SOFTWARE DEVELOPMENT
AGREEMENT
Master
Development Agreement Retaining Developer For Specific Project
Developer retains Copyright – License To Customer
THIS SOFTWARE DEVELOPMENT AGREEMENT (“Agreement”) is made and entered into on this _______ day of ______________________________, 20____, by and between _________________________________________, a _______________, ____________________ (hereinafter referred to as the “Customer”) and _________________________________________, a _______________, ____________________ (hereinafter referred to as the “Developer”).
A. The Customer is a [corporation] organized under the laws of the State of _______ who operates a [Describe business briefly] with principal business offices located at [Address].
B. The Developer is a [corporation] organized under the laws of the state of ____________ which provides software development and programming services by and through various employees and contractors.
C. Customer wishes to have certain Software Programs (“Software Programs”) developed by the Developer as described in the Software Specifications attached hereto as Exhibit “A” (“Specifications”) and wishes to acquire a perpetual license to use such Software Programs.
D. The Developer has expertise in the areas desired by the Customer and Developer wishes to accept the assignment to provide services to the Customer pursuant to the terms and conditions set forth in this Agreement.
NOW THEREFOR, the parties hereto, intending to be legally bound by the terms hereof, herby enter into the following agreements:
ARTICLE
I
1.1 Commencement of Development. Developer shall commences development work on the Software Programs within ____ (____) days following the complete execution of this Agreement by both parties and upon payment of the initial development fee payment provided for in this Agreement. Such Software Programs shall be created substantially in conformance with the Specifications attached hereto as Exhibit “A.”
1.2 Changes To Specifications. The parties expect that there will be some changes to the Specifications after acceptance by both parties. Requests for changes shall be proposed by the Development Coordinators or the Technical Coordinators, but shall not be effective without the written consent of both parties. Prior to acceptance of any change requests, the parties shall cooperate to equitably determine the impact on pricing, time commitments, scheduling and deadlines and other project factors and reflect these changes in the change order. All change orders must be approved and executed by the Development Coordinators of each party. Developer may not decline any changes in Specifications provided that Developer has ample staffing to meet any increased demands, Developer has ample expertise to fulfill the technical requirements of such changes, reasonable adjustments are made to project scheduling and deadlines, appropriate adjustments are made to the compensation for the project, the changes requested are reasonably achievable from a technical standpoint, and the changes are reasonable in scope.
1.3 Plan of Development. The development of the Software Program shall be conducted substantially in compliance with the Plan of Development attached hereto as Exhibit “B.” (hereinafter referred to as “Plan of Development”). The Plan of Development includes a description of the various steps involved in the development process, various development phases with a description of the milestones to be achieved in each stage, estimated dates of completion for each phase of development, allocation of tasks for each phase and a listing of items and input to be provided by the Customer for each phase, and definition of the Deliverables to be provided at the end of each phase and upon completion of the development process. The Development Coordinators shall periodically review the Plan of Development during the project and discuss any necessary revisions as the project moves forward. Developer shall devote sufficient time and effort and shall allocate sufficient personnel resources to the project as may be required for the development and testing thereof. Developer shall conduct and conclude such development and tests in a professional manner, incorporate into the final version such modifications as the tests indicate are necessary, and conduct such further tests as may be required in the circumstances. Developer shall not be in default for failure to meet these timetable goals provided that the overall project is proceeding in a reasonable fashion and Developer is substantially achieving project objectives. Developer shall inform the Customer of factors that will lead to delays such as labor shortages, technical difficulties, competing projects, mechanical problems and other factors.
ARTICLE II
2.1 Appointment of Development Coordinators. Each party shall appoint a single individual from its respective organization, which shall be reasonably acceptable to the other party, to act as Development Coordinator to represent the interests of the party in connection with the Development process. The Development Coordinators of the parties shall communicate with each other on a regular periodic basis to assure the smooth administration of the Development process and the coordination of activities between the parties.
2.2 Functions of Development Coordinators. The Development Coordinators shall be the primary non-technical contact between the parties relative to development projects. The Development Coordinators shall arrange all non-technical meetings and communications between the parties and shall be the primary point of contact relating to the progress made and decisions to be made with respect to the development projects. All notices between the parties shall be presented to the Development Coordinators. All administrative matters relating to the development projects shall be communicated through the Development Coordinators. Each of the Development Coordinators shall be responsible for communicating within their respective organizations and procuring the input of management and others who are necessary for the achievement of project goals.
2.3 Technical Coordinator. Each party shall appoint a single individual with a technical background from its respective organization, which shall be reasonably acceptable to the other party, to act as Technical Coordinator to represent the interests of the party in connection with the Development process. The Technical Coordinators of the parties shall communicate with each other on a regular periodic basis regarding technical issues involved in the development process to assure the smooth administration of the Development process and the coordination of activities between the parties.
ARTICLE III
3.1 Project Pricing. Customer shall pay to the Developer a Development Fee equal to $______ for the development of the Software Programs. Such Development fee shall be paid in the installments set forth in the Plan of Development based upon project milestones indicated therein.
3.2 Timing of Payments. All payments shall be due upon achievement of the milestones set forth in the Plan of Development. Customer shall be in default under this Agreement if payment is not received within ____ (___) days following such dates unless the Customer disputes the invoice in good faith. Upon default in payment, Developer is authorized to suspend work hereunder until the default is cured by payment in full. In the event that such default is not cured within ____ (____) days following invoice, the Developer may terminate this Agreement by written notice to the Customer. Upon such termination, Developer shall have no further obligations under this Agreement but all payments due through the date of such terminate shall remain due and payable and Developer may take any and all actions necessary to collect the same, including but not limited to withholding delivery of any work product produced.
3.3 Project Expense Reimbursement. The fee to be paid to the Developer shall be exclusive of expense reimbursement which shall be treated separately. All such expenses shall be due and payable upon invoice to Customer. Alternatively, Developer may request that such expenses be paid directly by the Customer or paid in advance to the Developer. The parties shall use their reasonable efforts to estimate expenses when creating the Plan of Development. Expenses may include such items as (I) postal charges, federal express, facsimile charges, long distance telephone charges, and other costs of project specific communications, (ii) costs of purchasing or licensing graphics, sound, or other content form third parties, (iii) costs of any special software or hardware that is necessary to complete the specific development task for the project, (iv) travel expenses, (v) costs of acquiring or leasing any special development tools made necessary by the nature of the project, and (vi) all other expenses identified by the parties in the Plan of Development. Expense items shall not include items that a within the normal overhead and operating expenses of the Developer.
3.4 Project Deposit. Upon acceptance of this Agreement, the Customer shall deliver to the Developer a deposit in an amount equal to %______ of the total estimated project costs. Such deposit shall be non-refundable to the Customer and shall be deemed earned by the Developer upon receipt thereof. The Developer shall credit the deposit to the last payment due by the Customer.
3.5 Taxes On Fees. The fees set forth above are exclusive of taxes. Customer shall be responsible for all taxes, levies, and assessments, excepting taxes based on the net income of Developer, and shall, upon receipt of notice from Developer, promptly pay, or if Developer has paid any such amounts, reimburse Developer for all such taxes, levies, or assessments.
3.6 Verification Records. Developer shall maintain accounting, time, and other records as are necessary to verify any amount to be paid by the Customer hereunder. Upon any dispute of any invoice, Developer shall provide backup records to support the invoice that is questioned if applicable.
ARTICLE IV
4.1 Delivery. Upon completion of the Software Program, Developer shall notify the Development Coordinator for the Customer. The Development Coordinators for each party shall then arrange the logistics of making delivery of the Deliverables (as defined herein) and for performing acceptance testing. Upon delivery, the Development Coordinators shall prepare and execute a mutually acceptable “Delivery Certificate.”
4.2 Acceptance Testing Procedures. The Development Coordinators for each party, with input and involvement from the Technical Coordinators for each party, shall, during the course if the development project, establish mutually agreeable acceptance testing procedures to be performed on completion of the project.
4.3 Performance of Acceptance Testing. Upon delivery, the parties shall reasonably cooperate in good faith to perform the agreed acceptance testing procedures. In no event shall the acceptance testing process last more than ____ (____) days following delivery, unless specifically provided in the agreed acceptance testing procedures for the project. Following the performance of acceptance testing, Customer shall, acting in good faith, give written notice of acceptance or rejection of the Deliverables. In the event the Deliverables are rejected, Customer shall detail the reasons for such rejection in the written notice. Additionally, the Customer shall identify with specificity the portions of the acceptance tests that form the basis for the rejection. In the event that such written notice is not provided within _____ (____) days following delivery, the Customer shall be deemed to have accepted the Deliverables. Following receipt of notice of rejection, Developer shall use reasonable diligence to correct any deficiencies cited in good faith by the Customer and to resolve any Customer concerns over the Deliverables.
PROPRIETARY
RIGHTS
5.1
License of Software. Upon payment in full of all amounts due to the Developer, the
Developer shall grant to the Customer a perpetual, world-wide, nontransferable
license to the object code version of the Software Program, subject to the
terms and conditions of this Agreement.
Such license shall be limited to the right to install the computer software portion of Subject Programs on computer systems owned, leased,
or controlled by Customer, utilize the
Software Programs for its own internal purposes, and make sufficient copies of
the Software Program for backup purposes and as reasonably necessary to
exercise the right to use the Software Programs as permitted hereunder. This Agreement shall not provide Customer
with the right of ownership or title in and to the Software Programs but
rather, Customer’s rights shall be limited to the scope of license provided
herein. Customer shall not take any
action or permit any occurrence that would create a lien or encumbrance on the
Software Program or the copyright thereto, or create any cloud on Developer’s
title thereto. Customer shall not use
the Software Program in such a manner that may infringe upon the rights of any
other party.
5.2 Exclusivity. The license granted to the Customer hereunder [shall/shall not] be exclusive to the Customer.
5.3 Pre-Existing Works. In the event that the Deliverables include any pre-existing works created by the Developer or any other party, the Developer hereby grants, and shall arrange for applicable third parties to grant, a perpetual, non-exclusive, royalty free license to use such pre-existing works in connection with the Deliverables.
5.4 Infringement On Third Party Rights. The Developer agrees to use reasonable diligence to avoid infringement on the proprietary rights of any third party in performance of the creation of Deliverables. The Developer agrees that all aspects of the Deliverables shall be original works of creation and shall not use, in whole or in part, any work created by any other party, except, where specifically disclosed by the Developer to the Customer and where a license to use such items is obtained for the benefit of the Customer. All such licenses shall be royalty free, perpetual, world-wide licenses, sufficient in scope to permit Customer’s full use and enjoyment of the Deliverables, except where specifically agreed in writing by the Customer.
5.5 Inventions. The parties intend that all inventions and creations developed by Developer in the course of the development project, conditioned on full and complete payment of all amounts due to Developer hereunder, shall be the property of the Developer, subject only to the license granted hereunder. For purposes of this Agreement, Inventions shall mean and include any and all ideas, concepts, discoveries, designs, improvements, and creations, regardless of whether the same are patentable or protected under any Federal of State law, rule or regulation or under the common law of any state, or under International law.
5.6 Reservation of Proprietary Rights In Developer. Customer acknowledges and agrees that the Development Fee applicable to this project was negotiated based upon the Developer retaining the copyright and all other proprietary rights in and to the Software Programs and other Inventions created hereunder and that the Development Fee would have been substantially greater had the Developer not retained the copyright in and to such items. Therefore, Customer represents, acknowledges and agrees that the Software Programs are valuable trade secrets and proprietary property of the Developer. Customer further acknowledges and agrees that Developer retains all copyrights and proprietary rights in and to the Software Programs. Customer agrees to refrain from any copying, distribution, or other infringements on the exclusive rights of the Developer as the copyright owner of the Software Programs, except as specifically permitted in the license granted hereunder. Customer agrees to maintain the confidentiality of the Software Programs and to protect the same as trade secrets of the Developer. Customer further agrees to immediately notify the Developer of any third party infringement on the Developer’s rights of which the Customer may become aware.
5.7 Confidential Information. Customer shall not, at any time, disclose or disseminate the trade secrets embodied in the Subject Programs or any supporting program documentation to any other person, firm, organization, or employee who does not need to obtain access thereto consistent with Customer's rights under this Agreement. Under no circumstances may Customer modify, reverse compile, or reverse assemble the object code contained within the Subject Programs. Under no circumstances may Customer disclose or disseminate such trade secrets to any competitor of Developer. Customer shall devote Customer' s best efforts to ensure that all persons afforded access to the Subject Programs and all supporting program documentation protect Developer's trade secrets against unauthorized use, dissemination, or disclosure.
5.8 Copyright Notice. Customer shall cause to be placed on any and all copies or physical embodiments of the Software Program (to the extent permitted hereunder), a notice which complies with the United States Copyright Laws and indicates Developer as the owner of the Copyright in and to the Software Program.
ARTICLE VI
6.1 Independent Contractors. Developer shall use only bona fide employees to conduct all aspects of the development project, unless independent contractors are specifically consented to by the Customer. In the event Independent contractors are used and consented to by the Customer, Developer shall obtain from such independent contractors written assignments of all items developed by or contributed to by such independent contractor in the course of their work on the development project and an agreement that all such items are created as “works for hire” under the copyright laws and are the sole and exclusive property of the Customer. Independent Contractors shall also be required to execute a confidentiality agreement in favor of the Customer.
6.2 Employees. Developer shall enter and maintain in full force and effect, written agreements with all of its employees in which the employees acknowledge that all work performed in the course of the development project are “works for hire” and are the property of the Customer. Additionally, employees shall enter a confidentiality agreement agreeing to maintain the confidentiality of all information relative to the Customer.
ARTICLE VII
7.1 Basic Support Services. For a period of ______ (____) months following delivery of the Deliverables and final acceptance thereof by the Customer, Developer shall provide certain support services to the Customer related to the Software Program including the following: (i) telephone support regarding operation and use of the Software Program during the Developer’s normal business hours and (ii) such further programming services to correct any demonstrated errors in the operation of the Software Programs which are necessary to enable the Software Program to operate substantially in accordance with the Specifications.
7.2 Compensation For Support Services. Customer shall compensate Developer at Developer’s then published rates for providing such support services that are necessary after acceptance of the Software Program. Additionally, Customer shall be responsible for paying or reimbursing Developer for all costs and expenses reasonably incurred by the Developer resulting from the provision of the support services. All compensation for support services shall be paid within 10 days following invoice therefore. Developer may require the Customer to pay an estimated amount for such services in advance of performing any support services hereunder. In the event that the Customer fails to make any payment within 10 days of invoice, or if the Customer fails to pay any amount required by the Developer in advance, Developer shall not have any obligation to perform support services.
7.3 Customer Responsibilities. Customer shall not attempt to correct an errors in the Software Programs or do anything to alter or modify any programming code. Customer shall promptly report any errors in the operation of the Software Program to the Developer and shall not take any actions that would increase the severity of the error. Customer shall use the Software Programs only for its intended purpose and only in the manner intended. In the event that the Customer violates any of the requirements of this Section, the Developer shall have no responsibility to provide support services, these requirements being express preconditions to the availability of Developer support services hereunder.
7.4 Place of Support Services. All support services shall be provided by the Developer from the Developer’s facility, or through electronic access to the Customer’s computers, unless the Developer determines, in its sole and absolute discretion, that it is necessary to perform such services at the Customer’s facilities.
ARTICLE VIII
8.1 Performance. Developer represents and warrants that service hereunder shall be performed in a workmanlike manner consistent with industry standards, that all Deliverables shall function substantially in compliance with agreed specifications, and that its shall perform all development tasks in compliance with all applicable state, federal and local laws, rules and regulations..
8.2 Pre-Existing Works. Developer represents and warrants that Customer, upon payment in full of all amounts due hereunder, shall have a perpetual, royalty free, worldwide license to use and pre-existing works, whether developed by the Developer or by and other party, which are used in connection with the Deliverables.
8.3 Warranty Disclaimers. Other than as specifically set forth in this Agreement, THE DELIVERABLES ARE DELIVERED TO CUSTOMER ON AN "AS IS" BASIS, WITHOUT ANY WARRANTIES OR REPRESENTATIONS EXPRESS, IMPLIED, INCLUDING, WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, QUALITY, PERFORMANCE OR NONINFRINGEMENT UPON THE RIGHTS OF ANY OTHER PARTY. DEVELOPER MAKES NO WARRANTY THAT THE DELIVERABLES WILL MEET CUSTOMER'S SPECIFIC OBJECTIVES OR NEEDS OR THAT THE DELIVERABLES WILL BE FREE FROM ERRORS OR BUGS. DEVELOPER MAKES NO WARRANTY THAT THERE WILL BE UNINTERUPTED OPERATION OF THE DELIVERABLES. CUSTOMER ACKNOWLEDGES AND AGREES THAT THE FOREGOING EXCLUSIONS AND DISCLAIMERS OF WARRANTIES ARE AN ESSENTIAL PART OF THIS AGREEMENT AND FORMED THE BASIS FOR DETERMINING THE PRICE CHARGED FOR THE PRODUCTS.
8.4 Limitation On Damages. In no event will Developer be liable for any incidental, special or consequential damages in spits of the fact that the Customer acknowledges that Customer has been fully advised that such damages are possible. Under no circumstances will damages assessed against Developer exceed the development fee (exclusive of costs and expenses) actually paid to the Developer.
8.5 Third Party Claims. Developer shall not liable for claims made against the Customer or the Developer arising out of Customer’s use or ownership of the Deliverables and Customer hereby indemnifies and holds the Developer harmless from and against any and all claims, of every nature or type, that may be brought or asserted by any other party.
ARTICLE IX
9.1 Term. This Agreement shall be effective upon execution hereof by both parties and shall remain in full force in effect for a period of _____ (____) years from the effective date; provided, that any license to use the Software Program contained herein shall be perpetual unless sooner terminated pursuant to the terms hereof. The obligation to provide support services following acceptance shall terminate following the expiration of the period described in the Article applicable to support services.
9.2 Termination Without Cause. Either party may terminate this Agreement prior to completion of the development project, with or without cause, by giving ____(_____) days prior written notice of termination to the other party.
9.3 Termination For Cause. Either party may terminate this Agreement for cause in the event that the other party substantially defaults under any term or condition contained herein; provided that if the termination is against the Developer based upon the performance or lack of performance of the Developer’s development responsibilities, the Developer shall first be given thirty (30) days advanced written notice specifying the alleged deficiency in detail and Developer shall have such thirty (30) day period to reasonably cure the alleged default.
9.4 Termination Prior To Completion. Upon any early termination prior to completion of development, the Developer shall immediately cease work on the relevant project and shall issue an invoice to the Customer for all work performed through the date of termination. The final invoice shall be due and payable by the Customer upon receipt thereof.
9.5 Survival of Certain Provisions. In the event of any termination, the following provisions shall continue in full force and affect: (i) the obligation of the Customer to make payments due hereunder to the Developer, (ii) confidentiality provisions, and (iii) representations and warranties as to proprietary rights of the Deliverables.
ARTICLE X
10.1 Excusable Delays. Any delay or nonperformance of any provision of this Agreement caused by conditions beyond the reasonable control of Developer shall not constitute a breach of this Agreement, provided that Developer has taken reasonable measures to notify Customer of the delay in writing and uses reasonable efforts to perform in accordance with this Agreement notwithstanding such conditions. The delayed party's time for performance shall be deemed to be extended for a period equal to the duration of the conditions beyond its control. Conditions beyond a party's reasonable control include, but are not limited to, natural disasters, acts of government after the date of the Agreement, power failure, fire, flood, acts of God, labor disputes, riots, acts of war and epidemics.
10.2 Notices. Any notification or written communication required by or contemplated under the terms of this Agreement shall be in writing and shall deemed to be delivered if transmitted via Email at the Email addresses listed below, except for any notice of termination of this Agreement which shall be in writing and sent by United States Mail, Certified Mail, Return Receipt Requested and shall be deemed to have been delivered five (5) business days after the date of mailing. Addresses and Email addresses for such notices shall be:
If To Developer: _____________________________________________
If To Customer: ______________________________________________
10.3 No Assignment. The Services to be performed by Developer hereunder are personal in nature, and Customer has engaged Developer as a result of Developer's unique expertise relating to such Services. Neither this Agreement nor any right, interest, duty or obligation hereunder may be assigned, transferred or delegated by Developer without the express written consent of Customer which consent may be withheld in the discretion of the Customer.
10.4 Independent Contractor Status. The parties agree that Developer shall be an independent contractor and not an agent, employee or representative of Customer. Customer shall have no right to direct or control the details of the Developer’s work. Developer shall not receive any fringe benefits or other perquisites that the Customer may provide to its employees and Developer agrees to be responsible for its own business overhead and costs of doing business and to furnish (or reimburse Customer for) all tools and materials necessary to accomplish the services required of the Developer pursuant to this Agreement, and shall incur all expenses associated with performance, except as expressly provided in Exhibits or amendments to this Agreement. Developer shall be responsible for paying all taxes on payments received pursuant to this Agreement and that Customer shall have no obligation to withhold taxes from service fees payable to the Developer hereunder. Developer hereby indemnifies and holds the customer harmless any obligation that may be imposed on Customer (i) to pay in withholding taxes or similar items or (ii) resulting from Developer's being determined not to be an independent contractor.
10.5 Arbitration. Except as specifically provided in this Agreement, the parties agree that any dispute or controversy arising out of, relating to or in connection with the interpretation, validity, construction, performance, breach or termination of this Agreement shall be submitted to binding arbitration to be held in _____________ in accordance with the rules of the American Arbitration Association (the "Rules"). The decision of the arbitrator shall be final, conclusive and binding on the parties to the arbitration. Judgment may be entered on the arbitrator's decision in any court of competent jurisdiction. The parties shall each bear their own attorney fees with respect to such Arbitration but shall share equally the other costs and expenses of arbitration.
10.6 Controlling Law. In interpreting the terms of this Agreement, the parties agree that the laws of the State of ___________ shall be applicable. All suits permitted to be brought in any court shall be venued in __________ County, State of ____________.
10.7 This Agreement contains the entire agreement and understanding of the parties with respect to the subject matter hereof and supercedes and replaces all prior discussions, agreements, proposals, understandings, whether orally or in writing, between the parties related to the subject matter of this Agreement. This Agreement may be changed, modified or amended only in a written agreement that is duly executed by authorized representatives of the parties. If any provisions hereof is deemed to be illegal or unenforceable by a court of competent jurisdiction, the enforceability of effectiveness of the remainder of the Agreement shall not be effected and this Agreement shall be enforceable without reference to the unenforceable provision. No party’s waiver of any breach or accommodation to the other party shall be deemed to be a waiver of any subsequent breach.
IN WITNESS WHEREOF, the parties hereto have duly entered and
executed this Agreement as of the day and year first above written and
represent and warrant that the party executing this Agreement on their behalf
is duly authorized.