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SYSTEM PURCHASE AGREEMENT
<br />This Agreement is made by and between SALIENT NETWORKS, a California Corporation, with its princippal office at 5750 Fleet Street,
<br />Suite 100, Carlsbad, CA 92008 (herein "Seller") and The City of San Leandro (herein "Customer"). In consideration of the mutual
<br />agreements herein contained, Seller agrees to sell, and Customer agrees to purchase, or cause a third party acceptable to Seller (herein "Third
<br />Party Funding Source") to purchase from Seller, communications hardware and/or software as described m the Component Itemization(s) -
<br />Addendum A (herein "Component(s)") under the following terms and conditions.
<br />AGREEMENT OF SALE. Seller shall deliver and install at location defined in Addendum A (herein "Premises"), the Component(s).
<br />PURCHASE PRICE. $58,101.62 plus applicable taxes and shipping. The Purchase Price for the Component(s), including installation
<br />and warranty as provided in this Agreement, shall be outlined in Addendum A. Should there be equipment added to this Agreement,
<br />outside of that itemized on Addendum A, there will be an additional charge to the Customer. Should there be additional labor costs
<br />incurred outside of the Project Plan, those charges would be billable at our then current, billable rate.
<br />TERMS OF PAYMENT. A single Purchase Order for entire Purchase price shall be issued at the time of contract execution.
<br />Customer is responsible for sales, use-and other applicable taxes (excluding taxes on Seller's income). Upon delivery of equipment to
<br />Customer location, Customer will be invoiced for 50% of total purchase price, due net 30. The remaining 50% of purchase price, plus
<br />applicable shipping and taxes, will be invoiced immediately following the Cutover Date, due net 30. The term "Cutover Date" means
<br />the first business day on which the Component(s) is/are installed and operational. Minor omissions or variances in performance to the
<br />Component(s) that do not materially and adversely affect the operation of the System as a whole, shall not be deemed to have
<br />postponed the Cutover Date. Customer acknowledges that this installment represents a final payment for any remaining unpaid portion
<br />of the hardware and/or software being purchased and payment for all implementation services. Seller shall use all commercially
<br />reasonable efforts to make timely delivery, installation and Cutover. HOWEVER, ALL STATED DELIVERY, INSTALLATION
<br />AND GUT-OVER DATES ARE APPROXIMATE AND EXCEPT AS EXPRESSLY PROVIDED 1N THIS AGREEMENT, SELLER
<br />SHALL UNDER NO CIRCUMSTANCES, BE DEEMED TO BE IN DEFAULT HEREUNDER. IN NO EVENT SHALL SELLER
<br />BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL OR SPECIAL DAMAGES OR COMMERCIAL LOSS RESULTING FROM
<br />DELAYS IN DELIVERY OR INSTALLATION BEYOND ITS REASONABLE CONTROL.
<br />The Customer has the option to enter into an agreement with a Third Party Funding Source acceptable to the Seller. Seller will
<br />cooperate with the Customer in arranging for such funding. Seller shall not be required to commence installation of the System until the
<br />appropriate leasing documents have been executed and approved through the Third Party Funding Source. In the event the Customer
<br />elects to obtain a Third Party Funding Source for payment of the System, the Customer shall remain liable to the Seller for payment of
<br />all amounts due hereunder until Seller has received payment in full. If Customer's Third Party Funding commitment is canceled or
<br />terminates for any reason before Seller receives full payment, Customer shall, aeon receipt of Seller's invoice, immediately make
<br />payment to Seller the unpaid balance of the Purchase Price and any other amounts due Seller hereunder. Customer shall promptly and
<br />on a tamely basis execute all documents and take all other action required or reasonably requested to cause payment to Seller to be
<br />made by Customer's Third Party Funding Source in accordance with the terms of this Agreement.
<br />4. EQUIPMENT RETURN. Should Customer wish to return equipment, and said equipment can be returned to the Manufacturer,
<br />Customer shall pay to Seller a restock fee plus shipping and handling charges.
<br />5. GRANT OF SECURITY INTEREST. Customer shall acgwire title to the Component(s) (excluding software that is licensed
<br />hereunder) upon payment in full of the Purchase Price, plus all applicable taxes to Seller. As long as any part of the Purchase Price
<br />remains outstanding, title to the Component(s) shall remain with Seller, and Seller shall retain a security interest in the Component(s)
<br />until all amounts are paid in full. Customer agrees to execute an documents, which maybe necessary or appropriate to perfect Seller's
<br />interest in the Component(s), including, but nat lirrnted to a UCCY1.
<br />6. RISK OF LOSS. Seller shall bear all RISK OF LOSS or damage to Component(s) while in transit to the Customer and until delivered
<br />to the Premises. Thereafter, such Risk of Loss shall be borne by Customer, except for loss caused by the negligence of Seller or its
<br />employees.
<br />7. SOFTWARE LICENSE. All references to the purchase or sale of software pursuant to this Agreement shall mean a license or
<br />sublicense to use such software as described herein. Subject to the terms of this Agreement, Seller grants to Customer anon-exclusive,
<br />fully paid, perpetual sub-license to use the system software options indicated in Addendum A in combination with the specific system
<br />hardware listed in same. The foreggoing sub-license is subject to all conditions, limitations and exclusions in Seller's license of such
<br />software from the manufacturer. By granting this sub-license to Customer, Customer is not granted any rights to copy, modify, reverse
<br />engineer or otherwise appropriate sub-license software systems. Seller represents and warrants that it 1s authorized to grant the
<br />software licenses furnished under this Agreement.
<br />8. LIMITED WARRANTIES. Seller warrants the System against defective parts and warkmanship for the period outlined in
<br />Addendum A, (herein "Warranty Period"). Seller does not warranty system operation if the functionality has been adversely affected
<br />by failure or modification of the customer's network Seller's sole obligation under this warranty and the sole and exclusive remedy of
<br />the Customer under this warranty is limited to the replacement or repair of the defective part(s) or workmanship. Other manufacturers,
<br />such as Compaq, Fenestrae, etc. have their own warranties and, to the extent permitted by such manufacturers, Seller will pass through
<br />such warranties to Customer, but Seller shall not be responsible for such manufacturers' warranties or any maintenance or services
<br />under those manufacturers' warranties. The repair or replacement of defective part(s) or workmanship is conditioned upon the System
<br />not having been altered or repaired by anyone other than Seller, its employees or agents. Seller shall not be responsible for any defect
<br />resulting from the mishandling, abuse, rrnsuse, improper storage, accident, negligence, theft, vandalism, fire, water or other peal
<br />beyond the control of Seller or because of conditions outside of specifications, including but not limited to wiring, electrical power,
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