Text version of this Form
THIS SOFTWARE LICENSE AGREEMENT (“Agreement”) is made as of the ___day of _______, 20___ (the “Effective Date”) between _______________ (“Customer”) and _______________ (“Contractor”).
WHEREAS, Contractor owns certain computer software programs which it desires to license to Customer; and
WHEREAS, Customer wishes to license such computer software programs from Contractor on the terms and conditions specified below.
NOW THEREFORE, Customer and Contractor mutually agree as follows:
1. GRANT OF LICENSE:
(a) License. Effective upon delivery to Customer, and subject to payment of the applicable License Fees set forth in Section 2- below, Contractor hereby grants to the Customer and the Customer hereby accepts, a non-exclusive, non-transferable, irrevocable, perpetual and enterprise-wide license to operate the object code version of the licensed computer programs listed on Appendix A, which is incorporated herein by reference, together with all fixes, patches, new releases and updates thereto, and all related documentation developed by Contractor and its licensors (collectively, the “Licensed Product”). Delivery of the Licensed Product shall be made according to the applicable Project Schedule under the ___________________ Agreement dated __________ , 20____ between Customer and Contractor (the “Master Services Agreement”).
(b) Releases. Subject to payment of the applicable annual Renewal Fee as provided in Section 2, below, Contractor shall provide Customer with an annual updated release of the Licensed Product, which is compatible with the operating environment and applications programs for which such Licensed Product is being used by Customer. Customer will be required to upgrade the latest release of the Licensed Product within ninety (90) days of receipt of such release.
(c) Copies. The license granted hereunder includes the right to make additional copies of the Licensed Product solely for test, development, archival and security purposes, provided that Customer at all times shall maintain a record of all such copies made detailing their location, use and ultimate destruction. Contractor shall not be obliged to install or assist with the installation of any copies made by the Customer under the provisions of this Section 1(c).
(d) Source Code Escrow. Within sixty (60) days of delivery of the Licensed Product to Customer, Customer and Contractor shall enter into an agreement to provide for the delivery of the source code to the Licensed Product to an escrow agent, either Fort Knox Escrow Services, Inc. or another escrow agent mutually acceptable to both parties, and providing for regular and timely updates thereof, verification of the escrow deposit, and release thereof to Customer in the event Contractor ceases to provide maintenance for the Licensed Product or Contractor becomes the subject of any voluntary or involuntary bankruptcy proceeding, or ceases business as a going concern. Customer shall pay the reasonable fees for such escrow arrangement.
2. LICENSE FEES.
The initial license fee for the Licensed Products for the period upon delivery through __________ , 20___ shall be $_____________ payable within thirty (30) days of execution of this Agreement (“Initial License Fee”). An annual renewal license fee of $_________ (the “Renewal Fee”, and together with the Initial License Fee, the “License Fees”) shall be payable beginning _________ , 20___ and each year thereafter that Customer desires to extend the license set forth in Section 1(a), above. Customer may elect not to renew the license at any time, and upon written notice thereof to Contractor, Customer shall have no obligation to pay any further annual Renewal Fee, provided that Customer’s rights to use the Licensed Product under this Agreement shall cease, and this Agreement shall terminate, at the expiration of the applicable period for which the annual Renewal Fee has been paid. Unless otherwise specified above, Customer shall make payment within thirty (30) days after Customer’s receipt of Contractor’s invoice. Any payment not made when due shall be subject to a service charge at the rate of one and one-half percent (1½%) per month or, if less, the highest rate permitted by applicable law.
3. RIGHTS IN LICENSED PRODUCT.
Contractor shall retain all right, title, and interest in and the patent, copyright, trademark, trade secret and any other intellectual property rights to the Licensed Product and any derivative works thereof, subject only to the limited licenses set forth in this Agreement. Customer does not acquire any rights, express or implied to the Licensed Product other than those rights expressly granted under this Agreement. The Customer shall not remove or delete any proprietary notices from the Licensed Product and shall require that similar proprietary notices are retained on all copies thereof. Except to the extent required by applicable law, the Customer shall not reverse engineer, disassemble or decompile the Licensed Product. Customer shall not use the Licensed Product for the purpose of developing a competing product.
4. TERM AND TERMINATION:
(a) Term. The term of this Agreement (“Term“) shall commence on the date hereof and shall continue in full force and effect until terminated as provided herein.
(b) Termination for Cause. If either party materially defaults in the performance of any of its duties or obligations under this Agreement, which default is not substantially cured within thirty (30) days after notice is given to the defaulting party specifying such default or, with respect to those defaults that cannot reasonably be cured within thirty (30) days, should the defaulting party fail to proceed within thirty (30) days to commence curing the default and thereafter to proceed with all reasonable diligence to substantially cure the default, not to exceed an additional period of thirty (30) days, the party not in default may, by giving notice thereof to the defaulting party, terminate this Agreement as of a date specified in such notice. For the avoidance of doubt, non-payment of the License Fees shall constitute a material default.
5. CONFIDENTIAL INFORMATION:
(a) Acknowledgment of Confidentiality. Customer acknowledges that the Licensed Product constitutes confidential and proprietary information of Contractor (“Confidential Information“). Confidential Information does not include (i) information already known or independently developed by the recipient; (ii) information in the public domain through no wrongful act of the recipient, (iii) information received by the recipient from a third party who was free to disclose it, (iv) information approved by the owner thereof for disclosure, or (v) information required to be disclosed pursuant to a requirement of a governmental agency or law of the United States of America or a state thereof, or any governmental or political subdivision thereof, so long as the party required to disclose the information provides the other party with prior notice of such requirement.
(b) Covenant Not to Disclose. With respect to the Confidential Information, Customer agrees that during the Term and for a period of four (4) years thereafter it shall not use, commercialize or disclose such Confidential Information to any person or entity, except to its own employees having a “need to know” (and who are themselves bound by similar written nondisclosure restrictions), and to such other recipients as Contractor may approve in writing, provided, that all such recipients shall have first executed a confidentiality agreement in a form acceptable Contractor. Customer and its approved recipients shall not alter or remove from any Licensed Product any proprietary, copyright, trademark or trade secret legend. Customer shall use at least the same degree of care in safeguarding the Contractor’s Confidential Information as Customer uses in safeguarding its own comparable Confidential Information.
(c) Injunctive Relief. Customer acknowledges that a violation of Section 3 and this Section 5 would cause irreparable harm to Contractor which is not adequately compensable by monetary damages. In addition to other relief, Customer agrees that Contractor shall be entitled to seek injunctive relief from a court of competent jurisdiction to prevent any actual or threatened violation of such provisions. The injunctive remedy provided for in this Section 5(c) shall be in addition to any other legal or equitable remedy otherwise available. No bond or other security will be required in connection with the pursuit of any such injunction.
(a) Non-infringement Warranty. Contractor represents and warrants to Customer that the Licensed Product, when properly used, will not infringe or misappropriate any United States copyright, trademark, patent, or the trade secrets of any third persons. Upon being notified of such a claim, Contractor shall (i) defend through litigation or obtain through negotiation the right of Customer to continue using the Licensed Product; (ii) rework the Licensed Product so as to make it non-infringing while preserving the original functionality, or (iii) replace the Licensed Product with functionally equivalent software. If Customer determines that none of the foregoing alternatives provide an adequate remedy, Customer may terminate all or any part of this Agreement and, in addition to other relief, recover all amounts paid hereunder applicable to any or all parts of this Agreement so terminated. Contractor shall indemnify, defend and hold harmless Customer against and in respect to all claims, demands, losses, costs, expenses, obligations, liabilities, damages, recoveries, and deficiencies, including interest, penalties, and reasonable attorneys’ fees, arising from or as a result of Contractor’s breach of this Section 6(a).
(b) Performance Warranty. Contractor represents and warrants to Customer that the Licensed Product shall conform to and perform in accordance with the specifications as detailed in ___________________ to the Master Services Agreement (“Schedule A”) and the related Statement of Work, referred to and incorporated by reference in Schedule A. In the event of any defect or failure of performance hereunder at any time during the period commencing on the date such Licensed Product is delivered to and accepted by Customer pursuant to the applicable Schedule of the Master Services Agreement and for a period of ninety (90) days thereafter, Contractor shall either repair or replace such Licensed Product at Contractor’s sole cost and expense (the “Limited Warranty”) but only so long as the Licensed Product is not modified or enhanced by other than Contractor during the Limited Warranty period. Upon expiration of the applicable Limited Warranty, Contractor shall provide additional on-going maintenance services, including technical support and error resolution in connection with the Licensed Product for each year for which the applicable annual Renewal Fee has been paid by Customer to Contractor. Contractor will provide support remotely unless such remote support is inappropriate to a specific solution design. In such an instance, the required Contractor resources will be utilized at the Customer corporate site. Solution design will be initiated when the Customer’s staff provides the Contractor’s contact person with a detailed description of each incident, along with a preliminary priority classification. Contractor will be responsible to qualify, diagnose, and resolve the incident according to the following table setting forth the applicable service levels categorized by severity of the incident.
Level 1: The problem/issue with the application has caused the site to stop functioning normally and has to be rectified immediately. Contractor will take up the issue on a priority basis for resolution and provide hourly update while resolution is in progress. Contractor will support the issue resolution 24 hours, 7 days a week. Problem resolution will result in 6 hours or less, or the site will be restored to the latest functioning version of the application while resolution to the problem is made.
Level 2: The problem/issue will cause the business to stop if it is not resolved in the next 2-3 days. The issue is prioritized and will be resolved within this timeframe by Contractor’s applicable personnel. Progress will be reported on a daily basis.
Level 3: The problem/issue is more of a corrective action to the existing functionality than an enhancement, but the nature of the problem/issue leading to such a corrective action is below that which could conceivably cause business operations to cease. The issue is prioritized and resolved through agreed upon release schedules and unplanned corrective actions may limit the number of level 4 enhancements that are undertaken.
Level 4: The problem/issue is such that it results in an enhancement: a development action, which is more of a desire/cosmetic in nature. The resolution is managed through the regular agreed upon release schedules. Due to the discretionary nature of enhancements, no interdependencies will be introduced through the implementation of enhancements nor will fixed completion dates be assigned.
7. LIMITATION OF LIABILITY:
(a) Disclaimer. EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, CONTRACTOR DOES NOT MAKE ANY WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THE LICENSED PRODUCT, INCLUDING, WITHOUT LIMITATION ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE. IN NO EVENT SHALL CONTRACTOR BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL, SPECIAL OR INDIRECT DAMAGES, REGARDLESS OF WHETHER IT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
(b) Total Liability. Contractor’s and Customer’s respective liability hereunder for damages for any claim arising out of the Agreement shall not exceed the total amount paid to Contractor under the Agreement; provided, however, that the limitations set forth above in this Section 7(b) shall not apply with respect to (i) damages occasioned by grossly negligent, reckless or intentional tortious misconduct of the defaulting party’s fraud or such party’s criminal misconduct, (ii) Contractor’s indemnification obligation pursuant to Section 6(a), above., or (iii) Customer’s breach of its obligations under Sections 3 or 5 hereof.
Notices sent to either party shall be effective upon delivery when delivered in person or transmitted by telecopier (“fax”) machine, and shall be effective one (1) day after being sent by overnight courier, or two (2) days after being sent by first class mail postage prepaid to the address set forth below, or at such other address as the parties may from time to time give notice:
Customer Address: Contractor Address:
Attn: _ _ Attn: _ __
Facsimile: _ Facsimile: ____
A facsimile of this Agreement and notices generated in good form by a fax machine (as well as a photocopy thereof) shall be treated as “original” documents admissible into evidence unless a document’s authenticity is genuinely placed in question.
9. GOVERNING LAW:
This Agreement shall be governed by and construed in accordance with the laws of the State of ________. Subject to Section 10, below, to the fullest extent permitted by law, the Contractor and Customer hereby (i) submit to the jurisdiction of the ____________ and United States courts for the ____________ judicial circuit and the federal district, respectively, wherein lies ________ County, ________ for purposes of any legal action or proceeding brought under this Agreement and (ii) agree that exclusive venue of any such action or proceeding may be laid in such _______ judicial circuit and federal district, and waive any claim that the same is an inconvenient forum.
10. DISPUTE RESOLUTION:
(a) Informal Procedure. In the event of any dispute between the parties of any kind arising under this Agreement, except for certain emergency judicial relief authorized under Section 5(c) (“Injunctive Relief“) which may be brought at any time, the parties agree that all disputes between them shall first be submitted for informal resolution between the parties within the respective cure periods set forth in Section 4(c). Upon the written request of either party, each of the parties will appoint an officer whose task it will be to meet for the purpose of endeavoring to resolve such dispute. If the dispute cannot be resolved by such officers, then the parties may initiate formal proceedings upon the earlier to occur of: (i) the officers concluding in good faith that amicable resolution through continued negotiation of the dispute does not appear likely; (ii) sixty (60) days after the initial request to negotiate the dispute (unless preliminary or temporary relief of an emergency nature is sought by one of the parties); or (iii) thirty (30) days before the statute of limitations governing any cause of action relating to the dispute would expire.
(b) Arbitration. Any dispute that the parties are unable to resolve as provided in Section 10(a), above, will be resolved by final and binding arbitration conducted in accordance with and subject to the Commercial Arbitration Rules of the American Arbitration Association by three arbitrators selected in accordance with those rules. The arbitrators will allow such discovery as is appropriate, consistent with the purposes of arbitration in accomplishing fair, speedy and cost-effective resolution of disputes. All discovery will be completed, and the arbitration hearing will commence, within forty-five (45) days after appointment of all of the arbitrators, and the arbitration hearing will conclude within thirty (30) days after it commences. Discovery will be permitted pursuant to the _______ Rules of Civil Procedure. The exclusive venue for any arbitration shall be in _______ County, _____. The arbitrators will make every effort to enforce these timing requirements strictly, but may extend the time periods upon a showing that exceptional circumstances require extension to prevent manifest injustice. The decision of the arbitrators will be rendered in writing and will explain the reasons therefor. Each party will bear its own attorneys’ fees and other costs and expenses, and each party will equally share the cost of the arbitrators. The arbitrators may render awards of monetary damages, direction to take or refrain from taking action, or both, and may, at their discretion, notwithstanding the preceding, order one party to reimburse the other for attorneys’ fees and other expenses reasonably incurred by the other party in connection with the arbitration. Judgment upon the award rendered in any such arbitration may be entered in any court having jurisdiction thereof, or application may be made to such court for a judicial acceptance of the award and an enforcement, as the law of such jurisdiction may require or allow. Unless otherwise agreed, the transcript of the proceedings shall remain confidential.
This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and these documents supersede all other communications, whether written or oral. This Agreement may be modified or amended only by a writing signed by the party against whom enforcement is sought. Except as otherwise expressly provided in this Agreement, where agreement, approval, acceptance, consent or similar action is required of either party by any provision of this Agreement, such action will not be unreasonably withheld or delayed. Except as specifically permitted herein, neither this Agreement nor any rights or obligations hereunder may be transferred or assigned by one party without the other party’s prior written consent and any attempt to the contrary shall be void. The written consent of the other party to an assignment shall not be required if said assignment is made to a subsidiary or affiliate in which the assignor owns not less than fifty-one percent (51%) of the voting securities or other ownership interests, or to a successor by reason of merger, acquisition, consolidation or sale of substantially all of the assets of such assigning party, and the assignee assumes in writing all of the obligations and duties of the assignor. Waiver of any provision hereof in one instance shall not preclude enforcement thereof on future occasions. Except as otherwise expressly provided in this Agreement, all remedies provided for in this Agreement will be cumulative and in addition to and not in lieu of any other remedies available to either party at law, in equity or otherwise. Should any part of this Agreement, for any reason, be declared invalid, such decision shall not affect the validity of any remaining portion. Such remaining portion shall remain in force and effect as if this Agreement had been executed with the invalid provision eliminated. Section headings have been included in this Agreement merely for convenience or reference. They are not to be considered part of, or to be used in interpreting this Agreement.
This Agreement may be executed in two counterparts, both of which taken together shall constitute one single Agreement between the parties.
IN WITNESS WHEREOF, and intending to be legally bound, the parties hereto have caused this Agreement to be executed by their duly authorized representatives.
By: __________________ By: ____________________