Recognizing Contract Risk and Opportunities Memo

Date: September 10, 2010

To : Project Team Span Systems for Project Citizen – Schwartz AG (C-S)

From: Harold Smith

Subject: Recent conflicts and contractual issues with Citizen – Schwartz AG (C-S)

Team as you are aware we have recently averted a costly and lengthy battle with C-S as it relates to our development of their banking software system. As you know this initial project could lead to our first E-CRM project in the Banking Industry. That being said I feel it is imperative during the remainder of this project and projects going forward that each of you be cognizant of our contractual responsibilities along with the communication needs to maintain and cultivate the relationship with C-S and all our customers.

This project has from the start been riddled with issues related to performance in general, communication, quality and schedule.

Communication:

To protect the company and ensure clear communication we always include an Internal Escalation procedure for disputes: This clause is written into all our contracts to ensure resolution to all issues prior to escalation on a legal level. The escalation clause is clear and unambiguous and must be strictly adhered to by all levels of the Span Project Team (regardless of C-S performance in this area of communication). In this particular contract prior to the filling of any formal proceedings with respect to a dispute the party believing itself aggrieved shall call for progressive management involvement in the dispute negotiation by written notice to the other party in the following manner:

Step one the Span Project leader – C-S Project leader are to communicate with each other with a turnaround time not to exceed5 business days. It is our endeavor to resolve all issues at the primary level, retaining the working relationship is critical to the ongoing success of this and future projects. In the event the disputes or issues cannot be resolved at the primary level then...