SAMPLE SOFTWARE MAINTENANCE AGREEMENT (COMPREHENSIVE SERVICES AND DELIVERABLES WITH MAINTENANCE)

[WARNING: THIS AGREEMENT AND ALL QUESTIONS ARE OFFERED AS SAMPLES ONLY.  USE OF THIS AGREEMENT IS BY YOU AT YOUR DIRECTION, IS NOT DIRECTED BY WHICHDRAFT.COM, AND IN NO WAY CONSTITUTES LEGAL ADVICE.  WHICHDRAFT.COM RECOMMENDS THAT ANYONE ENTERING INTO A CONTRACT CONSULT AN ATTORNEY FOR LEGAL ADVICE. THE COPYRIGHT IN THIS CONTRACT IS OWNED BY RADIO FREE CONTRACTS LLC.] j

This Software License and Maintenance Agreement ("Agreement") is made as of March 11, 2010 (the "Effective Date") between , an individual with an address at , , ("Party-1"), and , a company with an address at , , ("Party-2").

This Agreement describes Party-1's purchase of Services and Deliverables from Party-2.

Party-1 and Party-2 therefore agree as follows:

1. DEFINITIONS. 

(a) "Business Hours" means the hours between 9:00 a.m. and 5:00 p.m. in the time zone where Party-2's address is located, except for weekends and Party-2 holidays. [QR-116]

(b) "Contract Year" means any twelve (12) month period during the Term beginning on January 1 and ending on December 31. [QR-65]

(c) "Correction" means the correction of a Malfunction at any and all priority levels to ensure that the Maintained Item performs in accordance with the requirements of this Agreement.

(d) "Deliverables" means the deliverables Party-1 provides to Party-2 as described in this Agreement.

(e) "Government Authority" means any governmental authority or court, tribunal, agency, department, commission, arbitrator, board, bureau, or instrumentality of the United States of America or any other country or territory, or domestic or foreign state, prefecture, province, commonwealth, city, county, municipality, territory, protectorate or possession.

(f) "Law" means all laws, statutes, ordinances, codes, regulations and other pronouncements having the effect of law of any Government Authority.

(g) "Maintained Item" means  [QR-129]

(h) "Maintenance Services" means the specific Services consisting of Corrections, Revisions and Upgrades. 

(i) "Malfunction" means a malfunction of the Maintained Item that prevents the Maintained Item from performing in accordance with the requirements of this Agreement.

(j) "Priority 1" means a severe Malfunction exists which makes the use of one or more Maintained Item critical functions inoperable or materially decreases the functionality required by this Agreement.

(k) "Priority 2" means a non-severe Malfunction exists which makes the use of one or more Maintained Item functions less operable or decreases functionality as required by this Agreement, but is not a Priority 1 Malfunction. 

(l) "Revision" means a version of the Maintained Item with updates, modifications, patches, fixes, or changes that is a less substantial change to the Maintained Item than an Upgrade, as the version is made generally available to the Maintained Item's customers, and as indicated by a change in the release number to the right of the decimal point. [QR-120]

(m) "Services" means the services Party-1 provides to Party-2 as described in this Agreement.

(n) "Software Deliverables" means the software described in this Agreement.

(o) "Upgrade" means a version of the Maintained Item with major new features or significant enhancements, as the version is made generally available to the Maintained Item's customers, and as indicated by a change in the release number to the left of the decimal point. [QR-121]

2. SERVICES.  Party-1 agrees to provide the following Services: [QR-84]

3. MAINTENANCE SERVICES.

(a) Revisions and Upgrades.  Party-1 agrees to provide Maintenance Services for the current Upgrade as of the Effective Date. Revisions are included with the Maintenance Services fee and are not subject to an additional charge. Upgrades are subject to an additional fee (at the same price Party-1 generally charges its customers) over and above the fee for Maintenance Services. [QR-125]  Party-2 agrees to offer Revisions and Upgrades to Party-1 when and if available.  Each Revision and Upgrade must be functionally compatible with the prior release or version of the Maintained Item, and must comply with the requirements of this Agreement that apply to the Maintained Item.  Party-1 may not be required to install any Revision or Upgrade except: (i) as a prerequisite to installing a subsequent Revision or Upgrade; or (ii) to avoid violation of intellectual property or proprietary rights of a third party, in which case the Revision or Upgrade will be provided at no charge. Revisions and Upgrades must include appropriate changes to the documentation that is generally provided to the Maintained Item's customers.

(b) Corrections.  After Party-1 has informed Party-2 of a Malfunction, and subject to Party-1 reasonably assisting Party-2 in attempting to recreate and diagnose the Malfunction, Party-2 agrees to: (i) provide a progress report to Party-1 within twenty four (24) hours of receiving each request to do so from Party-1, (ii) for Priority 1 level Malfunctions, promptly assign a Party-1 employee to address the Malfunction, provide a response within twenty four (24) hours during Business Hours, and ensure that the assigned employees work continuously during Business Hours until a Correction is provided and (iii) for Priority 2 level Malfunctions, within twenty four (24) hours respond and assign technical support resources, and provide a Correction within a reasonable amount of time and at the same time or sooner than Party-1 provides the Correction to its other customers. In order to remotely address Malfunctions and provide Corrections, Party-2 consents to Party-1 remotely accessing the Maintained Item to do so. [QR-124]

4. DELIVERABLES.  Including the Software Deliverables described below, Party-1 agrees to provide the following Deliverables: [QR-70]

5. SOFTWARE DELIVERABLES.

(a) License Grant.  Party-1 grants Party-2 a perpetual, non-exclusive, worldwide, non-transferable, and non-sublicenseable license to use the Software Deliverables for Party-2's internal business purposes. This license survives the Agreement, but may be terminated in the same way described in the provision entitled "Termination for Breach" in this Agreement. [QR-111]

(b) License Type.  All Party-2 employees may exercise the Software Deliverables license. [QR-110]  [QR-115]

(c) Location.  Subject to any license grant requirements, Party-2 may install and use the Software Deliverables on any computer system(s) or central processing unit(s) selected by Party-2 from time to time. 

(d) Copies.  Party-2 may make one (1) copy of each of the Software Deliverables for testing, backup or archival purposes and not for production use.  In making copies of the Software Deliverables, Party-2 may not remove any copyright or other proprietary rights notices contained in or placed upon the Software Deliverables by Party-1.

(e) Restrictions.  Party-2 may not (except if expressly authorized to do so elsewhere in this Agreement): (a) reproduce, publicly display, publicly perform, distribute, or create derivative works from the Software Deliverables; (b) provide third parties with access to the Software Deliverables under a service bureau, time sharing, or other arrangement; or (c) reverse engineer, decompile, disassemble, or otherwise attempt to derive or access any of the Software Deliverables' source code and/or human readable embodiment.


6. ESCROW.  "Escrow Agent" means the third party escrow agent mutually agreed to by the parties in writing. [QR-106]

(a) Escrow Agreement.  The parties agree to select an Escrow Agent.  Party-1 must keep the escrow updated to reflect the version of the Software Deliverables used by Party-2.  The parties further agree to select and execute one of the Escrow Agent's escrow agreements that the Escrow Agent makes generally available to its escrow customers. [QR-107]  The escrow agreement must contain the following release conditions:

(i) Support Failure.  If Party-1 fails to perform its warranty, maintenance or support contractual obligations after receipt of notice and at least thirty (30) days to cure such failure;

(ii) Insolvency.  If Party-1 becomes bankrupt or insolvent; and

(iii) Additional Release Conditions.  Upon the occurrence of any other release conditions specified in the escrow agreement.  

(b) Escrow Items.  Party-1 agrees to place in escrow for Party-2:

(i) Source Code.  At least one (1) copy of the source code for the Software Deliverables on a computer-readable magnetic medium and a human-readable listing of such source code;

(ii) Documentation.  Two (2) copies of the documentation that Party-1 ordinarily provides to licensees of the Software Deliverables; and

(iii) Technical Documentation.  Technical documentation, program specifications, and any other documentation necessary to enable a reasonably skilled computer programmer to modify, customize, and create derivative works based on the Software Deliverables.

(c) Escrow Release Usage.  Party-2 may reproduce and prepare derivative works of any source code released from escrow and otherwise use such source code to maintain the Software Deliverables, limited to allowing Party-2 to exercise its license to the Deliverables under this Agreement.

7. DEADLINE.  The Services and Deliverables will be provided by the following date: [QR-45]   [QR-85]

8. OWNERSHIP, TITLE AND RISK OF LOSS.  Ownership of, title to, and risk of loss for the Deliverables passes to Party-2 upon Party-1's delivery of the Deliverables to a nationally reputable carrier, fully insured with a nationally reputable insurer (such insurance may be invoiced to Party-2 at cost). [QR-87]  However, ownership, title and risk of loss for the Software Deliverables applies to the copy only and does not extend to the intellectual property and other proprietary rights in the Software Deliverables.  Additionally, if any Software Deliverables are downloaded, ownership of, title to, and risk of loss passes to Party-2 upon Party-2's complete download of the Software Deliverables.

 

9. FEES. Except as expressly stated in this Agreement, there are no additional fees, charges or expenses incurred.  In consideration for Party-1 performing all obligations under this Agreement, Party-2 agrees to pay Party-1 a flat fee of: [QR-89]     Party-1 shall invoice Party-2 for the entire overall flat fee in this Agreement on the date the Deliverables are accepted by Party-2. [QR-92]  As a condition precedent to Party-1 charging the fees stated in this Agreement, Party-2 shall meet the following requirements: [QR-90]  If Party-2 pays within ten (10) days of the date of Party-2's receipt of an invoice, then Party-1 will deduct from the next invoice a credit equal to two percent (2%) of the invoiced amount. [QR-91]  [QR-88]

10. MAINTENANCE SERVICES FEE.  The annual Maintenance Services fee is: TEXTFIELD [QR-127]  Party-1 may invoice Party-2 for the Maintenance Services fee annually and in advance on the first day of each Contract Year.  If Party-2 does not timely pay the Maintenance Services fee, then Party-1 may suspend performance of the Maintenance Services until Party-2 does so, in which case Party-2 must pay the entire Maintenance Services fee for the entire time the Maintenance Services were suspended, plus any additional fee due for the rest of the Contract Year and any subsequent Contract Year.  The Maintenance Services fee may not be increased during any particular Contract Year, but Party-1 may increase the Maintenance Services fee for any subsequent Contract Year. 

11. INVOICES AND TAXES.  Party-2 agrees to pay to Party-1 all fees owed under this Agreement within thirty (30) days after the date of Party-2's receipt of a complete invoice.  A complete invoice is one that contains the invoice number, invoice date, description of the transaction, total invoice amount with miscellaneous charges listed separately and payment terms consistent with and not additional to any provisions under this Agreement. To the extent that the transactions under this Agreement are subject to any sales, use, value added or any other taxes, payment of these taxes, if any, is Party-2's responsibility. Party-1 is liable for any and all taxes on any and all income it receives under this Agreement.

12. WARRANTIES.

(a) Mutual Warranties.  Each party represents, warrants and covenants to the other that:

(i) General.  It: (a) is a company duly organized and validly existing and in good standing under the Laws of its jurisdiction of organization; (b) is qualified or licensed to do business and in good standing in every jurisdiction where qualification or licensing is required; and (c) has the corporate power and authority to negotiate, execute, deliver and perform its obligations under this Agreement.

(ii) Law Compliance.  It complies with all applicable Laws.

(b) Warranties by Party-2.  Party-2 represents, warrants and covenants to Party-1 that:

(i) Warranty Length.  For a period of thirty (30) days after receipt, the Services and Deliverables conform to the requirements of this Agreement, are free from any defect in material and workmanship, and are free of all liens, claims and encumbrances of any kind. [QR-68]

(ii) Infringement.  The Services and Deliverables do not violate any patent, trade secret, or other intellectual property or proprietary rights of any third party, and as of the Effective Date.

(iii) No Litigation.  There is no actual or threatened litigation: (a) that affects its ability to comply with this Agreement, or (b) concerning the Services or Deliverables.

(iv) Services Performance.  The Services are performed in a professional and competent manner, conforming to generally accepted standards applicable to services provided by nationally recognized firms specializing in the area of Services provided under this Agreement. Each of the individuals assigned to provide any Services under this Agreement have the proper skill, training, and background to provide the Services.

(c) Disclaimer. EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT, PARTY-1 AND PARTY-2 EACH MAKE NO REPRESENTATIONS AND EXTEND NO WARRANTIES OR COVENANTS OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

13. LIMITATION OF LIABILITY.  THIS LIMITATION OF LIABILITY PROVISION APPLIES IN THE AGGREGATE AND NOT ON A PER CLAIM BASIS, WHETHER ANY DAMAGES ARE CHARACTERIZED IN TORT, NEGLIGENCE, CONTRACT, OR OTHER THEORY OF LIABILITY, REGARDLESS OF WHETHER A PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF OR COULD HAVE FORESEEN ANY DAMAGES, AND IRRESPECTIVE OF ANY FAILURE OF ESSENTIAL PURPOSE OF A LIMITED REMEDY. THIS LIMITATION OF LIABILITY PROVISION DOES NOT LIMIT A PARTY'S LIABILITY FOR GROSS NEGLIGENCE, INDEMNIFICATION OBLIGATIONS, BREACH OF CONFIDENTIALITY REQUIREMENTS, INTENTIONAL MISCONDUCT, INTENTIONAL TORTS AND INTENTIONAL VIOLATIONS OF LAW. NEITHER PARTY IS LIABLE TO THE OTHER OR ANY THIRD PARTY UNDER THIS AGREEMENT FOR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE, EXEMPLARY, OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR RESULTING FROM THIS AGREEMENT. [QR-33]  EACH PARTY'S LIABILITY SHALL NOT EXCEED THE AMOUNTS PAID UNDER THIS AGREEMENT IN THE ONE (1) YEAR PERIOD PRIOR TO THE DATE THE CLAIM AROSE. [QR-34]

14. INDEMNIFICATION. The term "Claim" means any claim, suit or action by any third party, and the term "Losses" means any damages awarded and fines assessed in any Claim by a court of competent jurisdiction or pursuant to an arbitration proceeding, any amounts due under Claim settlement, and any other costs or expenses incurred in complying with any injunctive or equitable relief or any settlement requirements.

(a) Party Indemnification.

(i) Indemnification by Party-1. Upon receipt of notice from Party-2 requesting Party-1 to do so, Party-1 agrees to indemnify, defend, and hold harmless Party-2 and its affiliates, subsidiaries, shareholders, members, directors, officers, employees, agents, and parents, from and against any Claim, and any associated Losses to the extent caused by violation of any patent, copyright, trademark, trade secret, or other intellectual property or proprietary right due to Party-1 providing the Services or Deliverables (except to the extent a Claim is caused by Party-2's internally created specifications). [QR-71]

(ii) Indemnification by Party-2. Upon receipt of notice from Party-1 requesting Party-2 to do so, Party-2 agrees to indemnify, defend, and hold harmless Party-1 and its affiliates, subsidiaries, shareholders, members, directors, officers, employees, agents, and parents, from and against any Claim, and any associated Losses to the extent caused by violation of any patent, copyright, trademark, trade secret, or other intellectual property or proprietary right to the extent caused by Party-2's internally created specifications or Party-2's use of the Services or Deliverables. [QR-73]

(b) Indemnification Procedures. The term "indemnifying party" means the party assuming indemnification obligations under this Agreement, and the term "indemnified party" means all parties, including any third parties, which the indemnifying party agrees to indemnify under this Agreement.

(i) Notice. The indemnified party must give the indemnifying party prompt written notice of a Claim, provided, however, that failure of an indemnified party to give prompt written notice does not relieve the indemnifying party from its indemnification obligations under this Agreement except to the extent the defense is materially prejudiced by the failure. When the indemnifying party receives notice of a Claim from an indemnified party, the indemnifying party agrees, at its sole cost and expense, to assume the defense of the Claim by representatives chosen by the indemnifying party. The indemnified party may participate in the defense of the Claim and employ counsel at its own expense to assist in the defense of the Claim, subject to the indemnifying party retaining final authority and control over the conduct of the defense.

(ii) Conduct of Defense. The indemnifying party's defense attorneys must be reasonably experienced and qualified in the areas of litigation applicable to the defense. The indemnifying party has the right to assert any defenses, causes of action or counterclaims arising from the subject of the Claim available to the indemnified party and also has the right to settle the Claim, subject to the indemnified party's prior written consent to the extent the settlement affects the rights or obligations of the indemnified party. The indemnified party agrees to provide the indemnifying party with reasonable assistance, at the indemnifying party's expense, as may be reasonably requested by the indemnifying party in connection with any defense, including, without limitation, providing the indemnifying party with information, documents, records and reasonable access to the indemnified party as the indemnifying party reasonably deems necessary.


15. TERM AND TERMINATION.

(a) Term. The term of this Agreement (together with any renewals, the "Term") begins on the Effective Date and expires one (1) year [QR-24] later.  Immediately upon expiration this Agreement automatically renews on the same terms and conditions for additional successive periods of one (1) year on each anniversary of the Effective Date, unless either party gives the other party notice that the Agreement does not renew at least thirty (30) days before the end of the then applicable Term. [QR-18]

(b) Survival.  The following captioned sections survive any termination, expiration or non-renewal of this Agreement: "Disclaimer", "Limitation of Liability", "Indemnification", "Survival" and "General", as well as any other provisions expressly stating that they are perpetual or survive this Agreement.

(c) Termination for Insolvency. If either party is adjudged insolvent or bankrupt, or upon the institution of any proceedings by it seeking relief, reorganization or arrangement under any Laws relating to insolvency, or if an involuntary petition in bankruptcy is filed against a party and the petition is not discharged within sixty (60) days after filing, or upon any assignment for the benefit of a party's creditors, or upon the appointment of a receiver, liquidator or trustee of any of a party's assets, or upon the liquidation, dissolution or winding up of its business (each, an "Event of Bankruptcy"), then the party affected by any Event of Bankruptcy must immediately give notice of the Event of Bankruptcy to the other party, and the other party may terminate this Agreement by notice to the affected party.

(d) Termination for Breach.  If either party breaches any provision contained in this Agreement, and the breach is not cured within thirty (30) days after the breaching party receives notice of the breach from the non-breaching party, the non-breaching party may then deliver a second notice to the breaching party immediately terminating this Agreement.

[QR-17]

16. FORCE MAJEURE.   Any failure or delay by a party in the performance of its obligations under this Agreement is not a default or breach of the Agreement or a ground for termination under this Agreement to the extent the failure or delay is due to elements of nature or acts of God, acts of war, terrorism, riots, revolutions, or strikes or other factor beyond the reasonable control of a party (each, a "Force Majeure Event"). The party failing or delaying due to a Force Majeure Event agrees to give notice to the other party which describes the Force Majeure Event and includes a good faith estimate as to the impact of the Force Majeure Event upon its responsibilities under this Agreement, including, but not limited to, any scheduling changes. However, should any failure to perform or delay in performance due to a Force Majeure Event last longer than thirty (30) days, or should three (3) Force Majeure Events apply to the performance of a party during any calendar year, the party not subject to the Force Majeure Event may terminate this Agreement by notice to the party subject to the Force Majeure Event.

17. GENERAL.  Entire Agreement and Amendments. This Agreement is the entire agreement between the parties and supersedes all earlier and simultaneous agreements regarding the subject matter, including, without limitation, any invoices, business forms, purchase orders, proposals or quotations. This Agreement may be amended only in a written document, signed by both parties. Independent Contractors, Third Party Beneficiaries, and Subcontractors.  The parties acknowledge that they are independent contractors under this Agreement, and except if expressly stated otherwise, none of the parties, nor any of their employees or agents, has the power or authority to bind or obligate another party.  Except if expressly stated, no third party is a beneficiary of this Agreement. The parties may not subcontract any of their obligations under this Agreement. [QR-63] Governing Law and Forum.  All claims regarding this Agreement are governed by and construed in accordance with the Laws of TEXTFIELD [QR-27], applicable to contracts wholly made and performed in such jurisdiction, except for any choice or conflict of Law principles, and must be litigated in TEXTFIELD [QR-28], regardless of the inconvenience of the forum, except that a party may seek temporary injunctive relief in any venue of its choosing.  The parties acknowledge and agree that the United Nations Convention on Contracts for the International Sale of Goods is specifically excluded from application to this Agreement.  Assignment.  This Agreement binds and inures to the benefit of the parties' successors and assigns.  Either party may assign, delegate, sublicense or otherwise transfer this Agreement, or any right or obligation under this Agreement, to a third party. [QR-46]  No Waivers, Cumulative Remedies.  A party's failure to insist upon strict performance of any provision of this Agreement is not a waiver of any of its rights under this Agreement. Except if expressly stated otherwise, all remedies under this Agreement, at Law or in equity, are cumulative and nonexclusive.  Severability.  If any portion of this Agreement is held to be unenforceable, the unenforceable portion must be construed as nearly as possible to reflect the original intent of the parties, the remaining portions remain in full force and effect, and the unenforceable portion remains enforceable in all other contexts and jurisdictions.  Notices.  All notices, including notices of address changes, under this Agreement must be sent by registered or certified mail or by overnight commercial delivery to the address set forth in this Agreement by each party.  Captions and Plural Terms.  All captions are for purposes of convenience only and are not to be used in interpretation or enforcement of this Agreement.  Terms defined in the singular have the same meaning in the plural and vice versa.



IN WITNESS WHEREOF, the parties execute this Agreement as of the Effective Date. Each person who signs this Agreement below represents that such person is fully authorized to sign this Agreement on behalf of the applicable party.

PARTY-1

By: __________________________________
Print Name: ___________________________
Title: ________________________________

PARTY-2

By: __________________________________
Print Name: ___________________________
Title: ________________________________