March 27,2007CSMS - Savannah Negotiating a Fair Contract for Software and Services John Lateulere

March 27,2007CSMS - Savannah IANAL

March 27,2007CSMS - Savannah But … We all have to deal with contracts Apply a critical eye to vendor supplied contracts Most contracts are written to their business advantage Consult with counsel

March 27,2007CSMS - Savannah It’s NOT a War Vendors want to sell you their product They are often willing to change their standard contract If you don’t ask … But you may need the sledge hammer approach (legal counsel)

March 27,2007CSMS - Savannah To Protect – Them and Me All contract references to the company have been replaced with The Company Modified identifiable product information

March 27,2007CSMS - Savannah Committed Services As long as THE COMPANY were ready, willing and able to provide the Committed Services in the time period specified in Exhibit 1, then Licensee’s failure to use the Committed Services within that time period will not excuse Licensee’s obligation to pay THE COMPANY the total fees for the Committed Services, but will excuse THE COMPANY’s obligation to provide any unused Committed Services upon the expiration of that time period.

March 27,2007CSMS - Savannah Negotiated Langauge Licensee will be obligated to pay THE COMPANY for such services as if THE COMPANY had performed such services on the date scheduled, unless Licensee has notified THE COMPANY that Licensee would like to reschedule or cancel the provision of such services at least thirtyfifteen (3015) days prior to the date which THE COMPANY is scheduled to perform such services

March 27,2007CSMS - Savannah … And had deleted Without limiting the foregoing, nothing in this Section 4(f) will act in any way to reduce Licensee’s obligation to THE COMPANY in connection with any Committed Services. The Commited Services definition didn’t exist anymore

March 27,2007CSMS - Savannah What documentation? “documentation” used in freely in the contract but not defined we had a definition added to the definitions section Had a list of documentation appended to the contract

March 27,2007CSMS - Savannah Hey we have “confidential” information too! As defined confidential information was one sided Confidential Information of Licensee includes all “educational records” as that term is defined in 20 U.S.C (Family Educational Rights and Privacy Act).

March 27,2007CSMS - Savannah The License License. Subject to the terms and conditions of this Agreement, THE COMPANY grants Licensee a perpetual, non-exclusive, non- transferable (except as provided herein) license to use and copy for use the Licensed Software on the Equipment within the United States of America for Licensee’s own, non- commercial internal computing operations.

March 27,2007CSMS - Savannah Test vs. Prod vs. Training? Object Code. Licensee has right to use the Licensed Software in Object Code form. Licensee also has the right to use the Licensed Software in Object Code form temporarily on another THE COMPANY- supported configuration, for testing and disaster recovery of Licensee’s computer operations

March 27,2007CSMS - Savannah Payments and Schedules PAYMENT OF LICENSE FEE: The Total License Fee is due on the Execution Date. Execution date was February; installation would be in July

March 27,2007CSMS - Savannah PAYMENT OF LICENSE FEE: The Total License Fee shall be due in accordance with the following schedule:

March 27,2007CSMS - Savannah 35% of the Total License Fee shall be due not later than the Execution Date. 40% of the Total License Fee shall be due not later than 90 days after the Execution Date. 25% of the Total License Fee shall be due not later than 150 days after the Execution Date.

March 27,2007CSMS - Savannah Services Payments Licensee will remit payment for the Fixed Fee Services set forth in Table 2, …, as follows: fifty percent (50%) on the Execution Date and the remaining fifty percent (50%) by not later than six (6) months after the Execution Date.

March 27,2007CSMS - Savannah Much Better Licensee will remit payment for all other Fixed Fee Services (a total of $XXX,XXX) set forth in Table 2 as follows: in eight (8) equal and successive quarterly installments of $XXX,XXX per installment, with the first such installment to be due to THE COMPANY by not later than February 1, 2006.

March 27,2007CSMS - Savannah This payment schedule is based on the presumption that THE COMPANY will provide an equal amount of Fixed Fee Services hours each quarter throughout the Services Period. To the extent Fixed Fee Services are rendered on a more accelerated basis during the Services Period, THE COMPANY reserves the right to adjust the payment amounts above (without increasing the Total Fixed Fee Services Fee), upon written notice to Licensee, to more accurately reflect the rate at which Fixed Fee Services are being rendered during the Services Period

March 27,2007CSMS - Savannah We added … If fewer hours are expended than expected during a given period, the payment for that period will be adjusted downward.

March 27,2007CSMS - Savannah Although THE COMPANY’s obligation to provide these services for the Fixed Fee set forth in Table 2 is subject to the time limitation provided in Table 2, subject to the parties’ mutual agreement set forth in a writing signed by both parties, and subject to the availability of THE COMPANY resources, THE COMPANY shall provide additional services as may be necessary to complete all Data Migration tasks for additional fees at THE COMPANY’s then-prevailing rates.

March 27,2007CSMS - Savannah Also added: In the event the assignment of the THE COMPANY Project Manager must change, Licensee shall have the right to pre-approve the new Project Manager, which approval shall not be unreasonably delayed or withheld.

March 27,2007CSMS - Savannah 1 year = 7 months THE COMPANY will provide: an aggregate of 660 service hours of “Short Term” Remote Database Administration Services and on-going support for the THE COMPANY Baseline Component Systems. Service hours must be used within a twelve- month service period from the Execution Date

March 27,2007CSMS - Savannah 1 year = 12 months Execution date changed to: date of installation of the Licensed Software

March 27,2007CSMS - Savannah Severability – Jurisdiction Changed to reflect The Company agrees to the federal court in our state Had been subject to the laws of their home state

March 27,2007CSMS - Savannah Limited Liability The COMPANY’S LIABILITY IN CONNECTION WITH THE LICENSED SOFTWARE, ANY SERVICES, THIS LICENSE OR ANY OTHER MATTER RELATING TO THIS AGREEMENT WILL NOT EXCEED THE FEE THAT LICENSEE ACTUALLY PAID … FOR THE COMPONENT SYSTEM OR SERVICES GIVING RISE TO THE LIABILITY.

March 27,2007CSMS - Savannah A little less Limited THE COMPANY’S LIABILITY IN CONNECTION WITH THE LICENSED SOFTWARE, ANY SERVICES, THIS LICENSE OR ANY OTHER MATTER RELATING TO THIS AGREEMENT WILL NOT EXCEED THE FULL AMOUNT OF ALL FEES ACTUALLY PAID BY LICENSEE FOR THE BASELINE COMPONENT SYSTEMS AND THE SERVICES

March 27,2007CSMS - Savannah And for other components WITH REGARD TO ANY COMPONENT SYSTEMS OR SERVICES THAT LICENSEE OBTAINS FROM THE COMPANY SUBSEQUENT TO THE EXECUTION DATE,THE COMPANY’S LIABILITY IN CONNECTION THEREWITH OR WITH ANY OTHER MATTER RELATING TO THE AMENDMENT/WORK ORDER PURSUANT TO WHICH SUCH COMPONENT SYSTEMS/SERVICES ARE BEING OBTAINED WILL NOT EXCEED THE FULL AMOUNT OF ALL FEES ACTUALLY PAID BY LICENSEE FOR THE BASELINE COMPONENT SYSTEMS

March 27,2007CSMS - Savannah What will it run on? Added: THE COMPANY confirms that it supports the use of the Licensed Software on the configuration set forth in Attachment B.

March 27,2007CSMS - Savannah You can find the presentation at: /jhnfltlr/csms2007.htm