11-089.00 Paladin Data SystemsPALADIN DATA SYSTEMS CORPORATION
ENGAGEMENT AGREEMENT
THIS AGREEMENT ( "AGREEMENT ") is between PALADIN DATA SYSTEMS CORPORATION
( "PALADIN "), a Washington corporation, 19362 Powder Hill Place NE, Poulsbo, WA 98370, and City of
Spokane Valley ( "CUSTOMER "), a Washington incorporated City, 11707 E. Sprague Avenue, Suite 106,
Spokane Valley, WA 99206. The effective date ( "EFFECTIVE DATE ") will be the date of the last signer of
this AGREEMENT.
IN CONSIDERATION of the mutual covenants, and conditions set forth below, the receipt and adequacy
of which are hereby acknowledged, the parties to this AGREEMENT hereby agree as follows:
1.0 DEFINITIONS
1.1 "Derivative Work" means a work, including software in human readable form, which is based
upon one or more pre- existing copyrightable works such as a revision, modification, translation,
abridgment, compilation, condensation or expansion or any other form in which such pre- existing work
may be recast, transformed, or adapted, and which, if prepared without the consent of the author of the
pre- existing work, would be a copyright infringement.
1.2 "Documentation" means the user guides and manuals for installation and use of the Software,
regardless of the media or format of such materials.
1.3 "Error" means a reproducible defect in the Software or Documentation when operated on a
Supported Environment which causes the Software not to operate substantially in accordance with the
Documentation.
1.4 "End User" means an individual registered and identified by CUSTOMER by name to receive a
password in order to access SMARTGovTM, including employees, agents, consultants, contractors and
any other persons having access to SMARTGovTm by virtue of his or her relationship with CUSTOMER.
1.5 "Fees" means, as appropriate, the license fees ( "License Fees ") or support fees ( "Support Fees ")
payable by CUSTOMER to PALADIN pursuant to Article 7.0.
1.6 "Go Live" means the date when the CUSTOMER begins to use PALADIN's SMARTGovTM to
support business operations. It is a day appointed by PALADIN's delivery manager and agreed to by
CUSTOMER's project manager. In preparation for this cutover, the system has been configured, data
has been migrated from the legacy system, and staff has been trained.
1.7 "Hardware" means the specific equipment, if any, described in Exhibit A.
1.8 "Premium Support" means the additional services not included in Support.
1.9 "Software" means the specific version of the software program described in Exhibit A, including
any Updates to that version.
1.10 "Specifications" means PALADIN's published functional and operational specifications for the
Software.
1.11 "Support" means PALADIN's ongoing support as described at
http: / /smartgov.paladindata.com /smartgov /support/overview.html and Updated from time to time, for the
Licensed Software described in Exhibit A, including any Updates thereto.
1.12 "Supported Environment" means the specific configuration of Hardware and releases of the
operating Software and platforms described in Exhibit A.
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1.13 "Update" means a subsequent release of the Software issued by PALADIN from time to time to
deal with any Errors or to enhance the functionality of the Software as part of any Support purchased by
CUSTOMER during the term of this AGREEMENT. PALADIN may release bug fix patches as required to
repair known defects between regular releases.
1.14 Trademarks. SMARTGov is a trademark of Paladin Data Systems Corporation, covering
PALADIN's local government applications.
2.0 SOFTWARE & HARDWARE SUPPLIED
2.1 This AGREEMENT covers the Software described in Exhibit A. All Software licensed by
PALADIN to CUSTOMER is covered by the software license agreement in Exhibit B. All other software is
to be provided by CUSTOMER, such as Microsoft software, are covered by their own specific software
license or end -user agreements, which are not attached to and are not part of this AGREEMENT.
2.2 Incidental Hardware Solely for the convenience of CUSTOMER, CUSTOMER may order and
PALADIN may resell hereunder certain third party - supplied computers, servers or other similar Hardware
to operate the Software within the Supported Environment (collectively, "Third Party Hardware "). Any
such Hardware, if supplied, is listed on Exhibit A to this AGREEMENT. PALADIN hereby assigns and
passes through to CUSTOMER "AS -IS" any warranties or service agreements on any Third Party
Hardware from the original equipment manufacturers ( "OEMs "), and PALADIN makes no independent
representations or warranties with respect to any such Third Party Hardware. CUSTOMER
acknowledges that CUSTOMER shall look solely and exclusively to the respective OEMs with respect to
any issues or problems regarding any such Third Party Hardware.
2.3 Virus Protection. PALADIN's software facilitates the transfer and storage of data and files and
does not claim to, nor does it perform any virus detection and /or virus elimination function. It is the
responsibility of the CUSTOMER to install and maintain virus protection software on related servers and
client workstations.
3.0 TECHNICAL SUPPORT
3.1 Support Availability. Technical Support for PALADIN's SMARTGov is optionally available to
customers. Information on the inclusion of Support is included in Exhibit A to this AGREEMENT. Exhibit
C provides specific information on how PALADIN provides technical Support.
4.0 TERM AND TERMINATION
4.1 Term This AGREEMENT shall continue indefinitely unless terminated in accordance with this
Article 4.0
4.2 Termination for Convenience CUSTOMER may terminate this AGREEMENT at any time upon
thirty (30) days written notice to PALADIN, provided such termination for convenience shall not entitle
CUSTOMER to any refund of any License Fees or Support Fees paid prior to such termination.
4.3 Termination for Material Breach Either party may terminate this AGREEMENT upon ten (10)
days written notice to the other party if the other party is in material breach of this AGREEMENT and fails
to cure such breach within thirty (30) days written notice thereof.
4.4 Insolvency or Bankruptcy If CUSTOMER becomes insolvent or enters into any voluntary or
involuntary bankruptcy proceeding that is not dismissed within sixty (60) days of filing, PALADIN may
treat such situation as a material breach hereunder. If PALADIN becomes insolvent or enters into any
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voluntary bankruptcy proceeding that is not dismissed within sixty (60) days of filing, at CUSTOMER's
option and upon payment of royalty payments if any, as specified in Exhibit A, to PALADIN, this
AGREEMENT and its licenses of intellectual property to CUSTOMER are intended to and shall remain in
full force and effect under Section 365(n) of the U.S. Bankruptcy Code.
4.5 Cumulative Remedies Termination of this AGREEMENT or any license hereunder shall not limit
either party's right to pursue other remedies available to it, including, without limitation, injunctive relief.
4.6 Survival Upon any termination of this AGREEMENT, CUSTOMER shall promptly cease using,
and shall return or destroy, all copies of the applicable Software and Documentation. The parties' rights
and obligations under Articles 4.0 through 11.0, Article B.3 through B.3.i, including, without limitation,
CUSTOMER's duty to pay any outstanding Fees or expenses, shall survive any such termination.
5.0 WARRANTIES, INDEMNITIES AND REMEDIES
5.1 Limited Software Warranty For a period of ninety (90) days from the EFFECTIVE DATE
( "Warranty Period "), PALADIN represents and warrants to CUSTOMER that the Software will function in
all material respects in accordance with the Specifications. PALADIN DOES NOT WARRANT THAT THE
SOFTWARE WILL BE ERROR -FREE OR WILL PERFORM WITHOUT INTERRUPTION, THE
SOFTWARE WILL NECESSARILY MEET CUSTOMER'S REQUIREMENTS; OR ANY ERROR CAN OR
WILL BE CORRECTED. CUSTOMER shall give PALADIN prompt written notice of any claim under the
foregoing warranty; and in such event, PALADIN's sole obligation shall be to use its reasonable
commercial efforts to modify or repair the Software to conform to the Specifications. The foregoing
warranty shall not apply to the extent that any alleged defect derives from (a) a combination of the
Software with any program, equipment or device not supplied by PALADIN or not described in the
Specifications; (b) any modification or customization of the Software by or on behalf of CUSTOMER
which is not performed by PALADIN; or (c) CUSTOMER's failure to use the most current version of the
Software provided to CUSTOMER.
5.2 Limited Warranties PALADIN represents and warrants to CUSTOMER that:
(a) PALADIN has not intentionally included or embedded any disabling code or devices
within the Software;
(b) PALADIN has the full power and authority to grant the licenses for the Software and
Documentation under this AGREEMENT to CUSTOMER without the consent of any other person;
and
(c) Neither the license to, nor use by the CUSTOMER of the Software and Documentation
(including the copying thereof) will constitute an infringement of a third party's U.S. copyright,
trademark, trade secret or, to the best of PALADIN's knowledge as of the EFFECTIVE DATE, a
third party's U.S. Patent.
5.3 Disclaimer of Other Warranties PALADIN GIVES AND MAKES NO REPRESENTATION OR
WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, OTHER THAN THOSE EXPRESSLY SET FORTH
IN SECTIONS 5.1 and 5.2. WITHOUT LIMITING THE FOREGOING, NO IMPLIED WARRANTY OF
MERCHANTABILITY, NO IMPLIED WARRANTY OF FITNESS FOR ANY PARTICULAR PURPOSE,
AND NO IMPLIED WARRANTY ARISING FROM USAGE OR TRADE, COURSE OF DEALING, OR
COURSE OF PERFORMANCE IS GIVEN OR MADE BY PALADIN OR SHALL ARISE BY OR IN
CONNECTION WITH THIS AGREEMENT.
5.4 PALADIN Indemnity to CUSTOMER PALADIN shall defend and indemnify CUSTOMER and its
officers, directors, employees and agents from and against liability, costs, damages and fees, including
reasonable attorneys' fees and legal costs incurred by CUSTOMER resulting from or arising out of the
infringement or violation by the Software on a third party's valid U.S. patent, copyright, trademark or trade
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secret (collectively, "IP Legal Claim "). Notwithstanding the foregoing, PALADIN shall have no liability to
CUSTOMER for any IP Legal Claim based on:
(a) solely on CUSTOMER's operation of an application developed using the Software and
not upon the Software itself;
(b) CUSTOMER's combination of the Software with other products not furnished by
PALADIN when such IP Legal Claim is based upon such combination;
(c) CUSTOMER's continued use of a superseded version of the Software when a non -
infringing current version is available from PALADIN; or
(d) CUSTOMER's use of an altered version of the Software not supplied by PALADIN when
such IP Legal claim is based upon such alteration.
5.5 CUSTOMER Indemnity to PALADIN CUSTOMER shall defend and indemnify PALADIN and its
officers, directors, employees and agents from and against liability, costs, damages and fees, including
reasonable attorneys' fees and legal costs incurred by PALADIN resulting from or arising out of the use of
the Software with any data not owned by CUSTOMER ( "Third Party Data "), any failure of CUSTOMER to
secure the proper third party consents to use, compile or publish such Third Party Data, and all acts or
omissions relating thereto (collectively, "Third Party Data Legal Claim ").
5.6 Mechanics of Indemnity A party seeking indemnity for an IP Legal Claim or a Third Party Data
Claim ( "Indemnified Party ") gives the other party ( "Indemnifying Party ") prompt written notice of any such
Legal Claim and gives the Indemnifying Party full authority, information and assistance and sole control
over the defense and settlement of such claim. In response to any such IP Legal Claim, PALADIN, in its
sole discretion and at its sole expense, may procure from such third party the right to allow CUSTOMER
to continue to use the Software; modify or replace the Software or infringing portions thereof to become
non - infringing; or, if neither option is commercially reasonable under the circumstances, PALADIN may
terminate this AGREEMENT and refund the applicable Fees to CUSTOMER. In response to any such
Third Party Data Claim, CUSTOMER, in its sole discretion and at its sole expense, may procure from
such third party the right for CUSTOMER to continue to use, compile or publish such data; modify its use,
compilation or publication thereof to satisfy such third party; or, if neither option is commercially
reasonable under the circumstances, may terminate this AGREEMENT without refund of the applicable
Fees to CUSTOMER. An Indemnified Party may engage counsel of its own choosing and at its sole
expense. An Indemnified Party shall not settle any Legal Claim without Indemnifying Party's written
consent, which consent will not be unreasonably withheld.
6.0 LIMITATIONS OF LIABILITY
6.1 Liability Cap TO THE EXTENT PERMITTED BY LAW, PALADIN'S AGGREGATE
CUMULATIVE LIABILITY FOR DAMAGES ARISING OUT OF OR RELATED TO THIS AGREEMENT
(WHETHER ARISING FROM CONTRACT, TORT OR OTHERWISE) SHALL NOT EXCEED THE TOTAL
AMOUNT OF LICENSE, SUPPORT OR OTHER SERVICE FEES OR EXPENSES PAID BY
CUSTOMER IN THE TWELVE (12) MONTHS PRIOR TO THE INCIDENT GIVING RISE TO SUCH
LIABILITY.
6.2 Consequential Damages Exclusion IN ANY CASE, NEITHER CUSTOMER NOR PALADIN OR
ITS SUPPLIERS SHALL BE LIABLE IN ANY AMOUNT FOR ANY INDIRECT, SPECIAL, INCIDENTAL,
PUNITIVE OR CONSEQUENTIAL DAMAGES, WHETHER BASED UPON CONTRACT, TORT OR ANY
OTHER LEGAL THEORY, ARISING OUT OF OR RELATED TO THIS AGREEMENT.
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7.0 PAYMENTS
7.1 Fees and Expenses CUSTOMER shall pay all Fees or expenses according to the payment
terms set forth in Exhibit A. In addition, on any sums not paid when due, CUSTOMER shall pay interest
at the lower of the maximum legal rate of interest or one percent (1 %) per month, which interest will be
immediately due and payable. Without limiting the foregoing, as an additional remedy for non - payment
when due, PALADIN may suspend its Support of the Software until all amounts in arrears (including
applicable interest) have been paid in full.
7.2 Payments CUSTOMER shall make all payments of Fees or expense in United States Dollars
and directed to:
Attention: Accounts Receivable
Paladin Data Systems Corporation
19362 Powder Hill Place NE
Poulsbo, WA 98370
Electronic Remittance should be made to
Bank of America
Account# 485007023715
Account Name: Paladin Data Systems Corporation
ACH Routing Number # 323070380
Bank Address: 1000 6th Street, Bremerton, WA 98337
A contract or invoice reference number must accompany all payments.
7.3 Taxes The Fees listed in Exhibit A do not include any sales tax, use tax, excise, tax import or
export tax, value added tax, nor any other tax applicable to the Software and are not based on Paladin
Data Systems Corporation's net income (collectively, "Taxes "). CUSTOMER shall be solely responsible
for payment of any Taxes and shall not offset, deduct or withhold any sum for such Taxes from its
payments of the Fees or expenses hereunder.
8.0 OWNERSHIP AND CONFIDENTIALITY.
8.1 Ownership of PALADIN Materials CUSTOMER acknowledges that PALADIN or its suppliers
shall own all right, title and interest in and to any patent, copyright, trademark, trade secret or other
intellectual property right in the Software, Documentation or other materials provided by PALADIN under
this AGREEMENT, which shall be treated as the confidential information of PALADIN. CUSTOMER shall
not remove or alter any copyright, trademark or other proprietary notice thereon, whether in printed or
electronic form. Nothing in this AGREEMENT shall be construed to create a "work for hire," and neither
the Software nor the Documentation shall be considered a "work for hire."
8.2 Ownership of CUSTOMER or Third Party Data PALADIN acknowledges that CUSTOMER or its
suppliers shall own all right, title and interest in and to any intellectual property right in the data used,
compiled or published with the Software, which shall be treated as the confidential information of
CUSTOMER except to the extent such data may be placed in the public domain by CUSTOMER.
PALADIN shall not remove or alter any proprietary notice thereon, whether in printed or electronic form.
8.3 Non - Disclosure Each party shall keep confidential and take any other reasonable steps to
protect the intellectual property rights in the other party's confidential information ( "Confidential
Information ") and shall not use or disclose the same except as permitted by this AGREEMENT.
8.4 Injunctive Relief Each party acknowledges that any material breach of this Article 8.0 or the
licenses set forth in Exhibit B will cause irreparable harm to the other party, and that, accordingly, in
addition to any other remedies at law or in equity for any breach or threatened breach, an aggrieved party
5 Initials — Paladin Customer
may seek injunctive and equitable relief, including, but not limited to, the right to specific performance,
without the necessity of posting a bond.
9.0 ESCROW
This AGREEMENT does automatically not provide for escrow of the Software source materials. Escrow
is available separate from this AGREEMENT. Upon payment of the separate escrow fees by the
CUSTOMER ( "Escrow Fees ") and execution of an appropriate Software Escrow and License Agreement,
PALADIN shall deposit the source code for the most current version of the Software and Documentation,
as it now exists or hereafter becomes available (collectively, "Escrow Materials ") with a reputable and
independent software escrow firm in the United States for the benefit and non - exclusive use of
CUSTOMER in the event that PALADIN ceases to do business or is otherwise unable to provide Support
for the Software.
10.0 DISPUTE RESOLUTION
10.1 Dispute Resolution Except as provided in Section 10.2 below, PALADIN and CUSTOMER shall
each use its best efforts to resolve any dispute between them promptly and amicably and without resort to
any legal process if feasible within thirty (30) days of receipt of a written notice by one party to the other
party of the existence of such dispute. The foregoing requirement in this Section 10.1 shall be without
prejudice to either party's rights, if applicable, to terminate this AGREEMENT under Section 4.3 above.
10.2 Litigation Rights Reserved If any dispute arises with regard to the unauthorized use or
infringement of Confidential Information by a party, the other party may seek any available remedy at law
or in equity from a court of competent jurisdiction.
10.3 Procedure for Arbitration Except as provided in Section 10.2 above, any dispute, claim or
controversy arising out of or in connection with this AGREEMENT which has not been settled through
negotiation within a period of thirty (30) days after the date on which either party shall first have notified
the other party in writing of the existence of a dispute shall be settled by final and binding arbitration
under the then applicable Commercial Arbitration Rules of the American Arbitration Association ( "AAA ").
Any such arbitration shall be conducted by a single neutral arbitrator appointed by mutual agreement of
the parties or, failing such agreement within fifteen (15) days of a demand for arbitration, in accordance
with said Rules. Such arbitrator shall be an experienced business attorney or independent certified
public account with background in commercial software products. Any such arbitration shall be
conducted in Seattle, Washington, U.S.A. The arbitrator is to apply Washington State law, without regard
to its choice of laws principles. An arbitral award may be enforced in any court of competent jurisdiction.
Notwithstanding any contrary provision in the AAA Rules, the following additional procedures and rules
shall apply to any such arbitration:
(a) Each party shall have the right to request from the arbitrator, and the arbitrator shall order
upon good cause shown, reasonable and limited pre- hearing discovery, including (i) exchange of
witness lists, (ii) depositions under oath of named witnesses at a mutually convenient location, (iii)
written interrogatories and (iv) document requests;
(b) Upon conclusion of the pre- hearing discovery, the arbitrators shall promptly hold a
hearing upon the evidence to be adduced by the parties and shall promptly render a written
opinion and award;
(c) The arbitrators may not award or assess punitive damages against either party or any
other damages limited or excluded by Article 6.0; and
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(d) Each party shall bear its own costs and expenses of the arbitration and one -half (1/2) of
the fees and costs of the arbitrator, subject to the power of the arbitrator, in their sole discretion,
to award all such reasonable costs, expenses and fees to the prevailing party.
11.0 EXAGO INC. END USER LICENSE AGREEMENT
11.1 Ad Hoc Report Writer CUSTOMER'S use of the Software involves one or more of Exago Inc.
products. Exago Inc. is the owner of the ad hoc report writer currently known as eWebReports that
PALADIN uses as part of SMARTGovT""
11.2 End User's license to eWebReports is a nonexclusive and non - sublicensable right to use the
eWebReports only for its internal business purposes as part of SMARTGov rm, and not for any further
resale, re- license or other use by third parties;
11.3 End Users shall not remove, alter, cover or obfuscate any copyright notices or other proprietary
rights notices placed or embedded by PALADIN or its licensors on or in any eWebReports or related
documentation;
11.4 PALADIN and its licensors retain all right, title and interest (including all intellectual property
rights) in and to the eWebReports and related documentation. End Users agree to be bound by
confidentiality obligations with respect to such materials that are at least as protective as those
undertaken by PALADIN with respect to the eWebReports in this Section 11;
11.5 End Users agree not to (i) lease, rent or engage in any time - sharing of the EWebReports;
(ii) modify or create any derivative work of any eWebReports; or (iii) reverse assemble, decompile,
reverse engineer or otherwise attempt to derive source code or algorithms of the eWebReports; and
11.6 End Users acknowledge that the laws and regulations of the United States restrict the export of
the eWebReports. End Users agree that End Users will not export or re -export the eWebReports in any
form without first obtaining the appropriate United States and foreign government approvals;
11.6 PALADIN's licensors make no warranties to End Users in connection with the eWebReports or
Documentation of any kind, and expressly disclaim any implied warranties of merchantability, non -
infringement or fitness for a particular use; and
11.7 PALADIN's licensors make no warranties to End Users in connection with the eWebReports or
Documentation of any kind, and expressly disclaim any implied warranties of merchantability, non -
infringement or fitness for a particular use; and
11.8 PALADIN's licensors shall not be liable to End Users for any indirect, consequential, incidental or
special damages arising out of its use of the eWebReports, regardless of the theory of liability (including
negligence and strict liability), to the maximum extent permitted by law. These limitations shall apply
notwithstanding the failure of the essential purpose of any limited remedy.
12.0 MISCELLANEOUS
12.1 Entire AGREEMENT. This AGREEMENT, its appendices and exhibits supersede, and their
terms shall govern over, all prior proposals, agreements or other communications between the parties,
oral or written, regarding the subject matter of this AGREEMENT. If there is any conflict between the
terms of this AGREEMENT and any exhibit hereto, the terms of this AGREEMENT shall control. This
AGREEMENT, its appendices, and its exhibits shall not be modified except by a subsequently dated
written amendment signed by the parties, and any conflicting terms on a CUSTOMER purchase order or
other similar document purporting to supplement the provisions hereof shall be void.
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12.2 Force Maieure Neither party shall be liable hereunder by reason of any failure or delay in the
performance of its obligations hereunder (except for the payment of money) on account of strike,
shortage, riot, insurrection, fire, flood, storm, explosion, acts of God, war, governmental action, labor
condition, earthquake, material shortage or any other cause which is beyond the reasonable control of
such party. The affected party shall give prompt written notice to the other party of any such event.
12.3 Assignment Neither this AGREEMENT nor any rights or obligations of either party hereunder
may be assigned, in whole or in part, without the prior written approval of the other party, which approval
shall not be unreasonably withheld, provided, however, either party's rights and obligations, in whole or in
part, under this AGREEMENT may be assigned by such party as part of any merger or acquisition of such
party with another entity that has agreed in writing to be bound by the terms and conditions of this
AGREEMENT.
12.4 Waiver The failure of either party to require performance by the other party of any provision
hereof shall not affect the right to require such performance at any time thereafter; nor shall the waiver by
either party of a breach of any provision hereof be taken or held to be a waiver of the provision itself.
12.5 Severability In the event that any provision of this AGREEMENT shall be unenforceable or
invalid under any applicable law or court decision, such unenforceability or invalidity shall not render this
AGREEMENT unenforceable or invalid as a whole and, in such event, any such provision shall be
changed and interpreted so as to best accomplish the objectives of such unenforceable or intended
provision within the limits of applicable law or applicable court decisions.
12.6 Law, Jurisdiction and Venue This AGREEMENT, and all matters arising out of or relating to this
AGREEMENT, shall be governed by, and construed and enforced in accordance with, the laws of the
State of Washington. Subject to Article 10.0, any action at law, suit inequity or other judicial proceeding
arising under or out of this AGREEMENT may be instituted and maintained only in a court of competent
jurisdiction located in Kitsap County, Washington. CUSTOMER hereby waives all defenses of lack of
personal jurisdiction and forum non conveniens.
12.7 No Agency Nothing contained herein shall be construed as creating any agency, partnership or
other form of joint enterprise between the parties.
12.8 Headings. The section headings appearing in this AGREEMENT are inserted only as a matter of
convenience and in no way define, limit, construe or describe the scope or extent of such section or in
any way affect such section.
12.9 Counterparts. This AGREEMENT may be executed simultaneously in two or more counterparts,
each of which will be an original, but all of which together will constitute one and the same instrument.
12.10 CUSTOMER Reference PALADIN may refer to CUSTOMER as a customer in sales or
marketing presentations, press releases or other similar activities. CUSTOMER shall reasonably
cooperate with calls or questions from other potential users of the Software.
12.11 Notices All notices, including notices of address change, required to be sent hereunder shall be
in writing and shall be deemed to have been given three (3) business days following the date when
mailed by first -class mail, postage prepaid, or the next business day if sent by nationally recognized
overnight courier to the addresses listed on page one hereof.
12.12 Export Restrictions The Software is subject to the U.S. Export Administration Regulations
( "EAR "). CUSTOMER shall not knowingly export or re- export, or knowingly permit the re -export of, the
Software or any technical data relating to the Software, directly or indirectly, to any other country or any
other user except as permitted by the EAR.
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12.13 Non - solicitation of Employees Starting when this AGREEMENT is signed by all parties, and
continuing for a period of six months following the successful deployment of the licensed Software, each
party agrees not to solicit for employment any technical or professional employees of the other party
without the prior written approval of the other party.
IN WITNESS WHEREOF, the parties have executed this AGREEMENT by their authorized
representatives.
PALADIN DATA SYSTEMS CORPORATION CITY OF S20KANE VALLEY ( "CUSTOMER ")
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EXHIBIT A - Pricing and Payment for the City of Spokane Valley
SOFTWARE MODULES
SMARTGov CommunityTM - 30 Named Users License
— SMARTPermit $46,740.00
— SMARTPlan
SMARTPortal — Unlimited Users $15,000.00
SMARTConnectors:
— GIS $10,000.00
— Parcel $10,000.00
— FMS $10,000.00
Discount on Software ($55,044.00)
Annual Support and Maintenance $19,265.00
— Due at time of Go -Live
— Renewals due at Go -Live Anniversary at the then - current Support Fees
SMARTGov CommunityTM Software and Support subtotal $55,961.00
Hardware — Not included and responsibility of CUSTOMER
Microsoft SQL Server Software — Not included and responsibility of CUSTOMER
Services:
Implementation Services:
$45,000.00
— Time and Materials work at $150 per hour
— 300 Hours Estimated
— See Exhibit D Statement of Work for Time and Materials for estimated amount
Data Migration
$15,000.00
— Time and Materials work at $150 per hour
— 100 Hours Estimated
— See Exhibit D Statement of Work for Time and Materials for estimated amount
Training
$12,000.00
— Time and Materials work at $150 per hour
— 80 Hours Estimated
— See Exhibit D Statement of Work for Time and Materials for estimated amount
Travel and Expenses-
$9,600.00
— Estimated based on 6 trips, one week each
— On -site services above and beyond the proposed solution will be charged at
the GSA per diem rate plus actual travel costs.
— Actual costs are charged monthly as they occur
— See Exhibit D Statement of Work for Time and Materials for estimated amount
Total with Estimated Services and SMARTGov Community Software subtotal
$137,561.00
10 Initials— Paladin Custome /,
City of Spokane Valley
Payment Terms - Schedule of Payments
50% of Software
$18,348.00
Invoice
$18,348.00
Due U on Contract Sig
50% of Software
$18,348.00
Annual Support and Maintenance
$19,265.00
Total Invoice #2
$37,613.00
Due at Go -Live Date
Time and Materials Services Estimated
$72,000.00
Travel and Expenses Estimated
$9,600.00
Travel and Expenses and Time and Materials work to be
billed monthly per Exhibit D- Statement of Work
Invoice
$81,600.00
Total Overall
$137,561.00
Sales Tax Not Included in the Above Amounts
11 Initials — Paladin Customero�
EXHIBIT B — PALADIN's SMARTGov Products Software License
B.1 Rights Granted Subject to the terms and conditions of this AGREEMENT and in consideration of
the payment of the Fees under Article 7, PALADIN hereby grants to CUSTOMER for the CUSTOMER's
internal business use only a perpetual, personal, non - exclusive, non - transferable and non - assignable
(except as provided under Section 11.3) license to use the Software (in object code form only) and the
Documentation on the Supported Environment. CUSTOMER may make one copy of the Software and
Documentation electronic media for back -up purposes. CUSTOMER may make as many printed
reproductions of manuals supplied on the electronic media as are required for the CUSTOMER's normal
operations. Except as so expressly licensed, no other rights are granted to CUSTOMER and none shall
be implied.
13.2 Limitations Except as reasonably necessary for CUSTOMER's own internal use, CUSTOMER
shall not;
(a) Cause or permit the copying or reproduction of the Software or Documentation;
(b) Disclose the Software or Documentation to or permit any use thereof by any third party;
(c) Disassemble, decompile, compile, or reverse engineer the Software or modify or create
any Derivative Works;
(d) Sublicense, lease, distribute or enter into any time share or service bureau arrangement
with respect to the Software;
(e) Transfer title or ownership of the Software license to any third party; or
(f ) Export the Software outside the United States without PALADIN's prior written consent.
13.3 Object License. As part of the Software distribution, the CUSTOMER will be provided the object
(machine executable) code for every release received under this license as governed by Exhibit C —
Technical Support. The Object Code is provided in an unencrypted format on the electronic media
shipped for each release.
6.3.a Object Code Non - Disclosure The object code contains PALADIN proprietary information
consisting of, but not limited to, any machine instructions — both in English and machine
interpretable, processes, methods and underlying structures. This information is provided to
CUSTOMER subject to the following non - disclosure terms. Object code is provided to execute
on computer hardware. A license is granted to use internally the Object Code versions of the
PALADIN's SMARTGovTm Technology for the sole purpose of CUSTOMER's own use.
CUSTOMER is expressly prohibited from reproducing, distributing, licensing or sublicensing the
Object Code version of PALADIN's SMARTGovTM Products, including any Derivative Works
containing PALADIN's SMARTGovTM Products Object Code to any third party. You may not
copy, reverse engineer, decompile, reverse compile, translate, adapt, or disassemble the Object
Code, or any part thereof.
13.3.b Prohibited Uses You may not use the PALADIN's SMARTGovTM Products, or any part
thereof, in the operation of a service bureau, or for the benefit of any other person or entity. You
may not cause, assist or permit any third party to do any of the foregoing.
13.3.c Confidential Information All information (including, but not limited to; machine
instructions — both in English and machine interpretable, processes, methods and underlying
structures, business plans, data, business records, license agreements, strategic information,
instruction techniques, strategies or procedures, formulas, trade secrets or the like) ( "Confidential
Information ") disclosed by PALADIN to the CUSTOMER shall be considered highly confidential
and valuable proprietary information not previously released or available to the public and such
information is recognized and acknowledged by both Parties to possess competitive value.
13.3.d Use of Confidential Information CUSTOMER agrees that Confidential Information will be
used solely by it to support day to day operations to accomplish those functions that the Software
is designed to support.
12 Initials — Paladin CustomgW
B.3.e Non - disclosure Covenants CUSTOMER agrees that it will not, without the prior written
consent of PALADIN, disclose any Confidential Information to anyone, except its employees who
need to know it for the purpose of supporting the business needs of CUSTOMER, and they will
keep permanently confidential all Confidential Information. Employees of the CUSTOMER will be
required to agree to be bound by this AGREEMENT to the same extent as if they were parties
thereto prior to the disclosure to them of any Confidential Information. In any event, CUSTOMER
will be responsible for any breach of this AGREEMENT by its employees.
B.3.f Reasonable Safeguards CUSTOMER warrants to PALADIN it will use reasonable
safeguards against the unauthorized disclosure of Confidential Information, and agrees it shall
protect the Confidential Information of PALADIN in the same manner that it protects its own
confidential proprietary information. If this Software agreement is terminated for any reason
CUSTOMER agrees to immediately return to PALADIN all copies of Confidential Information in its
possession, or to send a certified letter documenting the destruction of all Confidential Information
in its possession.
B.3.g Exclusion This AGREEMENT shall be inoperative as to such portions of the Confidential
Information which;
(i) are generally available to the public through no fault or action by the CUSTOMER, its
agents or representatives,
(ii) are available to the CUSTOMER on a confidential basis from a source other than
PALADIN which is not prohibited from disclosing such Confidential Information to CUSTOMER by
a contractual, legal or fiduciary obligation to PALADIN or
(iii) has been disclosed pursuant to a requirement of a court order, subpoena,
governmental agency or law, provided that CUSTOMER has provided PALADIN with prior notice
of such requirement and has cooperated with any attempt by PALADIN to prevent such
disclosure.
B.3.h Remedies In the event of a breach or threatened breach by CUSTOMER, or its
employees, of the provisions of Sections B.3.a, B.3.b, B.3.c, B.3.d, B.3.e, B.3.f, B.3.g, or B.3.h,
PALADIN shall be entitled to an injunction restraining CUSTOMER, or its employees, from such
breach. Nothing herein contained shall be construed as prohibiting PALADIN from pursuing any
injunction or any other remedies available for such breach, or threatened breach, or any other
breach of this AGREEMENT. PALADIN shall also have the right to recover from CUSTOMER all
reasonable costs and attorneys' fees incurred by it in seeking any such remedies. No breach by
a Party of any other agreement between the Parties shall be a defense to any breach by the other
Party to this AGREEMENT.
B.3.i Common Law, Torts and Trade Secrets The Parties agree that nothing in this
AGREEMENT shall be construed to limit or negate the common law of torts or trade secrets
where it provides a Party with broader protection than that provided herein.
13 Initials — Paladin Customer v2
EXHIBIT C - TECHNICAL SUPPORT
C.1 General Except during the Warranty Period in Section 5.1 hereof, PALADIN provides the
Software to CUSTOMER "AS IS" and without Support. At its option, CUSTOMER may purchase Support
as described in Exhibit A on an annual basis upon payment of the then - current Support Fees. If Support
has been terminated or interrupted, PALADIN may, at its option, reinstate such Support to CUSTOMER
only if PALADIN then offers such Support for the Software and CUSTOMER pays a fee equal to the
Support Fees that would have been payable for the period during which Support was terminated or
interrupted.
C.2 Right to Modify Support Fees PALADIN reserves the right to modify Support Fees for
SMARTGovTM under this Agreement upon notice to CUSTOMER no less than sixty days prior to the
Annual Support and Maintenance renewal and before such Fee modification is to take place.
C.3 Access to Personnel and Equipment If CUSTOMER has purchased Support for the Software,
CUSTOMER shall provide PALADIN with reasonable access to CUSTOMER's personnel and VPN
access to CUSTOMER's equipment for the purpose of providing remote software support from PALADIN
facilities. PALADIN shall only access and use the Supported Environment for purposes of Support.
CA Incidental Expenses For any on -site services requested by CUSTOMER in relation to any
Support provided under this AGREEMENT, CUSTOMER shall reimburse PALADIN for its actual and
reasonable travel, lodging and out -of- pocket expenses thereby incurred.
C.5 Training, Data Conversion and Database Administration Services. At its option, CUSTOMER
may also purchase training, data conversion or database administration services from PALADIN. All such
separate services shall be billed to CUSTOMER on a time - and - materials basis at PALADIN's then - current
rates unless the parties expressly agree otherwise in writing.
C.6 Third Party Hardware CUSTOMER shall work directly with any relevant OEMs regarding any
technical Support questions or issues regarding Third Party Hardware. PALADIN shall not provide any
Support for Third Party Hardware, including that provided by PALADIN for CUSTOMER's convenience as
listed on Exhibit A.
C.7 Service Desk If CUSTOMER has purchased Support for the Software, Support will include up to
100 hours of professional services for the applicable year and consist of a Service Desk manned by a live
person, during hours listed in C.9. Service Desk will:
• answer application functional questions
• resolve defects and application related technical problems
• perform application maintenance by making available software patches, updates, new releases
and documentation
C.8 Premium Support If CUSTOMER has purchased Support for the Software, at its option
CUSTOMER may purchase Premium Support.. Examples of Premium Support include system
enhancements not currently scheduled for a future release, building reports, training, system
configuration, new interfaces, and data migration. All such separate services shall be billed to
CUSTOMER on a time - and - materials basis at PALADIN's then - current rates unless the parties expressly
agree otherwise in writing.
C.9 Support Hours and Phone Numbers Hours of availability and the methods to be used to contact
Support are published publicly, and are subject to change in order to best support our customer base.
They are available on the web at
http://smartgov.paladindata.com/smartgov/support/overview.html .
14 Initials— Paladin Customer//
EXHIBIT D — Statement of Work 23071
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15 Initials — PaladinR Customer ��r
Paladin Data Systems Corporation
19362 Powder Hill Place NE
Poulsbo, WA 98370 -8720
Tel: 360 -779 -2400 1- 800 - 532 -8448
Spokane Valley, City of
TO: 11703 E. Sprague Avenue
Spokane Valley, WA 99206
Date: 12- MAY -2011
Quotation: 23071
Telephone: 509 - 720 -5317
Fax: --
Estimated By: Genevieve Olivarez-
Required date: 06/11/2011
Work to Be Performed
City of Spokane Valley Services associated with purchase of SMARTGov Community are time and
materials work and consist of Implementation of SMARTGov Community, Data Migration, and Training,
Travel and Expenses:
Implementation- Estimated 300 hours at $150 per hour
Data Migration - Estimated 100 hours at $150 per hour
Training- Estimated 80 hours at $150 per hour
Travel and Expenses- Estimated based on # of trips
On -site services above and beyond the proposed solution will be charged at the GSA per diem rate plus
actual travel costs.
The dollar amount listed below is an estimate. Actual costs will be billed to CUSTOMER.
Extended
Cost Price
300 150.00 $45,000.00
Implementation
00 0 $15,000.00
Data Migration
U0 15O.Ou ,
Training
Travel and Expenses 6 1600.00 $9,600.00
$81,600.00
Total estimated cost:
nanK you.
This "Statement of Work" (SOW) is a cost estimate based on time and materials work.
The Paladin "Professional Services Agreement" (PSA) is incorporated as part of this statement of work.
Billing occurs monthly. Terms are Net 15. Late payments are subject to a 1.0% finance charge.
16 Initials — Paladin. Customer
Professional Services Agreement between Paladin Data Systems Corporation and Spokane Valley,
City of
1. Services
PALADIN will provide to CUSTOMER the Services specified on a standard Paladin Work Order, Paladin Proposal or
Client Purchase Order, under the terms of this PSA. Each Work Order, Proposal or Purchase Order shall specify the
Services
and applicable fees, and will be governed by the terms of this PSA.
2. Fees for Services and Termination
Unless otherwise specified in the applicable Work Order, Proposal or Purchase Order, Services shall be provided to
CUSTOMER on a time and material basis ('T & M'q. Rates must be specified on the attached Rate Structure or on a
standard Work Order or Proposal. If a dollar limit is stated in the applicable Work Order, Proposal or Purchase Order,
the limit shall be deemed an estimate for CUSTOMER's budgeting and PALADIN's resource scheduling purposes;
after the limit is expended, PALADIN will continue to provide the Services on a T& M basis if a Work Order, Proposal
or Purchase Order for continuation of the Services is signed by the parties. Unless otherwise stated in a Work Order
or Proposal, any T & M Work Order or Proposal may be terminated by providing to PALADIN 14 days written notice
of such termination.
3. Incidental Expenses
Unless otherwise stated in the Work Order, Client shall reimburse PALADIN for reasonable travel, communications,
and out -of- pocket
expenses incurred in conjunction with the services.
4. Invoicing and Payment
PALADIN shall invoice CUSTOMER monthly for T &M Services and expenses, unless otherwise expressly specified
in a Work Order or Purchase Order. Charges shall be payable within 15 days of invoice date and shall be deemed
overdue if they remain unpaid thereafter. All overdue invoices are subject to an interest charge of 1.0% per month.
5. Taxes
See Section 7.3 of the AGREEMENT
6. Term
This PSA shall commence on the AGREEMENT Effective Date. Either party may terminate this PSA at anytime by
providing the other
party with at least 14 days written notice. Any Work Order outstanding at the time of termination shall continue to be
covered by this
PSA as if it had not been terminated.
7. Warranty
Paladin warrants that the Services will be performed consistent with generally accepted industry standards.
8. Limitations on Warranty
See Section 5.0 of the AGREEMENT
9. Exclusive Remedy
For any breach of the above warranty, CUSTOMER s exclusive remedy, and PALADIN 's entire liability, shall be the
reperformance of the Services. If PALADIN is unable to reperform the Services as warranted, CUSTOMER shall be
entitled to recover the fees paid to PALADIN for the deficient services. IN NO EVENT SHALL PALADIN BE LIABLE
FOR ANY CONSEQUENTIAL OR INCIDENTAL DAMAGES ARISING FROM ANY SERVICES PROVIDED
HEREUNDER, INCLUDING BUT NOT LIMITED TO CLAIMS FOR LOST PROFITS OR OTHER ECONOMIC
DAMAGES.
10. Relationship between the Parties
PALADIN is an independent contractor, nothing in this Agreement shall be construed to create a partnership, joint
venture, or agency relationship between the parties. Each party will be solely responsible for payment of all
compensation owed to its employees, as well as employment related taxes. Each party will maintain appropriate
worker's compensation for its employees, as well as employment related taxes. Each party will maintain appropriate
worker's compensation for its employees as well as general liability insurance.
17 Initials — Paladin Customer _' `
7
If. Authority to Enter Into Agreement
Each party to this PSA has the authority to enter into and form this PSA. The individuals signing the AGREEMENT
have the authority to act as agents of their respective organizations. Each party acknowledges that they have read
this PSA and will abide by it.
12. Force Majeure
See Section 12.2 of the AGREEMENT
13. Assignment of Contract
See Section 12.3 of the AGREEMENT
14. Hold Harmless Indemnity
CUSTOMER asserts it possesses all the rights and interests in the third party licensed software necessary to enter
into this AGREEMENT, and shall indemnify and hold Paladin, its agents and employees harmless from any loss,
damage or liability for infringement of any United States patent right or copyright with respect to the use of the
licensed software; provided that CUSTOMER is notified in writing within ten calendar days of suit or claim against
PALADIN, that PALADIN permits CUSTOMER to defend, compromise or settle said claim of infringement and give
CUSTOMER all available information, assistance and authority to enable CUSTOMER to do so, provided PALADIN
fully observes all the terms and conditions of this PSA.
15. Confidentiality and Non - Disclosure
See Section 8.0 of the AGREEMENT
16. Nonsolicitation of Employees
See Section 12.3 of the AGREEMENT
17. Insurance and Risk of Loss
The CUSTOMER bears all responsibility for damages to their equipment and facilities.
18. Possession of Software, Software Enhancements and Documentation
PALADIN shall be entitled to exclusive possession of all Software, enhancements to the Software, documentation
relating to such
Software and enhancements and other intellectual property developed pursuant to this AGREEMENT. PALADIN s
exclusive right to possession shall continue until full payment is received regardless of ownership rights in the software.
CUSTOMER expressly agrees to PALADIN's possessory lien on all Software, Software enhancements,
Documentation, and intellectual property developed by PALADIN.
19. Survival of Rights
The rights and responsibilities of sections 14, 15 and 16 shall survive the termination of this PSA.
20. Severability
All provisions of this AGREEMENT are severable and no provision hereof shall be affected by the invalidity of any
other such provision.
21. Goveming Law, Attorney's Fees; Venue
See Section 10.0 and 12.6 of the AGREEMENT
22. Entire Agreement
See Section 12.1 of the AGREEMENT
18 Initials —Paladin Customer