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Terms and Conditions


1. Definitions

1.1. "ConfidentialInformation" shall mean all material and informationsupplied by Customer that has or will come into Developer's possession orknowledge of Developer in connection with its performance hereunder.Confidential information does not include information that:

(a) is or becomes public knowledge through no fault ofDeveloper;

(b) Developer knew before Customer disclosed it;

(c) Developer obtains from sources other than Customer who oweno duty of confidentiality to Customer; or

(d) Developer independently develops.

1.2. "Deliverables" shall mean a listingof all items to be delivered to Customer under this Agreement.

1.3. "DerivativeWork" [as an adaption] shall mean a work that is[substantially] based on any preexisting works, such as a revision,modification, translation, abridgement, condensation, expansion, or any otherform in which such preexisting works may be recast, transformed, or adapted,and that, if prepared without authorization of the owner of the copyright insuch preexisting work, would constitute a copyright infringement under the UnitedStates Copyright Act.

"Derivative Work" [as anextension] shall mean a work that is [substantially] based on any preexistingworks.

1.4. "Open Source License Agreement" means the termsunder which Software is licensed in source code form to the general public foruse without charge, including without limitation any license agreement that

(a) conditions the use or distribution of any Software programthat incorporates such Software on the disclosure, licensing or distribution ofthe source code of such program (including such Software) and

(b) otherwise materially limits a licensee's freedom of actionwith regard to seeking compensation in connection with licensing ordistributing such program or Software in object code form, including withoutlimitation the GNU General Public License or the GNU Lesser General PublicLicense.

1.5. "Open Source Software" means Softwarelicensed pursuant to the terms of an Open Source License Agreement.

1.6. "Schedule" shall mean the delivery dates foreach Deliverable.

1.7. "Specifications" shallmean the specifications for the Software as directed by Customer, together withany modifications that may be agreed to in writing by the parties during theterm of this Agreement.

2. Duties and Responsibilities

2.1. Specifications. Customer shall define theSpecifications, Deliverables, andSchedules[, with input from Developer].

2.2. Development. Developer shall design, develop,and implement the Software in accordance with the Specifications, Deliverablesand Schedule.

2.3. Training.

(a) Training Scope. Developer shall provide Customerwith [[HOURS OF TRAINING] of training OR such training as may reasonably berequested by Customer] on the use of the Software.

(b) Training Dates and Locations. The training will beconducted on such dates and locations as the parties may agree.

2.4. Maintenance. Developer shall perform remedial andpreventive maintenance for the Software after its acceptance so that theSoftware continues to perform in accordance with the technical design. Customerand Developer shall negotiate the terms and price of such maintenance services,but Developer shall not charge Customer more than [MAXIMUM ANNUAL RATE FORMAINTENANCE] per year for the first two years of maintenance services afteracceptance of the Software. Customer shall have the right to terminate suchmaintenance services at any time upon thirty (30) days written notice toDeveloper. Developer shall have the right to terminate such maintenanceservices upon thirty (30) days written notice to Customer if Customer is inmaterial breach of the maintenance agreement between Customer and Developer andremains in material breach for such thirty (30) days.

3. Delivery and Acceptance

3.1. Acceptance Period. Customer willhave [ACCEPTANCE PERIOD] following the date of [delivery OR installation] toassess and test the Software.

3.2. Completion. If Developer, in the soleopinion of Customer, delivers the Software in accordance with theSpecifications, Deliverables, or Schedule, then Developer shall be deemed tohave completed its delivery obligations.

3.3. Rejection. If Developer, in the soleopinion of Customer, fails to deliver the Software in accordance with theSpecifications, Deliverables, or Schedule, then:

(a) Notification. Customer shall detail in writing itsgrounds for rejection; and

(b) Rectification. Developer shall [promptly OR useits best efforts to] correct the Software and upon delivery of such correction,the process of acceptance, completion, and rejection shall restart.

(c) Continued Failure. If the Developer'scorrections[,in the sole opinion of Customer,] fails to deliver the Software in accordancewith the Specifications, Deliverables, or Schedule, then Customer may elect to:

(i) terminate the agreement, or

(ii) adjust the Specifications, Deliverables, or Schedule.

4. Changes

4.1. Change Orders. Customer may request changes to theSpecifications, Deliverables, or Schedules.

4.2. Additional Time or Expense. If the proposedchange will, in the reasonable opinion of Developer, require a delay indelivery of the Software or would result in additional expense, then:

(a) Customer and Developer shall confer; and

(b) Customer may elect to either:

(i) withdraw its proposed change, or

(ii) require Developer to deliver the Software with the proposedchange, subject to the delay and/or additional expense.

If Developer cannot or chooses not to accept the change order,then Customer may elect to terminate the agreement.

5. Payment.

5.1. Development Costs. Customer shall payDeveloper:

(a) [INITIAL PAYMENT] deposit; and

(b) [FINAL PAYMENT] upon [delivery [in accordance with theSpecification] OR acceptance].

5.2. Expenses. [Subject to Customer's prior approval, Customerwill reimburse Developer for all reasonable expenses incurred by Developer duringthe development of the Software.

5.3. Training Costs. The training shall beprovided at [the rate of [TRAINING COST RATE] OR no additional cost toCustomer].

6. Ownership of Software. 

Developer agrees that the development of the Software is "workfor hire" within the meaning of the Copyright Act of 1976, as amended fromtime to time, and that the Software shall be the sole property of Customer.Developer assigns to Customer its entire right, title and interest in anythingcreated or developed by Developer for Customer under this Agreement("Product") including all patents, copyrights, trade secrets andother proprietary rights. This assignment is conditioned upon full payment ofthe compensation due Developer under this Agreement.

7. Term. 

This Agreement shall commence upon [EFFECTIVE DATE] and continueuntil all of the obligations of the parties have been performed or untilearlier terminated as provided herein.

8. Representations

8.1. No Infringement. Developerrepresents and warrants that the Software will not infringe any patent,copyright, trademark, trade secret or other proprietary right of any person.

8.2. No Third Party Property. Developerrepresents and warrants that it will not use any trade secrets or confidentialor proprietary information owned by any third party in developing the Software.

8.3. No Obligation. Developer representsand warrants that neither Developer nor any other company or individualperforming services pursuant to this Agreement is under any obligation toassign or give any work done under this Agreement to any third party.

8.4. No Open Source. Developer warrantsthat the Software does not contain any Open Source Software.

9. Warranties

9.1. Performance. Developer warrantsthat for a period of [WARRANTY PERIOD], the Software will operate substantiallyaccording to the Specifications.

9.2. Repair or Replace. Developer willrepair or replace the System during such [WARRANTY PERIOD] as soon as possibleafter Customer informs Developer of any breach of this warranty.

9.3. Exclusions. This warranty excludesany claims based on defects in the Software caused by Customer, other partiesbeyond the control of Developer, or the hardware.

9.4. No Other Warranties. There are no expressor implied warranties, including the implied warranties of merchantability andfitness for a particular purpose, respecting this Agreement, the Software orServices.

10. Acknowledgement-Relationship of the Parties

10.1. Independent Contractor. Developer is anindependent contractor and is not an employee or agent of Customer.

10.2. No Partnership. Nothing in thisAgreement creates a partnership or joint venture between the parties.

11. Escrow of Source Code

11.1. Delivery of Object Code. Customer agrees thatthe Software developed under this Agreement shall be delivered to Customer inobject code form only.

11.2. Escrow of Source Code. Developer agrees thatone copy of the source code version of the Software and associateddocumentation shall be deposited with an escrow agent specializing in softwareescrows to be mutually agreed upon in writing by Developer and Customer aftergood faith negotiation.

11.3. Delivery and Update of Source Code. The source code shallbe delivered to the escrow agent within [NUMBER OF DAYS] days after delivery ofthe object code to Customer. Thereafter, the source code version of allupdates, enhancements and modifications of the Software created by Developer onCustomer's behalf, as well as associated documentation, shall be deposited byDeveloper with the escrow agent. Customer shall pay all fees necessary toestablish and maintain the escrow.

11.4. Contingent License. Developer herebygrants to Customer a contingent license to receive the source code from theescrow agent and to use the source code to support its use of the Software inmachine-readable form if one or more of the following conditions occurs:

(a) Developer, whether directly or through a successor oraffiliate, ceases to be in the software business.

(b) Developer fails to fulfill its obligations to maintain theSoftware as provided in this Agreement.

(c) Developer becomes insolvent or admits insolvency or ageneral inability to pay its debts as they become due.

(d) Developer files a petition for protection under the U.S.Bankruptcy Code, or an involuntary petition is filed against it and is notdismissed within 60 days.

(e) Developer comes under the control of a competitor ofCustomer.

12. Confidentiality.

During the term of this Agreement and for [RESTRICTED PERIOD]afterward, Developer [will keep the Confidential Information confidential ORwill use reasonable care to prevent the unauthorized use or dissemination ofthe Confidential Information].

13. Indemnification.

If any third party brings a lawsuit or proceeding against Customerbased upon a claim that the Software breaches the third party's patent,copyright or trade secrets rights, and it is determined that such infringementhas occurred, then Developer shall hold Customer harmless against any loss,damage, expense or cost, including reasonable attorney fees, arising from theclaim.

14. Limitation of Liability. 

Neither party shall be liable for any special, indirect,incidental or consequential damages (including damages for loss of business,profits or any other loss) incurred or suffered in connection with the Software[or services performed in connection with this agreement].

15. Term and Termination.

15.1. Termination for Cause. This Agreementmay be terminated by either party upon written notice to the other, if:

(a) the other party breaches any material obligation; and

(b) the breaching party fails to cure such breach within [NOTICEPERIOD] of receipt of the notice.

15.2. Effect of Termination

(a) Payment of Outstanding Fees. Customer shall payDeveloper for all services rendered and work performed up to the dateoftermination[, subject to Customer's right to pay only fair value if Customerterminates for cause].

(b) Return or Destruction. Within [PERIOD FOR RETURNOR DESTRUCTION] after the termination or expiration of this Agreement,Developer shall return, or at the option of Customer, Developer shall destroyall copies of Confidential Information and shall deliver written certificationby an officer of Customer that Customer has complied with these requirements.

16. General Provisions.

16.1. Dispute Resolution. Any controversyor claim arising out of or relating to this contract shall be settled byarbitration in accordance with the Commercial Arbitration Rules of the AmericanArbitration Association, and judgment upon the award rendered by thearbitrator(s) may be entered in any court having jurisdiction.

16.2. Notices. Any notice required by thisAgreement or given in connection with it, shall be in writing and shall begiven to the appropriate party by personal delivery or a recognized overnightdelivery service such as FedEx.

If to Developer: [DEVELOPER ADDRESS]

If to Customer: [CUSTOMER ADDRESS]

16.3. Entire Agreement. This Agreementcontains the entire agreement between the parties and supersedes allunderstandings and agreements whether written or oral.

16.4. Amendment. No amendment ormodification of this Agreement is valid unless in writing, signed by theparties.

16.5. Governing Law. This Agreement isgoverned by the laws of [GOVERNING LAW STATE], without regard to any conflictof law principles.

16.6. Force Majeure. Except with regard topayment obligations, either party shall be excused from delays in performing orfrom failing to perform its obligations under this Agreement to the extent thedelays or failures result from causes beyond the reasonable control of theparty.

16.7. No Waiver. The waiver or failure of eitherparty to exercise any right provided in this agreement shall not be deemed awaiver of any other right or remedy to which the party may be entitled.

16.8. Severability. If any provision of this Agreementis invalid, illegal, or unenforceable, the remainder of this Agreement willremain in full force and effect.

In Witness whereof, the parties have executed this Agreement asof the date first written above.