HomeMy WebLinkAbout2010-02-16; City Council; 20119; Contract Hosting Services for HCMS SoftwareCITY OF CARLSBAD - AGENDA BILL
20.119AB#
MTG. 2/16/10
DEPT. IT
APPROVAL OF CONTRACT FOR HOSTING
SERVICES FOR THE HUMAN CAPITAL
MANAGEMENT SYSTEM (HCMS)
SOFTWARE
DEPT. DIRECTOR 6
CITY ATTORN
CITY MANAGER
RECOMMENDED ACTION:
Adopt Resolution No. 2010-025 approving the agreement with Velocity Technology
Solutions, Inc. for software hosting services of the Human Capital Management System
(HCMS) software.
ITEM EXPLANATION:
On January 12, 2010, Council authorized staff to negotiate contracts with vendors for the
purchase and installation of Human Capital Management System (HCMS) software. After a
detailed request for proposal and system selection process Lawson Corporation's Human
Resources Suite product was selected. Continuing with the practice of fully evaluating all
service options, City staff research shows that the most effective manner of operating and
supporting the Lawson system is through outsourcing - using the software hosting
methodology. The vendor selection for the hosted solution of Lawson's HCMS software is
Velocity Technology Solutions, Inc. - a certified Lawson hosting partner.
The decision to outsource the Lawson application is founded on cost-saving and efficiency
data. Often times supporting a system of this type can be resource intensive and costly using
internal resources (staff, equipment and facilities). The proposed hosting solution includes
application management and hosting support of the Lawson Applications being deployed as
part of the HCMS project. Hosting services, as provided by Velocity, will provide economies
by outsourcing infrastructure and environment investments associated with the project as well
as access to specialized system expertise - eliminating the need to hire a city Information
Technology department staffer to support the HCMS application.
Velocity's hosting solution allows the city Human Resources, Payroll and Information
Technology Departments to focus on core services with the assurance that system users are
fully supported and that the applications are performing at optimum levels.
Advantages of Hosted Solution:
• Cost savings
• Includes all hardware, OS and database licenses and maintenance
• Carlsbad can focus on core initiatives
• Avoid annual support budget fluctuations
• Full support of Lawson Applications
DEPARTMENT CONTACT: Gordon Peterson 760-602-2454 Gordon.Peterson@Carlsbadca.gov
FOR CITY CLERKS USE ONLY.
COUNCIL ACTION: APPROVED
DENIED
CONTINUED
WITHDRAWN
AMENDED
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CONTINUED TO DATE SPECIFIC
CONTINUED TO DATE UNKNOWN
RETURNED TO STAFF
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• Ability to allocate existing staff to support strategic value-add projects
• Avoid maintenance and upgrade costs associated with Hardware & Operating
Systems
• True 24/7/365 support coverage for critical applications
• Access to multiple subject matter experts for helpdesk support
• Access to additional implementation resources
• Access to resources who understand your environment and processes
• IT decision support, guidance and advice
• Access to lessons learned from supporting 100 plus other organizations
After thoughtful and detailed review process, staff recommends entering into an agreement
with Velocity Technology Solutions, Inc. for the hosting of Lawson's Human Resource Suite.
FISCAL IMPACT:
The cost of hosting services is $196,212 annually with an initial set up fee of $26,151. The
initial agreement is for a five year period. On January 12, 2010, the City Council authorized
staff to transfer funds from the Technology Innovation Fund to the General Capital
Construction (GCC) Fund for the HCMS project. Therefore, no new funding is needed for this
purchase, and subsequent agreement. Funding for renewal of the hosting agreement will be
funded with savings derived through future eliminated full-time positions City-wide as a result
of the efficiency improvements.
ENVIRONMENTAL IMPACT:
This action does not constitute a project as defined under CEQA (California Environmental
Quality Act) pursuant to CEQA regulation 15060c(3).
EXHIBITS:
1. Resolution No. 2010-025
2. Master Agreement for Velocity Services
3. Rider to the Master Agreement for Velocity Services
4. Velocity Services Application Management and Hosting Services Service Description
Number 1
1 RESOLUTION NO. 2Q1Q-Q25
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
2 CARLSBAD, CALIFORNIA, APPROVING AN AGREEMENT
WITH VELOCITY TECHNOLOGY SOLUTIONS, INC. FOR
3 HOSTING SERVICES FOR THE HUMAN CAPITAL
4 MANAGEMENT SYSTEM (HCMS) SOFTWARE
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WHEREAS, on January 12, 2010, Council authorized the purchase and
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installation of a Human Capital Management System (HCMS); and
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WHEREAS, it has been determined that the most effective way to operate and8
support the Human Capital Management System (HCMS) is through use of a hosted
solution; and
11 WHEREAS, on January 12, 2010, sufficient funds were transferred from the
12 Technology Innovation Fund to the General Capital Construction (GCC) Fund for the
HCMS project and, therefore, no new funding is required.
14 NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of
15 Carlsbad, California, as follows:
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1. That the above recitations are true and correct.
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2. That the fees and compensation for said hosting services is $196,212
19 annually with an initial, year one, set up fee of $26,151, and shall be as
20 described in the contract between the City of Carlsbad and Velocity
21 Technology Solutions, Inc.
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PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council
of the City of Carlsbad on the 16th day of February, 2010, by the following vote to wit:
AYES: Council Members Lewis, Kulchin, Hall, Packard, Blackburn
NOES: None
ABSENT: None
ATTEST:
LOR^AlMEQVl/^WOOrXjfcity Clerk
Karen R. Kundtz, Assjslant City Clerk
(SEAL)
4
Velocity
This Master Agreement is made as of February 16, 2010, by and between Velocity Technology Solutions, Inc. ("we",
"us", "our" or "Velocity"), a Delaware corporation with its principal offices located at 850 Third Avenue, New York,
New York 10022-6222, and City of Carlsbad, California ("you", "your" or "Client"), a California corporation with its
principal offices located at 1200 Carlsbad Village Drive, Carlsbad, California 92008-1949 (Velocity and Client referred
to individually as a "Party" and/or collectively as the "Parties").
4. BILLING AND PAYMENT
The Parties agree as follows:
1.CONSTRUCTION
1.1 Captions.
The titles and headings in this Agreement are intended for
reference purposes only and shall in no way be construed
so as to amend or modify any of the terms or provisions of
this Agreement.
1.2 Order Of Precedence.
In the event of a conflict between or among this
Agreement, the following shall be the order of precedence:
this Agreement and the Service Description.
2.DEFINITIONS
2.1 "Agreement" shall mean this Master Agreement,
including any and all addenda, riders, exhibits, and
schedules attached hereto from time to time, all as may be
amended from time to time.
2.2 "Service" shall mean the services specified in
individual Service Descriptions provided, directly or
indirectly, by us to you in accordance with the terms and
conditions of this Agreement.
2.3 "Service Description" shall mean any Service
Description attached hereto and incorporated herein by
reference, as such Service Description may be amended
in accordance with this Agreement.
2.4 "Velocity Third Party Supplier" shall mean any
supplier, directly or indirectly, to Velocity of any
component of any hardware, software, network or service
to be provided by Velocity.
3.SERVICES
3.1 Services.
We shall provide you the Service described in the Service
Description in accordance with the terms and conditions of
this Agreement and the Service Description. You and we
may, by mutual agreement and in accordance with this
Agreement, from time to time enter into additional Service
Descriptions which, upon execution by both you and us,
shall become schedules to and shall be incorporated into
this Agreement.
3.2 Resale Of Services.
You shall not resell the Service, or access to the Service,
directly or indirectly, to any third party, except as may be
authorized by the Service Description.
4.1 Fees.
As compensation to us for our provision to you of the
Service, you agree to pay us the fees and other charges
set forth in the applicable Service Description.
4.2 Expenses.
In addition to our fees, you agree to reimburse us for the
reasonable travel, lodging, and out-of-pocket expenses
incurred by us in connection with the Service when such
expenses are not explicitly defined as included as part of
the Service in the applicable Service Description.
4.3 Invoices/Payment.
Unless otherwise stated in the Service Description, we
shall invoice you monthly for any and all (i) application
management and hosting fees on or about the first (1st)
day of the calendar month prior to the applicable calendar
month, or (ii) consulting fees on or about the first (1st) day
of the month immediately following the applicable service
period. Fees for partial months shall be prorated. You
agree to pay us in full within thirty (30) days from receipt of
any invoice.
4.4 Late Charges.
We reserve the right to charge, and you shall pay, interest
in the amount of one and one half percent (1.5%) monthly
(or the maximum amount allowed by law, whichever is
lower) on any invoiced amounts not paid within sixty (60)
days after your receipt of our invoice therefore.
4.5 Invoice Disputes.
In the event that you dispute any amounts billed by us in
an invoice, you shall, within sixty (60) days of your receipt
of the invoice, notify us in writing, providing documentation
and/or information to substantiate your dispute of our
charges. Disputes not raised within such sixty (60) day
period shall be deemed waived. All billing disputes shall
be resolved in accordance with Article 9 below.
4.6 Taxes.
The fees and charges described herein are exclusive of
federal, state, local, and foreign sales, use, excise, utility,
gross receipts, value added and other taxes, tax-like
charges, and tax-related charges, which you hereby agree
to pay, together with all other invoiced amounts, upon your
receipt of our invoice.
5. REPRESENTATIONS AND WARRANTIES;
INDEMNITIES
5.1 Insurance.
We represent and warrant that Velocity is covered by, and
will during the term of this Agreement continue to be
covered by, business insurance which is appropriate and
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which is customary for the industry in which Velocity
operates.
5.2 Other Warranties.
We represent and warrant that (a) the Service will be
provided in compliance with all applicable national, state
and local laws, (b) no software or component of the
Services provided by Velocity will infringe the proprietary
rights of any third party, (c) Velocity has or will timely have
all rights necessary to enable it to lawfully provide the
Service, and (d) Velocity will not knowingly or intentionally
provide or store in connection with the Service any
software or data that includes obscene, pornographic,
racist, libelous, illegal or otherwise reasonably
objectionable matter.
5.3 Limited Warranty.
We warrant that the Service provided to you will be
performed by qualified personnel in a professional
manner. WE DISCLAIM ALL OTHER WARRANTIES,
EXPRESS OR IMPLIED, ARISING BY LAW OR
OTHERWISE, INCLUDING ANY IMPLIED
REPRESENTATION OR WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE EXCEPT AS SPECIFICALLY PROVIDED IN
THIS AGREEMENT.
5.4 Indemnities.
Each Party shall indemnify, defend and hold the other
Party harmless against any and all claims, costs,
expenses (including reasonable attorneys' fees and
expenses), losses or liabilities incurred by the other Party
in connection with any violation by it of any of the
representations or warranties set forth hereunder.
6.CONFIDENTIALITY
6.1 All information marked as confidential and
disclosed by either Party to the other and any other
information that a Party receiving such information should
know, by its nature, is confidential, including the terms and
conditions and pricing relating to this Agreement, shall be
confidential information ("Confidential Information"). The
receiving Party shall, with respect to the disclosing Party's
Confidential Information, (a) safeguard it using the same
degree of care which that Party uses to safeguard its own
Confidential Information, (b) not disclose it to any third
party (except as authorized by this Agreement and, in the
case of Velocity, to any Velocity Third Party Supplier)
without the disclosing Party's express written prior consent
to any such disclosure, and (c) in no event, use less than
a commercially reasonable degree of care to safeguard
the same. The obligation of confidentiality as set forth in
this Section 6.1 shall not extend to any information that (x)
is known to the receiving Party prior to receiving it from the
disclosing Party, (y) is in the public domain or becomes
generally known to the public by some action other than
breach of this Section 6.1 by either Party, or (z) is
compelled to be disclosed pursuant to law or legal
process. The Parties' obligations pursuant to this
Section 6.1 shall extend for a period of three (3) years
from the termination or expiration of this Agreement.
6.2 The Parties agree that, notwithstanding any other
provision to the contrary in this Agreement, the non-
breaching Party shall be entitled to seek equitable relief to
protect its interests, including temporary, preliminary and
permanent injunctive relief.
7.TERM AND TERMINATION
7.1 Term.
The term of this Agreement shall continue in effect until
the later of the termination or expiration of the last Service
Description to terminate or expire, and shall be extended
to include the period during which any Transition Services
(as set forth in Section 7.3.2 below) are provided.
7.2 Termination For Default.
The occurrence of any of the following shall constitute a
default, giving the non-defaulting Party the right to
terminate this Agreement and/or any applicable Service
Description(s):
7.2.1 Nonpayment.
In the event that you shall fail to pay when due
any amount due hereunder and such failure shall
continue for a period often (10) days after notice
from Velocity to you that such payment is then
due;
7.2.2 Other Breach.
In the event that either Party shall materially fail
to perform or observe any material covenant,
condition, or agreement to be performed or
observed by it hereunder (other than your failure
to pay pursuant to Section 4.3 above) and such
failure shall continue for a period of thirty (30)
days after notice thereof to the breaching Party;
7.2.3 Infringement.
In the event that either Party infringes any patent,
copyright, trademark, trade secret, or any other
third party proprietary right and such Party does
not either (a) secure the right for the other Party
to continue using it in connection with the
Service, or (b) remove, replace or modify it so
that it is not infringing, and such infringement
causes the other Party to not be able to perform
under this Agreement;
7.2.4 Bankruptcy.
In the event of the voluntary filing of bankruptcy
by a Party or the making of a general assignment
for the benefit of creditors or the failure of a Party
to have an involuntary bankruptcy or
reorganization proceeding dismissed within sixty
(60) days after it has been filed; or
7.2.5 Violation Of Law.
In the event of any violation of any applicable
law, regulation, statute, ordinance or other such
legal requirement where such violation is not
remedied within thirty (30) days after notice
thereof to the violating Party.
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7.3 Rights And Obligations Upon Termination.
7.3.1 Payment.
Upon termination by either Party, you shall be
required, within thirty (30) days of the effective
date of the termination, to pay us all amounts due
us at such time, whether or not yet invoiced at
the time of termination.
7.3.2 Transition Services.
Upon expiration or termination of this Agreement
or of any Service Description hereunder, except
for default by you pursuant to Section 7.2.1
above, we shall provide, upon notice of request
therefor by you, the "Transition Services" set forth
in the applicable Service Description(s).
7.3.3 Relief From Obligations.
Upon termination hereof by either Party, we shall be
relieved of any and all further obligations under this
Agreement without incurring any liability.
8.LIMITATIONS OF LIABILITY AND DAMAGES
8.1 LIMITATION OF LIABILITY.
EXCEPT FOR BREACH BY EITHER PARTY OF ANY
CONFIDENTIALITY OBLIGATIONS MADE PART OF
THIS AGREEMENT AND INFRINGEMENT BY EITHER
PARTY OF THE INTELLECTUAL PROPERTY RIGHTS
OF THE OTHER PARTY OR OF A THIRD PARTY,
NEITHER PARTY (NOR ITS SUPPLIERS OR CLIENTS)
SHALL BE LIABLE TO THE OTHER PARTY FOR
PUNITIVE, SPECIAL, CONSEQUENTIAL, INCIDENTAL
OR INDIRECT DAMAGES, INCLUDING WITHOUT
LIMITATION DAMAGES RELATING TO LOST PROFITS
OR REVENUE OR DAMAGE TO OR LOSS OF DATA,
EVEN IF THE PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.
8.2 LIMITATION OF DAMAGES.
EXCEPT WITH RESPECT TO CLAIMS BY EITHER
PARTY FOR INDEMNIFICATION AND CLAIMS BY US
FOR PAYMENTS AS PROVIDED IN THIS AGREEMENT
THE AGGREGATE LIABILITY OF EITHER PARTY TO
THE OTHER RELATING TO OR ARISING OUT OF THIS
AGREEMENT, WHETHER IN CONTRACT, TORT
AND/OR OTHERWISE, SHALL NOT EXCEED THE
TOTAL AMOUNTS PAID BY YOU TO US FOR THE
SERVICE IN QUESTION DURING THE SIX (6) MONTH
PERIOD IMMEDIATELY PRECEDING THE DATE OF
THE EVENT WHICH GAVE RISE TO THE CLAIM OR, IF
THE SERVICES IN QUESTION HAVE NOT THEN BEEN
PERFORMED FOR SIX (6) MONTHS, SIX (6) TIMES
THE AVERAGE MONTHLY FEES PAID TO SUCH DATE.
9.DISPUTE RESOLUTION PROCEDURES
9.1 Upon written notice by one Party to another of a
dispute, each Party agrees to appoint a senior
management level representative to negotiate in good
faith with the other Party to try to resolve the dispute. In
the event that the Parties do not resolve a dispute within
thirty (30) days of the receiving Party's receipt of the
foregoing notice of dispute, either Party may
arbitration in accordance with Section 9.2 below.
initiate
9.2 Any dispute between the Parties, except those
for which injunctive relief may be sought in accordance
with Section 9.3 below, arising under or relating to this
Agreement and not otherwise resolved in accordance with
this Agreement to both Parties' reasonable satisfaction,
shall be settled by arbitration in New York County, New
York, in accordance with the Commercial Arbitration Rules
of the American Arbitration Association then in effect. In
any such arbitration proceeding, the Parties may take
discovery pursuant to New York law and rules. The final
decision of the arbitrator or arbitrators shall be final and
binding upon the Parties, shall include written findings of
law and fact, and may be entered as a judgment in any
court of competent jurisdiction. The cost of the arbitration,
including the fees and expenses of the arbitrator or
arbitrators, but not including the Parties' respective
attorneys' fees, shall be shared equally by the Parties. The
arbitrator or arbitrators shall be instructed to establish
procedures such that a decision can be rendered within
sixty (60) days of the appointment of the arbitrator or
arbitrators. In no event shall the arbitrator or arbitrators
have the power to award any damages described in and
prohibited pursuant to Article 8 above, which Article shall
be binding upon the arbitrator(s).
9.3 Notwithstanding anything herein to the contrary,
the Parties shall be entitled to apply for injunctive or other
interim relief in aid of arbitration or to prevent violations of
Article 6 above and/or other irreparable harm.
9.4 Irrespective of the forum (whether a dispute is
resolved or sought to be resolved through arbitration or, in
the limited circumstances permitted herein, before a
court), no dispute or action arising out of or relating to this
Agreement may be raised or brought, as applicable, later
than one (1) year after the cause of action or basis for the
dispute became known to the injured Party. Nothing herein
shall be construed to lengthen any shorter period of time
provided for herein.
10.MISCELLANEOUS
10.1 Notices.
All notices required or permitted under this Agreement and
all requests for approvals, consents, and waivers shall be
delivered by a method providing for proof of delivery. Any
notice or request shall be deemed to have been given on
the date of delivery. Notices and requests shall be
delivered to the Parties at the following addresses and fax
numbers, unless a different address has been designated
by notice to the other Party:
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Velocity
To Client:
City of Carlsbad, California
Artn:
1200 Carlsbad Village Drive
Carlsbad, California 92008
Fax: (760) 602-8555
To Velocity:
Velocity Technology Solutions, Inc.
Attn: Mr. Timothy L. Moeggenberg, Director of Finance
850 Third Avenue, 10th Floor
New York, New York 10022
Fax: (646) 884-6670
10.2 Assignment.
Neither Party shall assign, transfer, or subcontract this
Agreement and/or any licenses, rights, duties and/or
privileges under this Agreement without the prior written
consent of the other Party, other than to an affiliate or in
connection with the sale of all or substantially all of its
equity or assets to the proposed assignee (by merger,
reorganization or otherwise).
10.3 Force Maieure.
If the performance of any obligation hereunder is
interfered with by reason of any circumstance beyond a
Party's reasonable control ("Force Majeure"), the Party in
question shall be excused from such performance to the
extent necessary, provided that that Party shall use
reasonable efforts to remove such cause(s) of
nonperformance. This Section 10.3 shall not delay or
excuse your obligations to pay all amounts due hereunder
and any applicable Service Description(s) unless Velocity
fails to provide services as a result of such Force Majeure.
10.4 Non-Solicitation.
You acknowledge and agree that because of the nature of
Velocity's business it would suffer substantial and
irreparable damage if it were to lose the services of any of
its employees or independent contractors, and you
accordingly agree that during the term of this Agreement
and for a period of two (2) years after the termination or
expiration of this Agreement, you shall not, on your own
behalf or on behalf of any other person or entity, directly or
indirectly solicit (except through a published general
solicitation) the employment of, or seek to retain the
services of, any employee or independent contractor of
Velocity who participates in the performance of the
Services. You agree that, if you breach this covenant of
non-solicitation, damages will be impossible or
unreasonably difficult to ascertain, and, in addition to any
other remedies which Velocity may have at equity, you
shall pay to Velocity as liquidated damages, and not as a
penalty, an amount equal to the total cost to Velocity of the
annualized compensation at the time of the breach for the
Velocity employee or independent contractor, calculated
on the basis of a 1,800-hour work-year. You agree that the
provisions of this Section 10.4 constitute a reasonable
covenant under the circumstances, and you further agree
that if any court of competent jurisdiction holds that the
provisions of this Section 10.4 are not enforceable in any
respect, such court shall have the right, power and
authority to excise or modify to the minimum extent
necessary the provisions which such court holds
unenforceable and to enforce the remaining provisions as
so amended.
10.5 Independent Contractor.
We are providing the services under this Agreement as an
independent contractor, and our personnel shall not be
considered to be your employees or agents. This
Agreement shall not be interpreted as creating any other
form of relationship between you and us, including that of
agency, representation, partnership, employment or joint
venture. Neither Party may make any representation or
incur any liability on behalf of, or otherwise bind, the other
Party.
10.6 Right To Reference.
Velocity may identify you as a Velocity client, and you may
inform your clients and suppliers that you are using
services provided by us.
10.7 Applicable Law: Jurisdiction: No Jury Trial.
This Agreement shall be governed by and construed in
accordance with the laws of the State of New York
(without regard to conflicts of law principles), excluding the
United Nations Convention on Contracts for the
International Sale of Goods. The New York State and
federal courts located in New York County, New York,
shall have exclusive jurisdiction over any legal action or
proceeding arising out of any dispute between the Parties
with respect to this Agreement, and each of the Parties
hereby submits itself to the personal jurisdiction of such
courts. THE PARTIES WAIVE THEIR RIGHTS TO A
TRIAL BY JURY FOR ANY DISPUTES BETWEEN THEM.
10.8 Waiver.
Neither Party's failure, at any time, to enforce any right or
remedy available to it under this Agreement shall be
construed to be a waiver of such Party's right to enforce
each and every provision of this Agreement in the future.
10.9 Survival.
The rights and obligations of the Parties which by their
nature would continue beyond the termination or
expiration of this Agreement and/or individual Service
Descriptions shall survive such termination or expiration.
10.10 Severabilitv.
If any portion of this Agreement is terminated or deemed
to be void or unenforceable, that portion of this Agreement
shall be severed herefrom or reformed to the minimum
extent necessary to render it enforceable, and the
remainder of this Agreement shall continue to be effective
and enforceable. This Agreement shall be construed as if
drafted jointly by the Parties, and no presumption or
burden of proof shall arise that favors or disfavors either
Party as a result of its responsibility for or participation in
the drafting hereof.
10.11 Miscellaneous.
This Agreement, together with any and all Service
Descriptions, constitutes the entire agreement between
the Parties with respect to subject matter hereof and may
be modified only by a writing signed by the Party to be
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charged therewith. No third party has authority to bind
either you or us unless such authority is specifically
included within the express terms of this Agreement
(including any addendum, riders, exhibit, or schedule
attached hereto) signed by an authorized signatory of the
Party to be charged therewith. All prior and
contemporaneous purchase orders, agreements,
representations, statements, proposals, negotiations,
understandings, and undertakings with respect to the
subject matter of this Agreement, whether written or oral,
are superseded by this Agreement. No third party shall be
a third party beneficiary under, nor shall it have the right to
enforce the obligations of or assert any claim against
either Party hereto pursuant to the terms and conditions
of, this Agreement. This Agreement may be executed in
counterparts, all of which shall be considered one and the
same agreement.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement by their duly authorized representatives as of the
date set forth above.
HNOLQGY SOLUTIONS, INC.
Name
Si/P
Title
Approved As To Form
Paul Edmonjzfsoji, Deputy/Assistant City Attorney
By:
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Velocity
ADDENDUM to the MASTER AGREEMENT
I MANAGED ' AND HOSTING SERVICES
This Addendum ("Addendum") dated as of February 16, 2010 to the Master Agreement dated as of February 16, 2010
(the "Master Agreement"), by and between Velocity Technology Solutions, Inc. ("we", "us", "our" or "Velocity"), a
Delaware corporation with its principal offices located at 850 Third Avenue, New York, New York 10022-6222, and City
of Carlsbad, California("you", "your" or "Client"), a California corporation with its principal offices located at 1200
Carlsbad Village Drive, Carlsbad, California 92008-1949 (Velocity and Client referred to individually as a "Party"
and/or collectively as the "Parties").
2.4 "Software" shall mean the software programs in
executable form, including all corrections, updates,
modifications and enhancements to such software, all
related source code, and all documentation and
WHEREAS, Client wishes Velocity to provide, and Velocity
wishes to provide to Client, application management and
hosting services pursuant to the terms of the Master
Agreement, this Addendum and the applicable Service
Description(s) attached hereto.
WHEREAS, the Parties
Agreement; and
have entered into the Master
information pertaining to software, whether in online, hard-
copy or other form, together with any updates, revisions,
new versions and supplements thereto, which is made
available by either Party and used, directly or indirectly, by
Velocity in connection with the Service.
Now, therefore, the Parties agree as follows:
1. CONSTRUCTION
1.1 All of the terms and conditions of the Master
Agreement shall apply to this Addendum. All capitalized
words and phrases which are not defined herein and
which are defined in the Master Agreement shall have the
same meanings as are set forth in the Master Agreement.
1.2 The terms Hardware, Software, or Network, when
preceded by the words "Client-Provided", shall
respectively mean any Hardware, Software, or Network
which is owned, leased, licensed, contracted for, or
otherwise provided, directly or indirectly, by you and made
available to Velocity in connection with the Service.
1.3 The terms Hardware, Software, or Network, when
preceded by the words "Velocity-Provided", shall
respectively mean any Hardware, Software, or Network
which is owned, leased, licensed, contracted for, or
otherwise provided, directly or indirectly, by Velocity, in
connection with the Service.
2.DEFINITIONS
2.1 "Hardware" shall mean the equipment which is
made available by either Party and used, directly or
indirectly, by Velocity in connection with the Service.
2.2 "Network" shall mean the network (and related
equipment and features) which is made available by either
Party and used, directly or indirectly, by Velocity to
connect your Premises to the data center facility at the
location set forth in the applicable Service Description.
2.3 "Processing Environment" shall mean all
Velocity-Provided Hardware, Velocity-Provided Software,
and Velocity-Provided Network used in connection with
our provision of the Service.
2.5 "Software License" shall mean any agreement
entered into by and between a Party and a Software
licensor for the use of Software by that Party to the extent
permitted thereby.
3.FEES; TERM
3.1 Fees.
All monthly fees related to any Application Management
and Hosting Service Description shall be increased
annually by a percentage equal to that of the United
States Consumer Price Index - All Urban Consumers
("CPI-U") (but in no event less than zero percent) for the
previous calendar year, plus one and one half percent
(1.5%); however, no such increase shall be made in the
first twelve (12) months following the date of any such
Service Description.
3.2 Term.
Each Service Description related to Application
Management and Hosting Services will automatically
renew for successive twenty four (24) month periods,
provided that neither party has given the other written
notice, not less than twelve (12) months prior to the end of
the then current term of such Service Description, of its
intention not to renew.
4.RESPONSIBILITIES OF THE PARTIES
4.1 Service Level Commitments.
We shall provide the Service in a manner consistent with
the service level commitments described in the applicable
Service Description(s). Except for your right to terminate
as set forth in Master Agreement, the service level
commitments and remedies set forth in the applicable
Service Description(s) provides the sole and exclusive
remedy for failure of or defect in the Service.
4.2 System Maintenance.
Each Party shall ensure that the Hardware and Network
provided by it meets, over the course of the term of the
applicable Service Description(s), the specifications of the
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Velocity
manufacturers and any other standards which may be
reasonably required.
4.3 Access to Premises.
You shall allow Velocity access to your offices during
normal business hours upon reasonable advanced notice
for purposes of our provision to you of the Service.
4.4 Authorized Users.
You are responsible for the manner in which you and your
end users access and use the Service, including the
policies and procedures you establish to protect the
security of your data, network and all other matters
relating to how you use the Service. You shall restrict
access to and use of the Service to Authorized Users (as
defined in individual Service Descriptions), including by
protecting against and notifying us immediately in the
event of any disclosure, loss, theft, fraudulent or otherwise
unlawful or unauthorized use of any password provided to
you in connection with the Service. Velocity reserves the
right to set and enforce any policy and/or procedure with
respect to access to the Processing Environment.
4.5 Velocity System Access Restrictions.
You and each of your end users shall not access any
Velocity or Verizon internal or external networks, facilities,
computer systems, partitions, programs, or data which
is/are not specific to you. You and each of your end users
shall not publish or make generally known via any medium
(e.g., via electronic mail or posting on bulletin boards) any
such capabilities for such access. You and each of your
end users shall not introduce any program, routine, device
or other undisclosed feature, including any so called time
bomb, virus, software lock, drop-dead device, malicious
logic, game, worm, Trojan horse, data capture routine, or
trap or back door (each a "Virus") which is designed to
delete, deactivate, interfere with or otherwise harm any
component of the Processing Environment, any Software,
and/or any data, or which is intended to provide
unauthorized access or produce unauthorized
reproduction or modification to any component to the
Processing Environment, any Software, and/or any data.
In the event of any unauthorized access or introduction of
any Virus or any other act or omission by you which is in
violation of your obligations as set forth in this Section 4.5,
we shall, at your expense, analyze the specific situation
and use all commercially reasonable efforts to cure the
situation. We reserve the right to take all actions to
protect the Processing Environment, Software, and data
against an improper act as set forth in this Section 4.5 or
otherwise, including suspension of the Service.
4.6 Service Usage Conditions.
You shall not use or permit the Service to be used (a) in
violation of any applicable export law or regulation
(including any U.S. export law or regulation), (b) in
violation of any applicable national, state, or local law or
regulation, including any law governing the import of
services or governing the content which you make
available via the Service, (c) to store any Client-Provided
Software or content that includes obscene, pornographic,
racist, libelous or illegal material or which is otherwise
objectionable, or (d) in any way that infringes the right of
any third party or interferes with other users of our
Service. You shall indemnify, defend and hold us
harmless against any and all claims, costs, expenses
(including reasonable attorneys' fees and expenses),
losses or liabilities incurred by us in connection with a
claim by any third party arising out of any violation by you
of this Section 4.6. We shall have the right to take all
appropriate actions, including without limitation
suspension of the Service, in the event that we reasonably
determine that your use (or any of your end users' use) of
the Service is in violation of this Section 4.6.
5.SOFTWARE
5.1 Software License Adherence.
Each Party agrees that it shall not act or omit to act in any
fashion which would cause the other Party to breach or
otherwise be in violation of the terms and conditions of any
Software License in connection with the Service. In the
event that you do not enter into or do not comply with any
agreement which is required by any Software licensor, we
shall not be required to use the applicable Software in
connection with the Service, and we will not as a result
thereof be in breach of any obligation of this Agreement
with respect to our provision to you of the Service.
5.2 Software Usage Restrictions.
Neither Party shall allow third parties to, (a) disclose or
make available to any third party any portion of any
Software provided by the other Party, (b) copy or duplicate
any Software provided by the other Party, or (c) reverse
engineer, decompile or disassemble any Software
provided by the other Party. Neither Party shall provide
any third party access to any Software provided by the
other Party (except by Velocity to Velocity subcontractors).
Neither Party shall sublicense, rent, lease, barter, sell, or
otherwise distribute any Software provided by the other
Party or use any technical information in any way related
to or acquired in connection with its use of any Software
provided by the other Party for the prospective economic
advantage of or otherwise to any third party. Neither Party
shall disclose the results of any benchmark tests of any
Software provided by the other Party or data output of the
same to any third party.
6. ASSUMPTION OF SERVICES BY VERIZON
6.1 In the event that Velocity ceases to conduct its
operations in the ordinary course of business other than
pursuant to an assignment as provided in Master
Agreement, Verizon Information Technologies, LLC, a
Delaware limited liability company ("Verizon"), shall, upon
entering into a mutually acceptable agreement with you,
perform for you the services relating to the hosting of the
Client-Provided Software on Verizon infrastructure within
Verizon data centers, help desk services, and all other
services relating to the support of your infrastructure which
Velocity has agreed to perform for you, and Verizon shall
charge you prices therefor no greater than the prices
charged to you by Velocity, provided that your credit
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Velocity
standing meets Verizon's then generally effective
minimum credit approval and other client acceptance
policies.
7.REPRESENTATIONS AND WARRANTIES
7.1 Agreement With Verizon.
Velocity represents and warrants that it has entered into
an Agreement with Verizon Information Technologies,
LLC, a Delaware limited liability company and the assignor
and predecessor-in-interest to Verizon, which (a) provides
for Verizon to provide hosting services for the Service until
the end of the term of this Agreement and (b) allows
Velocity to grant to you any rights with respect to Verizon
which we have granted to you herein.
7.2 Software.
Each Party represents and warrants that it has all
necessary and appropriate right, title and interest in and to
the Software provided by it and that it is authorized to
license, sub-license, or grant use of, as applicable, such
Software to the other Party and to Velocity Third Party
Suppliers for use in connection with the Service.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement by their duly authorized representatives as of the
date set forth above.
OLOGYSOLJ4TIONS/INC
Title
Approved As To Form
Paul Edmonton, DoputyfAssistanjCrty-Attorney
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Page 8 of 10
Velocity
ADDENDUM to the MASTER AGREEMENT
for
CONSULTING SERVICES
This Addendum ("Addendum") dated as of February 16, 2010 to the Master Agreement dated as of February 16, 2010
(the "Master Agreement"), by and between Velocity Technology Solutions, Inc. ("we", "us", "our" or "Velocity"), a
Delaware corporation with its principal offices located at 850 Third Avenue, New York, New York 10022-6222, and City
of Carlsbad, California ("you", "your" or "Client"), a California corporation with its principal offices located at 200
Carlsbad Village Drive, Carlsbad, California 92008-1949 (Velocity and Client referred to individually as a "Party"
and/or collectively as the "Parties").
4.2 Deliverables.
Except for Velocity-Provided Intellectual Property (as
defined below), all deliverables (as described in any
Service Description) developed, authored, conceived,
produced or acquired by Velocity or Velocity
subcontractors for Client under this Agreement shall, as
between Velocity and Client, be deemed to be the
property of Client. Velocity shall notify Client of the license
terms of any third party software that is part of the
deliverables, and Client shall comply with such license
WHEREAS, the
Agreement; and
Parties have entered into the Master
WHEREAS, Client wishes Velocity to provide, and Velocity
wishes to provide to Client, consulting services pursuant to
the terms of the Master Agreement, this Addendum and
the Service Description(s) attached hereto.
Now, therefore, the Parties agree as follows:
1.CONSTRUCTION
1.1 All of the terms and conditions of the Master
Agreement shall apply to this Addendum. All capitalized
words and phrases which are not defined herein and
which are defined in the Master Agreement shall have the
meanings set forth in the Master Agreement.
2.DEFINITIONS
2.1 "Affiliate" shall
controlling, controlled by
Client.
mean any person or entity
or under common control with
2.2 "Change Order" shall mean any change order or
other written amendment to a Service Description entered
into and signed by the Parties from time to time.
3.CLIENT RESPONSIBILITIES
You shall timely provide access to all necessary and
appropriate resources to Velocity as set forth in the
Service Description and as may otherwise be required to
accomplish the work objectives, including access to your
premises, hardware, software, personnel. You shall timely
provide accurate responses to any necessary and
appropriate request for information or direction by us with
respect to the work.
4.MATERIALS AND INTELLECTUAL PROPERTY
4.1 Client-Provided Materials.
As between Client and Velocity, Client shall retain all
rights in any data, software and other works, materials and
intellectual property provided or made accessible by Client
to Velocity (collectively the "Client-Provided Materials").
Client hereby grants to Velocity a limited, non-exclusive
license to use the Client-Provided Materials solely for the
purpose and to the extent necessary to perform the
Service. The Client-Provided Materials shall be deemed
Clients Confidential Information.
terms.
4.3 Velocity-Provided Intellectual Property.
"Velocity-Provided Intellectual Property" means, without
limitation, any copyright, copyright application, license,
publication right, and software (including source code,
object code, and related documentation), derivative work,
invention, idea, know-how, process, trade secret,
information including Confidential Information as described
in the Master Agreement, drawing, document, design,
model, and all other tangible and intangible materials, any
improvements or derivative works to or modifications of
the foregoing, and any other items expressly identified as
"Velocity-Provided Intellectual Property" in a Service
Description. All Velocity-Provided Intellectual Property
shall, as between Velocity and Client, be the property of
Velocity. Velocity hereby grants to Client a perpetual, non-
exclusive, non-transferable, irrevocable, worldwide, fully-
paid right and license to use, display, perform and modify
the Velocity-Provided Intellectual Property to and only to
the extent that the Velocity-Provided Intellectual Property
is included in any deliverable hereunder. Velocity shall, to
the extent to which it may legally do so and subject to the
rights and claims of any third parties, grant to Client a
perpetual, non-exclusive worldwide license to use the
Velocity-Provided Intellectual Property exclusively in its
internal operations subject to the following conditions:
Client agrees that it shall not, nor shall it attempt to
sublicense, lease, transfer or assign to any third party all
or any portion of the Velocity-Provided Intellectual
Property or any rights to the Velocity-Provided Intellectual
Property, provided that no use of the Velocity-Provided
Intellectual Property by an Affiliate of Client shall constitute
a prohibited assignment hereunder.
4.4 Third Party Rights.
Nothing herein shall be deemed to constitute a grant or
assignment of any rights by any Party which is unlawful or
which infringes upon the rights of any third party.
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Velocity
5.SOFTWARE
5.1 Software License Adherence.
Each Party agrees that it shall not act or omit to act in any
fashion which would cause the other Party to breach or
otherwise be in violation of the terms and conditions of any
Software License in connection with the Service. In the
event that you do not enter into or do not comply with any
agreement which is required by any Software licensor, we
shall not be required to use the applicable Software in
connection with the Service, and we will not as a result
thereof be in breach of any obligation of this Agreement
with respect to our provision to you of the Service.
6.REPRESENTATIONS AND WARRANTIES
6.1 Software.
Each Party represents and warrants that it has all
necessary and appropriate right, title and interest in and to
the Software provided by it and that it is authorized to
license, sub-license, or grant use of, as applicable, such
Software to the other Party and to Velocity Third Party
Suppliers for use in connection with the Service as
contemplated hereunder.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement by their duly authorized representatives as of the
date set forth above.
Name
Title
Approved As To Form
Paul Edmonifeon,
By;
Distant City Attorney
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Velocity
This Rider ("Rider") dated as of February 16, 2010 to the Master Agreement dated as of February 16, 2010 (the Master
Agreement"), by and between Velocity Technology Solutions, Inc. ("we", "us", "our" or "Velocity"), a Delaware
corporation with its principal offices located at 850 Third Avenue, New York, New York 10022-6222, and City of
Carlsbad, California ("you", "your" or "Client"), a California corporation with its principal offices located at 1200
Carlsbad Village Drive, Carlsbad, California 92008-1949 (Velocity and Client referred to individually as a "Party"
and/or collectively as the "Parties").
The Parties hereby agree to amend the Master Agreement as follows:
1. Section 4.2 - At the end of Section 4.2, insert", provided that such expenses are approved by you and are consistent
with your expense policy, which you have provided to us".
2. Section 5.1 - At the end of Section 5.1, insert the following: "Velocity's insurance coverage includes (i) commercial
general liability insurance - $2 million aggregate; (ii) workers compensation insurance - $1 million per accident; (iii)
automobile liability - $1 million combined single limit; and errors and omissions insurance - $5 million.
3. Section 6.3 - Insert Section 6.3, as follows:
"Public Disclosure Request. If Client receives a request to disclose any Confidential Information under any Public
Information Act, Open Records Act or similar law ("Request"), the Client shall immediately notify Velocity and prior to
disclosure give Velocity an opportunity to take any protective action it deems appropriate. If Velocity has not
responded timely to the Request, as defined by the applicable law pursuant to which the Request is made, the Client
may, in its sole discretion and without being in breach of this Agreement, respond to the Request as the Client deems
appropriate. In the event that Velocity directs the Client not to disclose the Confidential Information materials sought
pursuant to the Request, Velocity will indemnify Client against any losses, including reasonable attorney fees and
costs, sustained arising from the non-disclosure of the Confidential Information material requested in the Request.
Client, in its sole discretion may tender the Request to Velocity for response, including, any and all subsequent legal
actions or challenges related to the non-disclosure. In its notice to Velocity of any Request, Client will specify the time
in which Velocity's response is due. Client shall use its best efforts to cooperate with Velocity in order to protect and
withhold from disclosure the following materials, which constitute Velocity trade secrets: all methodology, service
level agreement information, and pricing information embedded in Velocity's service descriptions and in all other
written materials provided by Velocity to the Client."
4. Section 8.2 - On lines 9 and 13, replace "SIX (6)" with "TWELVE (12)".
5. Section 9.2 - Delete Section 9.2.
6. Section 9.3 - Delete Section 9.3.
7. Section 9.4 - On lines 1 through 4, delete the parenthetical.
8. Section 10.4 - Section 10.4 shall be revised to read as follows:
"You acknowledge and agree that because of the nature of Velocity's business it would suffer substantial and
irreparable damage if it were to lose the services of any of its employees, and you accordingly agree that during the
term of this Agreement and fora period of one (1) year after the termination or expiration of this Agreement, you shall
not, on your own behalf or on behalf of any other person or entity, directly or indirectly solicit (except through a
published general solicitation) the employment of, or seek to retain the services of, any employee of Velocity who
participates in the performance of the Services. You agree that, if you breach this covenant of non-solicitation,
damages will be impossible or unreasonably difficult to ascertain, and, in addition to any other remedies which
Velocity may have at equity, you shall pay to Velocity as liquidated damages, and not as a penalty, an amount equal
to the total cost to Velocity of the annualized compensation at the time of the breach for the Velocity employee,
calculated on the basis of a 1,800-hour work-year. You agree that the provisions of this Section 10.4 constitute a
reasonable covenant under the circumstances, and you further agree that if any court of competent jurisdiction holds
that the provisions of this Section 10.4 are not enforceable in any respect, such court shall have the right, power and
authority to excise or modify to the minimum extent necessary the provisions which such court holds unenforceable
and to enforce the remaining provisions as so amended."
9. Section 10.7 - In the caption, delete "; No Jury Trial". On lines 2 and 5, replace "New York" with "California". On line
6, replace "New York County, New York" with "San Diego County, California". Delete the final sentence.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
City of Carlsbad
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Form RIDER 2009-02-06
Velocity
The Parties hereby agree to amend the Addendum to the Master Agreement for Application Management and Hosting
Services as follows:
10. Section 3.1 - On lines 6 and 7, delete ", plus one and one half percent (1.5%)".
11. Section 3.2 - On line 3, replace "twenty four (24)" with "twelve (12)". On line 5, replace "twelve (12)" with "six (6)".
12. Section 4.6 - On line 19, after "Service" insert "upon four (4) hours prior notice to you thereof.
IN WITNESS WHEREOF, the Parties have executed this Rider as of the date first set forth above.
VELOCITY TECHNOLOGYSto
CM
LU:
Name
Title
Approved As To Form
Paul Edmon/zlsonrOoputyifAssistant City Attorney
City of Carlsbad
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Form RIDER 2009-02-06
Page 2 of 2
IL?
Velocity
APPLICATION MANAGEMENT AND HOSTING SERVICES
SERVICE DESCRIPTION NUMBER 1
This Service Description dated February 16, 2010, is attached to and made a part of the Master Agreement dated as of
February 16, 2010 by and between Velocity Technology Solutions, Inc. ("we", "us", "our" or "Velocity"), and City of Carlsbad
California ("you", "your" or "Client").
1.OVERVIEW OF SERVICES
1.1 Processing Environments
We shall provide you with access to two processing environments for your Lawson Software, Inc. ("Lawson") application
software: one (1) Test environment and one (1) Production environment. The Test Environment will contain a three (3) product
lines and the Production Environment will have one (1) product line as described below.
Environments
Test
Production
Product Lines
Training
Build (Development)
Test
Production
1.2 Application Software
The Lawson and Third Party applications that we will install and manage with these processing environments will be as
follows:
Categories
Lawson Core Business
Applications
Lawson Self-Service Applications
Lawson Technology Extensions
Third-Party Applications
Application Suites
Lawson Human Resources/Payroll
EMSS
Lawson System Foundation
Portal
Design Studio
MS Add-lns
LBI
Process Flow Integrator
BSI TaxFactory
MicroFocus Compiler and Runtime
Software Modules
BN, HR, PR, PS
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Velocity
1.3 Platform
The Core Lawson Application Software will be supported on the Velocity On-Demand platform set forth in the table below.
Some of the application software may be supported on other server equipment (i.e., Intel) as required. The components of the
Velocity On-Demand platform are subject to change based upon the requirements of the software and/or processing
requirements.
Core Lawson
Components
Servers
Storage
Operating System
Database
Descriptions
IBM pSeries Configuration
150 GB of SAN storage
AIX Unix
Oracle
LBI
Components
Servers
Storage
Operating System
Database
Descriptions
Intel PEE 2950 (2X8, w 4GB Memory
350 GB of Internal storage
Windows
SQL
2. SERVICE ACTIVATION
The following services will be provided in order to assist you with the activation of your hosting services.
2.1 Client Manager
You will be provided with a Client Manager who will coordinate Velocity's resources and serve as a focal point for all
communications.
2.2 System Review
We will review your technical requirements and collect data necessary for us to plan the activation of and configure your
processing environments and establish connectivity between your site and data center. We will also indoctrinate you on the
proper procedures to access our Client Service Desk.
2.3 System Installation & Setup
We will establish the processing environment and install the required database, Lawson, and Third-Party software
applications. We will setup the appropriate product lines and data environments.
3. SOFTWARE
3.1 Velocity-Provided Software
The "Velocity-Provided Software" to be installed and supported under this Service Description is as follows:
Database
• Oracle Database for Lawson Core Applications
• SQL Database for LBI Applications
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Velocity
Processing Environment Support Software
Velocity servers are monitored and supported using a combination of software products and proprietary technology. The
following list details some of the software included with the Velocity On-Demand Solution.
• Vertias Netbackup
• BMC Perform and Predict
• F-SecureSSH(ForAIX)
• Reflection Secure IT Server SSH (For Intel Servers)
• Symantec Antivirus (For Intel Servers)
Velocity will be responsible for paying licensing and maintenance fees and obtaining the appropriate media with respect to the
Velocity-Provided Software.
32 Client-Provided Software
The "Client-Provided Software" to be installed and supported is listed in Section 1.2, Application Software, above.
You will be responsible for paying all licensing and maintenance fees and supplying Velocity with the appropriate media and
vendor support access with respect to the Client-Provided Software. The Client-Provided Software must be maintained at a
version/release level supported by the software vendor. Velocity is not responsible for providing support for any Client-
Provided Software that is not supported by the vendor.
4. DATA CENTER SERVICES
4.1 Hardware Services
The services we will provide to support the hardware configuration will include procurement, installation, testing and
maintenance of all servers related to the processing environment. An on-site inventory of spare parts and service contracts
with hardware suppliers will serve to speed the repair time in the event of equipment failure. In addition to the forgoing,
hardware services will include:
• Performance monitoring and tuning.
• Disk storage utilization tracking.
• Configuration planning and change management.
• 24x7 automated monitoring.
4.2 Operating System Services
Operating system software support will include maintenance, monitoring and tuning of the environment. In addition to the
forgoing, operating system services will include:
• Initial installation, configuration, and testing.
• Performance monitoring and tuning.
• Maintaining software at release levels required by Client-Provided Software vendors including installation,
configuration, and testing of patches and upgrades.
• Software troubleshooting and repair.
• 24x7 automated monitoring.
4.3 Database Administration Services
We will install and configure the database in accordance with requirements of the operating system and the Client-Provided
Software. The following activities will be included as part of the database administration services:
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Velocity
• 24x7 monitoring of database state, availability, and backup status.
• Space utilization monitoring for filesystems, tablespaces, archive logs, and redo logs.
• Database tuning and periodic maintenance.
• Maintaining database software at release levels required by Client-Provided Software vendors including installation,
configuration, and testing of patches and upgrades.
4.4 Backup
Velocity backup and restoration systems include fiber-attached robotic tape libraries, a separate backup network for
performing network backups, and Veritas Netbackup servers and software for administering the backup environment.
Client has the right to request at any time a snapshot of Client's data (a copy of Client's production product line data) and
Velocity will promptly provide it in a reasonable medium and format agreeable to Client. Client agrees to pay reasonable time
and material fees associated with the generation and delivery of such snapshot data.
Backup Schedule
We will perform full weekly and incremental daily backups to tape of all data and application software . Databases are
configured for hot backups, as well as, the ability to perform a point in time recovery.
Tape Retention
Velocity uses an off-site tape vault service for storage of backup media in a secure environment. Tapes are rotated offsite in
order to maintain a 48 hour recovery point.
In the event this Service Description is terminated, back-up tapes will be made available to you for the cost of the media and
shipping.
4.5 Data Center Facilities and Equipment
The data center facilities used by Velocity in the provision of its Application Management and Hosting services are owned by
Verizon Communications, Inc. Personnel from Velocity and Verizon's information technologies division conduct the design,
management and monitoring functions for the servers, storage and communication equipment used in the provision of
Velocity's services.
46 Disaster Recovery
In the event of a major incident, emergency management and disaster assessment teams will be engaged to determine if a
disaster should be declared. In the event of material damage to or destruction of the primary processing site, the disaster
recovery plan will be invoked. This plan may call for moving your processing environments to a remote recovery site.
In such an event, production environments would be recovered first, with Test and other environments following. Services for
accelerated recovery times and recovery points are available as an additional service.
The following disaster recovery services are included:
Remote recovery site
Secure off-site storage of backup media
72 hour recovery time objective
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Velocity
5. DATA CENTER CONNECTIVITY
5.1 Network Services
We will install and configure a Local Area Network (LAN) within our data center as well as establish any Wide Area Network
(WAN) connection as described in this Service Description. The following systems and procedures will be included as part of
the connectivity services:
• 24x7 monitoring of network, servers, and network equipment.
• A network-based intrusion detection system that enables security personnel to detect and address intrusions in real
time. These systems are monitored 24x7. The intrusion detection software used will be RealSecure by Internet
Security Systems (ISS).
• Redundant firewalls that are strategically placed at all ingress points into our networks which are designed to allow
only authorized traffic to enter such networks. Firewalls will be strategically placed within the internal networks to
effectively isolate your traffic.
• Virtual local area network ("VLAN") technology that isolates Client network traffic from other client and internal
Velocity traffic.
• Full log analysis correlation and review, including router, firewall, host, and IDS logs to proactively identify anomalies.
• VPN and SSH protocols that eliminate the use of insecure protocols when traversing external networks.
• A dedicated Computer Incident Response Team (CIRT) within our security community to monitor and address
intrusions and other computer-related emergencies.
• Development and dissemination of host hardening guidelines that are designed to add another layer of security to our
security posture.
5.2 Network Management
Velocity has built a fully redundant network infrastructure that provides secure, high-speed connectivity within our data center.
The servers defined in this Service Description will be connected to this network infrastructure.
To protect our clients' processing environments, we have created multiple security zones (referred to as "De-Militarized Zones"
or "DMZs") that are separated by redundant firewalls. Within each DMZ, we utilize virtual LANs to further segment network
traffic.
The external DMZ ("EDMZ") represents the "dirty" side of the network. Servers placed in this zone are direct Internet facing
and required to undergo a hardening process to secure them from unwarranted access. Servers in the EDMZ will also require
the use of "Secure Socket Layer" ("SSL") technology.
Application and database servers will be placed within the internal DMZ ("IDMZ"). Like the EDMZ, this zone will be protected
by redundant firewalls and the use of VLAN segmentation.
5.3 Network Connectivity
Site-to-Site VPN Connection
VPN connectivity will be provided for communication to the data center from the primary location:
• At the data center we will establish, manage, and maintain redundant VPN devices connected to the Internet.
• Between locations, we will establish and monitor the VPN connection from the Velocity data center to your location.
• The VPN connection at both locations must utilize 168 bit 3-DES encryption.
• Client is responsible for providing and maintaining Internet bandwidth, VPN hardware, and VPN device support at the
Client facility.
6. CLIENT-PROVIDED HARDWARE
The equipment required to access the processing environment installed at your facility ("Client-Provided Hardware" and
"Client-Provided Network") will be supplied, installed and maintained by you. Your responsibilities with respect to the Client-
Provided Hardware will include:
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• Providing and maintaining the hardware necessary for your users to access the system including desktop PCs and/or
thin client terminals equipped with appropriate software.
• Providing and maintaining the Lawson supported printer(s) for batch output purposes and all other output devices as
required.
• Providing and maintaining the local area network (LAN) equipment and software required to connect desktop systems
and printers to the network communications equipment (i.e., firewall and VPN).
• Providing and maintaining the network communications hardware and software required to securely connect devices
to the system up to the point of demarcation.
• Providing end user support for the Client hardware described above.
7. CLIENT SUPPORT SERVICES
We will provide the support services necessary to ensure that your processing environment operates at or above the
performance levels guaranteed by us herein. The specific support services we will provide under this Service Description are
as follows.
7.1 Client Manager
A Velocity Client Manager (CM) will be assigned to your account. The CM will serve as the main point of contact for all service
related support needs. The responsibilities of the CM include:
• Coordinating all support related activities and resources.
• Coordinating migration activities, upgrades, and patch applications.
• Maintaining an up to date understanding of your service needs and outstanding issues.
• Overseeing the change management process.
• Notifying and coordinating any unscheduled maintenance activities.
• Managing and reporting all account activity (projects, service level and performance).
• Conducting periodic meetings to review our adherence to service level commitments and other relevant issues.
Your client manager will be available and should be contacted for Critical and Non-Critical Incidents during Standard Business
Hours. In the event that you require support outside of Standard Business Hours, you will be able to contact the Service Desk.
7.2 Technical Service Desk
We will provide the following support and system administration services with respect to the Lawson and third party software.
• 24x7 monitoring of application state and availability.
• Application tuning and periodic maintenance.
• Installation and testing of patches or bug fixes (as further described below).
• Technical support for Critical Issues will be available on a 24x7 basis.
• Technical support for Non-Critical Issues and system administrative requests during Standard Business Hours.
7.3 Designated Support Users
In order to assist in maintaining consistent communications among your staff and Velocity, you agree to designate specific
personnel who will serve as Support Users. These Support Users will have specific roles as follows:
• Four (4) application trained "super users" that will serve as the primary interface with Velocity for support issues.
• One (1) security officer and one (1) backup security officer. These individuals are responsible for authorizing
changes to user accounts including password resets and user account additions, changes, and deletions.
• One (1) primary contact for account related issues. This individual will interface directly with the Client Manager.
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7.4 Scheduled Operational Hours/Maintenance Windows
• "Scheduled Operational Hours" will be twenty-four (24) hours a day, seven (7) days a week.
• "Standard Business Hours" shall be Monday through Friday from 9 am to 9 pm Eastern Time excluding holidays.
(Holidays include: Memorial Day, Independence Day, Labor Day, Thanksgiving Day and the day after Thanksgiving,
Christmas Day, and New Year's Day).
• "Scheduled Maintenance Windows" means the time periods used by Velocity to conduct maintenance, backup and
other activities. The standard Scheduled Maintenance Windows will be six (6) hours per week commencing Sunday
at 12:01 AM Eastern Time. In additional, Velocity will publish an annual maintenance calendar detailing special
maintenance periods that are required for maintenance that would exceed the duration of the standard Scheduled
Maintenance Window.
7.5 Scope of Support Services
The Client Manager and Enterprise Service Desk services will cover only the application software defined in this Service
Description. The following conditions will apply to the support services:
• Non-Critical Incidents which are identified outside of Standard Business Hours will be recorded and assigned to a
technician the next business day.
• Velocity will be the primary contract for applications specified in this Service Description.
• Velocity will provide issue identification support for items specified in this Service Description. Any support request
reasonably deemed by us (after reasonable consultation with you) to be solely attributed to a third party application
not covered by this Service Description, its setup, configuration or architecture, or incompatibility or interoperability
errors with other supported components, will be billed on a time and materials basis after we obtain your written
approval for the work and the additional fees.
• As a maintenance paying client of Lawson, you are entitled to receive support from Lawson's support organization.
In the event that you determine a problem to be related directly to the Lawson software application, you may contact
the Lawson support desk directly to seek a resolution. Upon request, your Client Manager will coordinate your
communications with the Lawson support desk.
7.6 User Account Management (Adds, Changes. Deletions)
You will be responsible for establishing and maintaining user accounts and security settings utilizing the Velocity On-Demand
tool suite.
In the event that our security monitoring systems detect that a user ID is being used in a manner that could jeopardize system
performance or security, we may suspend or revoke that user ID. We will promptly notify you of any such suspension or
revocation actions taken.
Lawson Security Support
You are responsible for designing and enforcing Lawson-specific security among your users. Your security responsibilities will
include:
• Defining users' access to the system and the application software.
• Defining security classes and groups within the Lawson software applications.
• Defining which users have access to the defined security classes and groups.
• Lawson users will have access to the system through the Lawson Portal, self-service applications, and Lawson
Insight Desktop (LID). LID user access will not include access to the command line for security purposes.
Application Server Security
In order to safeguard your application software data, Velocity does not permit access to the UNIX command prompt. This is
done to safeguard your application software and data. The Velocity On-Demand solution requires that any action that was to
be performed at the UNIX command prompt be performed by using the Lawson application. This ensures that only the people
to whom you have given access to perform these functions will be able to do so. Along with On-Demand® enhancements,
Lawson forms such as the Lawson Program Generator ("PGMDEF"), Lawson Editor ("LEX" or "LED"), and CNVIMP can be
used to perform these system administration functions.
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DBMS Security
The Velocity On-Demand solution allows read only ODBC access to perform third party report writing, such as Crystal
reporting.
Software Patch Management
Lawson provides patches in the form of cyclical updates, service packs, and critical transfer packs and updates to its clients
under maintenance contracts. Many other third party software products will follow similar practices with respect to patches.
The Velocity On-Demand solution includes a quarterly Software Upgrade Patch ("SUP") process. This process is designed to
keep your software versions current and simplify the maintenance of your system. The process has the following steps:
Velocity gathers information about current patches and releases.
• The patches are bundled together into a combined package called a "SUP".
• The SUP undergoes extensive interoperability and quality assurance testing.
• The SUP is applied to the test environment during a SUP change window during the first month of the quarter. The
schedule of SUP change windows is published annually.
• Client is provided with a comprehensive document that details the included patches, impacted modules, related
Lawson documentation, and any required pre- and post- application steps. Client has thirty (30) days to perform
testing on the SUP.
• The SUP is applied to the production environment during a SUP change window during the second month of the
quarter.
Client has the right to opt out of a SUP in a particular quarter. However, it must then participate in the next quarter's SUP so
that it can be brought current. Clients can also choose to have the SUP applied outside of the normal SUP change window for
an additional fee.
The following items relating to support with respect to patch applications are not provided under this Service Description (but
can be performed by Velocity for an additional charge) and will be the responsibility of the Client unless otherwise agreed to in
writing by Parties:
• Functional differences and end user training.
• Functional application setup, testing, and support.
• Data integrity testing.
• Custom code testing or retrofitting.
• Interface program testing or retrofitting.
Software Upgrade Management
Lawson provides software upgrade to its clients under maintenance contracts. Many other third party software vendors will
follow similar practices with respect to patches. The tasks that we will perform with respect to software upgrades are as
follows:
• We will coordinate with you the timing of software upgrades.
• Assistance with developing an upgrade project plan.
• Technical project coordination.
• Setup of a Lawson product line to test the upgrade.
• We will perform the technical installation and testing relating to the upgrades.
• We will provide you with guidance as to the coordination of the functional configuration, functional testing, and data
validation testing.
• Upgrade of the Lawson environment.
• Installation of the upgraded Lawson software on the servers.
• Execution of the upgrade data conversion programs three (3) times (test 1, test 2, and final production move).
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• Upon your approval we will upgrade the production environment and applications.
• Production cut-over support and post go-live support.
Depending on the complexity of the upgrade additional server resources and temporary software licensing may be required.
Velocity reserves the right to charge for these additional temporary items at cost. Additionally, Velocity reserves the right to
impose time limits on the length of time devoted to the upgrade process. Additional fees may apply if the time limit is
exceeded.
The following items relating to support with respect to upgrades are not provided under this Service Description (but can be
performed by Velocity for an additional charge) and will be the responsibility of the Client unless otherwise agreed to in writing
by the Parties:
• Overall upgrade project management.
• Functional differences and end user training.
• Functional application setup, testing, and support.
• Data integrity testing.
• Custom code testing or retrofitting.
• Interface program testing or retrofitting.
7.7 Custom Code
Customization of the base Lawson code is permitted under this Service Description. In the event of an upgrade or patch,
retrofitting and testing of custom code may be required. You may choose to engage Velocity to perform these services for an
additional charge or perform these activities yourself.
7.8 System Change Management
All changes to your processing environment are governed by our change control procedures, which are organized in
conjunction with ISO 9001:2000-certified data center processes. The change management process will include the following:
• Schedule, track, communicate, coordinate, monitor, and implement changes.
• Create complete documentation of each change activity and distribute that documentation to affected parties
(documentation to include, for example, reason for change, components affected, and duration of change).
• Endeavor to secure change approval by all affected parties to facilitate successful changes.
• Develop a back out plan as a component of each change activity. Each change request includes a specific plan for
restoration of processing to original condition if the implemented change is not successful.
• Continually monitor and review all changes throughout the change management process.
• Your Client Manager will serve as your primary contact for all change requests.
Client is responsible for handling change control relative to the Lawson application code.
8. SERVICE LEVEL AGREEMENT (SLA)
8.1 Service Level Framework
Velocity's objectives with respect to its service level framework are to:
• Act preemptively to prevent or mitigate outages.
• Identify problems as soon as possible and begin corrective actions.
• Promptly notify you of problems and communicate with you throughout their duration.
• Resolve problems as quickly as practicable.
• As problems exceed preset time limits, escalate the involvement of progressively higher levels of personnel.
• After problems have been resolved, analyze their causes and, if appropriate, implement corrective measures.
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8.2 Incident Definition
For purposes of this SLA, an "Incident" is defined as an event with respect to which your processing environment requires
corrective action by Velocity. Client will reasonably classify each Incident as being either Critical or Non-Critical based on the
criteria below.
Critical Incident
• The processing environment is inaccessible.
Non-Critical Incident
• The performance of the processing environment has degraded, but not to such a degree that major functions cannot
be performed.
• A reasonable work-around can be employed with respect to the Incident.
• You request or we recommend that a system administration task be conducted.
• Incident and Outage notifications
Incident Notification
We will promptly notify you upon discovery of any Critical Incident. The notification will include providing you with information
regarding the nature, scope, expected duration and plan of action to resolve the Incident. Notification as used in this SLA
includes notice by email message, telephone call, pager message, or other expedient means, which may or may not provide
for proof of delivery.
You or your end users may identify a problem with the processing environment before it is detected by our monitoring
functions. In such an event, one of your designated Support Users must promptly contact Velocity's Enterprise Service Desk
and convey all known facts relevant to the problem.
Controlled Outage Notification
We will notify you upon discovery of any condition(s) (including those set forth below) that present the potential for an outage
and require preemptive corrective actions, with respect to which we may schedule a controlled system outage ("Controlled
Outage"). Velocity will provide as much advanced notification as reasonably possible. Velocity will make commercially
reasonable efforts to promptly implement the corrective actions, to minimize controlled outage time, and to schedule controlled
outage time during Client's non-peak processing hours. These conditions include:
• Hardware or operating system instability that may cause the processing environment to become inaccessible or
damage any data.
• Network instability that may cause the processing environment to become inaccessible or damage any data.
• The breach of a capacity threshold.
• The presence of a virus.
• Detection of unauthorized access.
Incident Resolution Notification
After the resolution of any Incident or the conclusion of any Controlled Outage, we will notify you thereof. In addition, after the
resolution of any Critical Incident, we will conduct a Root Cause Analysis as set forth below.
8.3 Call Response Time
Velocity guarantees you will receive a timely response to calls made to our Enterprise Service Desk. We will respond to each
initial call relating to a Critical Incident within one (1) hour 95% of the time over each calendar month. We will respond to each
initial call relating to a Non-Critical Incident within four (4) Standard Business Hours 95% of the time over each calendar
month If the response time falls below the stated objectives, then you will receive, subject to the section titled "Service
Credits" below, a "Service Credit" equal to the corresponding percentage (as set forth in the following table) of the hosting fees
for the month during which the stated objectives were not achieved.
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Incident Severity
Critical
Non-Critical
Response Ti'rne""": ;•,;
No more than 1 hour 95% of the time
No more than 4 Standard Business
Hours 95% of the time
Service Credit
2%
1%
A response will be deemed to have occurred at the point that we contact, via the agreed means, your designated contact
person in response to an initial call placed to the Enterprise Service Desk. However, we will be considered to have met this
commitment if such person is unreachable and, in such case, we will then endeavor to contact your designated back-up
contact person.
Incident Escalation
In the event that the duration of any Incident exceeds certain preset time limits, the Parties agree to commit the involvement of
progressively higher levels of personnel, as set forth below. Each progressive level of personnel will bring to bear authority and
resources beyond the limits of the previous level(s) involved and will apply such greater authority and resources to expedite
the resolution of the escalated Incident. Escalation will occur automatically for all Critical Incidents when the duration of such
Incident exceeds a predetermined time limit, as set forth below. If the severity level of an Incident is changed to Critical from
Non-Critical, the Incident duration will be measured from the time of such change in severity.
Escalation for Critical Incidents:
Incident Duration
Under 1 hour
1 hour
2 hours
4 hours
Velocity Management Lewi
Technical Advocate
Client Manager
VP of Managed Services
President and CEO
Velocity Operational 4®v»l
Operations Team
1st Level System Support
2nd Level System Support
Data Center Executive Management
System Availability
Velocity guarantees that your production environment will be available for the purposes of accessing interactive functions,
submitting batch processes and producing reports no less than 99.5% of each calendar month. This guarantee will go into
effect sixty (60) days after the Service commences.
In the event of an outage, we will endeavor to restore access to the system as soon as possible. The cause and responsibility
for and the duration of any outage resulting from a Critical Incident will be agreed to by the Parties following the outage. In the
event that an outage is caused by actions or failures beyond Velocity's control, the duration of that outage will not be included
in any downtime calculation. Actions or failures beyond Velocity's control include, without limitation:
• Unauthorized actions by you and/or any of your end users.
• Defects in any software provided by you.
• Connectivity problems related to any wide area network connection.
• Problems with any hardware and/or network provided by you.
• Shut-down of the processing environment in response to any request by you to do so.
The following definitions are set forth for purposes of calculating the Availability Percentage:
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Velocity
• "Scheduled Operational Hours" will mean 24 hours per day x 7 days per week.
• "Standard Business Hours" as used in this SLA will be defined the same as "Standard Business Hours" as set forth in
Section 6 above.
• "Actual Operational Hours" will mean Scheduled Operational Hours less the aggregate duration of any unscheduled
outages as set forth in this Service Description.
• "System Availability Percentage" will mean the percentage of Scheduled Operational Hours during any calendar
month represented by the Actual Operational Hours during the same month.
Test and Development Environments
System availability guarantees will apply only to environments (and the related Lawson product lines) designated as
production environments. In the event of an outage involving a test or development environment or server, we will start
restoration activities immediately, pending any other activities required to restore any production environments or product
lines. If requested by you or initiated by us, we will conduct a Root Cause Analysis. Any Root Cause Analysis with respect to
a test or development environment or server will consist of short, informal exchanges of information designed to quickly
assess the cause of the failure.
Dispute Resolution
In the event that the Parties are unable to mutually agree to the cause and/or duration of any Critical Incident, such dispute will
be managed in accordance with the dispute resolution procedures set forth in the Master Agreement.
If in any calendar month the System Availability Percentage falls below the Optimal performance level, you will receive a
"Service Credit" equal to the corresponding percentage (as set forth in the following table) of the hosting fees for such month.
Performance level
Optimal
Sub-Optimal 1
Sub-Optimal 2
Sub-Optimal 3
:. Availability Peipintage ,,%,
> 99.5%
< 99.5% and > 95.0%
< 95.0% and > 90.0%
< 90.0%
Service Credit
N/A
4%
8%
12%
Performance Reporting
This solution is designed to provide redundancy throughout the processing environment, including redundant power, network
cards, processors, and system disks. The data storage utilizes a RAID 5 configuration. Spare equipment, replacement parts
and vendor maintenance agreements are in place along with the resources, policies and procedures required to meet the
service level commitments set forth above.
To the extent that the configuration, infrastructure or environment in use for your applications is not sufficient or adequate to
maintain or exceed the service levels (other than due to excessive growth of Client's user base, transaction volume or the
addition of new software modules), Velocity will promptly tune the application including database and operating system
("Performance Tuning") to achieve this performance target.
We will provide you with a monthly report package depicting key metrics related to services provided. These performance
reports, which will be delivered monthly via email, will include:
• System availability statistics.
• Disk space utilization statistics.
• Client support data including summary data on all Incidents.
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Velocity
Service Credits
If Velocity has not achieved the service level commitments defined in this SLA at the conclusion of any full calendar month
during which the Service was provided, then Velocity will apply the commensurate "Service Credit" (as defined above) to your
account, provided that, as of the date on which such Service Credit would otherwise accrue, you are (a) in full compliance with
all of your payment obligations under the Master Agreement and (b) not in default of any other material obligation under the
Master Agreement.
9. FEES AND TERM
9.1 Fees
Client shall pay the fees indicated herein, in accordance with the applicable terms and conditions of the Master Agreement.
The activation fees are due upon execution of this Service Description. The billing for the monthly service fees shall
commence one month following the date of this Service Description.
Application Suite
Hosting fees for Environment as defined in section 1 of
this Service Description
Totals:
Activation Fee
$26,151
$26,151
Monthly Fee
$16,351
$981,060
9.2 Adjustments to Monthly Fees
Usage Thresholds
On each anniversary of the date of this Service Description, we shall examine the metrics outlined below and, if any one of
such metrics increases by more than fifteen percent (15%) over the amount thereof as in effect as of the date of this Service
Description the monthly recurring fee for the applicable Application Suite shall be increased proportionately. This percentage
increase in the effected statistic shall be multiplied by the portion of the total monthly fee assigned to the effected application
suite (determined by dividing the number of concurrent users for the effected suite by the total number of concurrent users).
9.2.1. For the HR/Payroll Application Suite:
Concurrent Users
Number of employees
50
5,000
Future Releases
Future releases of Lawson or other hosted applications may necessitate changes to the hardware, system software, and/or
network communications which have not been factored into the monthly hosting fee.
9.1 Term
The term of this Service Description shall commence on the date hereof and shall continue for sixty (60) months.
9.2 Transition Services
Upon expiration or termination of this Service Description, for any reason other than default by you pursuant to the Master
Agreement, we will provide to you, upon your request, the following "Transition Services" intended to enable you to effect the
orderly and comprehensive transition of your system from our data center to your facility or the facility of a third party
designated by you. Such Transition Services shall be provided as follows:
• Continuation of the Service under this Service Description up to ninety (90) day, provided that you make timely
payments of all amounts due to us under the Master Agreement for such transition period at the monthly fees that
were applicable to the last month of the term.
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Velocity
Participation in the preparation and implementation of a turnover plan on a time and materials basis at our rates then
in effect.
Transfer of all available Client-Provided Software and Client data (archived and current) to you. Velocity shall not be
responsible for the retention of Client data for a period in excess of sixty (60) days following the completion of
Transition Services. You understand and agree that at any time on or after the sixty-first (61st) day following the
completion of the Transition Services, Velocity will implement data purge procedures, erasing disk storage and tapes,
including backup tapes, containing Client data. You hereby release Velocity from any and all liabilities in connection
with the erasure or destruction of Client data which has been stored on any Velocity-Provided Hardware after the
sixtieth (60th) day following the completion of Transition Services.
IN WITNESS WHEREOF, the Parties hereto have executed this Service Description by their duly authorized representatives
as of the date set forth above.
VELOC
Name / ' / /
Si/P
*/
Title
Date
Approved As To Form
Paul Edmojfcon, Qoputy^Assistant City Attorney
Date:/O
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