require payments in accord with the appropriate municipal code sections and especially with regard to requiring payment of all current & prior year obligations. • Invoice responsible parties via the business licensing system for REALIZED BENEFITS resulting from PSI's software or services within 15 days of notification. • Notify PSI in writing of: o Recovery payments received within 5 days from receipt (Or allow PSI internet access to such data) so that PSI may invoice the CITY. o Decisions or communications which document CITY's benefit from REALIZED BENEFITS including, but not limited to, increased accounts receivable (including tax levy), reduction of prior, current and future accounts payable and the reduction Page 4 EXHIBIT C: REVENUE RECOVERY SOFTWARE & PROFESSIONAL SERVICES AGREEMENT payments made on exempt purchases, reduction of prior, current and future accounts payable and the reduction of future liabilities. "CONTINGENT FEE" shall be defined as compensation to PSI in consideration of the timely and faithful performance of services set forth in this AGREEMENT (such as initial setup, training & other services). Such fees shall be earned by PSI for REALIZED BENEFITS obtained by the CITY due to PSI's efforts, use of the cross referencing or SBE notification capabilities of the licensed business license software. As situations may arise where legal or other challenges limit PSI's ability to perform services or obtain compensation, CITY shall ensure continuation of services via payment of non contingent fees. Such challenges may result from potential or actual litigation arising from CITY municipal code, ordinances, resolutions, policies, procedure, etc. Other possible challenges include but are not limited to: refusal of access to records & litigation. "NON CONTINGENT FEE" shall be defined as reimbursement of all or part of PSI's costs. Payments of NON CONTINGENT FEES shall reduce contingency fees due to PSI as explained in paragraph 2 below. Minimum fees shall be the greater of the 15% recovery findings or the stated amounts below. Examples of non contingent costs relating to PSI provided services include: ➢ $750 minimum fee for each field business or occupancy tax audit (including written audit findings) ➢ $50 minimum for each desk business tax audit ➢ $1,250 for each field franchise fee audit (including written audit findings) ➢ all reasonable related expenses incurred Reasonable expenses shall include but are not limited to: meals, transportation, lodging, postage and costs of data obtained to identify non compliant businesses & individuals. "ONE TIME" recoveries shall be defined as REALIZED BENEFITS derived from Audits of Transient Occupancy, Business License and/or other data. Audits may be prioritized and scheduled for licensed businesses to examine documentation generated within the audit period (typically for the current and 3 prior years). "ONGOING" recoveries shall be defined as REALIZED BENEFITS derived from newly identified businesses, sales tax misallocations or existing businesses without resale permits that have been identified as requiring them. PSI professional services as well as PSI revenue enhancement software & services are provided as a backstop audit program which supplements services currently provided by another vendor. PSI will provide a mechanism for flagging PSI 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). As a direct result of this agreement, the CITY obtains the potential of a large financial return with limited financial outlay. As no budget commitment need be made by the CITY, all risk is absorbed by PSI. PSI business licensing software has been designed to facilitate follow-up notice processing. Software license and maintenance fees are documented in separate Software License and Maintenance Agreements which are incorporated by reference herein. PSI will present CITY with a report of findings based upon the municipal code in effect at the time. Should CITY elect to waive or exempt payment of all or part of the amounts due (as reported by PSI) for any reason, the Finance Director will have 14 days from notification of realized benefits identified to modify the amount(s) due. In such case the contingency fee due to PSI shall be based upon the amount due determined by the Finance Director. Consequently, the contingent payment shall Page 3 0" EXHIBIT C: REVENUE RECOVERY SOFTWARE & PROFESSIONAL SERVICES AGREEMENT • Provide staff to perform either field or desk audits of Business Registration, Transient Occupancy, Franchise and/or other Audits ■ Upon completion of any audit, prepare findings, submit report to city & attach audit report to the appropriate account. • Collaboratively (with CITY staff) perform identification of businesses that should be contacted regarding a business outreach program to increase the amount use tax that is self accrued to the CITY. • Augment CITY staffs knowledge of existing information systems and related data in order to generate additional "audit leads" for both allocation and noncompliance situations. ■ Provide CITY with invoices which document the nature of CITY'S REALIZED BENEFITS and taxpayer identification (i.e. account, FEIN, SEIN or resale numbers) As CITY budgets and funding are often constrained, this agreement provides software for revenue enhancement services/software which facilitate significant revenue recovery. Any authorized revenue recovery audits are generally performed by reviewing the current year and the prior 3 years records at the same time. Postponement of audits or other services would likely cost the CITY countless dollars should any delay limit the revenue recovery period. Financially responsible cities generally elect to continue audit and other services to retain the possibility of significant revenue recovery. PSI is expected to expand opportunities for both CITY and PSI to realize additional Revenue. Revenue recovery activities shall be approved by CITY in writing prior to implementation. 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 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 programs, development disposition and development agreements and in other related areas as questions arise. SECTION 2 TERM OF AGREEMENT. The term of this AGREEMENT shall be from December 1, 2006 to November 30, 2009, 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 by implementing the revenue recovery automation suite, customizing recovery letters, providing answers to frequently asked questions and instruction. Recovery projects may be initiated by CITY and assigned to PSI under this AGREEMENT until November 30, 2009. The CITY, subsequent to November 30, 2009, 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 An initial Setup Fee of $2,500 shall be paid to PSI by CITY for a nonexclusive revenue recovery software license, training and related services. Payment of the Service Fee shall be paid to PSI from revenue recovery benefits realized by the CITY. "REALIZED BENEFITS" shall be defined as increased CITY accounts receivable due to the identification or non-payment and/or underpayment of a tax (including tax levy), receipt of an audit report which verifies the city has received the full extent of tax due, recovery of tax Page 2 EXHIBIT C: REVENUE RECOVERY SOFTWARE & PROFESSIONAL SERVICES AGREEMENT THIS AGREEMENT by and between the CITY OF NATIONAL CITY, a municipal corporation, hereinafter referred to as "CITY", and PROGRESSIVE SOLUTIONS, INC., a California Corporation, hereinafter referred to as "PSI" is made and entered into on December 1, 2006. RECITALS WHEREAS, the CITY desires to obtain state of the art revenue recovery automation & professional services to augment CITY's revenue enhancement efforts; and WHEREAS, PSI has the necessary software, professional expertise and skill to provide such services. NOW, THEREFORE, the purpose of this AGREEMENT is to retain PSI as a consultant to CITY to implement the revenue recovery module and to perform services specified in SECTION 1 of this AGREEMENT as authorized by CITY. THE PARTIES HEREBY AGREE AS FOLLOWS: SECTION 1 SCOPE OF OFFERING. PSI shall assist CITY staff to maximize CITY's revenue recovery results. To that end, upon direction of the Finance Director or designee, PSI shall: License Revenue Recovery Automation for City Staff: ■ Implement state of the art —revenue recovery/discovery software suite which will: o Automate processing of AB990 data, AB63 data and other data • Provide appropriate written responses to Frequently Asked Questions (FAQ's) as well as detailed procedures. • Perform cross checks using revenue recovery software and available data. • Automatically create leads for automated follow-up. • Create letters for notification of non compliance as well as providing a tracking mechanism for all additional follow-up. ■ Provide generation of ad hoc reports of payment received as a result of non compliant business discovery efforts over any period (day, week, month, year etc.). o Automate Business, Transient Occupancy, Franchise & other Audits • Provide appropriate written responses to Frequently Asked Questions (FAQ's) as well as detailed procedures. • Provide staff with ability to prioritize audit leads and flag/select leads for audit. ■ Provide staff with ability to review both completed as well as assigned audits. • Provide staff with ability to enter audit data and consequently have the system automatically generate audit findings invoices. • Provide generation of ad hoc reports of payment received as a result of audit findings over any period (day, week, month, year etc.). o Automate electronic transmission of data for submittal to SBE (State Board of Equalization) to correct misallocations, and follow-through to ensure that the SBE makes the corrections. o Facilitate revenue trend analysis & forecasting. o Provide ability for staff to evaluate the success of all recovery endeavors at any time. Optional Services • Collaborate with CITY staff to identify service priorities. ■ 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. Page 1 Exhibit B: Progressive Solutions'® Implementation Prerequisites Done General Tasks Notes Send us your initial payment and signed: • Software License and Services agreement • Software Maintenance Agreement • Purchase Order (which references the terms of the software license, services & maintenance agreements) Send us a digitized image of your city logo Designate the name of the server that will host the SQL data and have the SQL tools loaded. Send us a copy of your Municipal Code relating to Business Licensing for our review. Have someone from IS contact us so that we may verify our ability to access your SQL & file servers via the internet. Identify all financial accounts to be posted to and transmit accounts to us. Create a share named 'PSI' on the designated file or SQL server. Provide us with both the file server name and IP address. (Be sure to provide our user with the appropriate security to access this area.) We will use this share location to load our program & implementation files. Done LicenseTrack Tasks Notes Send us the complete set of current migration data (with logical field labels) and desired city forms/formats so that our staff may begin to migrate your data and to recreate your forms on the new system. (Business Licensing) If there are changes or improvements that you would like to have, include notations along with the forms. Software and converted data installed at city. Basic training provided for review of suitability/functionality Review proposed forms and provide comments for implementation. Notify PSI of your desired go live/implementation dates. Done Ca$hierCentral Tasks Hardware ordered and delivered. Identify and document the location of all proposed registers Order/prepare personal computers for implementation as registers and determine the appropriate computer names. Inform PSI of the serial connector type on each PC (DB9 or DB25) Identify and forward all general ledger (GL) accounts to be posted to, their contra accounts and all charge code abbreviations. Charge codes are the codes used at the registers which point to GL accounts. They consist of a code and a description. The code can be the entire GL number or an abbreviation that is unique to the financial account (either alpha or numeric) to facilitate data entry. If you are going to be processing credit cards, a Windows 2000 or XP workstation is required. Notify PSI of your desired go live/implementation dates. Progressive Solutions®; PO Box 783 Brea, CA 92822; voice: (714)671-1597 fax: (714) 255-9775 www.progressivesolutions.com Exhibit B: Progressive Solutions'® Server & Workstation Requirements Recommended Minimum Network Server Operating System Microsoft® Windows© 2003 Server or Advanced Server Microsoft® Windows 2000, Novell®Netwaze 4.x Network Server Equipment • Pentium® IV (1.2 Ghz or faster) • 2 GB or more available RAM • 30 GB SCSI Ultra 160 Hard -Disk Space • Color SVGA .28 Monitor • 100 mbit Ethernet Network Card • 100 mbit Ethernet Switch • 24x CD-ROM Drive • Pentium® II (750 Mhz) - 1 GB of available RAM • 10 GB SCSI Hard -Disk Space • Color SVGA .28 Monitor • 10 mbit Ethernet Network Card • 10 mbit Ethernet Hub • CD-ROM Drive All hardware must be Microsoft®/Novell® certified (request printed certification documents). Database Server Equipment Use the Recommended Network Server or for better performance, use a separate Database Server (same specifications as the Network Server). • Microsoft® Windows® 2000 • If Novell® Netware is the Network Operating System, install a separate Database Server. Software Microsoft® SQL Server 2003 or 2005 Standard or Enterprise Edition with .NET 2.0 installed Same as recommended. Network Server & Database Server Power Protection Same as required. True On -Line UPS, 600 Volt amps minimum with UPS Monitoring card, cable, and software. Explanation: Using a surge protector will only address I % of the potential power problems. On -Line protection will protect against an additional 80% of the potential power problems. When commercial power fails, the UPS monitoring card will close all open files and shutdown the file server safely. Some SPS (Switching Power Supply) vendors refer to their SPS products as UPS products. An SPS will NOT provide sufficient protection against sags, brownouts, etc. Workstation Computer • Pentium® IV (1 Ghz or faster) • 128 MB of available RAM • 10 GB Hard -Disk Space • Color SVGA .28 Monitor • 24x CD-ROM Drive • Pentium®11(500 Mhz) • 64 MB of available RAM • 4 GB Hard -Disk Space • Color SVGA .28 Monitor • CD-ROM Drive Workstation Operating System Microsoft® Windows® XP Professional with latest .NET framework Microsoft® Windows® 2000 with latest .NET framework Workstation Power Protection Same as required. Combination On -Line conditioner and surge protector. Tape Backup System Same as required. Network -quality system to backup fileserver hard drive on one tape and provide tape read after write verification. Data File Transfer Same as required. CDR/CDRW Drive Printer Hewlett Packard® 5, 6, or 7 series, Hewlett Packard® 4000 — 5000 Laser Printer with HPCL or PostScript fonts About Dot Matrix Printers: In Microsoft® Windows®, dot matrix printers print slowly. Often dot matrix printers DO NOT have adequate graphic drivers. Internet Access Same as required. CABLE, DSL, ISDN, or T1 Explanation: Progressive Solutions® applications requires Internet access to download program updatcs. Using an Internet connection that is slower than 256 Kbps will take significantly longer to download data. E-mail Same as required. Microsoft® Outlook®. Network Installer Same as required. Microsoft® or Novell® Authorized and Certified Report Modification Crystal Reports Version 8.5 Crystal Reports Version 8.5 Redundancy A RAID solution for data and web operations No redundancy Progressive Solutions®; PO Box 783 Brea, CA 92822; voice: (714)671-1597fax: (714) 255-9775 www.progressivesolutions.com EXHIBIT C: REVENUE RECOVERY SOFTWARE & PROFESSIONAL SERVICES AGREEMENT 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. 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, Finance Director, 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 of National City Finance Director 1243 National City Blvd. National City, CA 91950-4397 PSI: Progressive Solutions, Inc P.O. Box 783 Brea, CA 92822 Notices shall be deemed effective on the date personally delivered or, if mailed, three (3) days after deposit in the mail. Page 7 EXHIBIT C: REVENUE RECOVERY SOFTWARE & PROFESSIONAL SERVICES AGREEMENT 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 NATIONAL CITY By: Title: Ron Morrison, Mayor Date: November 21, 2006 PROGRESSIVE SOLUTIONS® By: -,L1�- Title: it,-/ Date: //PA� Page 8 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 SOLUTIONS® By: Title: President Date: 11/7/2006 Page 9 RESOLUTION NO. 2006 — 230 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY AUTHORIZING WAIVER OF THE FORMAL BIDDING PROCESS, AND AWARDING A CONTRACT TO PROGRESSIVE SOLUTIONS, INC. FOR LICENSE TRACK, PET TRACK, AND PERMIT TRACK SOFTWARE SYSTEMS WHEREAS, the City's current software for business license, pet license and permit tracking is limited in support, unreliable, inefficient, impedes the City's ability to collect taxes and other revenues, and does not support web -based transactions; and WHEREAS, staff from the Building, Finance, Fire, and M.I.S. Departments have evaluated a software system provided by Progressive Solutions, Inc., and concluded that this system would increase revenue generation, is the best system available, and is the only system available to meet the City's unique requirements; and WHEREAS, City staff recommends that the formal bidding requirement be waived, and that Progressive Solutions, Inc. be awarded the contract for License Track, Pet Track, and Permit Track software systems, in the amount of $87,900.00 for the following reasons: 1. M.I.S. and Finance have worked with Progressive Solutions on the cashier system project, and is comfortable with the quality of their work, their technical expertise, and reliability. MIS also has first-hand knowledge of (and confidence in) Progressive Solution's engineering service and support capabilities. Progressive Solutions has already integrated their cashiering module with our financial system providing a benefit for the purchase of the additional modules. 2. Since Progressive Solutions was involved in building the City's cashier system, they understand the scope of work. 3. Progressive Solutions is familiar with M.I.S. and Finances projects for the City, and they understand the immediate and long-term needs and goals for software projects. 4. No further purpose would be served by issuing a formal bid at this point in the process.; and WHEREAS, pursuant to Section 12.60.220(D) of the National City Municipal Code, the Purchasing Agent may dispense with the requirements of the bidding process when the City Council determines that due to special circumstances, it is in the City's best interest to purchase a commodity or enter into a contract without compliance with the bidding procedure. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of National City finds that special circumstances exist, and authorizes the waiver of the bidding process, and awards a contract to Progressive Solutions, Inc. for the purchase of License Track, Pet Track and Permit Track software systems in the amount of $87,900.00. --- Signature Page to Follow --- Resolution No. 2006 — 230 November 21, 2006 Page 2 PASSED and ADOPTED this 21st day of Novemb 2006. on Morrison, Mayor ATTEST: Mich el R. Della, 'f y Clerk APPROVED AS TO FORM: George }�I. iser, III City Attorney Passed and adopted by the Council of the City of National City, California, on November 21, 2006, by the following vote, to -wit: Ayes: Councilmembers Inzunza, Morrison, Natividad , Parra. Nays: None. Absent: Zarate . Abstain: None. AUTHENTICATED BY: By: NICK INZUNZA Mayor of the City of National City, California C rkofthei f/ ational City, California Deputy I HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of RESOLUTION NO. 2006-230 of the City of National City, California, passed and adopted by the Council of said City on November 21, 2006. City Clerk of the City of National City, California By: Deputy City ty o EXPLANATION See attached City of National City, California COUNCIL AGENDA STATEMENT MEETING DATES Nov 21, 2006 AGENDA ITEM NO. 9 ITEM TITLE Resolution waiving the bid process, and awarding a contract to Progressive Solutions for License Track & PetTrack and Building Permit Track Software in the amount of $87,900.00 using PC Maintenance Funds. PREPARED BY DEPARTMENT Gabby S riano - 4378 City Manager/ Information Technology Environmental Review Financial Statement ✓ N/A Funds are available in FY 06/07 PC Maintenance Fund %,„ Qtcu�o'' Account No.629-415-000-281-0000 STAFF RECOMMENDATION In conjunction with the Purchasing Agent, it is recommended that award be made to Progressive Solutions, and that authority be given to the Purchasing Agent to issue the resulting purchase order. BOARD / COMMISSION RECOMMENDATION N/A ATTACHMENTS ( Listed Below ) Resolution Contract Resolution No. ZOO (o - 23 Q A-200 (9/80) C Coal, E. �/ EXPLANATION: One of the MIS departmental goals was to aide the finance and building department in the replacement of the current business, pet license, and permit tracking system. The current software is limited in support, unreliable, inefficient, and prevents the City's ability to collect taxes and other revenues and does not support web based transactions. It has been a tedious and time consuming process to retrieve and input data from such an antiquated system. Staff has had many instances where it has been difficult to obtain support from the software provider which is located on the east coast. On January 1/1/07 our current vendor will be increasing their price on third party software by 6%. Currently we pay about $9,000.00 for renewal fees yearly not to include over $3,000 for additional modules and applications and yearly conversions. Another component being added to this new system will be a web interface. This component will promote e-govt. and provide businesses and citizens to initiate financial transactions over the internet. Payments for business licenses, building permits, and pet licensing, can be made at the counter or over the internet. Staff from the building, finance and fire depaitiuent have previewed and evaluated the new software and highly recommend the purchase of this software system. Staff concluded that Progressive Solution, Inc. provides the best system available and the only system available to meet National City's unique requirements. The new system would increase revenue generation through more efficient identification, billing and collection from noncompliant and delinquent licensing and permitting. The new software would be installed this fiscal year. It is requested that Council waive the formal bidding requirements as allowed in Section 12 of Purchasing Ordinance #1480, and in Chapter 2.60.220(d) of the Municipal Code, and award the contract to Progressive Solutions, the for the following reasons: 1. M.I.S. and Finance have worked with Progressive Solutions on the Cashier system project, and is comfortable with the quality of their work, their technical expertise, and reliability. MIS also has first-hand knowledge of (and confidence in) Progressive Solution's engineering service and support capabilities. Progressive Solutions have already integrated their cashiering module with our financial system providing a benefit for the purchase of the additional modules. 2. Since Progressive Solutions was involved in building the City's Cashier system, they understand the scope of work. 3. Progressive Solutions is familiar with M.I.S., and Finances projects for the City, and they understand the immediate and long-term needs and goals for software projects. 4. No further purpose would be served by issuing a formal bid at this point in the process. As authorized by Purchasing Ordinance #1480, section 12a4, it is requested that the City Council declare that special circumstances exist, and that it is in the City's best interest to buy the LicenseTrack, PetTrack & Permit Track systems, without compliance with the formal bid process. Total value of the purchase will be $87,900.00 including tax, installation and delivery. RESOLUTION NO. 2006 — RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY AUTHORIZING WAIVER OF THE FORMAL BIDDING PROCESS, AND AWARDING A CONTRACT TO PROGRESSIVE SOLUTIONS, INC. FOR LICENSE TRACK, PET TRACK, AND PERMIT TRACK SOFTWARE SYSTEMS WHEREAS, the City's current software for business license, pet license and permit tracking is limited in support, unreliable, inefficient, impedes the City's ability to collect taxes and other revenues, and does not support web -based transactions; and WHEREAS, staff from the Building, Finance, Fire, and M.I.S. Departments have evaluated a software system provided by Progressive Solutions, Inc., and concluded that this system would increase revenue generation, is the best system available, and is the only system available to meet the City's unique requirements; and WHEREAS, City staff recommends that the formal bidding requirement be waived, and that Progressive Solutions, Inc. be awarded the contract for License Track, Pet Track, and Permit Track software systems, in the amount of $87,900.00 for the following reasons: 1. M.I.S. and Finance have worked with Progressive Solutions on the cashier system project, and is comfortable with the quality of their work, their technical expertise, and reliability. MIS also has first-hand knowledge of (and confidence in) Progressive Solution's engineering service and support capabilities. Progressive Solutions has already integrated their cashiering module with our financial system providing a benefit for the purchase of the additional modules. 2. Since Progressive Solutions was involved in building the City's cashier system, they understand the scope of work. 3. Progressive Solutions is familiar with M.I.S. and Finance's projects for the City, and they understand the immediate and long-term needs and goals for software projects. 4. No further purpose would be served by issuing a formal bid at this point in the process.; and WHEREAS, pursuant to Section 12.60.220(D) of the National City Municipal Code, the Purchasing Agent may dispense with the requirements of the bidding process when the City Council determines that due to special circumstances, it is in the City's best interest to purchase a commodity or enter into a contract without compliance with the bidding procedure. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of National City finds that special circumstances exist, and authorizes the waiver of the bidding process, and awards a contract to Progressive Solutions, Inc. for the purchase of License Track, Pet Track and Permit Track software systems in the amount of $87,900.00. --- Signature Page to Follow --- Resolution No. 2006 — November 21, 2006 Page 2 PASSED and ADOPTED this 21' day of November, 2006. Nick Inzunza, Mayor ATTEST: Michael R. Dalla, City Clerk APPROVED AS TO FORM: George H. Eiser, III City Attorney SOFTWARE LICENSE & SERVICES AGREEMENT I. INTRODUCTION Progressive Solutions®, Incorporated, a California corporation herein after referred to as 'Licensor' and City of National City, a municipal corporation, herein after referred to as 'Licensee' agree to the following terms and conditions. 'Software Maintenance' refers to Exhibit A: (Software Maintenance Agreement) which is incorporated by reference herein. 'Requirements' refers to those requirements identified in Exhibit B: (Requirements/ Prerequisites) which is incorporated by reference herein. 'Revenue Enhancement' refers to Exhibit C: (Revenue Enhancement Agreement) which is incorporated by reference herein. a. Licensor hereby grants and Licensee accepts a non-exclusive and non -transferable license to use Licensors database structure and corresponding software for the product(s) listed in Section IX using Microsoft® SQL Server® as the data base engine. Licenses for SQL software are not included in this agreement unless listed as 3rd party deliverables in Section IX. Only authorized Sub -agencies as specified in Section IX and Licensee are authorized to use the Licensed software, data structures & documentation on Licensee's premises for the purpose of supporting the internal business practices. No other right or use is permitted under this Agreement. 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 the attached Software Maintenance Agreement or subsequent renewals of the Software Maintenance Agreement which are incorporated by reference herein. 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 IX 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 IX, 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 Licensors 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, and/or enhancements. c. Title, ownership and control of Licensee's data shall be retained by Licensee. AGSOFTWR(2.6) Page 1 SOFTWARE LICENSE & SERVICES AGREEMENT IV. LIMITED WARRANTY a. Licensor warrants that it has developed, owns, and/or possesses all rights and interests in the Licensed software necessary to enter into this 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. While Licensor generally works as fast as Licensee will allow and can provide an estimated go live date, unless Licensee has purchased a PSI Guaranteed Time Frame Implementation, Licensor cannot guarantee a go live date as part of this agreement. A guaranteed or estimated go live date may only be provided once Licensee provides Licensor with the required items identified in Exhibit B-Requirements/Prerequisites (such as an executed agreement, initial payment, access to Licensee's network, etc.) for each Licensed product. 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® NT, 2000, 2003 & XP. The initial 'Software Support' period shall commence on the date the software Licensee has been accepted by Licensee as described in Section IX(e). 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 fumished 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 IX. VI. INDEMNIFICATION As Licensee acknowledges its duty to monitor ongoing operations, 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 due to the sole negligence or willful misconduct of Licensee. 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 AGSOFTWR(2.6) Page 2 SOFTWARE LICENSE & SERVICES AGREEMENT 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. VII. LICENSEE'S RIGHTS AND OBLIGATIONS a. All material comprising the Licensed software furnished to Licensee may carry notices of Licensor's proprietary, trade secrets and copyrights printed on reports, letters, documents and reference material supplied. Licensee agrees not to remove or obscure such notices in any production or reproduction. b. Licensee will preserve the confidential nature of the Licensed software and related media and will not make copies, including partial copies or updated versions thereof, except for internal reference, archive or backup purposes. Licensee agrees to conscientiously ensure the existence of functional daily backups for at least the last 10 business days and shall not remove or disable any SQL agent or backup plan initiated by PSI without both notification to PSI and at least monthly testing of any subsequently implemented alternate backup plan. If the backup plan is altered or disabled without notification to PSI, and there is a resulting data loss, an additional charge may be incurred for requested data recovery services. 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 relate information about 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. 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. Upon termination of usage, Licensee agrees to extract Licensee's data via any readily available tools and to provide written acknowledgement confirming destruction of all database/structure, software and related electronic forms. Licensee agrees that the software/components furnished by Licensor and all copies and versions thereof made by the Licensee are and shall remain the sole property of Licensor. 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. Training for users, managers and other personnel prior to going live is essential for efficient operation of the Licensed software. Licensee will designate one employee as a primary contact for each Licensed software application. The designee must have been trained on the Licensed software. This primary support contact should be one who both 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 and shall test/verify all configurations including but not limited to: general ledger accounts, rates, rate types billing & charge groups. In addition, they will accept software updates and arrange for software update installation. Should additional training services be required, they may be scheduled at the rates in effect at the time of service. Such training is neither available nor appropriate via customer support lines. f Should Licensee purchase conversion services for any product, Licensee acknowledges that is Licensee's responsibility to provide complete migration data to Licensor in a consistent computer readable format (with understandable field labels which clearly identify the field contents), to notify Licensor that the data is available or has been provided & to promptly review the AGSOFTWR(2.6) Page 3 41/ SOFTWARE LICENSE & SERVICES AGREEMENT g• subsequently converted data. In addition Licensee agrees to notify Licensor of any data/configuration issues relating to a converted product. Licensee's review period (for each product conversion) shall begin upon Licensee's receipt of the 1st converted data and shall end upon Licensee's submission of data for the 2nd/final conversion. While any previously submitted data issues are expected to have been corrected, Licensee is responsible for immediately verifying the requested corrections have been made and providing Licensor prior to the go live date with a written acknowledgment that Licensee has completed their review and accepted the data as converted by Licensor. Licensor desires to provide Licensee with a prompt, high quality data conversion. Neither Licensee & Licensor wish to incur additional time, effort &/or costs for Licensor to get staff back up to speed with Licensee's migration. Consequently, should Licensee's delay cause the period from Licensor's transfer of the converted data to the go live date to exceed 30 days, Licensee acknowledges that an additional conversion services fee equal to 50% of the original conversion amount shall be due. If after the software/data is live Licensee identifies data issues that were available for identification in the 1st converted data Licensor shall provide Licensee with a quote for additional conversion services (if any) and Licensee shall provide written approval for Licensor to provide the quoted services. Licensee agrees that addition of migration data (such as additional records or tables not originally provided) or changes to the format of the migration data may result in a delay of product implementation and shall result in additional charges for the conversion. Software corrections are defined as: Licensor software updates as well as specified operating system patches. Licensee agrees to implement software corrections that have been identified as necessary by Licensor and to ensure that the requirements identified in Exhibit B: (Requirements) are met by all machines intended to execute the Licensed software. Failure to implement those identified software corrections or to maintain the specified requirements shall relieve Licensor from any and all 'Software Support' responsibilities relating to any Licensee reported issue(s) that the Licensor correction(s) was/were offered to address. In the event Licensee fails to implement identified software corrections, any subsequent services relating to the Licensee reported issue(s) will only be provided on an emergency time and materials basis. Unlike the business models of other providers where products become obsolete, Licensor continually improves the software and offers upgrades which are included with software maintenance. It is highly recommended that staff receive additional training at least every 5 years so staff may benefit from and be able to take full advantage of the accumulated new features. h. 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 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 Licensor's "Share desktop facility", Microsoft®'s Netmeeting®, pcANYWHERE® or Citrix as specified in the Software Maintenance Agreement. In addition, Licensee agrees that designated workstations shall meet the minimum software requirements: Windows® (NT/2000/2003 or XP) & completed installation of: the licensed software, Microsoft® SQL tools & remote access software such as: VPN, Netmeeting® or PCAnywhere®. i. To minimize Licensee costs, to eliminate any requirement for manual update of validation and/or zip plus four codes, to allow for other on line validations (such as contractor's license, sales tax permit, pet microchip owner information retrieval etc.) and to maximize uptime of zip plus four & Licensed software validations, the Licensed software should optimally be configured for Internet access to the designated PSI internet address. Consequently users of the Licensed software may periodically obtain the latest zip plus four data and validation codes. Absent this configuration, to obtain automated zip plus four (4) functionality, Licensee must purchase a zip plus four data subscription and designate staff to install such zip plus four updates every three (3) months. Failure to promptly update zip plus four (4) data will cause disruption of the zip plus four (4) functionality. Furthermore absent internet access, any other possible automated validations are reduced to manual processes. AGSOFTWR(2.6) Page 4 i. SOFTWARE LICENSE & SERVICES AGREEMENT 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 direct staff, a Licensee retained consultant or Licensor (at Licensee's cost) to evaluate network/software performance. Such network evaluation shall utilize "Network Sniffer" or equivalent tools to facilitate generation of quantitative results. Licensee agrees to request & incorporate Licensor's recommendations in the network evaluation work plan. Licensee further agrees to transmit the results of such work to Licensor for review and to withhold publication of such results until after implementation of all Licensor recommendations. Requests of Licensor for performance troubleshooting (such as speed and network connection issues) in which Licensor receives prior written authorization to collect factual data and subsequently presents a determination that performance issue(s) is/are network related will be billed at the rates in effect at the time of service. k. Upon expiration pursuant to section II or demand by Licensor made pursuant to section X hereof, Licensee shall discontinue use of Licensor's database/structure, software & related electronic forms. 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, data or data structures which may become available from Licensor as provided for in the corresponding Support Maintenance Agreement. In the course of Licensor providing Licensee with 'Software Support', Licensor may install updates and minor enhancements to Licensed software, data or data structures. 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 shall be construed to obligate Licensor to provide any services whatsoever to any Licensee who fails to maintain 'Software Support. d. Insurance. It is understood that Licensor is expected to complete most if not all on -site technical support within 2 months from the signing of this agreement. No less than 90 days from completion of the on -site portion of this agreement, Licensor will remove the Licensee as an additional insured from its insurance policies. Thereafter, Licensor agrees to maintain the agreed upon insurance coverage and to furnish Licensee with certificates of insurance evidencing the required coverages upon request. On or before beginning any of the services or work called for by any term of this Agreement, Licensor, at its own cost and expense, shall carry, maintain for the duration of the Agreement, and provide proof thereof that is acceptable to Licensee for the insurance specified in subsections (a) through (c) below with insurers and under forms of insurance satisfactory in all respects to Licensee. Licensor shall not allow any subcontractor to commence work on any subcontract until all insurance required of the Licensor has also been obtained for the subcontractor. 1. Workers' Compensation. Statutory Workers' Compensation Insurance and Employer's Liability Insurance for any and all persons employed directly or indirectly by Licensor shall be provided with limits not less than one million dollars ($1,000,000). In the alternative, Licensor may rely on a self-insurance program to meet these requirements so long as the program of self-insurance complies fully with the provisions of the California Labor Code. 2. Commercial General and Automobile Liability. Licensor, at Licensor's own expense, shall maintain commercial general and automobile liability insurance for the period covered by this Agreement in an amount not less than one million dollars ($1,000,000) per occurrence, combined single limit coverage for risks associated with the work contemplated by this Agreement. AGSOFTWR(2.6) Page5 'l/ SOFTWARE LICENSE & SERVICES AGREEMENT 3. Each of the following shall be included in the insurance coverage or added as an endorsement to the policy: Licensee, its officers, employees, agents, and volunteers are to be covered as additional insureds as respects each of the following: liability arising out of activities performed by or on behalf of Licensor, including the insured's general supervision of Licensor; products and completed operations of Licensor; premises owned, occupied or used by Licensor; or automobiles owned, leased, hired, or borrowed by Licensor. The coverage shall contain no special limitations on the scope of protection afforded to Licensee, its officers, employees, agents or volunteers. 4. The insurance shall cover on an occurrence or an accident basis, and not on a claims made basis. 5. Any failure of Licensor to comply with reporting provisions of the policy shall not affect coverage provided to Licensee and its officers, employees, agents, and volunteers. 6. Insurance is to be placed with California -admitted insurers with AMBest's rating of no less than AVII. 7. Notice of cancellation or non -renewal must be received by Licensee at least thirty (30) days prior to such change. 8. Deductibles and Self -Insured Retentions. Licensor shall disclose the self -insured retentions and deductibles before beginning any of the services or,work called for by any term of this Agreement. During the period covered by this Agreement, upon written notice to the Licensee Attorney, Licensor may increase such deductibles or self -insured retentions with respect to Licensee, its officers, employees, agents, and volunteers. 9. Notice of Reduction in Coveraae. In the event that any coverage required under this section of the Agreement is reduced, limited, or materially affected in any other mariner, Licensor shall provide written notice to Licensee at Licensor's earliest possible opportunity and in no case later than five (5) days after Licensor is notified of the Change in coverage. 10. If Licensor fails to provide or maintain any insurance policies or policy endorsements to the extent and within the time herein required, Licensee may, at its sole option: (i) Order Licensor to stop work under this Agreement, withhold any payment which becomes due to Licensor hereunder, or both stop work and withhold payment, until Licensor demonstrates compliance with the requirements thereof; (ii) Terminate this Agreement. Exercise of either remedy listed above is the sole and exclusive remedy for Licensor's failure to maintain insurance or to secure appropriate endorsements. IX. LICENSE FEES AND PAYMENTS a. Payment of the License fee authorizes use of the Licensed software by no more than the number of users specified below: Software (Utilizes/Requires Microsoft SQL licenses) Concurrent Licenses License Fee LicenseTrackT"" PetTrackTM BuildingTrackTM(includes CodeTrackT"", ParcelTrackTM & PermitTrackT"') Package License Discount Credit Card Connector Web Interface(each module)with PSI package 4 Users 4 Users 4 Users $17,000 $5,000 $35,000 ($4,000) $1,000 $8,500 Read only Users Unlimited Included Professional Services Units Extended Cost LicenseTrackTM Discounted conversion of all convertible records from $11,000 AGSOFTWR(2.6) Page 6 SOFTWARE LICENSE & SERVICES AGREEMENT r cust PetTrackTM BuildingTrace" data provided by city(package price) Discounted turnkey off -site configuration(package price) Discounted training(package price) $7,000 $7,400 Requested Modifications LicenseTrackT"' PetTrackT"^ BuildingTrackTM None None None Forms & Letters to be Customized* LicenseTrackTm PetTrackTM BuildingTrackTM Renewal, Delinquent, Underpayment & License Renewal, Delinquent, Underpayment & License Custom Letters Included Total Professiona Services $25,400 Project Grand Total * $87,900 Whenever form or lette omization is quoted, unless otherwise specified, Licensee may expect Licensor to modify Licensor's standard formslformats to accommodate Licensee's names, addresses, phone numbers, text, emblems, logos, and bank account numbers, etc. (List price $600) Deviations from Licensor's standard formats (such as creation of one or more entirely new forms) require additional effort and will be billed at Licensor's standard hourly rates. **Maintenance will be billed in May and will be due July 1st, 2007 . Travel expenses will be billed at our actual cost and limited to customary reasonable travel, ground transportation or auto rental fees, lodging and meal per diem expenses. 3rd Party Deliverables: Any required or desired hardware, software, and communications products not specifically included in the following table are Licensee's responsibility. This configuration represents Licensor's recommended products, and the cost is an estimate only, as the prices of the third -party vendors are subject to change without Licensor's approval. Also, Licensee understands that Licensor may decide to change this recommendation if Licensor believes a new solution is better suited for the proposed installation. Should this recommendation changes, Licensor will notify Licensee as soon as practical. Licensor makes no warranty, whether expressed or implied, regarding the components listed below and shall not be responsible for servicing such components. The components shall be subject only to manufacturers' warranties, if any. 3rd Party Products (Prices do not include sales tax) Crystal Reports(run-time) Sub -Agencies: Application(s) authorized for use by specified sub -agency LicenseTrackT"" PetTrackTM BuildingTrackTM Cost $0.00 Sub -Agency None None None b. All consultant service is billed portal to portal and subject to such minimum response charges as may then be in effect. c. Charges for additional support services will be invoiced to Client at the hourly rate (minimum of four (4) hours) in effect at the time of service and shall be payable thirty (30) working days from receipt of invoice. Consultant will submit invoices which reflect the date of service, staff -hours expended and a description of the services rendered. d. 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 all provisions of this Agreement will apply for the requested products or services. To avoid conflicting 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 conflict arise with any other unilateral writings of either party, this Agreement will govern. AGSOFTWR(2.6) Page 7 44/ SOFTWARE LICENSE & SERVICES AGREEMENT 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 shall reimburse Licensor for any state or local requirements which Licensor must obtain to provide services (i.e. additional insured certificates, etc.). Licensor shall obtain any necessary City business tax certificate prior to commencement of any work authorized by this Agreement at Licensor's expense, and shall maintain such certificate through the term of the Software Maintenance Agreement. e. Licensed software and Licensor supplied Hardware 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. f. 50% of the Software License fee will be billed upon execution of this Software & Services Agreement and due 15-days from date of invoice. Payment for services will be invoiced as stated below and due on a 15-day net basis from date of invoice. Payment milestones will include: ➢ Execution of Software License Agreement (50%) > Acceptance of Software will trigger invoice for all remaining balances due in 30 days 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 shall be entitled to terminate this Agreement and Licensee shall immediately discontinue use of database/structure, software and related electronic forms. In addition, Licensee shall provide Licensor with written confirmation that previously licensed components have been erased and copies are no longer on Licensee's computer or backup tapes per section VII(c). Licensee agrees that failure to provide a 'Statement of Destruction' within 30 days from discontinuation of software use shall result in a $1,000 charge for each subsequent 7 day period until such statement has been provided. Licensor agrees to transmit a 'Statement of Destruction' to Licensee with a reminder that a 'Statement of Destruction' must be provided to Licensor prior to Licensor assessment of charges authorized by this section. b. In the event of default, Licensor shall be entitled to exercise any one 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 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 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 several 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 AGSOFTWR(2.6) Page 8 SOFTWARE LICENSE & SERVICES AGREEMENT any other provision in the future unless such waiver has rendered future performance commercially impossible. c. Except in the event of a merger or substantial sale of assets, neither this Agreement, 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 shall 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 providing an email containing the same notification has been sent to the designated contact. 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. h. In the event that any one 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. i. During the term of the relationship between Licensee and Licensor ("Services Period"), and for a consecutive one (1) year period following termination of Services for any reason, whether voluntary or involuntary (the "Post Services Period"), Client shall not directly or indirectly, or by action in concert with others, induce or influence, or seek to induce or influence, any employee, agent, independent consultant, or other business affiliate of Licensor ("Consultant Associate") to terminate his/her relationship with Licensor. J. Licensee acknowledges that should he violate any of the covenants contained in this Agreement, it will be difficult to determine the resulting damages to Licensor and, in addition to any other remedies Licensor may have, Licensor shall be entitled to temporary and permanent injunctive relief without the necessity of proving actual damages, or posting bond. k. To compensate Licensor for his investment of time training said Consultant Associate (as that term is defined above) and to Compensate Licensor for having to retrain a new Consultant Associate, Licensee agrees that for every Consultant Associate who Licensee retains as a consultant for the duration of this agreement & the Post Service Periods, Licensee shall pay Licensor 50% of all gross moneys spent for services with said Consultant Associate during the first year following termination of the relationship. For each Consultant Associate that Licensee retains as an employee, Licensee agrees to pay Licensor a fee equal to 50% of the solicited Consultant Associates' first year salary. AGSOFTWR(2.6) Page 9 SOFTWARE LICENSE & SERVICES AGREEMENT XII. EXECUTION Effective this 21st day of November , 2006 Licensor: Licensee: PROGRESSIVE SOLUTIONS® P 0 BOX 783 BREA CA 92822-0783 CITY OF NATIONAL CITY 1243 NATIONAL CITY BLVD. NATIONAL CITY CA 91950-4397 Authorized Representative Authorized Representative (714) 671-1597 Title: President ( ) Phone Number (Type or Print) Approved as to form: Attest by: AGSOFTWR(2.6) Page 10 EXHIBIT A: SOFTWARE MAINTENANCE AGREEMENT I. INTRODUCTION. Progressive Solutions®, a California corporation herein after referred to as "Licensor" and City of National City, a municipal corporation, herein after referred to as "Licensee" agree to the following terms and conditions. II. NATURE AND DURATION OF SUPPORT. Licensor is in the business of providing software support services. Software support services are intended to facilitate smooth & efficient ongoing operations of the Licensed software. Licensee desires to obtain software support services for the Licensed software specified in section V. This Agreement provides for service only during normal business hours (8am to 5pm PST) and shall expire at 5:00 PM Pacific Standard Time on June 30, 2007 unless renewed as set forth below. Support outside of normal business hours is available for purchase. Requests for service for which the intended result is of negligible operational benefit are not available free of additional charge under this software support agreement. (i.e. Changing the name of a server (absent a hardware upgrade) which consequently results in the need to reinstall/verify the SQL data base software, the operating system, the Licensed software and to update every client machine which run the Licensed software.) Licensees that purchase after hours support will be provided with the appropriate contact information. Licensor reserves the right to prorate the software support fee and provide more or less than one year of coverage so that subsequent Software Maintenance Agreements expire on June 30th. Unless written notice of termination 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 each'year thereafter for an additional year at the support rate in effect at that time. In the event Licensee drops coverage of any module/product and later requests to reinstate the same module/product, Licensee agrees to pay all support fees for the lapsed period(s). III. LICENSEE'S RIGHTS AND OBLIGATIONS a) Training for users, managers and other personnel is essential for efficient operation of the Licensed software. Licensee will designate one employee as a primary contact for each Licensed software application. The designee must have been trained on the Licensed software. This primary support contact should be one who both 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. Should training services be required, they may be scheduled at the rates in effect at the time of service. Such training is neither available nor appropriate via customer support lines. 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) Software corrections are defined as: Licensor software updates as well as specified operating system patches. Licensee agrees to implement software corrections that have been identified as necessary by Licensor and to ensure that the requirements identified in Exhibit B: (Requirements) are met by all machines intended to execute the Licensed software. Failure to implement those identified software corrections or to maintain the specified requirements shall relieve Licensor from any and all 'Software Support' responsibilities relating to any Licensee reported issue(s) that the Licensor correction(s) was/were offered to address. In the event Licensee fails to implement identified software corrections, any subsequent services relating to the Licensee reported issue(s) will only be provided on an emergency time and materials basis. Unlike the business models of other providers where products become obsolete, Licensor continually improves the software and offers upgrades which are included with software maintenance. It is highly recommended that staff receive additional training at least every 5 years so staff may benefit from and be able to take full advantage of the accumulated new features. c) Licensee will preserve the confidential nature of the Licensed software and related media and will not make copies, including partial copies or updated versions thereof, except for internal reference, archive or backup purposes. Licensee agrees to conscientiously ensure the existence of functional daily. backups for at least the last 10 business days and shall not remove or disable any SQL agent or backup plan initiated by PSI without both notification to PSI and at least monthly testing of any subsequently implemented alternate backup plan. If the backup plan is altered or disabled without notification to PSI, and there is a resulting data loss, an additional charge may be incurred for requested data recovery services. AGSOFTMT(2.5) Page 1 EXHIBIT A: SOFTWARE MAINTENANCE d) 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 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 Licensor's share desktop facility, Microsoft®'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 98/ME/NT/2000/2003 or XP, and completed installation of (licensed software, Netmeeting®, PCAnywhere®, Microsoft® Access® and/or Microsoft® SQL tools). In the event Licensor deems 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 services 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. e) To minimize Licensee costs, to eliminate any requirement for manual update of validation and/or zip plus four codes, to allow for other on line validations (such as contractor's license, sales tax permit, pet microchip owner information retrieval etc.) and to maximize uptime of zip plus four & Licensed software validations, the Licensed software should optimally be configured for Internet access to the designated PSI internet address. Consequently users of the Licensed software may periodically obtain the latest zip plus four data and validation codes. Absent this configuration, to obtain automated zip plus four (4) functionality, Licensee must purchase a zip plus four (4) data subscription and designate staff to install such zip plus four updates every three (3) months. Failure to promptly update zip plus four data will cause disruption of the zip plus four (4) functionality. Furthermore absent Internet access, any other possible automated validations are reduced to manual processes. f) 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 direct staff, a Licensee retained consultant or Licensor (at Licensee's cost) to evaluate network/software performance. Such network evaluation shall utilize "Network Sniffer" or equivalent tools to facilitate generation of quantitative results. Licensee agrees to request & incorporate Licensor's recommendations in the network evaluation work plan. Licensee further agrees to transmit the results of such work to Licensor for review and to withhold publication of such results until after implementation of all Licensor recommendations. Requests of Licensor for performance troubleshooting (such as speed and network connection issues) in which Licensor receives prior written authorization to collect factual data and subsequently presents a determination that performance issue(s) is/are network related will be billed at the rates in effect at the time of service. g) 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. Licensee agrees to allow 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. Upon expiration pursuant to section II or demand by Licensor made pursuant to the default provisions of the. corresponding Software License Agreement, Licensee shall discontinue use of Licensor's database/structure, software & related electronic forms. In addition, Licensee shall provide Licensor with written confirmation that previously licensed components have been erased and copies are no longer on Licensee's computer or backup tapes. Licensee agrees that failure to provide a 'Statement of Destruction' within 30 days from discontinuation of software use shall result in a $1,000 charge for each subsequent 7 day period until such statement has been provided. AGSOFTMT(2.5) Page 2 EXHIBIT A: SOFTWARE MAINTENANCE AGREEMENT 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 and/or minor enhancements to Licensed software, data or data structures, which may become available from Licensor without additional charge. Furthermore, in the course of Licensor providing Licensee with support services, upon direction, Licensor may install (or instruct Licensee on installation of) the above mentioned updates and minor enhancements to Licensed software, data or data structures. (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 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. 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 is due in advance. 'Software Support' services will not be provid Licensed Software Annual Support Fee Prorated Fee LicenseTrackTM- 4 Users $3,700 $0.00 PetTrackTm- 4 Users $2,200 $0.00 BuildingTrackTM- 4 Users $4,500 $0.00 LicenseTrackTm Web Renewal $1,000 $0.00 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 quality -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 term 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 forms 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 forms, mailings, and/or reports. Licensor's annual software maintenance does not include the provision of technical support for user written customized Crustal Reports'. 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 personal property such as storage media. Licensee shall reimburse Licensor for any state and or local requirements, which Licensor must meet or AGSOFTMT(2.5) Page 3 Ay EXHIBIT A: SOFTWARE MAINTENANCE 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 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. VII. EXECUTION Effective this Licensor: Progressive Solutions® P 0 Box 783 Brea CA 92822-0783 day of :. �r //i GEl2•tw / �ute/ A thorized Representative (714) 671-1597 2006 Licensee: City of National City 1243 National City Blvd. National City CA 91950-4397 Authorized Representative ( ) Phone Number (Type or Print) AGSOFTMT(2.5) Page 2 Exhibit B: Progressive Solutions'® Server & Workstation Requirements Recommended Minimum Network Server Operating System Microsoft® Windows® 2003 Server or Advanced Server Microsoft Windows® 2000, Novell® Netware 4.x Network Server Equipment • Pentium® IV (1.2 Ghz or faster) • 2 GB or more available RAM • 30 GB SCSI Ultra 160 Hard -Disk Space • Color SVGA .28 Monitor • 100 mbit Ethernet Network Card • 100 mbit Ethernet Switch • 24x CD-ROM Drive • Pentium® II (750 Mhz) • 1 GB of available RAM • 10 GB SCSI Hard -Disk Space • Color SVGA .28 Monitor • 10 mbit Ethernet Network Card • 10 mbit Ethernet Hub • CD-ROM Drive All hardware must be Microsoft®/Novell® certified (request rinted certification documents). Database Server Equipment Use the Recommended Network Server or for better performance, use a separate Database Server (same specifications as the Network Server). • Microsoft® Windows® 2000 • If Novell Netware is the Network Operating System, install a separate Database Server. Software Microsoft® SQL Server 2003 or 2005 Standard or Enterprise Edition with .NET 2.0 installed Same as recommended. Network Server & Database Server Power Protection Same as required. True On -Line UPS, 600 Volt amps minimum with UPS Monitoring card, cable, and software. Explanation: Using a surge protector will only address 1% of the potential power problems. On -Line protection will protect against an additional 80% of the potential power problems. When commercial power fails, the UPS monitoring card will close all open files and shutdown the file server safely. Some SPS Switching'Power Supply) vendors refer to their SPS products as UPS products. An SPS will NOT provide sufficient protection against sags, brownouts, etc. Workstation Computer • Pentium® IV (1 Ghz or faster) • 128 MB of available RAM • 10 GB Hard -Disk Space • Color SVGA .28 Monitor • 24x CD-ROM Drive • Pentium® II (500 Mhz) • 64 MB of available RAM • 4 GB Hard -Disk Space • Color SVGA .28 Monitor • CD-ROM Drive Workstation Operating System Microsoft® Windows® XP Professional with latest .NET framework Microsoft® Windows® 2000 with latest .NET framework Workstation Power Protection Same as required. Combination On -Line conditioner and surge protector. Tape Backup System Same as required. Network -quality system to backup fileserver hard drive on one tape and provide tape read after write verification. Data File Transfer Same as required. CDR/CDRW Drive Printer Hewlett Packard® 5, 6, or 7 series, Hewlett Packard® 4000 — 5000 Laser Printer with HPCL or PostScript fonts About Dot Matrix Printers: In Microsoft® Windows®, dot matrix printers print slowly. Often dot matrix printers DO NOT have adequate graphic drivers. Internet Access Same as required. CABLE, DSL, ISDN, or T1 Explanation: Progressive Solutions® applications requires In ernet access to download program updates. Using an Internet connection that is slower than 256 Kbps will take significantly longer to download data. E-mail Same as required. Microsoft ®Outlook®. Network Installer Same as required. Microsoft®or Novell® Authorized and Certified Report Modification Crystal Reports Version 8.5 Crystal Reports Version 8.5 Redundancy A RAID solution for data and web operations No redundancy Progressive Solutions®; PO Box 783 Brea, C'A 92822; voice: (714)671-1597 fax: (714) 255-9775 www.progressivesolutions.com Exhibit B: Progressive Solutions'® Implementation Prerequisites Done General Tasks Notes Send us your initial payment and signed: • Software License and Services agreement • Software Maintenance Agreement • Purchase Order (which references the terms of the software license, services & maintenance agreements) Send us a digitized image of your city logo Designate the name of the server that will host the SQL data and have the SQL tools loaded. Send us a copy of your Municipal Code relating to Business Licensing for our review. Have someone from IS contact us so that we may verify our ability to access your SQL & file servers via the internet. Identify all financial accounts to be posted to and transmit accounts to us. Create a share named 'PSI' on the designated file or SQL server. Provide us with both the file server name and IP address. (Be sure to provide our user with the appropriate security to access this area.) We will use this share location to load our program & implementation files. Done LicenseTrack Tasks Notes Send us the complete set of current migration data (with logical field labels) and desired city forms/formats so that our staff may begin to migrate your data and to recreate your forms on the new system. (Business Licensing) If there are changes or improvements that you would like to have, include notations along with the forms. Software and converted data installed at city. Basic training provided for review of suitability/functionality Review proposed forms and provide comments for implementation. Notify PSI of your desired go live/implementation dates. Done Ca$hierCentral Tasks Hardware ordered and delivered. Identify and document the location of all proposed registers Order/prepare personal computers for implementation as registers and determine the appropriate computer names. Inform PSI of the serial connector type on each PC (DB9 or DB25) Identify and forward all general ledger (GL) accounts to be posted to, their contra accounts and all charge code abbreviations. Charge codes are the codes used at the registers which point to GL accounts. They consist of a code and a description. The code can be the entire GL number or an abbreviation that is unique to the financial account (either alpha or numeric) to facilitate data entry. If you are going to be processing credit cards, a Windows 2000 or XP workstation is required. Notify PSI of your desired go live/implementation dates. Progressive Solutions®; PO Box 783 Brea, CA 92822; voice: (714)671-1597fax: (714) 255-9775 www.progressivesolutions.com EXHIBIT C: REVENUE RECOVERY SOFTWARE & PROFESSIONAL SERVICES AGREEMENT THIS AGREEMENT by and between the CITY OF NATIONAL CITY, a municipal corporation, hereinafter referred to as "CITY", and PROGRESSIVE SOLUTIONS, INC., a California Corporation, hereinafter referred to as "PSI" is made and entered into on December 1, 2006. RECITALS WHEREAS, the CITY desires to obtain state of the art revenue recovery automation & professional services to augment CITY's revenue enhancement efforts; and WHEREAS, PSI has the necessary software, professional expertise and skill to provide such services. NOW, THEREFORE, the purpose of this AGREEMENT is to retain PSI as a consultant to CITY to implement the revenue recovery module and to perform services specified in SECTION 1 of this AGREEMENT as authorized by CITY. THE PARTIES HEREBY AGREE AS FOLLOWS: SECTION 1 SCOPE OF OFFERING. PSI shall assist CITY staff to maximize CITY's revenue recovery results. To that end, upon direction of the Finance Director or designee, PSI shall: License Revenue Recovery Automation for City Staff: • Implement state of the art —revenue recovery/discovery software suite which will: o Automate processing of AB990 data, AB63 data and other data • Provide appropriate written responses to Frequently Asked Questions (FAQ's) as well as detailed procedures. ■ Perform cross checks using revenue recovery software and available data. • Automatically create leads for automated follow-up. ■ Create letters for notification of non compliance as well as providing a tracking mechanism for all additional follow-up. • Provide generation of ad hoc reports of payment received as a result of non compliant business discovery efforts over any period (day, week, month, year etc.). o Automate Business, Transient Occupancy, Franchise & other Audits • Provide appropriate written responses to Frequently Asked Questions (FAQ's) as well as detailed procedures. • Provide staff with ability to prioritize audit leads and flag/select leads for audit. • Provide staff with ability to review both completed as well as assigned audits. • Provide staff with ability to enter audit data and consequently have the system automatically generate audit findings invoices. • Provide generation of ad hoc reports of payment received as a result of audit findings over any period (day, week, month, year etc.). o Automate electronic transmission of data for submittal to SBE (State Board of Equalization) to correct misallocations, and follow-through to ensure that the SBE makes the corrections. o Facilitate revenue trend analysis & forecasting. o Provide ability for staff to evaluate the success of all recovery endeavors at any time. Optional Services • Collaborate with CITY staff to identify service priorities. • 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. Page 1 / EXHIBIT C: REVENUE RECOVERY SOFTWARE & PROFESSIONAL SERVICES AGREEMENT • Provide staff to perform either field or desk audits of Business Registration, Transient Occupancy, Franchise and/or other Audits • Upon completion of any audit, prepare findings, submit report to city & attach audit report to the appropriate account. • Collaboratively (with CITY staff) perform identification of businesses that should be contacted regarding a business outreach program to increase the amount use tax that is self accrued to the CITY. • Augment CITY staffs knowledge of existing information systems and related data in order to generate additional "audit leads" for both allocation and noncompliance situations. • Provide CITY with invoices which document the nature of CITY'S REALIZED BENEFITS and taxpayer identification (i.e. account, FEIN, SEIN or resale numbers) As CITY budgets and funding are often constrained, this agreement provides software for revenue enhancement services/software which facilitate significant revenue recovery. Any authorized revenue recovery audits are generally performed by reviewing the current year and the prior 3 years records at the same time. Postponement of audits or other services would likely cost the CITY countless dollars should any delay limit the revenue recovery period. Financially responsible cities generally elect to continue audit and other services to retain the possibility of significant revenue recovery. PSI is expected to expand opportunities for both CITY and PSI to realize additional Revenue. Revenue recovery activities shall be approved by CITY in writing prior to implementation. 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 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 programs, development disposition and development agreements and in other related areas as questions arise. SECTION 2 TERM OF AGREEMENT. The term of this AGREEMENT shall be from December 1, 2006 to November 30, 2009, 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 by implementing the revenue recovery automation suite, customizing recovery letters, providing answers to frequently asked questions and instruction. Recovery projects may be initiated by CITY and assigned to PSI under this AGREEMENT until November 30, 2009. The CITY, subsequent to November 30, 2009, 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 An initial Setup Fee of $2,500 shall be paid to PSI by CITY for a nonexclusive revenue recovery software license, training and related services. Payment of the Service Fee shall be paid to PSI from revenue recovery benefits realized by the CITY. "REALIZED BENEFITS" shall be defined as increased CITY accounts receivable due to the identification or non-payment and/or underpayment of a tax (including tax levy), receipt of an audit report which verifies the city has received the full extent of tax due, recovery of tax Page 2 EXHIBIT C: REVENUE RECOVERY SOFTWARE & PROFESSIONAL SERVICES AGREEMENT payments made on exempt purchases, reduction of prior, current and future accounts payable and the reduction of future liabilities. "CONTINGENT FEE" shall be defined as compensation to PSI in consideration of the timely and faithful performance of services set forth in this AGREEMENT (such as initial setup, training & other services). Such fees shall be earned by PSI for REALIZED BENEFITS obtained by the CITY due to PSI's efforts, use of the cross referencing or SBE notification capabilities of the licensed business license software. As situations may arise where legal or other challenges limit PSI's ability to perform services or obtain compensation, CITY shall ensure continuation of services via payment of non contingent fees. Such challenges may result from potential or actual litigation arising from CITY municipal code, ordinances, resolutions, policies, procedure, etc. Other possible challenges include but are not limited to: refusal of access to records & litigation. "NON CONTINGENT FEE" shall be defined as reimbursement of all or part of PSI's costs. Payments of NON CONTINGENT FEES shall reduce contingency fees due to PSI as explained in paragraph 2 below. Minimum fees shall be the greater of the 15% recovery findings or the stated amounts below. Examples of non contingent costs relating to PSI provided services include: ➢ $750 minimum fee for each field business or occupancy tax audit (including written audit findings) > $50 minimum for each desk business tax audit > $1,250 for each field franchise fee audit (including written audit findings) > all reasonable related expenses incurred Reasonable expenses shall include but are not limited to: meals, transportation, lodging, postage and costs of data obtained to identify non compliant businesses & individuals. "ONE TIME" recoveries shall be defined as REALIZED BENEFITS derived from Audits of Transient Occupancy, Business License and/or other data. Audits may be prioritized and scheduled for licensed businesses to examine documentation generated within the audit period (typically for the current and 3 prior years). "ONGOING" recoveries shall be defined as REALIZED BENEFITS derived from newly identified businesses, sales tax misallocations or existing businesses without resale permits that have been identified as requiring them. PSI professional services as well as PSI revenue enhancement software & services are provided as a backstop audit program which supplements services currently provided by another vendor. PSI will provide a mechanism for flagging PSI 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). As a direct result of this agreement, the CITY obtains the potential of a large financial return with limited financial outlay. As no budget commitment need be made by the CITY, all risk is absorbed by PSI. PSI business licensing software has been designed to facilitate follow-up notice processing. Software license and maintenance fees are documented in separate Software License and Maintenance Agreements which are incorporated by reference herein. PSI will present CITY with a report of findings based upon the municipal code in effect at the time. Should CITY elect to waive or exempt payment of all or part of the amounts due (as reported by PSI) for any reason, the Finance Director will have 14 days from notification of realized benefits identified to modify the amount(s) due. In such case the contingency fee due to PSI shall be based upon the amount due determined by the Finance Director. Consequently, the contingent payment shall Page 3 D" EXHIBIT C: REVENUE RECOVERY SOFTWARE & PROFESSIONAL SERVICES AGREEMENT be due and payable upon the date of the decision. Otherwise the contingency fee due to PSI shall be based upon the amount(s) due per the submitted PSI report of findings. Audit related contingency fees will be calculated from the report of findings and invoiced to CITY no earlier than 14 days from presentation of audit report(s) to CITY staff for their review. In the event PSI findings are found to be invalid by an administrative or judicial proceeding, PSI will revise said findings and credit CITY with any CONTINGENT FEES paid. 1) CITY agrees to pay CONTINGENT FEES to PSI from recoveries of REALIZED BENEFITS such as deficiencies 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 in lieu or as a result of audits, licensed software or other PSI provided service. 2) CONTINGENT FEE CALCULATIONS: When PSI's audits, licensed software or other PSI provided services result in the detection and correction of errors/omissions 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 plus revenue recovered during the first twelve consecutive quarters following correction. 100% of the REALIZED BENEFITS shall apply toward,. reimbursable costs and NON CONTINGENT expenses. For all funds recovered (REALIZED BENEFITS) in excess of the cost of the software, support costs and NON CONTINGENT expenses, CITY shall pay PSI a 15% Contingent Fee of REALIZED BENEFITS. In the event that software, support and expense costs are not fully recovered within the first year, REALIZED BENEFITS in subsequent years will be applied to any remaining balances. SECTION 5 CITY'S OBLIGATIONS To facilitate revenue recovery via audits and/or 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 and protocol for inviting businesses for question & answer sessions, hearings and/or appeals regarding scheduled audits. • Requests for information (as required for revenue recovery purposes) from third parties (such as the state, county, trash & utility companies, etc.) • Codes & ordinances covering each tax recovery effort authorized by the CITY. • Resources for obtaining state franchise tax (AB63) and/or state board of equalization (AB990) data. • Resources for importing and processing AB63 & AB990 data to affect revenue recovery. With regard to REALIZED BENEFITS and CONTINGENT FEES, the CITY agrees to: • With the exception of waiving penalties to facilitate timely revenue recovery, City agrees as a rule to require payments in accord with the appropriate municipal code sections and especially with regard to requiring payment of all current & prior year obligations. • Invoice responsible parties via the business licensing system for REALIZED BENEFITS resulting from PSI's software or services within 15 days of notification. • Notify PSI in writing of: o Recovery payments received within 5 days from receipt (Or allow PSI Internet access to such data) so that PSI may invoice the CITY. o Decisions or communications which document CITY's benefit from REALIZED BENEFITS including, but not limited to, increased accounts receivable (including tax levy), reduction of prior, current and future accounts payable and the reduction Page 4 EXHIBIT C: REVENUE RECOVERY SOFTWARE & PROFESSIONAL SERVICES AGREEMENT of future liabilities within 5 days from the date the benefits take effect or from receipt of notification whichever is first (Or allow PSI Internet access to such data). o All other relevant information and progress reports received related to the above REALIZED BENEFITS and payment. (Or allow PSI Internet access to such data) o Any proposed change in municipal law which has the potential to impact this agreement at least 60 days prior to implementation of the change. PSI will then reserve the right to either reaffirm or renegotiate the terms of this agreement. ■ Make payment to PSI: o Within 24 hours of decisions by the Finance Director to modify amounts due from audits or other findings. In such cases, CONTINGENT FEES resulting from any modified amounts shall become NON CONTINGENT. o Within 14 days from receipt of PSI's invoice for NON CONTINGENT expenses. City agrees that payment shall not be delayed even if no funds have been recovered. o Within 14 days from receipt of PSI's invoice for CONTINGENT expenses which do not exceed the aggregate revenue recovered under this agreement or any subsequent agreements. o Within 30 days from receipt of PSI's invoice for contingent RECURRING recoveries. 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 CITY 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, Toss 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 attorney's 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 Page 5 EXHIBIT C: REVENUE RECOVERY SOFTWARE & PROFESSIONAL SERVICES AGREEMENT 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 upon request. 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. 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 or CITY fail to perform any of its material obligations under this AGREEMENT, in addition to all other remedies provided by law, either party may terminate this AGREEMENT immediately upon written notice. C. The Finance Director 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 software and 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 subsequent 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". Page 6 EXHIBIT C: REVENUE RECOVERY SOFTWARE & PROFESSIONAL SERVICES AGREEMENT 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. 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, Finance Director, 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 of National City Finance Director 1243 National City Blvd. National City, CA 91950-4397 PSI: Progressive Solutions, Inc P.O. Box 783 Brea, CA 92822 Notices shall be deemed effective on the date personally delivered or, if mailed, three (3) days after deposit in the mail. Page 7 EXHIBIT C: REVENUE RECOVERY SOFTWARE & PROFESSIONAL SERVICES AGREEMENT 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 NATIONAL CITY PROG/RESSIVESOLLUTIONS° By: By: ,h 1- L414 p Title: Title: /u.-/ Date: Date: /P/o( Page 8 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 SOLUTIONS® By: Title: President Date: 11/7/2006 Page 9 City of National City Office of the City Clerk 1243 National City Boulevard, National City, CA 91950-4397 Michael R. Della, CMC - City Clerk (619) 336-4228 Fax: (619) 336-4229 December 14, 2006 Glenn Vodhanel President Progressive Solutions, Inc P.O. Box 783 Brea CA, 92822 Project: City of National City — Software Contract. Resolution No. 2006-230 Dear Mr. Vodhanel: On November 21, 2006 the City Council of the City of National City passed and adopted Resolution No. 2006-230, awarding a contract to Progressive Solutions, Inc. We are pleased to enclose a fully executed original agreement and a certified copy of the Resolution for your files. Should you have any questions, please contact The City Manager's Office at (619) 336-4240. Sincerely, a Michael R. ' alla City Clerk JAH Enclosure cc: City Manager MIS File C2006-64 Recycled Paper