Opening of Proposals - Utility Billing System - Systems & Software, Inc. - Part 2

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SYSTEM ACCEPTANCE System Acceptance shall be deemed to occur in each subject or module area at such time an Application Software module or group of interrelated modules (including any Customization) within thirty (30) days of the date it is made available for use by Customer in a production environment and it performs in material compliance with the applicable Documentation. If Customer notifies S&S in writing of material non-compliance of the Application Software during such thirty (30) day period, S&S shall correct such material non-compliance with the Application Software and Customer shall have an additional fifteen (15) days to test the corrected module or group of interrelated modules. In the event Customer fails to notify S&S in writing of any material non-compliance of the Application Software within such thirty (30) day period (or, as applicable, such fifteen (15) day period), System Acceptance shall be deemed to have occurred upon the expiration of the applicable period. 6. OWNERSHIP; LICENSE A. Ownership. S&S and its licensors shall have and retain sole and exclusive ownership of all right, title and interest in and to the Application Software, including ownership of all trade secrets and copyrights pertaining thereto, subject only to the license rights and privileges expressly granted to the Customer herein. Customer agrees that S&S and its licensors shall have sole ownership of all improvements and modifications made to the Application Software, including without limitation those made in connection with the Customization, regardless of whether such improvements and modifications are made by S&S alone or together with the Customer or third parties. Nothing in this Agreement shall be construed as a commitment of S&S to create improvements, modifications or future enhancements to the Application Software, other than those expressly specified in this Agreement. Upon request and without the necessity for further consideration, Customer shall take all necessary actions to assign ownership of the Application Software and Customizations to S&S. Subject to all the terms and conditions of this Agreement, S&S agrees to sell and Customer agrees to purchase the Hardware specified in Exhibit 1. S&S S&S shall arrange for Delivery of each unit of Hardware by common carrier at mutually agreeable time(s). Customer shall pay or reimburse S&S for all costs of Hardware shipping and transportation. At Customer's expense, S&S shall procure transit and casualty insurance for the replacement value of the Hardware, covering the transportation of the Hardware by the common carrier to Customer's loading dock. Good and merchantable title and risk of loss in and to the Hardware shall pass to Customer upon Delivery. S&S reserves a security interest in each item of Hardware, and shall have all of the rights of a secured creditor under the Uniform Commercial Code with respect thereto. Such security interest shall be retained and may be enforced until Customer's payment obligations for the applicable item of Hardware shall have been fully discharged. Customer shall execute all financing statements required to perfect S&S's security interest, and if financing statements are filed, S&S shall execute a termination statement evidencing the discharge of such obligations in the event a financing statement is filed. B. License. In consideration of Customer's payment of amounts set forth in Section 4, S&S grants to Customer a nonexclusive and nontransferable right and license to use the Application Software solely for Customer's internal business purposes in accordance with the provisions in this Agreement for the duration of the Term. Customer may use the Application Software on Hardware upgrades, additions or replacements; provided, however, the Customer must give S&S written notice in advance of any such change so as to permit S&S to provide support and to be aware from a licensing perspective of the numbers and types of Hardware on which the Application Software resides or is intended to reside. Customer agrees that it will not sell, assign, transfer, disclose, sublicense, or otherwise make the Application Software available to others without the prior written consent of S&S. Customer shall not create derivative works of the Application Software, meaning that the Customer shall not create any software or other works that are based upon the Application Software or recast, transform or adapt the Application Software in any manner. Customer shall not disassemble, decompile or "reverse engineer" the Application Software for any purpose. C. Additional License Terms. (i) Customer may prepare one copy of the Application Software for backup purposes only; provided that the backup copy may be used only during the term of the license and the copy shall be destroyed or returned to S&S upon termination of the license. Customer may prepare a reasonable number of copies of the Documentation for internal use only; provided that the copies of Documentation may be used only during the term of the license and the copies shall be destroyed or returned to S&S upon termination of the license. All copies of the Application Software and Documentation must contain the proprietary notices appearing on the copies as initially furnished to Customer. Except as permitted in this paragraph, Customer shall not copy or otherwise reproduce the Application Software or the Documentation, in whole or in part, without the prior written consent of S&S. Systems & Software, Inc. Confidential 4