Trying to set up Active Directory User Integration Configuration

We have a customer on Apps10 UPD7 trying to set up Active Directory User Integration Configuration but have not been successful.
When 'Database Authentication not allowed' is unchecked, they receive error
"Failed to perform LDAP search: [LDAP: error code 1 - 000020D6: SvcErr: DSID-031007E5, problem 5012 (DIR_ERROR), data 0"

When 'Database Authentication not allowed' is 'checked, no users are synchronized.

Please see attached screen shot