STAFF REPORT - AC Transitactransit.org/wp-content/uploads/board_memos/12-288... · A. Oracle is in...

Report No: Meeting Date:

Alameda-Contra Costa Transit District

STAFF REPORT TO: Operations Committee

AC Transit Board of Directors

FROM: David J. Armijo, General Manager

SUBJECT: Contract Extension for PeopleSoft Hosting

ACTION ITEM

RECOMMENDED ACTION!Sl:

12-288 November 14, 2012

Authorize the General Manager to Enter Into a Twelve-Month Extension of the PeopleSoft Hosting Agreement to December 30, 2013 with a Sixty-Day Termination Clause.

EXECUTIVE SUMMARY:

Our PeopleSoft application is hosted offsite through a contract with Oracle Corp. That contract expires on December 29, 2012 and a procurement is underway to re-compete it. The procurement should be completed before the contract ends but there may not be time to bring a recommendation for award before the Board prior to contract expiration. And if a different vendor is chosen, the District will certainly not have sufficient time to migrate PeopleSoft to that new vendor's facility, a process that may take at least several months. A contract extension will allow sufficient time to seek the Board's approval for an award and to carefully migrate our PeopleSoft application to a new hosting provider should that prove necessary.

BUDGETARY/FISCAL IMPACT:

Annually, the cost to host our PeopleSoft applications offsite is approximately $750,000. This is fully budgeted and no additional funds will be required for this contract extension.

BACKGROUND/RATIONALE:

The District began the Finance-Human Resource (FHR) project in 2007 to upgrade our existing PeopleSoft Human Capital Management (HCM) application and to implement both PeopleSoft Financials (FIN) and Portal, forming the three 'pillars' of our system. Staff determined that it was both safer and more cost-effective to have the application installed, monitored and supported offsite at a "hosting provider" with more robust facilities and technical staff available 24x7. A three-year contract was awarded to Oracle Corp. in late 2007 for hosting at their partner facility, NaviSite Inc., in San Jose, California.

Our PeopleSoft system, as with any large customized application, continues to be developed and enhanced. It includes over 15 different software environments dedicated to developing, testing and deploying changes and new modules within our three PeopleSoft pillars. When our original contract came due, it was extended once and then again because the demands on the

Report No. 12-288 Page 2 of 2

system were such that we could not afford to suspend development for the many months needed to migrate the environments, nor to move all the in-process environments.

Information Services staff began discussions about re-competing the hosting contract early this year; it was mentioned at the Board's February 29, 2012 Retreat. Development of the Requirements and Scope of Work began in April. In order to minimize cost, we decided not to engage outside contractors to develop these documents and to have internal staff do that work. In hindsight, this was a mistake as competing demands were allowed to distract staff from completing the Scope and routing it to Purchasing. That was completed in October but likely leaves insufficient time to complete the procurement and return to the Board in December for approval of an award. And if the decision is made to award to a different hosting provider, up to six additional months will be needed for migration.

ADVANTAGES/DISADVANTAGES:

The advantages of authorizing a contract extension are that:

• Our PeopleSoft applications (HCM, FIN and Portal) can continue to be hosted through Oracle at NaviSite's facility until our re-procurement of that contract can be completed, an award made, and the applications carefully migrated to and tested at a new hosting facility if necessary.

There are no disadvantages to authorizing a contract extension.

ALTERNATIVE ACTIONS:

No alternative actions are available at this time.

PRIOR RELEVANT BOARD ACTIONS/POLICIES:

07-204 Authorizing the General Manager to contract with Cherry Road Technologies and Oracle Corporation for replacement and implementation of the PeopleSoft Finance and Human Resources systems.

ATTACHMENTS: 1: Oracle Master Hosting Agreement Change Order Amendment 15

Department Head Approval: David J. Armijo, General Manager

Reviewed by: Vincent C. Ewing, General Counsel Lewis Clinton, Chief Financial Officer

Prepared by: Tom O'Neill, ChiefTechnology Officer

SR 12-288 Attachment 1

ORACLE" MASTER HOSTING AGREEMENT ("MHA") CHANGE ORDER

Amendment Fifteen

Customer Name: Alameda-Contra Costa Transit Oracle America, Inc. District

Customer Address: 1600 Franklin Street Oracle Address: 500 Oracle Parkway Oakland, CA 94612-2800 Redwood City, CA 94065

ORACLE CONTRACT INFORMATION

Agreement: Master Hosting Agreement ("MHA") Agreement Name: MHA-PS3543-US-29-NOV-2007

This change order incorporates by reference the terms of the agreement specified above (the "MHA"). For purposes of this change order, "you" or "your" as defined in this change order shall have the same meaning as "Customer" or "Client" in the MHA.

The effective date of this change order amendment fifteen is December 29, 2012 (To be completed by Oracle).

The MHA is amended as follows:

1. Description of Change: Extend current Master Hosting Agreement Contract #OKS 4983084 for Twelve (12) months.

a. Term: December 29, 2012 thru December 28, 2013

2. Terms of Change: This amendment and the pricing herein will expire on December 29, 2012.

3. Service Fees:

On Going Service Fees: $62,307.50/Monthly

4. Definitions: Unless otherwise defined in this Amendment Fifteen (15), capitalized terms in this Amendment Fifteen (I 5) shall have the same meaning as used in the MHA.

5. Conflict: Except as otherwise provided in this Amendment Fifteen (I 5), no other change is made to the MHA and the MHA remains in full force and effect. This Amendment Fifteen (15) is governed by the terms and conditions in the MHA. If any conflict or inconsistency exists between the provisions of this Amendment Fifteen (15) and the MHA, the provisions of this Amendment Fifteen (15) shall prevail.

GCRA# 1718858_.MHAAmendmentl5.ACTRANS.v3dsr Page 1 of2

6. Specific Provisions All terms & conditions in this Hosting Change Order (the "HCO") are subject to the January I 0, 2004, Master Services Agreement (the "MSA") between Oracle USA, Inc., and NaviSite, Inc. Oracle America, Inc. is a successor in interest to Oracle USA, Inc., and has assumed all rights and obligations of Oracle USA, Inc. under this agreement. All references to Oracle in the specified agreement shall mean Oracle America, Inc. All capitalized terms used in this HCO will have the same meaning as in the MSA, unless otherwise stated in this HCO. Any terms and conditions not specifically addressed in this HCO are governed by the terms and conditions of the MSA or the Hosting Order between NaviSite and Oracle for the Customer.

This change order is valid through November 30, 2012, and shall become binding upon execution by you and acceptance by Oracle.

Alameda-Contra Costa Transit District ORACLE AMERICA, INC.

Authorized Signature: Authorized Signature:

Name: ------------------------------------ Name: --------------------------------

Title: _________________ _ Title: ______________ _

Signature Date: __________________ __ Signature Date: ________________________ _

GCRA# 1718858 _.MHAAmendment 15 .ACTRANS. v3dsr Page 2 of2

The information contained in this document including the Schedules constitutes trade secrets and confidential information of Oracle. Oracle furnishes it to Customer on the condition that Customer will not, without

Oracle's permission, use or disclose it for other than evaluation purposes. If Customer and Oracle enter into an agreement based on this document, Customer shall have the right to use and disclose this information to

the extent provided in the agreement.

Oracle Master Hosting Agreement

This Oracle Master Hosting Agreement is entered into between:

Name:

Type of entity: State of formation: Address:

Contact Person and title: Telephone: Fax: email: Category:

Alameda-Contra Costa Transit District ("Customer") Public Sector Transit District California 1600 Franklin Street Oakland, California 94612-2800 USA Blake Pelletier, Chief Technology Officer 510-891-4739

[email protected] Value

and Oracle USA, Inc., ("Oracle")

Corporation Colorado 500 Oracle Parkway Redwood Shores, California 94065 USA

as of (the "Effective Date"), with a start date of (the "Start Date")

with the following schedules being incorporated into and made a part of this Agreement: Schedule 1: Statement of Work Schedule 2: Pricing Summary Schedule 3: Service Level Agreement Schedule 4: Change Procedures Schedule 5: Oracle Rules and Regulations Schedule 6: Glossary of Terms All terms with an initial capital letter are

defined in the Glossary of Terms

Recitals

A. Oracle is in the business, among other things, of hosting and managing Oracle software applications;

B. Customer desires to have software applications that it has separately licensed from Oracle hosted by Oracle; and

C. Customer and Oracle each agrees to the terms and conditions set forth in this Agreement.

Now THEREFORE, for valuable consideration, the receipt of which each party acknowledges, Customer and Oracle agree as set forth below.

Article 1. Hosting Services

1.1. Subject to Customer complying with its obligations under this Agreement, Oracle shall provide the Services for the Software as set out in the SOW.

1.2. Customer acknowledges that some or all of the Services, and where appropriate, decisions with respect to their format and delivery, may be provided on Oracle's behalf by suppliers ("Suppliers"). In particular, Customer acknowledges that Oracle utilizes NaviSite to provide the Services facility, and Oracle shall not change its provider

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of the Services facility without first providing Customer with at least 60 days notice, but this requirement shall not apply if Oracle itself assumes providing the Services facility under this Agreement. Oracle shall be responsible for any and all acts and failures by a Supplier in the perfonnance of Services to the same extent as if such action or failure were Oracle's action or failure, and all rights and privileges of Oracle under this Agreement may be exercised by a Supplier so authorized by Oracle.

1.3. Customer acknowledges that (i) the Services do not include the Software, (ii) it obtained all licenses for any Software separately pursuant to the OLSA, (iii) such separate license agreement(s) allow Oracle and its Suppliers to perform the Services, (iv) the Software has already been delivered to it, (v) Customer separately acquired and will continue to maintain technical support services for the Software for the duration of the Services, and (vi) the Services themselves do not convey any license to the Software or the right to utilize technical support.

1.4. Customer shall utilize the Services solely for its internal business operations and only in a manner consistent with the OLSA (including the number of licenses, employees, users and other applicable metrics). Customer shall not utilize the Services in a service bureau type of activity, time-share, lease or sublicense the Services or otherwise burden the Services beyond what is provided for in the SOW, and Customer shall not commercialize the Services in any way. Customer shall not publish any result of any benchmark of the Services, except with Oracle's prior written consent. Customer shall obtain at its sole expense any and all rights and consents from third parties (including intellectual property rights) necessary for Oracle and its Suppliers to perform the Services under this Agreement.

1.5. Oracle is responsible, as part of its providing System Administration Services ("SAS"), for applying any Maintenance Release as set forth in Schedule I, Exhibit 1-B. Customer acknowledges that the Services do not include the application of any Software upgrade, tools upgrade or any Functionality Release.

1.6. Oracle will provide, on an annual basis, an AI CPA Statement on Auditing Standards No. 70 ("SAS-70") Type II report, or the equivalent, providing a description of the controls and sustainability of the controls that Oracle has implemented at the Services facility to meet specified control objectives. The SAS· 70 Type II report is a foundation upon which Customer may rely and plan any additional internal controls evaluation or audit steps to support its external reporting and compliance with other regulatory or business needs, but Oracle shall not be responsible for any such additional controls or audits of such controls that Customer undertakes with respect to its use or access to the Services. Specifically, in providing such a SAS-70 Type II report, Oracle intends for the SAS-70 Type II audit report to address the issues that are common to most of its hosting customers on a hosting facility wide basis. Customer acknowledges that the Type II report is not intended to be Customer specific. Customer acknowledges that to receive the SAS 70 Type II report, it may have to sign a non-disclosure agreement specifically addressing the contents of the SAS 70 Type II report.

Article 2. Fees and Payment

2.1. The fee for the Services (the "Hosting Fee") shall initially be as set forth in the Pricing Summary attached as Schedule 2, start accruing on the Start Date and be increased for increased Services as the parties may agree and pursuant to Section 2.7. If Customer requests that the Services be reduced in such manner that reduces its requirements for SAS hours, such as by removal of Software from being hosted, such request shall be subject to the change order process identified in Section 9.19 of the General Terms and any applicable minimum volume and fees. Upon execution of this Agreement, Customer shall additionally pay Oracle a fee for setting up the Services and Hosting Environment (the "Start-Up Fee") as set forth in Schedule 2. Oracle shall promptly provide Customer with an invoice for the Start-Up Fee, but Customer's receipt of the invoice shall not be a condition to its obligation to pay the Start·Up Fee. Oracle will invoice Customer monthly in advance for the Hosting Fee.

2.2. Customer shall pay all invoices in U.S. Dollars in full within 30 days of Customer's date of the invoice. Customer shall pay Oracle a late payment charge of 12% per annum, or the highest rate allowed by law, whichever is lower, on all amounts not paid when due, until paid in full. If Customer disputes any amou'nt of an invoice, Customer shall promptly and no later than I 0 days after receiving the invoice, notify Oracle of the amount disputed with a short description of the basis for the dispute, and thereafter such dispute shall be subject to the Escalation Process.

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2.3. To the extent any data migration or other effort is not described in Schedule I, Exhibit 1-B as being covered by SAS, the activity is Customer's responsibility and is subject to additional fees. Customer is also solely responsible for any fee or cost in connection with support, maintenance, fixing or patching of any Enhancement.

2.4. Oracle may, without further notice to Customer, monitor Customer's use of the Services remotely from the Services facility for purposes of determining Customer's utilization of Services and compliance with this Agreement.

2.5. Excluding taxes based on Oracle's income, Customer is liable for all taxes relating to the Services whether or not Oracle invoices Customer for such taxes, except to the extent Customer has provided Oracle with a valid tax exemption or direct pay certificate that exempts Customer from such payment.

2.6. Once per year Oracle may increase the Hosting Fee up to 0% over the prior year's fees.

2.7. Customer acknowledges that any change from the Software version set forth in Schedule I may require additional hardware or Software and therefore may result in an increase in the Hosting Fee. Oracle will not effect any such addition without Customer's agreement, which shall be by execution of a Change Order.

Article 3. Confidentiality

3.1. During the course of the parties' relationship, they may have access to confidential information of the other party that the disclosing party ("Discloser") identifies as being confidential as well as information disclosed orally by either party in connection with this Agreement that is designated by Discloser at the time of disclosure the receiving party ("Recipient") as being confidential and which Discloser identifies briefly in a writing to Recipient within 15 days of such oral disclosure that also designates the oral disclosure as being confidential ("Confidential Information"). Customer's Confidential Information includes any personally identifiable data provided by Customer ("Customer Information"). Oracle's Confidential Information includes the Software, any accompanying documentation, information proprietary to Oracle or any Supplier, this Agreement and the terms, conditions and pricing contained herein. Neither party shall disclose any Confidential Information of the other party, orally or in writing, to any third party without the prior written consent of the owner of such information, except as provided in this Agreement or as required by federal or state law. A party's duty to protect the Confidential Information of the other party expires three (3) years after the disclosure of such Confidential Information.

3.2. The parties shall protect each other's Confidential Information with at least the same degree of care and confidentiality, but not less than a reasonable standard of care, which Recipient utilizes for its own information of a similar type that it does not wish disclosed to the public.

3.3. This Agreement imposes no obligation upon Recipient with respect to Discloser's Confidential Information which Recipient can establish by legally sufficient evidence: (a) was, prior to receipt from Discloser, in the possession of, or rightfully known by Recipient, without an obligation to maintain its confidentiality; (b) is or becomes generally known to the public without violation of this Agreement or without a violation of an obligation of confidentiality owed to Discloser; (c) is obtained by Recipient in good faith from a third party having the right to disclose it without an obligation of confidentiality; or (d) is independently developed by Recipient without reference to Confidential Information of the Discloser.

3.4. Recipient may provide access to and use of Discloser's Confidential Information only to those third parties that: (a) provide services to Recipient concerning Recipient's use of Discloser's Confidential Information; (b) have a need to use and access the Confidential Information; and (c) have agreed to substantially similar non-disclosure obligations as those contained in this Agreement. Disclosure of Discloser's Confidential Information by any such third party shall constitute a breach by Recipient of its obligations with respect to Discloser's Confidential Information. To the extent Recipient may be required to disclose Confidential Information in a legal proceeding, Recipient may make such disclosure, provided that Recipient (i) notifies Discloser of such requirement prior to disclosure and (ii) makes diligent efforts to avoid and limit disclosure. Notwithstanding Recipient's conformance with the procedures set forth in the prior sentence, the disclosure in connection with a legal proceeding shall not itself cause the information to lose its confidential character, and Recipient shall not treat such information thereafter as other than Confidential Information, unless the information ceases to be Confidential Information as a result of one of the reasons specifically set forth in Section 3.3 of these General Terms.

3.5. Each party understands that the Confidential Information may constitute valuable business assets of Discloser and its disclosure may irreparably harm Discloser. In the event of breach or threatened breach of

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obligations pertaining to Confidentiallnformation by Recipient, Discloser shall be entitled to seek injunctive relief and any other remedy available at law or equity.

3.6. To the extent Oracle compiles or otherwise has access to aggregated or non-identifying information gained from perfonning the Services, such as statistics about its customers and their users, traffic patterns and similar infonnation, Oracle may use such infonnation for such uses as service evaluations, use and equipment projections, product development, promotions and marketing. Oracle may share such Customer Infonnation in aggregate or summary fonn to its suppliers, customers, partners and such other third parties, as long as doing so does not disclose the name of or otherwise identify Customer, any User or any customer of Customer.

Article 4. Ownership

4.1. As between Oracle and Customer, Oracle and its respective Suppliers retain all right, title and interest in and to its respective proprietary technology, including the Software, hardware designs, copyrights, trademarks, patents, trade secrets software tools, algorithms, user interface designs, architectures, products, documentations, the designs and schema for any network or system connectivity and related intellectual property worldwide and whether in printed, written, electronically reproduced or any other form and whether owned by Oracle or any Supplier or licensed to Oracle or any Supplier and any enhancements, derivatives, improvements, modifications or extensions of such technology conceived, reduced to practice or developed during the term of this Agreement (collectively, "Oracle Technology").

4.2. As between Oracle and Customer, Customer retains all Customer Information and any trademark, service mark or domain name owned by Customer. Customer grants Oracle and its Suppliers the right to use Customer Infonnation to the extent necessary to provide Services to Customer. Customer acknowledges that neither Oracle nor any Supplier exercises any control whatsoever over the content of Customer Information. Customer shall have the full responsibility to provide Customer Information to Oracle and to ensure that all Customer Information that Customer and Users collect, transmit, provide or receive complies with all applicable laws, regulations and Oracle Hosting Rules and Regulations. Oracle shall have no obligation to review Customer Information for accuracy, potential liability or for any other reason.

4.3. Nothing in this Agreement grants, expressly or impliedly, any license, right, title or interest in any trademark, trade name or service mark of Oracle or of any of any Supplier, and except for the uses specifically set forth in this Agreement, nothing in this Agreement grants any right to Customer to utilize any intellectual property or software of Oracle or of any Supplier. Customer shall promptly notify Oracle of any and all infringements, imitations, illegal uses or misuses, by any person, of any trademark, trade name, service mark of Oracle that comes to Customer's attention in connection with Customer's utilization of the Services.

Article 5. Term. Termination and Suspension

5.1. This Agreement shall have a term commencing as ofthe Effective Date and running for three (3) years from the Start Date.

5.2. Customer may terminate the Services for any reason other than as provided in Section 5.4 prior to their scheduled expiration by: (i) providing 60 days notice to Oracle (the "Termination Notice"); (ii) paying Oracle for all Services performed through the date of termination and (iii) paying to Oracle a termination fee of$43,850.00 if the Services were not tenninated or otherwise changed (the "Termination Fee").

5.3. The parties acknowledge that the Termination Fee is not a penalty, that fixing the actual loss would be impracticable and that the Termination Fee is a reasonable estimation by the parties of fair compensation for the loss that might result from the termination.

5.4. Notwithstanding the provisions of Section 5.2, Customer may terminate this Agreement without obligation to pay the Termination Fee subject to the provisions of Section 8.2 of Schedule 3 (Remedies/SLA) as applicable. If Customer gives Oracle notice that Customer is terminating Services pursuant to this section, Customer may nonetheless continue to access the Services pursuant to this Agreement, conditioned upon its payment of the Hosting Fee, for up to six months after giving such notice or three (3) years after the Start Date, whichever is earlier.

5.5. Oracle shall be entitled in its sole discretion immediately to suspend Services in any the following situations:

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(a) Oracle reasonably believes that:

(i) the Services facility is about to suffer a threat to its security or functionality (a "Threat") or;

(ii) Oracle or any Supplier is likely to suffer an exposure to substantial liability in connection with a situation related to the Services facility or the Services (an "Exposure");

(b) Customer has failed to pay to Oracle any amount payable to Oracle under this Agreement when due and fails to cure such non-payment within five business days after Oracle has provided Customer with notice of such failure;

(c) Customer has breached any other obligation to Oracle and Customer has failed to cure such breach, other than a failure to pay described in Section 5.5(b) of the General Terms, within 30 days after Oracle has provided Customer with notice of such failure;

(d) Customer has failed to keep in effect a Oracle maintenance program for all Software, and Customer has failed to cure such condition within 30 days after Oracle has provided Customer with notice of such failure;

(e) Customer breaches any warranty in Section 6.1 ofthe General Terms and fails to cure such breach within 30 days of Customer becoming aware of such breach or notice from Oracle of such breach, whichever is earlier; or

(I) Customer's utilization of the Services at any time exceeds any aspect of the Capacity Threshold and has done so for three consecutive calendar months.

5.6. Whenever Oracle suspends Services pursuant to Section 5.5 of the General Tenns, it will provide Customer with notice and an opportunity to cure the situation giving rise to the suspension, if Oracle deems practical or applicable, depending on the nature ofthe situation. Oracle shall not be required to re-establish Services until Oracle determines, in its reasonable discretion, that the situation giving rise to the suspension has been cured. If, in Oracle's reasonable discretion, the situation giving rise to the suspension is cured, Oracle will reinstate Services as commercially reasonable. The Hosting Fee shall continue to accrue during all suspensions of Services effected pursuant to this Article 5 of the General Terms. Nothing in this Section 5.6 ofthe General Terms is intended to alter in any way Customer's obligations with respect to the Termination Fee.

5.7. After Oracle has suspended Services for 30 days, Oracle may terminate Services, effective upon giving notice to Customer unless such notice itself provides for a later effective date, if the situation giving rise to the suspension is primarily attributable to Customer and Oracle in its reasonable discretion has determined that Customer has not cured the situation giving rise to the suspension. Customer shall pay the Termination Fee if Oracle terminates Services for Customer's failure to cure any situation primarily attributable to Customer that has given rise to a suspension of Services.

5.8. Upon either suspension or termination of Services, Oracle may immediately cease performing all Services and terminate all Customer and User access to Service$.

5.9. Oracle shall have no liability to Customer, and Customer waives all claims and actions against Oracle with respect to termination, if Oracle terminates, suspends or withholds Services in accordance with this Article 5 of the General Terms.

5.10. Upon termination of Services, Customer shall immediately pay Oracle all amounts owing under this Agreement, all licenses and rights granted under this Agreement shall immediately terminate, and each party shall return to the other party all property, including but not limited to the other party's Confidential Information. At Customer's request, Oracle shall either destroy all Customer Information in its possession or provide to Customer a tape copy of Customer Information in a format designated by Oracle, typically being a database export format, or in any other format mutually agreed to by the parties.

5.11. Customer may, pursuant to the procedures set forth in Schedule 4, request Oracle to assist in moving Customer's Hosting Environment to a new site and convert Customer's data to a different format or to operate on a different database, and, if Oracle is willing to perform such services, Customer shall pay Oracle for such assistance on a time and materials basis at Oracle's then current rates.


Article 6. Warranties and Disclaimers

6.1. Customer warrants that (i) it has all requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement; (ii) it has no obligation that is inconsistent with or that will cause it to violate any of its obligations under this Agreement; (iii) it will not utilize the Services in any unlawful way or for any unlawful purpose; and (iv) it has provided all necessary notices and obtained all necessary consents in connection with its collection, use, processing, transfer and disclosure of data collected by Customer, or transmitted or otherwise provided to Oracle in connection with this Agreement, and that Oracle may access and transfer globally such data as necessary in connection with the provision of Services under this Agreement.

6.2. Oracle warrants that (i) it has all requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement; (ii) it has no obligation that is inconsistent with or that will cause it to violate any of its obligations under this Agreement; (iii) it will not utilize the Services in any unlawful way or for any unlawful purpose; and (iv) it will provide the Services in a professional manner, consistent with generally accepted industry standards, including the use of commercially reasonable virus detection and screening procedures.

6.3. Except as expressly set forth in this Agreement, THE HOSTING, EQUIPMENT, SOFTWARE, AND MATERIAL ORACLE OR ANY OF ITS SUPPLIERS PROVIDES IN CONNECTION WITH THIS AGREEMENT ARE PROVIDED "AS IS" WITHOUT ANY REPRESENTATION OR WARRANTY OF ANY KIND. ORACLE AND ITS SUPPLIERS MAKE NO OTHER REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED BY OPERATION OF LAW OR OTHERWISE, INCLUDING WITHOUT LIMITATION, ANY IMPLIED OR STATUTORY WARRANTY OF NONINFRINGEMENT, TITLE, QUIET ENJOYMENT, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY IMPLIED WARRANTY ARISING OUT OF COURSE OF CONDUCT, USAGE OR TRADE PRACTICE. NEITHER ORACLE NOR ANY OF ITS SUPPLIERS WARRANTS THAT THE SERVICES WILL BE PROVIDED ERROR-FREE, UNINTERUPTED, SECURE OR VIRUS-FREE. NEITHER ORACLE NOR ANY OF ITS SUPPLIERS SHALL HAVE ANY LIABILITY WHATSOEVER FOR THE ACCURACY, COMPLETENESS OR TIMELINESS OF ANY CUSTOMER INFORMATION. NEITHER ORACLE NOR ANY OF ITS SUPPLIERS WARRANTS THAT CUSTOMER IN USING THE SERVICES WILL OBTAIN THE RESULTS THAT CUSTOMER INTENDS NOR THAT THE SOFTWARE OR HARDWARE DESCRIBED IN THE SOW WILL BE ADEQUATE OR OTHERWISE FITTING FOR THE BUSINESS PURPOSES AND REQUIREMENTS OF CUSTOMER.

6.4. Oracle does not and cannot control the flow of data to or from Oracle's network, other portions of the internet or other access services (collectively "Conne.ctivity Service"). The Services and flow of data depends in part on actions or inactions of third parties and the performance of Connectivity Services provided or controlled by third parties than can impair or disrupt customer's Services. Oracle cannot guarantee that such events, including but not limited to computer virus, theft, operator error or hacker penetration, will not occur. Accordingly, ORACLE AND ITS SUPPLIERS DISCLAIM ANY AND ALL LIABILITY RESULTING FROM OR RELATED TO SUCH EVENTS. CUSTOMER ACKNOWLEDGES AND AGREES THAT CUSTOMER SHALL BE SOLELY RESPONSIBLE, AT ITS OWN EXPENSE, FOR ACQUIRING, INSTALLING AND MAINTAINING ALL NECESSARY DATA COMMUNICATIONS CIRCUITS AND CONNECTIVITY SERVICE RELATED EQUIPMENT, HARDWARE, SOFTWARE AND SERVICES.

6.5. Neither Oracle nor any Supplier shall be responsible for, and Customer shall establish policies and procedures to prevent, any deterioration or degradation of Software performance attributable to (i) batch jobs, (ii) enhancements, (iii) development activities, (iv) third party software applications, (v) specialty applications, (vi) adhoc queries, (vii) third party acts or omissions, (viii) exceeding the connectivity service capacity, or (ix) exceeding hardware capacity.

6.6. For any breach by Oracle to perfonn Services in accordance with this Agreement, including the services warranty set forth in Section 6.2(iv) above, that is not subject to Article 8 of Schedule 3 (Remedies/SLA), Customer's exclusive remedy shall be the reperfonnance of the deficient Services, and if Oracle is unable to substantially correct the breach in a commercially reasonable manner, Customer shall be entitled to recover the portion of the monthly Hosting Fee paid to Oracle for the deficient Services, and such refund shall be Oracle's entire liability.

Article 7. Limitation of Liability

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Notwithstanding anything in this Agreement to the contrary:

7.1. NONE OF CUSTOMER, ORACLE OR ANY OF ITS SUPPLIERS SHALL BE LIABLE FOR ANY

INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL DAMAGES, OR DAMAGES ARISING FROM LOST DATA OR DATA USE, INTERRUPTED COMMUNICATIONS, LOST REVENUE, LOST PROFITS (EXCLUDING FEES UNDER THIS AGREEMENT), LOST TECHNOLOGY, LOSS OF RIGHTS OR COSTS OF PROCURING

SUBSTITUTE SERVICES OR ANY OTHER SUBSTITUTION OR SOLUTION, HOWEVER ARISING, EVEN IF CUSTOMER, ORACLE AND/OR SUCH SUPPLIER HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

7.2. SPECIFICALLY, NEITHER ORACLE NOR ANY SUPPLIER SHALL HAVE ANY LIABILITY FOR ANY DETERIORATION, DEGRADATION OR LOSS IN SERVICES IN ANY WAY ATTRIBUTABLE TO CONNECTIVITY OR NETWORK ACCESS, ANY TIDRD PARTY PRODUCT, SERVICE OR SOFTWARE OR CUSTOMER'S FAILURE TO UPGRADE OR ADD TO CUSTOMER'S HARDWARE WHEN RECOMMENDED BY ORACLE TO DO SO.

IN NO CASE SHALL THE AGGREGATE OF ORACLE'S AND ALL OF ITS SUPPLIER'S TOTAL LIABILITY ARISING OUT OF OR RELATING TO OR IN ANY WAY CONNECTED WITH THIS AGREEMENT, ITS NEGOTIATION OR TERMINATION, OR THE PROVISION OR NON-PROVISION OF SERVICES, WHETHER IN CONTRACT, TORT OR OTHERWISE, EXCEED EITHER (A) SIX (6) TIMES THE AVERAGE AMOUNT OF HOSTING FEES PAID BY CUSTOMER FOR A MONTH (PRORA TA OF THE ANNUAL HOSTING FEE) FOR SERVICES DURING THE APPLICABLE ANNUAL TERM, OR (B) THE HOSTING FEES PAID FOR THE SERVICES FOR THE APPLICABLE ANNUAL TERM, WHICHEVER IS LESS.

ANY DAMAGE AWARD IN FAVOR OF CUSTOMER SHALL BE REDUCED BY ANY CREDIT RECEIVED BY

CUSTOMER UNDER THIS AGREEMENT, AND ANY SUCH CREDIT SHALL APPLY TOWARDS THE LIMITATION OF LIABILITY UNDER THIS ARTICLE 7.

THE PARTIES AGREE TO THE ALLOCATION OF LIABILITY SET FORTH IN THIS ARTICLE. CUSTOMER SPECIFICALLY ACKNOWLEDGES THAT WITHOUT THE LIMITATIONS CONTAINED IN THIS ARTICLE, THE HOSTING FEE WOULD BE HIGHER.

Article 8. Indemnity

8.1. Each party shall indemnity and defend the other party against all costs, liabilities, losses and expenses, resulting from every claim, suit, action and proceeding (a "Claim") brought against the other party by any third party or a Supplier to the extent arising out of any negligence or willful misconduct of the intended indemnifYing party, or a person employed by the indemnifYing party acting within the scope of his/her employment in connection with the Services while on a party's premises, which results in (i) bodily injury, sickness, disease or death; or (ii) any loss, damage or destruction of tangible personal property. The indemnifYing party's indemnity obligation under this section shall be reduced to the extent by which the liability, damage, or expense results from the willful misconduct or the negligent act or omission of an employee(s), or agent(s) of the party seeking indemnification, or a third party. For the purpose of this section, "tangible personal property" shall not include software, documentation, data, or data files nor shall the indemnity obligation stated in this section apply to damages incurred by use of any software.

8.2. !fa third party makes a Claim against either Customer or Oracle ("Recipient", which may refer to Customer or Oracle depending upon which party received the Material), that any information, design, specification, instruction, software, data, or material ("Material") furnished by either Customer or Oracle ("Provider", which may refer to Customer or Oracle depending on which Party provided the Material), and used by the Recipient infringes its intellectual property rights, the Provider, at its sole cost and expense, will defend the Recipient against the claim and indemnity the Recipient from the damages, liabilities, costs and expenses awarded by the court to the third party claiming infringement or the settlement agreed to by the Provider.

8.2.1 The Provider shall have no liability for any claim of infringement to the extent that the claim arises or results from: (a) any Material not furnished by the Provider; (b) any combination of any Material furnished by the Provider with other software, equipment, data, content, services or materials not furnished by the Provider; (c) any alteration ofthe Material not made by Provider, if


the infringement claim could have been avoided by using the unaltered version of the Material; or (d) any use of the Material outside the scope of the SOW.

8.2.2 In the event that some or all of the Material is determined or is believed by the Provider to violate the intellectual property rights of a third party, the Provider shall have the option, at its expense, (a) to modifY the Material to be non-infringing (while substantially preserving its utility or functionality) or (b) to obtain for the Recipient a license to continue using the Material. If it is not commercially reasonable to perform either of the above options, then the Provider may require that use of the Material cease and the Parties may determine an adjustment to the Services via the change order process identified in Section 9.19 of the General Terms.

8.3. Customer shall indemnifY and defend Oracle and its Suppliers against all costs, liabilities, losses and expenses, resulting from every Claim brought against Oracle or any Supplier by any third party to the extent arising out of(i) Customer's acts or omissions in connection with this Agreement or any breach of this Agreement by Customer; (ii) any misuse of the Services or Software by Customer, its employees, or representatives or any User, or (iii) any violation ofthe Oracle Hosting Rules and Regulations.

8.4. Customer shall additionally indemnifY Oracle and its Suppliers against all costs, liabilities, losses and expenses, including but not limited to reasonable attorneys fees relating to Oracle's or any Supplier's operating any third party software pursuant to the SOW or at the request of Customer, and such indemnity shall include any claim that in so operating such software, Oracle is violating any intellectual property right of any third party.

8.5. For purposes ofthis Article 8 ofthe General Terms, a third party means an entity or individual other than Oracle, Customer any Supplier acting in the role of a Supplier and any of their respective employees, officers, directors, agents, successors and assigns.

8.6. The party seeking indemnification shall: (i) give prompt notice of the Claim to the indemnifYing party once the party seeking indemnification becomes aware of the Claim; (ii) grant sole control of the defense and settlement of the Claim to the indemnifYing party; (iii) provide reasonable cooperation to the indemnifYing party and, at the indemnifYing party's request and expense, assistance in the defense or settlement of the Claim; and (iv) to the extent permitted by law, make any defenses available to it available to the indemnifYing party.

8.7. This Article 8 provides the parties' exclusive remedy for any claims or damages that are subject to indemnification hereunder.

Article 9. Miscellaneous

9.1. Notices. All notices required or permitted by this Agreement shall be in writing and shall be effective upon delivery (i) to the addresses indicated on the first page of this Agreement, or such other address as either party may indicate by at least 10 days prior written notice to the other party; and (ii) also to the attention of each party's General Counsel.

9.2. Assignment. Subject to Oracle's right to utilize Suppliers in the provision of Services as described in this Agreement, neither party shall assign or transfer any of its rights or delegate any of its duties under this Agreement, whether by operation of law, as a result of a change of control or otherwise, without the other party's prior written consent, which consent the other party shall not unreasonably withhold, delay or condition, and any purported assignment or transfer shall be null and void. Notwithstanding the foregoing sentence, in the event of a merger or acquisition of all or substantially all of the assets or stock of one party, or in the case of a sale or other transfer by Customer of substantially all of the assets with respect to that part of its business being hosted pursuant to this Agreement or in the case of a sale or other transfer by Oracle of substantially all of the assets with respect to its hosting business, that party may assign and transfer its rights and duties under this Agreement to the resulting or acquiring entity upon at least 30 calendar days prior written notice to the other party, but this provision shall not in any way waive or imply any waiver of any restriction upon assignment that may be imposed upon Customer and its use of the Software pursuant to the OLSA.

9.3. Survivability. The terms of this Agreement, which by the nature one would reasonably intend to survive this Agreement shall survive it, including terms addressing fees, confidentiality, ownership, tennination, warranty, limitation of liability, indemnity and the applicable miscellaneous sections.

9.4. Independent Contractors, Relationship. The parties are independent contractors, and no agency, partnership, franchise, joint venture or employment relationship is intended or created by this Agreement. Neither

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party shall make any warranty or representation on behalf of the other party. Neither party shall disparage the products or services of the other party.

9.5. No Implied Licenses. This Agreement shall not be the source of or give rise to any implied license, and Oracle reserves all rights not expressly granted to Customer hereunder.

9.6. Third Party Beneficiaries. Customer acknowledges and agrees that NaviSite is an Oracle supplier and is entitled to the protections afforded to Oracle's Suppliers under this Agreement, including the protections set forth in Articles 6 and 7 and Sections 8.I, 8.2 and 8.3 of the General Terms, as an intended third-party beneficiary. Oracle and Customer agree that no other third party beneficiary to this Agreement shall exist, except for Oracle's Suppliers and as otherwise specifically provided in this Agreement.

9.7. Remedies and Injunction. Except as expressly provided otherwise in this Agreement, (i) all remedies available to either party are cumulative and not exclusive, (ii) no action taken by either party shall restrict its availability of any other remedy, and (ii) termination or expiration of this Agreement shall not limit either party from pursuing any other equitable or legal remedy available to it. Termination or expiration shall not relieve Customer of its obligation to pay all fees that have accrued or are otherwise owed to Oracle.

9.8. Segmentation. Customer acknowledges that Oracle contracts for the Services separately from any Software license or professional service. Customer understands that it has the right to obtain licenses and professional services without the Services, and that Customer has the right to acquire the Services and Software licenses separately.

9.9. Law and Jurisdiction. This Agreement is made in and shall be governed by the laws of the State of California, without regard to its choice of law principles, and without regard to the provisions of any federal or state Uniform Computer Information Transactions Act. The parties expressly exclude the application of the United Nations Convention on Contracts for the International Sale of Goods. Exclusive jurisdiction and venue of any · actions arising out of, relating to or in any way connected with this Agreement, its negotiation or tennination, or the Services, shall be in Santa Clara, San Mateo, San Francisco, or Alameda counties, California if in state court and in the Northern District of California if in Federal Court.

9.10. Dispute Resolution. The parties intend that disputes and questions arising under this Agreement will be jointly identified, evaluated and resolved. In the event the Parties do not initially agree to resolve a particular dispute or question, the parties shall attempt to resolve such disagreement by prompt good faith discussions between their respective persons responsible for the operation of the hosting. Any such disagreement which such persons fail to resolve by such discussions between such persons, or their respective designee, within 15 calendar days following initiation of such discussions, shall be escalated for resolution to the parties' respective senior management. In the event the parties' respective senior managements are unable to resolve the particular issue, the executive sponsor of each party or their respective designees shall meet to seek to resolve the dispute. The foregoing steps to resolve a disagreement between the parties are referred to hereinafter as the "Escalation Process." Neither party shall be subject to the requirements of this Section 9.10 or be required to comply with the Escalation Process for breaches of Confidential Information or intellectual property rights. This provision does not preclude the parties from exercising any other remedy available under this Agreement.

9.11. Section Headings. The section headings herein are provided for convenience only and have no substantive effect on the construction of this Agreement.

9.12. Force Majeure. Except for Customer's obligation to pay Oracle or to assume obligations for taxes, duties and customs fees, neither party shall be liable for any failure to perfonn due to causes beyond its reasonable control.

9.13. Severability. If any provision of this Agreement is held to be unenforceable, this Agreement shall be construed without such provision.

9.14. Waivers. The failure by a party to exercise or enforce any right hereunder shall not operate as a waiver of such party's right to exercise or enforce such right or any other right in the future.

9.15. Cooperation by Oracle. Oracle shall, as part of SAS, cooperate with Customer and its third party contractors authorized by Customer to act on its behalf and engaged to provide services related to the Services. Neither Customer nor Oracle shall disclose to any third party contractor of Customer: (a) any Oracle pricing, financial or new product information that is not publicly disclosed by Oracle; and (b) any Oracle Confidential Infonnation unless and until such third party has agreed with Customer in writing to protect the confidentiality of

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such Confidential Information in the manner described in Article 3 of the General Terms and to use Oracle Confidential Infonnation solely in connection with its perfonnance of services for Customer. Customer shall be solely responsible for any action or inaction of its third party contractors that may affect, delay or prevent Oracle's ability to perform some or all components of the Services.

9.16. Cooperation by Customer. Customer acknowledges that its timely provision of and access to office accommodations, facilities, equipment, assistance, cooperation, complete and accurate infonnation and data from its officers, agents, and employees, and suitably configured computer products are essential to the performance of Services. Oracle will not be responsible for any deficiency in performing Services if such deficiency results from Customer's failure to provide full cooperation. Customer shall permit Oracle to post, at any site at which Services are performed, any documents necessary for Oracle to provide Services in compliance with the law

9.17. Publicity. Neither party may use the other party's name in any form of advertising without the other party's consent. Neither party may issue any press release with respect to the existence of this Agreement or the terms of this Agreement without first obtaining the consent of the other party.

9.18. Modifications, Additional Terms, Entire Agreement, Amendment. No purchase order or other document that purports to modifY or supplement this Agreement shall add to or vary the terms of this Agreement. All proposed variations or additions, whether submitted by Oracle or Customer, are objected to and deemed material unless othernrise agreed to in a writing signed by both parties. This Agreement constitutes the entire agreement and understanding between the parties concerning Customer's access to the Services and may not be modified by custom and usage. This Agreement replaces and supersedes all prior oral or written understandings, communications and representations between the parties with respect to the Services, except for confidentiality agreements between the parties. This Agreement may be amended only by a written document executed by a duly authorized representative of each of the parties, unless expressly provided otherwise in this Agreement in accordance with the procedures set forth in Schedule 4. The parties agree that the terms and conditions of this Agreement are the result of negotiations between the parties and that this Agreement shall not be construed in favor of or against any party by reason of the extent to which any party or its professional advisors participated in the preparation thereof.

9.19. Change Orders. All customer-initiated requests for changes to Services must follow the procedures set forth in Schedule 4.

9.20. Export. Customer agrees that U.S. export control laws and other applicable export and import laws govern Customer's use of the Software, including technical data ... Customer agrees that neither the Software nor any direct product thereof will be exported directly, or indirectly, in violation of these laws, or will be used for any purpose prohibited by these laws including, without limitation, nuclear, chemical, or biological weapons proliferation.

9.21. Limitations Period. Except for actions for: (i) Customer's failure to assume obligations for taxes, duties and custom fees; (ii) nonpayment of amounts owed to Oracle; or (iii) breach of Oracle's or its licensors' or suppliers' proprietary rights in Oracle's Confidential Information, no action, regardless offonn, arising out of, relating to or in any way connected with this Agreement or Services provided or to be provided by Oracle may be brought by either party more than two years after the cause of action has accrued.

THE PARTIES ENTER INTO THIS AGREEMENT AS OF THE EFFECTIVE DATE

ALAMEDA-CONTRA COSTA TRANSIT

DISTRICT

By: -------------------------

Name: --------------------------------

Title:

ORACLE USA, INC.

By: -------------------------Name: ------------------------------

Title:

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Oracle Hosting Schedule 1: Exhibit 1-A Systems and Application Summary Customer Name: Alameda-Contra Costa Transit District Hosting Offering: Value Application Product Family= Enterprise

1) Applications to be Hosted: Oracle shall perform the services as described in Exhibit 1-B with respect to the Software listed below.

Enterprise Applications: Human Resources (HCM) Financials/Supply Change Management (FIN/SCM) Enterprise Performance Management (EPM) Community Portal (Portal)

Version = 9.0

HCM: • Human Resources • Benefits Administration • Time and Labor • Payroll North America • Talent Acquisition Manager* • Candidate Gateway• • ePay* • eProfile* • eProfile Manager Self-Service* • eComp Manager Self-Service* • ePerformance• • Absence Management•

Fin/SCM: • General Ledger* • Projects• • Payables* • Assets* • Purchasing* • Expenses* • Cash Management• • Grants* • Contracts* • Billing• • Accounts Receivable* • Program Management- Demo environment only** • Inventory*

EPM: • Planning and Budgeting* • Financial Warehouse- Demo environment only** • HCM Warehouse- Demo environment only**

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Portal : • Community Portal

UPK* 'Indicates phased modules. Core HCM modules and the Portal module will begin on day 1 ; the Fl N/SCM modules will begin at the beginning of month 5 of the first year of the Agreement ; and EPM modules will begin at the beginning of month 12 of the first year of the Agreement. "Demo environment support only for a 30 day period. The thirty day period will be managed via the Change Process defined in Schedule 4.

2) Concurrent User Information: (Implementation and Production Schedule) • HCM 230 Concurrent Users • FIN/SCM 20 Concurrent Users • Portal 30 Concurrent Users • EPM 5 Concurrent Users

3) System Administration Service Hours:

Monthly SAS Product Line Month(s) Hours

Core HCM and Portal 1 thru 4 125 HCM, Fin/SCM, Portal, and EPM 5 thru 12 250 HCM, Fin/SCM, Portal, and EPM 13thru36 250

4) Configuration Footprint

Product Line = All Platform Microsoft Windows 2003 Database Software Microsoft SQL Server Webserver WebloQic Remote Development Access Terminal Server- 20 Named Users Included Database Instances Demo, Development, Test, Production Environment Summary Production:

2 DL580 (4 Dual Core, 12GB RAM, 2-146GB Internal Disk) 2 DL380 (2 Dual Core, 12GB RAM, 2 - 146 GB Internal Disk) 500 GB External Storage Production Support: 4 DL380 (2 Quad Core, 12GB RAM, 2 - 146 GB Internal Disk)

Disaster Recovery 48-Hour recovery for critical production processes

5) Enhancements

Enhancements to Software are assumed to be less than 3% as compared to a demo environment. Additional charges may apply to further Enhancements.

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6) Network Connectivity

One (1) internet VPN will be provided.

7) Additional Assumptions

• Customer will obtain, and maintain for the· duration of the term of the Agreement, licenses and technical support for Software listed in Section 1 above.

• Customer will not use any external ODBC connection that would cross the Oracle Hosting firewall.

• The Hosting Fees do not include any applicable state and/or local taxes. Customer shall pay applicable taxes in accordance with Article 2 of the General Terms of the Agreement.

• No global versions or foreign languages are required. • No public facing or Internet facing access is available for the Software and

Hosting Environment under this Agreement. • Software will be transmitted electronically to the Data Center. • Self-Service Users will only access the environment via the Customer network. • Services include support for up to 8 databases in HCM and FIN/SCM and up to 6

databases in Portal during the implementation phase and up to the go-live. • Oracle will support customizations migrated into the Hosting Environment and

developed by the project team as part of the implementation project. The extent of these changes shall be defined in the Oracle compare report to be run prior to the completion of the Production Readiness Criteria for each phase of the project. Any additional and future customizations or enhancements may be added to the hosting scope upon mutual agreement pursuant to the standard Change Order process.

• The interfaces specified on Attachment A will be supported as part of the base service. Any additional and future interfaces may be added to the hosting scope upon mutual agreement purusant to the standard Change Order process.


Attachment A

Num. Source Destination Description Tool I HRMS Pay base Payroll checks/advices 2 HRMS IFAS AP Payroll checks/advices 3 HRMS IFAS AP Entitlement payments 4 HRMS IFAS GL Payroll labor distribution 5 HRMS Benefits Providers ( 4) Benefit plan maintenance 6 HRMS Data warehouse Employee maintenance DTS 7 HRMS Win Star Employee maintenance 8 HRMS OTS Employee maintenance DTS 9 HRMS Worker's comp Employee maintenance

provider 10 HRMS Drug testing Employee maintenance II HRMS Safety awards Employee time 12 WinS tar HRMS Employee time !3 OTS HRMS Employee time 14 IFAS AP Claims Check numbers 15 Claims IFAS AP Claim payments 16 Workers comp IFAS AP Claim payments

provider 17 IFAS AP Banking provider Positive pay 18 IFAS AP IFAS GL AP vouchers DTS 19 Banking IFAS AP Check reconciliation

provider 20 IFASAR Banking provider Check deposits 21 IFAS AR IFAS GL AR cash receipts 22 Ellipse IFAS AP Vendor maintenance DTS 23 Ellipse IFAS AP Vendor invoices DTS 24 Ellipse IFAS GL Inventory journals DTS 25 IFAS GL Data warehouse Account maintenance DTS 26 IFAS GL Budget reporting Account transactions DTS 27 Ellipse MMIS Fixed asset maintenance DTS 28 Ellipse MMIS Fixed asset physical inventory DTS 29 MMIS Ellipse Fixed asset disposals 30 HRMS Ellipse Labor costing edit and load 31 Kronos Ellipse Work order labor costs 32 IFAS MMIS Fixed Assets Fixed asset transactions

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Oracle Hosting Mid-Market Enterprise Version 2.0

Exhibit 1-8: Oracle Hosting Roles and Responsibilities

The following are the Services to be performed by Oracle and under the Agreement and the related obligations to be performed by Customer. The terms "Oracle will" and "Customer will" designate which party will perform the task listed.

If a task ends in "SAS", the task is subject to the System Administrations Service hours outlined in the Agreement.

1. Infrastructure Services I. I. Operating System Management

Oracle will:

A) Manage operating system security. B) Install scheduled routine maintenance for operating systems. C) Monitor operating system performance. D) Isolate performance issues. (SAS) E) Implement and test fixes to performance issues. (SAS) F) Plan capacity based on the scope of services.

Customer will:

A) Assist with testing of operating system performance issues as needed.

1.2. Infrastructure Patches and Fixes

This involves the routine installation of Maintenance Code to operating systems, disk systems, monitoring software, or other infrastructure component.

Oracle will:

A) Identify need for and analyze impact of patches. B) Apply standard infrastructure patches. C) Apply customer requested infrastructure patches according to the change procedures.

(SAS) D) Test patches and their reaction to the device in need of maintenance. E) Notify Customer of the completion of applying the patches.

1.3. Hosting Facility {Data Center)

Oracle will:

A) Maintain physical security of the Hosting Facility. B) Maintain inventory of assets.

1.4. Storage Management

This item includes the management of disk systems and tapes.

Oracle will:

C) Monitor I maintain file systems. D) Provide offsite tape storage. E) Monitor I maintain storage for database instances. F) Plan capacity based on the scope of services.

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Customer will:

A) Define and implement application data archiving strategy.

1.5. Hardware Management

This involves the management and maintenance of physical servers, disk arrays, networking devices.

Oracle will:

A) Review hardware maintenance plans. B) Schedule hardware maintenance. C) Execute preventative maintenance plans. D) Test components that have received maintenance. E) Monitor maintenance plan for its effectiveness. F) Perform standard reboots of the hardware. G) Plan capacity based on the scope of services.

1.6. Network Management

This includes the management of equipment and connectivity for LAN and WAN.

Oracle will:

A) Maintain and monitor all network LANs within the Hosting Services Facility. B) Configure changes to all network LANS within the Hosting Services Facility (SAS). C) lnternaiiP address management, router table management, NAT administration,

switch administration and firewall administration (at Hosting services facility) (SAS). D) Plan capacity based on the scope of services. E) Provide Network Capacity recommendations if requested (SAS).

Customer will:

A) Be responsible for all desktop configurations and ISPs. B) Provide External DNS management for customer address space. C) Provide Internal DNS management. D) Manage Customer's internal network. E) Procure connectivity from Connectivity provider.

1.7. Desktop Management

Customer will:

A) Manage and administer all end-user desktop or laptops. B) Manage and deploy any needed client-side software such as browsers. Citrix clients,

or mobile software. C) Provide end-user support for desktops.

1.8. Backup/Restore Management

The Backup/Restore Management service involves the restoration of system, application and user files from a source device, such as high-speed disk, to alternate media. Customer should develop a business continuity plan specific to its business processes. Oracle and Customer will execute on the disaster recovery plan as set forth in Section 5 of the SLA.

Oracle will:

A) Setup and configure backups and monitoring. B) Perform and verify backups. C) Store backup media offsite. D) Perform restoration upon request. (SAS) E) Recover the environment according to the SLAin the event of a disaster.

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F) Perform an online Back-Up every night of Customer's database(s) and maintain each such nightly Back-Up for at least two weeks, each such month end nightly Back-Up for 12 months and each such quarter end nightly Back-up for the Term of the Services.

G) Perform a full file system Back-Up weekly with nightly increments. H) Perform a full Back-Up twice weekly of Customer's non-Production database(s). I) Upon Customer's request, Oracle will restore Customer's database from its Back-Up

up to two times per year. (SAS) J) Perform special backups according to the Change Procedures.

Customer will:

A) Validate application data integrity after restore. B) Test the environment in the event of a disaster.

2. Application Management Services 2.1. Monitoring, Event Detection and Notification

Oracle will utilize monitoring tools to monitor events for notification, log events, and react to events.

Oracle will:

A) Identify initial hardware, OS, LAN, database, and Software monitoring requirements. B) Determine initial event notification and escalation procedures. C) Monitor infrastructure and application. D) Monitor capacity of all devices. E) React to events according to event notification and escalation procedures.

2.2. Database Administration

Includes the management and maintenance of all Oracle database systems existing as of the Effective Date.

Oracle will:

A) Administer database instances including configuration, sizing, ongoing storage management, stopping, starting, connectivity setup and configuration, problem diagnosis, tuning, patching and backups. (SAS)

B) Provide Demo, Development, Test and Production database instances. C) Provide read-only access to all production data on an as-needed/restricted basis for

developer access. D) Provide change (read + change only) access to non-production for developer access. E) Provide routine start-ups and shutdowns. F) Provide database security management. G) Maintain custom database users Ids. (SAS) H) 1';1onitor database performance. I) Isolate database performance issues if necessary to the physical database level.

(SAS) J) Implement and test fixes to database performance issues as requested by Customer.

(SAS) K) Plan capacity based on the scope of services. L) Oracle will perform database instance refreshes with 48 hours advance notice in

writing. (SAS)

Customer will:

A) Assist with the testing of database performance issues, as necessary.

2.3. Oracle Software Architecture Administration


This involves the management of the application architecture such as the Application Servers, Web Servers, Database Servers, Citrix Server, and Batch Servers.

Oracle will:

A) Configure and maintain server environments. (SAS) B) Provide routine reboots of server components according to schedule. C) Isolate performance issues. (SAS) D) Monitor Software server components.

Customer will:

A) Assist in isolating performance issues, as necessary.

2.4. Printer Management

Oracle will configure Customer printers to work with the hosted Software.

Oracle will:

A) Configure Customer printers remotely to interact with the Oracle Software according to the boundaries identified in the SLA. (SAS)

B) Allow Customer to configure printers to interact with Oracle Software as required.

Customer will:

A) Provide printer names and configuration printer data, if requested. B) Request printers to be configured, as needed, through the Oracle Help Desk.

2.5. Oracle Software Releases: Maintenance Code and Functionality Releases

This involves researching, installing, and testing different code releases delivered by Oracle.

Oracle will:

A) Build and Apply Maintenance Code. (SAS) B) Identify customized objects that could be overwritten by software changes. (SAS) C) Migrate objects to the Production Environment. (SAS) D) Coordinate and apply tax updates. (SAS) E) Provide recommendations on upgrading to new release. (SAS) F) Oracle will retrofit basic customizations that no longer function as required as a result

of the patch, fix, tax updates, service pack, or maintenance pack. This activity must be approved by the Customer in advance and may incur additional charges. If Customer does not agree to the charge, Customer is responsible for the retrofit. (SAS)

G) Oracle will monitor newly released Oracle Maintenance Code updates. Based on Customer's application footprint, Oracle will coordinate with Client to determine which updates should be applied and provide over all management of the update process. (SAS)

H) Oracle will conduct unit testing to verify basic application functionality. (SAS)

Customer will:

A) Identify need for and analyze impact of patches. B) Provide approval to install Maintenance Code or Functionality Releases. C) Build and Apply Functionality Releases. D) Retrofit customized objects. E) Plan and execute testing of Maintenance Code or Functionality Releases. F) Develop and coordinate implementation/upgrade strategy for new releases. G) Review custom code to determine what impacts it may have on new releases, as

needed.

2.6, Oracle Software Object Migrations

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Oracle will:

A) Migrate Software objects into Production. (SAS) B) Migrate objects between all instances during the production phase. (SAS) C) Migrate software object between non-production instances, if requested. (SAS)

Customer will:

A) Initiate requests to migrate Software objects. B) Migrate Software objects between Instances during Implementation phase.

2.7. Help Desk I Client Management I Project Management

This service provides a method for designated callers to contact Oracle regarding the Services. Oracle will provide incoming call receipt and routing, and track progress to resolution. Oracle will facilitate the coordination of problem ownership, resolution and escalation for any call within Oracle's areas of responsibility. In the event that a request is not within Oracle's area of responsibility, Oracle will log the call and refer Customer to the appropriate vendor or supplier for resolution.

Oracle will assign a Service Delivery Manager to the Customer during the Implementation phase and Oracle will assign a Client Manager to the Customer during the Production phase. Support outside of the Business Hours will be provided by a Help Desk.

Oracle will:

A) Address issues and problems arising from the Services including the computing server environment, Database, Citrix, Web server, Enterprise Server app server, process scheduler), Cobol server, Oracle LAN, hardware and operating system. (SAS)

B) Educate Customer on the protocol for communicating issues and concerns. C) Provide appropriate documentation to the Customer for requesting the set up of

printers and other peripheral devices. D) Conduct regular status meetings, documenting discussions and agreements with the

Customer. (SAS) E) Handle submitted cases according to priority. F) Coordinate with Oracle Hosting Customer Support on issues when needed. (SAS)

Customer will:

A) Assist Oracle, when required, during fault isolation of issues. B) Address issues as to the substance of Customer's business processes (customer

process-related questions). C) Address issues and questions with use of functions of the Software (how-to,

feature/function questions). D) Provide end user support. E) Assign Super-Users per Section 6.4 of Schedule 3 (Service Level Agreement). F) Manage customer's internal communications, as needed. G) Log support calls during Business Hours to the designated client manager during

Production. H) Log support calls during Business Hours to the designated Project Manager during

Implementation.

2.8. Production Job Scheduling

This process involves the scheduling and monitoring of batch jobs during the Services.

Oracle will:

A) Monitor the Oracle Enterprise Process Scheduler and ensure that it is running.

Customer will:

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A) Create and maintain job schedule and adjust for failures. B) Document job dependencies, notification list, and restart procedures. C) Monitor the success or failure of jobs. D) Terminate or cancel jobs as requested or per pre-defined procedures. E) Assess impact of failed jobs.

2.9. Oracle Application Performance and Tuning

Oracle will:

A) Monitor application availability. B) Identify or determine Software or Service issues. (SAS) C) Facilitate the analysis of performance bottlenecks with Oracle Hosting Customer

Support. (SAS) D) Assist in troubleshooting application performance issues in base code with Oracle

Hosting Customer Support . (SAS)

Customer will:

A) Troubleshoot application performance issues in base code with Oracle Hosting Customer Support .

B) Troubleshoot application performance issues in customized code. C) Implement and test fixes to performance issues.

2.10. Oracle Application Security Management

This involves the administration of end-user security within the Oracle Software.

Oracle will:

A) Maintenance of standard Citrix user Ids. B) Maintenance of custom Citrix user Ids. (SAS) C) Manage all administrator I root accounts and passwords for the application. D) Mass migrate security configurations to Production using the Software. (SAS)

Customer will:

A) Define and maintain Customer overall security plan, security classes, and operator requirements.

B) Develop, create and maintain security classes and operators. C) Maintain end-user accounts and passwords. D) Maintain security configurations needed, roles, permission lists, and user profiles. E) Migrate individual security configurations to Production.

2.11. Stress and Volume Testing

Customer will:

A) Create testing strategies, testing plans and testing scripts, as needed. B) Licensing of load testing tools (such as Load Runner), as needed. C) Size and provision network bandwidth for testing, as needed. D) Manage and execute testing process, as needed. E) Evaluate impact of change on Software performance, as needed. F) Produce final reports, as needed.

3. General Hosting Services 3.1. Service Scheduling


Oracle will:

A) Conduct a Customer kickoff and planning meeting, which is to review the Agreement, Customer Handbook, and Change Management Process. The meeting will focus on the Services provided, roles and responsibilities of the Customer, Implementation team and Oracle staff throughout the Implementation process and Production. A key objective of this meeting is to confirm that the Implementation and Production time lines are clear and map to the delivery of the Services defined in the Agreement and the Oracle plan. Therefore, this meeting must include key representatives of the Customer and the Implementation partner. (SAS)

Customer will:

A) Provide Oracle with their implementation plan. B) Notify Oracle when Customer is ready to begin production services. C) Notify Oracle when there is a change to the application rollout schedule.

3.2. Implementation Audit Worksheet Exhibit 3-A

This section refers to Exhibit 3-A of the Agreement.

Oracle will:

A) Review the Implementation Audit Worksheet and provide customer with discrepancy feedback. (SAS)

B) Sign off and approval of Implementation Audit Worksheet according to Oracle standards.

Customer will:

A) Complete Implementation Audit Worksheet and correct discrepancies identified by Oracle.

3.3. Exit Migration Plan

This section refers to technical activities that would occur in the event of a termination.

Oracle will:

A) Provide information about current hardware configuration. (SAS) B) Provide available change/customization documentation. (SAS) C) Provide information about current Software and patch levels. (SAS) D) Provide information about current database version and patch levels (SAS) E) Provide Database export(s) to support mutually agreed migration schedule, utilizing the Oracle standard format. (SAS) F) Disconnect connectivity to Oracle Hosting facility. (SAS) G) Execute migration schedule. (SAS) H) Decommission Hosting Environments. (SAS)

Customer will:

A) Provide formal notification of termination date. B) Develop migration schedule (a maximum of two (2) test migrations, one (1) final

migration).

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Schedule 3

Service Level Agreement

Oracle and Customer agree that the terms and conditions of this Service Level Agreement ("SLA"), including the service levels and associated measurements are part of and incorporated into the Agreement, as of the Effective Date. Certain service level measurements apply only in certain phases or once certain conditions have been met. The phases during which service level measurements are applicable are summarized in the following table:

Applicability ofSLA During

Service Level Applit:ability ofSLA During Applicability of SLA Production -If any Capacity Implementation During Production Threshold is exceeded for two

months

Application Availability Performance No Yes No

Section 4.2

Service Desk Response Time goal Yes Yes No

Section 6.5

Disaster Recovery - recovery time goal Yes Yes Yes

Section 5.4(a)

1. Production Readiness Criteria

1.1. Prior to initial Production and prior to Production after any of the activities described in Section 1.2 of this SLA, Customer is responsible for the following tasks (the "Production Readiness Criteria"):

(a) Completing the Implementation Audit Worksheet attached as Exhibit SLA-(1) and associated audit tasks prior to each phase of the implementation designating modules that are in production;

(b) Remedying any open issue identified on the Implementation Audit Worksheet;

(c) Signing off on the Implementation Audit Worksheet that the key business processes, as tested by Customer, execute correctly;

(d) Signing off on the Implementation Audit Worksheet that the system has been unit and system tested adequately by Customer and the patch level of the Software is correct;

(e) Obtaining Oracle's approval of the Implementation Audit Worksheet; and

(f) Completing the Implementation Audit Worksheet designates the production phase for the specified modules.

1.2. Customer further acknowledges that the following activities will require Customer to meet a new Production Readiness Criteria described in Section 1.1 of this SLA.

(a) The implementation of any service pack, upgrade, new release implementation or other Functionality Release;

(b) The addition of Software to the Services; and

(c) The addition of any third-party application to the Services.

1.3. Oracle will not be held to any Application Availability Performance and Customer will not be eligible to receive any Credit until Customer has satisfied the Production Readiness Criteria.

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2. Capacity Utilization

2.1. Capacity Thresholds. lfCustomer's utilization exceeds any Capacity Threshold during the 30 days following the start of the first Production, Oracle shall be responsible for the cost of reducing Customer's capacity utilization below the Capacity Threshold, conditioned on the assumptions set forth in the SOW having been initially and remaining correct. Oracle will size the PeopleSoft environment for the user counts below in the Details of Production Usage table (the "Capacity Thresholds"), Measurement of concurrency will be achieved by measurement of Active Sessions from within the Weblogic Console. If frequent or sustained performance problems occur that are directly attributable to Oracle not configuring the hardware as agreed upon (CPU above 90%, RAM below 500MB, or 1/0 above Disk Queue Length of I 0, or not configuring the PeopleS oft Internet Architecture components), Oracle will be responsible for providing additional equipment at Oracle's cost to assist in eliminating the performance issue.

Twelve (12) Months after the start of the production phase (go-live) for each PeopleSoft Pillar, Oracle will take a Benchmark of the production database size (i.e., Total used GB). Should the production database size for any PeopleSoft Pillar then grow more than 50% from the Benchmark, the hardware footprint will need to be re-evaluated and supplemented pursuant to a Change Order that is mutually agreed to in writing by both parties and for additional cost.

Performance issues related to individual SQL statements, the functional setup of the PeopleSoft application, customizations or components outside the PeopleSoft Internet Architecture are not covered. If Customer terminates before the end of the term, in addition to Customer's obligations at termination, Customer will also be responsible for paying Oracle an additional amount, equal to the then current market value for any added equipment.

Details of Production Usage: (Enter Named Users)

Application Professional Medium (50% of Query/Light Self Service Admin Total (HR, FIN, etc) User(lOO% day accessing Users Employees - Production ofdav) svstem)

HCM 50 (30 cc) 200 cc max 600 have access

FIN/SCM 30 (20 cc)

Ent. Portal 30 cc

CRM

EPM 5 cc

2.2. Out of Compliance. If Customer's utilization exceeds any Capacity Threshold, Customer shall be responsible for the cost of reducing Customer's capacity utilization below the Capacity Threshold by either adding additional capacity or tuning the Software and associated Enhancements or both.

2.3. Notification.

(a) If Customer's utilization exceeds any of the Capacity Thresholds on any Configuration Footprint for any given calendar month, then Oracle will provide Customer with a warning notification; and

(b) If Customer's utilization exceeds any Capacity Threshold for any two consecutive calendar months, then Customer must put in place a mutually agreeable plan to return its utilization to below the

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Capacity Threshold and will be deemed to acknowledge that the monthly System Administration Services are likely in this event to exceed the Included Hours and that Customer will earn no Credit under any circumstance until its utilization ceases to exceed all aspects of the Capacity Threshold for a full calendar month.

3. Operational Availability

3.1. Primary Hours of Operation ("PHO"), based on the Hosting Offering, is as set out below:

(a) Value: 16 hours per day, five days per week from 4:00AM Pacific Time to 8:00PM Pacific Time, Monday through Friday, 52 weeks per year;

(b) Enhanced: 16 hours per day, seven days per week from 4:00AM Pacific Time to 8:00, PM Pacific Time, 52 weeks per year; and

(c) Ultimate: 24 hours per day, seven days per week, 52 weeks per year.

3.2. Customer acknowledges that it will not be able to access the Services during system maintenance in accordance with the following table, which table Oracle may change from time to time upon reasonable notice to Customer:

Period Duration of Scheduled Time Period Downtime

Saturday • Sunday 12 hrs 10:00 pm Saturday- 10:00 am Sundav, Eastern Time

3.3. Customer acknowledges that Oracle may require additional Scheduled Downtime to patch the Production Environment and conduct other system maintenance, and Oracle will notify Customer in advance of any Scheduled Downtime that exceeds what is provided in the table immediately above.

3.4. Oracle may perform Unscheduled Maintenance only when, in Oracle's commercially reasonable discretion, doing so is necessary to avoid loss of Services or an adverse impact to the Hosted Environment or during any downtime mutually agreed to with Customer to correct an unexpected situation that imposes business risk. Oracle shall endeavor when practical to provide advance notice to Customer of all Unscheduled Maintenance. In all cases, Oracle shall indicate to Customer the Software affected and the reasons for and duration of any Unscheduled Maintenance.

4. Application Availabilitv Service Level

4.1. For purposes of this SLA,

(a) "Unscheduled Downtime" means when the Monitor indicates that the Critical Access Components are not accessible to Customer during PHO, but Unscheduled Downtime shall not accrue during the following exceptions:

(i)

(ii)

(iii) Implementation Environment; and

(iv)

Scheduled Downtime;

Time taken for Unscheduled Maintenance;

Time when any Services are in the Production Support Environment or

a Disaster.

(b) "Application Availability Performance" is calculated as follows:

(total PHO in the measurement period, less total Unscheduled Downtime in the measurement period) [divided by] total PHO in the measurement period.

"Measurement period" means the applicable calendar month of the Services for which Application Availability Performance is being measured.

4.2. Target. For Production Environments only, Oracle undertakes to provide Customer with Application Availability Performance of99.5% or greater for each calendar month, and failure to do so will result in Customer receiving a Credit as described in Section 8 of this SLA. •


4.3. Exclusions. Notwithstanding the offer of Credits to Customer for Oracle's failure to meet the Application Availability Performance target, no Credit shall be earned or shall accrue:

(a) during Implementation;

(b) prior to the Production Readiness Criteria having been met;

(c) during Scheduled Downtime;

(d) during any Unscheduled Maintenance;

(e) whenever any Capacity Threshold has been exceeded for two consecutive months

(I) whenever the Services have been suspended pursuant to Section 5.5 of the General Terms; and

(g) during Disaster Recovery.

5. Disaster Recovery

Oracle will perform Disaster Recovery services as part of the Services. In the case of a Disaster, Oracle's goal will be to restore the Services within the same data center or at an alternate site, as Oracle determines in its sole discretion. Customer acknowledges that such an event may result in partial or degraded Services when restored.

5.1. Overview

(a) In the case of a Disaster resulting in a complete loss of access to the Services, Oracle's goal will be to restore the Services within the Recovery Time Objective defined in Section 5.4.

(b) Customer acknowledges that a Disaster may result in partial or degraded Services when restored.

(c) Customer acknowledges that it will not be entitled to earn any credit during a Disaster and all Disaster Recovery procedures.

(d) Customer acknowledges that the Disaster Recovery facility may be a short-term use facility. Oracle's goal is to have the Services restored at the pre-Disaster Services facility within 12 weeks, subject to change based on the extent of the Disaster.

(e) Customer acknowledges that during a Disaster, Oracle's obligations with respect to Application Availability Performance and Service Desk Response time goals will be suspended.

5.2. Customer Responsibilities

(a) Customer is required to designate in writing to Oracle no less than lO days after the Effective Date one or more representatives authorized to declare a Disaster and who must be available at the time to mutually declare a Disaster with Oracle.

(b) Customer shall designate in writing one or more operational representatives to work with Oracle in the testing of recovered systems.

(c) Customer is responsible for all network configuration changes at Customer's premises that are associated with the recovery systems, such as VPN changes that point to the new Hosting Environment and any recovery that may be necessary for Customer's connectivity service to the Services facility.

(d) Customer is responsible for any necessary desktop configuration changes.

(e) During a Disaster Recovery, Customer shall have its representative available to work with the recovery team. All such Customer representatives shall participate from the Customer site and must be sufficiently knowledgeable of the application to allow successful testing.

(f) Customer shall develop a business continuity plan to ensure the continuity of operations during a Disaster Recovery.

(g) Customer shall contribute to the finalization of a Disaster Recovery Operational Handbook by supplying contact information and content review.

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5.3. Oracle's Responsibilities

(a) Oracle shall supply and review with Customer a Disaster Recovery Operational Handbook 30 days before the start of the Production.

(b) Oracle is responsible for preparing the recovery site and executing the recovery service procedures as outlined in the Disaster Recovery Operational Handbook upon declaration of a Disaster. Oracle will provide services to support the availability, compatibility and integrity of the operating system, applications and databases relating to the Services used at the Services facility. Upon completion, Oracle will work with Customer's representatives to perfonn sufficient testing to ensure that the applications and databases have been recovered successfully.

event of a Disaster.

(c) Oracle will retrieve the last backup and will recover the Services from the last Back-Up.

(d) Oracle will notifY Customer of the time and date of the last Back-Up.

(e) Oracle will recover the Production Environment in accordance with Section 5.4 (a) in the

(I) Oracle will restore Services within the Recovery Time Objective for those Oracle Software application product lines that have been marked as applicable for Disaster Recovery within Schedule I, Exhibit 1-A Product Line Summary.

5.4. Service Level.

(a) Target. Oracle's Recovery Time Objective is to restore Production operations for the Software at a recovery site within 48 Hours from the time the parties mutually declare the disaster, but Customer acknowledges that the times for Disaster Recovery will depend upon the size and extent of the disaster and that except as otherwise specified in Schedule 1, Oracle does not:

(i) Store surplus hardware for Disaster Recovery; nor

(ii) Perform rehearsals for Disaster Recovery.

(b) Exclusions

(i) If applicable, Customer shall be responsible for application recovery on all Customer Managed Servers. Oracle will recover the hardware and operating system only in the event of a disaster under this Section 5.

(ii) If applicable, Customer shall be responsible for the recovery and testing of all Customer- owned hardware.

(iii) Oracle will have no responsibility for disaster recovery services other than as specifically set forth in this Section 5.

6. Service Desk

6.1. On call support will be available during PHO. Customer shall direct all Services related calls to the client manager during Business Hours. Customer shall direct all Services related calls outside of Business Hours to Oracle Hosting Customer Support. Each call for a new trouble issue shall initiate a case identified by number (a "Case"). Customer shall direct all other calls to the applicable Oracle support services organization. Customers may obtain support via the web on a 24 hours, seven days week, 52 weeks a year basis and may commence a Case through the web, though Oracle will not be obligated to work on any non-Critical (Priority 1) Case except during PHO.

6.2. Oracle will categorize Oracle Hosting Customer Support cases according to the following priorities:

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Case Description Priority

Category 1-Critical System is down. Customer has no access to

the production Hosting Environment.

2-UrgenUHigh The reported issue is significantly interfering with Customer's effective or imminent planned use of a Software application.

3-Medium The reported issue does not materially affect Customer's use of any related application.

4-Low The issue reported does not affect Customer's use of any related application.

6.3. Customer's call to Oracle will initiate a Case, and Oracle will escalate an unresolved Case according to the case priority and time elapsed indicated as follows (time periods are measured from the initial submission of the initiation of the Case):

Case Priority Category Level I (Technical Level 2 (Services Leve13 (General Manager/Project Director) Manager)

Manager)

I After I hour After 2 hours After 4 hours

2 After 2 hours After 4 hours After 8 hours

6.4. Customer may, by notice to Oracle, name up to one User (a "Super-User") per every 10 of the maximum number of concurrent Users set forth in Schedule I, up to a total number of 10 Super-Users. Customer may change the names of up to three Super-Users per month by so notifying Oracle. Super-Users shall act as the liaison between Customer's Users and Oracle and shall assist such Users with technical and troubleshooting support.

6.5. Service Level:

(a) Target. Oracle will use commercially reasonable efforts to address the priorities of Cases reported to Oracle by Customer within the following times during the applicable month:

Case Estimated Initial Estimated Time Goals for Resolution Priority Response time from first Status

Category contact to Oracle Reporting

1-Critical 98% within 30 minutes Hourly Work until resolved 2-Ur enUHi h 95% within 2 hours Daily 2 calendar days 3-Medium 95% within 1 working day 48 hours 7 calendar days 4-Low 95% within 3 workinQ days Weekly 14 calendar davs

(b) Exclusions. The Service Level goals defined in the table above will not apply if the Capacity Threshold has been exceeded for two consecutive months.

7. Reporting

7.1. Following the commencement of Production, Oracle will on the 15th day of each month provide the following reports:

(a) Customer's Application Availability Performance for the prior month. Oracle will post the measurement reports on Oracle's web site for access by Customer.

(b) the number of open Cases;

(c) utilized SAS Hours;

(d) analyses of any root causes for any significant problems that arose during the previous month; and

(e) capacity utilization for CPU, Memory, and Storage.


7.2. If Customer believes a report is incorrect, Customer shall so notify Oracle in writing, addressing specific measurements in dispute and describing the nature of the dispute.

7.3. Exclusions. Oracle shall monitor Customer's hosted environment continuously during PHO, but will not produce reports whenever the exclusions to Credits for Application Availability Performance, as set forth in Section 4.3 of this SLA, apply.

8. Remedies

8.1. Credits. Oracle shall provide a minimum Application Availability Performance at the target set out in Section 4.2 of this SLA, and Oracle's failure to meet that target will qualifY Customer for a Credit. Notwithstanding Customer's qualification for a Credit, Customer shall not earn any Credit arising at any of the times listed for exclusion under Section 4.3 of this SLA or if the failure otherwise qualifYing Customer for a Credit is attributable to any of the performance exceptions listed in Section 8.3 of this SLA. Oracle will apply Customer's Credits against the monthly Hosting Fee for the month the failure occurred and show it on the subsequent month's invoice. The aggregate maximum Credit that Customer may receive for any single calendar month shall not exceed 10% of the Hosting Fee paid by Customer for that month.

Application Availability Credit% Performance

99.5% or above 0

Less than 99.5% 3%

Less than 97% 6%

Less than 95% 10%

8.2. Termination for Chronic Problems. In addition to Credits that may be earned under Section 8.1 of this SLA, Customer may terminate this Agreement without penalty or payment of the Termination Fee if Customer experiences Chronic Problems. Termination under this section is conditioned upon Customer notifying Oracle in writing within 15 days following Customer's receipt of the monthly report for the third consecutive calendar month ofthe Chronic Problems, and in such case, termination will be effective 30 days after Oracle's receipt of such notice. Any notice from Customer under this section shall include a statement as to its intent to terminate along with a description of the Chronic Problems and dates of occurrences giving rise to the right to terminate. Failure by Customer to provide written notice in accordance with this section shall result in a waiver of the termination right as to the failure at issue. Any termination by Customer under this section will not be considered a termination for cause or a breach of this Agreement, and Customer acknowledges and agrees that Oracle will not be liable for any damages, other than Credits, for any such termination. Customer shall continue to pay all Hosting Fees during the time of Services notwithstanding any termination of Services pursuant to this section, which such termination shall not absolve Customer of any of its other obligations under this Agreement.

8.3. Performance Exceptions. Customer's remedies under this SLA shall not accrue, and Oracle shall not be responsible for deterioration or degradation of the Services or for paying any Credits for failure to comply with the terms ofthis SLA, to the extent such remedy or failure results, in whole or in part, from: (i) any occurrence, cause or event, including Unscheduled Downtime, outside Oracle's reasonable control, which includes, but is not limited to, the factors identified in Section 9.12 (Force Majeure) of the General Terms and any suspension pursuant to Section 5.5 of the General Terms; (ii) any action or inaction of Customer or any third party; (iii) Customer's equipment or any third party equipment not within the sole control of Oracle or a party under contract with Oracle to provide services in connection with the Agreement (including hardware equipment and infrastructure components); (iv) any defect or bug in the Software, Enhancements or a patch; (v) Customer's failure to follow any Oracle recommendation to upgrade or add hardware running the Services; (vi) Customer's connectivity services; (vii) any third party software not provided by Oracle that interfaces with any Software; (viii) due to exceeding any Capacity Threshold; (ix) failures or fluctuations in electrical or telecommunications equipment or lines or other equipment that is outside the reasonable control of Oracle; (x) any Enhancements; or (xi) occurs within a non-production environment.

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8.4. Sole and Exclusive Remedy. THIS SECTION 8 OF THE SLA STATES CUSTOMER'S SOLE AND

EXCLUSIVE REMEDY FOR ANY FAILURE OR INTERRUPTION OF SERVICES AND FOR ANY FAILURE BY ORACLE TO MEET ANY APPLICATION A VAl LABILITY PERFORMANCE TARGET AS WELL AS FOR ANY BREACH OR OTHER

VIOLATION BY ORACLE OR ANY SUPPLIER OF ANY WARRANTY OR OBLIGATION UNDER THIS SLA.

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Exhibit 3-A- Implementation Audit Worksheet

c - ~ -- ' < - ~~- - -- - ~ - ~ ~ .. ~ - Qr,ade Ho~ting Au(lit - ~ . ~ -- ·~

- ' Customer:

Date of Audit: Planned Go-Live Date Audit Performed By: Audit Result:

SECTION I

- - -

SQL Alter Audit DDDAUDIT SYSAUDIT

Modules moving to Production

Audit Sign-Off

PASS/ FAIL

Date

Oracle Hosting Project Manager

Implementation Team Project Manager

Customer Authorized Representative

PASS/ FAIL Notes

- -

Date

Date

Date


. - - ~

-

---

- - ~- - ----- - - -

- -

Schedule 4

Change Procedures

I. Customer may propose a change (a "Change") to the Services by submitting a request (a "Change Proposal") to Oracle that includes at least the following details:

(a) a complete description of the change and the reason for the Change;

(b) the person authorized by Customer to negotiate the Change with Oracle;

(c) the impact on Customer of Oracle not implementing the Change;

(d) the relative importance of the Change; and

(e) the proposed effective date of the Change.

2. Upon receiving a Change Proposal, Oracle shall promptly review it and respond to Customer as to any question Oracle may have or any clarification that it may require in order to complete its review. Upon completing its review, and during the review process, if appropriate, Oracle shall inform Customer as to whether:

(a) the Change, as proposed, is within the scope of Customer's existing SOW such that Oracle will not increase the Hosting Fee or require any set-up or other charge in order to implement the Change; or

(b) the Change, as proposed, will require Oracle to alter the SOW such that Oracle will either increase the Hosting Fee or require a set-up or other charge in order to implement the Change.

3. Upon receiving the infonmation described in Section 2(b) of this Schedule 4, Customer shall either:

(a) request Oracle to develop a Change order describing the Change and setting forth any additional charge (a "Change Order"); or

(b) invite Oracle to continue to negotiate the Change Proposal such that the Change will not incur a charge or that Customer is satisfied with the charge, in which latter case, Oracle shall proceed to develop the addendum described in Section 4 of this Schedule 4.

4. Once the parties have agreed to a Change, they shall set out as an addendum to this Agreement the tenms of the Change, and the Change shall be implemented only after each party has executed the addendum.

5. Until Customer and Oracle have approved a Change Order, Oracle shall continue to perfonm and Customer shall continue to pay for Services as if such Change had not been made.

6. The procedure described above for a Change does not contemplate any change that the parties may wish to make to the General Tenms, which change the parties should seek to make by means of an amendment to this Agreement, conforming at all times to the requirements of Section 9.18 of the General Terms, but this provision is not intended to constrict the parties if they wish to include in an addendum changes that otherwise would be contained in an amendment.

7. Oracle may also propose a Change to Customer, and the parties shall follow the procedures set forth above for each party except that Oracle shall, in such case, additionally perfonm the roles set forth for Customer in Section I of this Schedule 4.

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Schedule 5

Oracle's Rules and Regulations

CUSTOMER SHALL COMPLY ANI> SHALL ENSURE THAT ALL USERS COMPLY WITH THE ORACLE RULES ANI> REGULATIONS SET OUT IN THIS SCHEDULE 5, AS THEY MAY BE CHANGED FROM TIME TO TIME BY ORACLE ANI>

PROVIDED TO CUSTOMER.

Prohibited Activities. Customer and its representatives agree to adhere to and abide by all security and safety measures established by Oracle. Violations ofthe Services, facilities or system security are prohibited, and may result in criminal and civil liability. Oracle may investigate incidents involving such violations and may involve and will cooperate with law enforcement if a criminal violation is suspected. Customer will not, and will ensure any and all of its representatives, employees, agents and Users do not, participate in any activity or operation that violates the law or violates or compromises the security or safety of the Services, system, or network (a .. Prohibited Activity") including, without limitation:

• sending unsolicited commercial messages, advertising, informational announcements or communications in any form ("SPAM");

• engaging in any activities or actions that infringe or misappropriate the intellectual property rights of others, including without limitation, copyright, patent, trademark, trade secret and confidential information;

• engaging in any activities or actions that would violate the personal privacy rights of others;

• sending, posting or hosting any harassing, abusive, libelous or obscene materials;

• intentionally omitting, deleting, forging or misrepresenting transmission information, including headers, return mailing and internet protocol addresses. The above restriction does not prohibit you, however, from excluding the previously transmitted body or text of the transmission in a reply;

• engaging in any activities or actions intended to withhold or cloak Customer's or its Users' identity or contact information;

• misusing, abusing or making any unauthorized use of any property, website site, personnel or equipment of Oracle, its customers, Suppliers, or any third party related to the Services;

• harassing any individual, including Oracle personnel, third parties, Suppliers or representatives of other Oracle Customers in connection with the Services;

• engaging in any activity or using the Services for any illegal purposes, in violation of any applicable law or in violation of the rules of any other service provider;

• accessing, monitoring or using data, traffic, systems, facilities or networks, without proper authorization including any attempt to probe, scan or test the vulnerability of a system or network or to breach security or authentication measures without express authorization of the owner of the system or network.

• interfering with the system, or service to any user, host or network, including without limitation deliberate attempts to overload a system, including without limitation multiple postings of messages.

• transmitting, distributing or storing of any material or data in violation of any applicable law or regulation.

• configuring equipment in violation of the manufacturer's specifications or system requirements.

ANY INI>IRECT OR ATTEMPTED VIOLATION OF THIS POLICY, ANI> ACTUAL OR ATTEMPTED VIOLATION BY A THIRD

PARTY ON BEHALF OF CUSTOMER OR A USER, SHALL CONSTITUTE A VIOLATION OF THE POLICY BY SUCH

CUSTOMER AND, AS APPLICABLE, BY THE USER.

Suspension and Termination of Service. If Customer becomes aware of any Prohibited Activity, Customer shall cooperate fully with Oracle and use its best efforts to remedy any such Prohibited Activity immediately, including, if necessary, suspending or terminating User's access to the Services. In addition to the foregoing remedy, Oracle reserves the right to suspend and to terminate Customer's Services at any time for any material failure by Customer or any of its representatives, agents, employees or Users to comply with these Rules and Regulations. Oracle will

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provide Customer with notice of and an opportunity to cure such breach, except if notice and opportunity to cure are not, in Oracle' sole discretion, practical because of the nature of the breach, in which case Oracle may suspend or tenninate the Services immediately without prior notice to Customer or liability to Oracle.

Customer shall forward to Oracle customer support every complaint it learns of with respect to this policy customer support. Customer shall implement policies similar to these Rules and Regulations whenever it utilizes the Services.

Modification of these Rules and Regulations: Oracle reserves the right to modifY these Rules and Regulations at any time provided that Oracle provides Customer with advance written notice before the modifications go into effect.

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Schedule 6

Glossary

Tenns defined in the Agreement, whether in the main body or in a Schedule, shall have the meaning given the tenn as defined throughout the Agreement. Certain tenns not defined in the Agreement are defined below and shall have the indicated meaning throughout the Agreement.

1. "Agreement" means this Oracle Master Hosting Agreement and Schedules incorporated therein.

2. "Application Availability Performance" has the meaning given that tenn in Section 4.1 (b) of the SLA.

3. "Application Instance" means with respect to any applicable Software operating in a database environment, the Software's configuration in any of the demonstration, development, test, or Production modes.

4. "Back-Ups" means the live, hot copying of Customer's files, databases, applications and operating systems.

5. "Batch Job" means the Customer's processing of multiple transactions, as opposed to multiple Users processing single transactions, simultaneously.

6. "Business Hours" shall be defined as 9 AM to 5 PM local time in the client manager's time zone.

7. "Capacity Threshold" has the meaning given that tenn in Section 2.1 of the SLA.

8. "Case" has the meaning given that tenn in Section 6.1 of the SLA.

9. "Change Order" has the meaning given that tenn in Section 3(a) of the Change Procedures.

10. "Change" has the meaning given that tenn in Section I of the Change Procedures.

II. "Chargeable Hours" has the meaning given that tenn in Schedule 2, Exhibit 2-B.

12. "Chronic Problems" means Oracle's failure, for at least three consecutive months, to provide Application Availability Performance of95% or higher, but the calculation of Application Availability Perfonnance for purposes of detennining Chronic Problems shall not include any time accruing during or otherwise attributable to any (a) exclusion listed in Section 4.3 of the SLA or (b) performance exception referred to in Section 8.3 of the SLA.

13. "Claim" has the meaning given that term in Section 8.1 of the General Tenns.

14. "Concurrent Batch Jobs" means the total number of discrete batch processes that Customer submits through the initial process scheduler and that run with respect to a given Machine at any one time.

15. "Concurrent Users" means the total number of discrete User logons to an Application Instance at any one time.

16. ''Confidential Information" has the meaning given that tenn in Section 3.1 of the General Tenns.

17. "Configuration Footprints" has the meaning given that term in Schedule I, Exhibit 1-A(ii).

18. "Connectivity Service" has the meaning given that term in Section 6.4 of the General Tenns.

19. "CPU" means the then current Oracle Hosting standard capacity processor appropriate for the hosted Software applications in connection with this Agreement.

20. "Credit" means a credit for Customer that arises when the Application Availability Perfonnance falls below the criteria set forth in Section 8 of the SLA and the other criteria set forth in that section are met.

21. "Critical Access Components" means the web server, application server and database server components of the Software.

22. "Customer Information" has the meaning given that tenn in Section 3.1 of the General Tenns.

23. "Customer Managed Server" means a Machine that if included as part of the Services, is one for which the Services only provide for management and maintenance of the hardware and operating system on that Machine.

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Customer shall have full responsibility with respect to the database and application software for any Customer Managed Server.

24. "Customer" has the meaning given that term in the preamble to the General Terms.

25. "Disaster Recovery" means the process by which Oracle undertakes to establish Services subsequent to a disaster that has been declared by both parties.

26. "Disaster" means an event, mutually so declared by Customer and Oracle, which prevents the performance of Services within the primary Services facility for greater than three days, and may include but not limited to any such event as an explosion, fire, flood, power spike, sabotage and theft.

27. "Discloser" has the meaning given that term in Section 3.1 of the General Terms.

28. "Documentation" means the published user manuals, whether in print or electronic form, that relate to the use of the Services that have been provided, whether directly or through the Internet, by Oracle to Customer.

29. "Effective Date" has the meaning given that term in the preamble to the General Terms.

30. "Enhancement" means any addition, modification, change, alteration, enhancement, or customization made by Customer to any Software.

31. "Escalation Process" has the meaning given that tenn in Section 9.10 of the General Tenns.

32. "Exposure" has the meaning given that term in Section 5.5(a)(ii) of the General Terms.

33. "Functionality Release" means any release with respect to the Software that is not a Maintenance Release.

34. "General Terms" mean the tenns and conditions occurring in this Agreement prior to any Schedule.

35. "Hosting Environment" means one or more Configuration Footprints that together provide the hardware and software to run the Services.

36. "Hosting Fee" has the meaning given that term in Section 2.1 of the General Terms.

37. "Implementation Environment" is the Configuration Footprint used for the sole purpose of running Implementation.

38. "Implementation" means the activity of configuring and testing the Software and any associated third party application and/or the development and testing of Enhancements. Specific tasks conducted as part of Implementation are set forth in Schedule 1, Exhibit I-B.

39. "Included Hours" has the meaning given that term in Schedule 2, Exhibit 2-B.

40. "Machine" means a server that contains CPU's which is part ofthe Customer's hardware configuration.

41. "Maintenance Release" means any release the primary purpose of which addresses the manner of processing data or operating the Software but does not contain new functionality or change the Oracle intended results of processing data, including by way of example but not as a limitation, any Software patch, fix, tools update, tax update, bug fix, and a Maintenance Release specifically excludes any service pack or Software upgrade.

42. "Monitor" means a software program that is constantly seeking to determine whether or not Customer is able to access the Critical Access Components.

43. "OLSA" means Customer's Oracle License and Services Agreement dated-------~

44. "NaviSite" means NaviSite, Inc.

45. "Online Interface" means those interfaces utilizing HTTP based protocols or PeopleTools based Business Interlinks, Application Messaging, Component Interface and Integration Broker.

46. "Oracle'' has the meaning given that term in the preamble to the General Terms.

47. "Oracle Hosting Customer Support" is the help desk service center for Customer to call for Servicesrelated trouble issues.

48. "Oracle Technology" has the meaning given that term in Section 4.1 of the General Terms.

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49. "PHO'' means primary hours of operation as applied to the Services according to Customer's SLA.

50. "Production Environment" is the Configuration Footprint used for the sole purpose of running Production.

51. "Production Readiness Criteria" has the meaning given that term in Section 1.1 of the SLA.

52. "Production Support Environment" is the Configuration Footprint used for the purpose of Production Support.

53. "Production Support" means the activity of patching, fixing, troubleshooting and testing and any other change control activities necessary for the Production Environment.

54. "Production" means Oracle's post-Implementation hosting and managing of Customer's data on a live basis and when the Usage Acceptance Test completed or a time mutually agreed to by the Parties. Specific tasks conducted as part of Production are set forth in Schedule I, Exhibit 1-B.

55. "Recipient" has the meaning given that term in Section 3.1 ofthe General Terms.

56. "Schedule" means any of the so-titled documents, along with all of its exhibits and attachments, which follow in this Agreement after the General Terms.

57. "Scheduled Downtime" means the time periods described in Sections 3.2 and 3.3 of the SLA as times for system maintenance.

58. "Services" means the hosting and managing of the Software for Customer pursuant to this Agreement as set forth in Schedule I, Exhibit 1-B.

59. "SLA" means Customer's Service Level Agreement as defined in Schedule 3.

60. "Software" means those software products licensed separately by Customer pursuant to the OLSA with Oracle that are identified in Section I of Schedule I, Exhibit 1-A.

61. "SOW" is the Statement of Work attached to and incorporated into this Agreement as Schedule I.

62. "Start Date" means the date so defined in the preamble to the General Terms.

63. "Start-Up Fee" has the meaning given that term in Section 2.1 of the General Terms.

64. "Super-User" has the meaning given that term in Section 6.4 of the SLA.

65. "Supplier" means any person or entity contracted by Oracle, which provides services, materials, products, or supplies in connection with the Services, including but not limited to third party service or software providers, and shall include NaviSite.

66. "System Administration Services" consists of those items set forth in Schedule I, Exhibit 1-B, Roles and Responsibilities as "SAS".

67. "Termination Fee" has the meaning given that term in Section 5.2 of the General Tenns.

68. "Termination Notice" has the meaning given that term in Section 5.2 of the General Tenns.

69. "Threat" has the meaning given that term in Section 5.5(a)(i) of the General Terms.

70. "Unscheduled Downtime" has the meaning given that term in Section 4.1(a) of the SLA.

71. "Unscheduled Maintenance" means all maintenance activity in the calendar month that occurs outside of Scheduled Downtime and for which Oracle has made commercially reasonable efforts to notifY Customer of the anticipated maintenance activity.

72. "User" means a person allowed by Customer to have a logon id to the Software, but the employees of Oracle and its Suppliers are not considered Users if the person is responsible for delivering any of the Services.

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