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4. MEASUREMENT AND REPORTS <br />4.1 System Monitoring and Measurement: PALADIN will provide for monitoring of System <br />Availability on an ongoing basis. All measurements of System Availability will be calculated on the Service <br />Year period during the Term. This monitoring will be performed through a combination of monitoring <br />services provided by PALADIN's hosting vendor, internal PALADIN tools, and an external web site URL <br />monitor that validates the availability of the CLIENT's application URL. These tools are intended to serve <br />as an initial alert to PALADIN that the system may be unavailable. PALADIN will then conduct a series of <br />tests to confirm System Availability. <br />• If one of the above alerting mechanisms reports that the System is unavailable and PALADIN <br />confirms the System to be unavailable, then Unscheduled Downtime will be calculated, in 5 minute <br />increments, as the time between when the initial notification or alert was received until PALADIN <br />confirms System Availability has been restored. <br />• If one of the above alerting mechanisms reports that the System is unavailable, but PALADIN's tests <br />and assessments confirms that the System is available, then Unscheduled Downtime will be <br />calculated as the time between when the initial notification or alert was received until PALADIN <br />confirms System Availability has been restored if PALADIN is unable to confirm that the System was, <br />in fact, available during period between the initial notification or alert and point at which PALADIN <br />confirmed that the System was available. <br />4.2 System Performance Reports: Upon CLIENT's request and at no cost to CLIENT, PALADIN will <br />provide standard System Availability reports to CLIENT on a quarterly basis setting forth measurements <br />of Unscheduled Downtime and a calculation of System Availability for the relevant preceding Service <br />Year period. CLIENT agrees that PALADIN's monitoring and measurement method and standard System <br />Availability reports are the sole and exclusive methods of measuring System Availability under this <br />Agreement. No other measure shall be accepted unless validated, and mutually agreed to in writing by <br />both parties before implementation. If CLIENT disagrees with any measurement or other information set <br />forth in any such report, it must so inform PALADIN in writing within ten (10) calendar days after receipt <br />thereof. Accuracy of any such report shall be deemed conclusive unless such notice is provided by <br />CLIENT. Any such notice must indicate specific measurements in dispute and must include a detailed <br />description of the nature of the dispute. PALADIN and CLIENT agree to attempt to settle any such <br />disputes regarding System Availability and/or related measurements in a timely manner by mutual good <br />faith discussions. <br />4.3 Credits for Unscheduled Downtime: In the event PALADIN fails to meet 99% System <br />Availability in any Service Year period, then CLIENT shall receive a credit of 5% of the Annual <br />Subscription Service Fee. CLIENT must claim credit in writing within thirty (30) days following PALADIN's <br />provision of the quarterly System Performance Report as set forth in Section 4.2. Credits properly claimed <br />by CLIENT will be applied to the next renewal period's Annual Subscription Service Fee and such fee will <br />be reduced by the amount of the credit. PALADIN's invoice for each renewal period shall reflect any credit <br />earned during the previous subscription period and the reduction to the Annual Subscription Service Fee <br />for the upcoming renewal period. <br />15 <br />Initials — Paladin IV Client i° i' <br />