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Software License Agreement

1. Parties. Agreement between [name], a [state] corporation, having an office at [address] (Owner), and [name], a [state] corporation, having an office at [address] (Customer).

2. License. Owner grants to Customer, and Customer accepts, a nonexclusive license to use the programs (the Programs) and the optional materials (the Optional Materials) listed on Exhibit A [omitted] and additional programs and optional materials that Customer orders under this Agreement.

3. Term. This Agreement will start on [date] and remain in force until terminated by Customer or Owner. Customer may terminate this Agreement in whole or as to any Program or Optional Materials by [number] months' prior written notice to Owner. Owner may terminate or discontinue this Agreement if Customer fails to comply with the terms of this Agreement or as provided in Paragraphs 16 and 22.

If any Program license terminates, the license for all related Optional Materials will also terminate.

4. Charges.

a. Amount and Payment. Monthly charges payable for the licensed Programs and Optional Materials are specified in Exhibit A. Monthly charges will start [period] after shipment of the Program or Materials to Customer, and are payable no later than the [number] day of each following calendar month. Charges for part of a month will be prorated.

b. Change. Owner may change the monthly charge(s) on [number] months' prior written notice to Customer.

c. Additional Charges. Customer will pay any initial charge due for any licensed Program or Materials, in addition to the monthly charges, after receipt of an invoice for such charge and within [number] days of shipment of the Program or Materials.

d. Taxes. Customer will pay all taxes levied or based on this Agreement, the charges payable under it, on the Programs and Optional Materials, or on their use. Any such taxes payable by Owner (other than (i) taxes based on Owner's income or (ii) personal property taxes assessed against the Programs or Optional Materials) may be added to the monthly charges due under this Agreement.

5. Use Specifications.

a. Definitions. For purposes of this Agreement, the following definitions govern:

i. "CPU" means central processing unit and includes associated units when referring to designated CPUs; and

ii. "Use" means the copying of any part of the instructions or data of the Program or Optional Materials from storage units into the CPU for processing.

b. Use Authorization. The Program or Optional Materials are licensed for use in any machine-readable form on a CPU designated for such use in writing by Customer by type and serial number. Any other existing license from Owner for the same product can also be used on the designated CPU. Customer may also use licensed Programs and Optional Materials in printed form in support of the use of such Programs or Optional Materials in machine-readable form.

c. Separate License Requirements. A license is required for each CPU if the Program or Optional Materials will be used on more than one CPU. However, any license granted under this Agreement is extended to any other CPU if the designated CPU is inoperative due to malfunction, preventive maintenance, or features and/or engineering changes, until the designated CPU is operative.

d. Change of CPU Designation. Customer may, by written notice to Owner, change the designation of the CPU on which a Program or Optional Materials will be used. Such change will be effective on the date specified by Owner in a written amendment to this Agreement sent to Customer.

6. Additional Licenses. Customer may request additional licenses for previously licensed Programs or Optional Materials or for additional Programs or Optional Materials. Customer's request must contain a reference to this License Agreement. Such licenses are effective only after acceptance by Owner and are subject to the terms of this Agreement.

7. Basic Materials. Any basic materials, in machine-readable or printed form, provided by Owner for or with any Programs are governed by the terms of the license granted under this Agreement for such Program.

8. Optional Materials. Any Optional Materials offered by Owner are available to Customer only if Customer has a license of the Programs to which such Optional Materials relate.

9. Delivery. Owner's Programs will be shipped within [number] months after confirmation of Customer's order or within [number] months after they are available from Owner's program information department library, subject, however, to conditions beyond Owner's control. Customer may request a later delivery date. Programs will be shipped to Customer without charge. Storage items for Programs (magnetic tapes and disks) will be provided at Customer's expense if Customer does not supply them.

10. Risk of Loss. Programs or Optional Materials damaged or lost in shipment to Customer will be replaced by Owner at no cost to Customer. Programs or Optional Materials damaged or lost while in Customer's possession will be replaced by Owner at no charge except charges for storage items (magnetic tape and disks) if they are not supplied by Customer.

11. Programming Service.

a. Classification of Programs. Each Program is classified by Owner into a service classification, as described in Paragraph 11b and provided for in Exhibit A. Additional Program licenses will also be classified by Owner. Owner may, by [number] months' prior written notice to Customer (except as provided in Paragraph 16c), change the service classification of any Program.

b. Types of Classes and Services. The following programming services will be provided to Customer to correct Program errors:

i. Class A. For Class A Programs, if a defect is found by Owner's field-engineering analysis to be caused by a defect in the current version of a Program, Owner will report the defect to a central programming service location for correction. If the Program is inoperable, Owner will use reasonable efforts to apply a temporary fix or develop a bypass. The central programming service will release a corrected program or issue a notice of its availability. Any other programming services or assistance will be provided at Customer's expense.

ii. Class B. For Class B Programs, if a defect is found by Customer's engineering analysis to be caused by a defect in the current version of a Program, Customer may submit a report to the central programming service. The central programming service will release a corrected program or issue a notice of its availability. At Customer's request, Owner's central programming service will assist Customer in performing the engineering analysis and, if the Program is inoperable, use reasonable efforts to apply a temporary fix or develop a bypass. Any other programming services or assistance will be provided at Customer's expense.

iii. Class C. For Class C Programs, Owner will neither provide a central programming service for corrections nor issue a corrected program release. All programming services or assistance will be provided at Customer's expense.

c. Additional Charges. Owner may charge Customer for all additional costs and charges resulting from additional work in connection with any programming services resulting from Customer's modifications of Programs or Customer's use of Programs that are not the most recent versions of the Programs.

12. Design and Specification Announcements.

a. Design Objectives. Owner will publish design objectives and estimate dates of availability for all Programs available for licensing. Owner does not, however, represent or warrant that such design objectives or dates of availability will be met.

b. Specifications and Descriptions. Owner will publish

i. Product specifications for each Program classified in programming service classification A or B; or

ii. A functional description for each Program classified in programming classification C as the program is included in Owner's program information department library.

13. Copying of Programs and Optional Materials.

a. Printed Form. Customer may not copy all or any part of any Program or Optional Materials provided in printed form. Customer may obtain additional copies from Owner at the charges then in effect.

b. Machine-Readable Form. Customer may copy all or any part of Programs or Optional Materials provided in machine-readable form. Copies may be made in printed or machine-readable form. Copies are only authorized, however,

i. In sufficient quantities for use by Customer with the designated CPU;

ii. In order to understand the contents of machine-readable items;

iii. In order to modify the Program, as permitted in Paragraph 14; or

iv. For archive or emergency backup use.

Customer may have no more than [number] printed copies and [number] machine-readable copies at any one time.

c. Ownership. All originals and all copies, whether whole or partial, of all Programs and Optional Materials are owned by Owner.

d. Recordkeeping. Customer will maintain records of the number and location of all copies it makes of Programs or Optional Materials.

e. Location. Customer will keep the original and all copies of Programs and Optional Materials at the location of the designated CPU, but it may move originals and copies to another location after written notice to Owner identifying their new location. Notice is not required if the original or a copy is transmitted to another location for backup use due to CPU malfunction,. but such original or copy must either be returned to its prior location or be destroyed, if it is a copy, when the malfunction is corrected.

14. Modifications. Customer may modify Programs and Optional Materials that are in machine-readable form for Customer's own use and may merge them into other program material. However, on termination of the license for such Program or Optional Materials, the Program and/or Optional Materials provided by Owner must be separated and will otherwise be dealt with under this Agreement as if no permission to modify was granted. In addition, any part of a Program or Optional Materials merged into another program may only be used on the designated CPU, except as otherwise provided in Paragraph 5, and remains subject to all the terms of this Agreement.

15. Copyright Notice. Customer will reproduce and include Owner's copyright notice on any copy of Programs or Optional Materials and any parts modified and/or merged into another program.

16. Patent and Copyright Actions and Indemnification.

a. Obligation to Defend. Owner will, at Owner's expense, defend any action brought against Customer that is based on a claim of U.S. copyright or patent infringement by any Program or Optional Materials used within the scope of the license granted under this Agreement. Customer must promptly inform Owner, in writing, of any claim and allow Owner to control the defense of such action and agree to any settlement of claims.

b. Liability. Owner will pay all damages and costs awarded, or that result from Owner's settlement of claims, in any action satisfying the conditions described in Paragraph 16a.

c. Right to Alter or Discontinue. If any Program or Optional Materials are, or, in Owner's opinion, are likely to be, the subject of a copyright or patent infringement claim, Owner may:

i. Obtain the right to continue using the Program or Optional Materials; or

ii. Replace or alter the Program or Optional Materials to make them noninfringing.

If, in Owner's opinion, neither of these alternatives is reasonably available, Owner may discontinue the license for the Program or Optional Materials upon written notice to Customer. Upon notice of discontinuance, the Program shall become a Class C Program for purposes of Paragraph 11.

d. Limitation of Liability. Owner has no liability for patent or copyright infringement claims based on:

i. Use of other than the latest, unaltered version of a Program or Optional Materials if the infringement would have been avoided by use of the latest, unaltered release; or

ii. Use or combination of a Program or Optional Materials with programs or data not owned or supplied by Owner if the infringement would have been avoided by use or combination solely of Programs or Optional Materials licensed under this Agreement.

The provisions of this Paragraph 16 set out Owner's entire liability for patent or copyright infringement of the Programs or Optional Materials.

17. Limited Access. Customer will not make any Program or Optional Material available to any person, other than Customer's employees and Owner's representatives and employees, without Owner's prior written consent.

18. Customer's Supervisory Duties.

a. Product Supervision Responsibility. Customer is solely responsible for supervision of Customer's use of the Programs and Optional Materials, including:

i. Ensuring proper program installation, machine configuration, operating methods, and audit controls;

ii. Establishing adequate backup plans to diagnose and repair defects in Programs, in the event of a malfunction; and

iii. Implementing adequate procedures to satisfy Customer's requirements for security, accuracy of input and output, and restart and recovery in the event of a program malfunction.

b. Employee Responsibilities. Customer will take all necessary and appropriate action with respect to Customer's employees, and all other persons to whom Customer grants access to Programs or Optional Materials, to ensure compliance with Customer's obligations under this Agreement regarding the use, copying, alteration, protection, and/or security of Programs and Optional Materials.

19. Warranty. Programs in service classification A or B will conform to Owner's published program product specifications on delivery to Customer. Owner will ship sample data with such Programs to assure Customer that Customer has received a valid copy. Programs in service classification C are provided "as is," without warranty.

THE WARRANTY STATED ABOVE IS IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

20. Limitation of Liability.

a. Amount. Owner's liability for damages with respect to this Agreement and the licenses provided, except for liability for patent or copyright infringement, will not exceed the charges paid by Customer for the Program or Operational Materials that are the subject of any claim.

b. Type. Owner in no event will be liable for:

i. Lost profits or for other special damages; or

ii. Any claim against Customer by any third party other than a claim for patent or copyright infringement.

c. Limitations Period. No action arising under this Agreement may be brought by either party more than [number] years after the cause of action accrued, except for an action for nonpayment of charges that may be brought within [number] years after the date of the last payment.

21. Modification of Agreement.

a. Owner's Right to Modify. Owner may modify the terms of this Agreement by [number] months' prior written notice to Customer, except for provisions relating to discontinuances of licenses, as set out in Paragraphs 16 and 22, and to charges, as provided in Paragraph 4.

b. Customer's Right to Terminate. If Owner modifies the Agreement, Customer may terminate this Agreement or discontinue any licenses provided under it on [number] months' prior notice to Owner. Absent such termination, Owner's modification of this Agreement will be effective on the date provided in Paragraph 21a.

22. Termination of Licenses. Owner may terminate this Agreement or discontinue any license on [number] months' prior written notice to Customer (a) if Customer fails to comply with any of the terms of this Agreement or (b) as provided in Paragraph 16, if notice of discontinuance of a Program license acts as a notice of discontinuance of any license for Optional Materials granted in connection with the Program license. It all licenses are discontinued, this Agreement shall not terminate unless Owner specifically provides notice of termination.

23. Destruction on Discontinuance. Customer will provide Owner, within [number] weeks after discontinuance of any license under this Agreement, with a certification that the original and all copies (including partial copies and parts incorporated into other programs), in any form, of the applicable Program and Optional Materials have been destroyed.

24. No Assignments. This Agreement and the Programs and Optional Materials may not be assigned, sublicensed, or transferred in any way by Customer, without Owner's prior written consent.

25. Miscellaneous.

a. Exclusive Agreement. This Agreement is the complete and exclusive agreement between the parties, and supersedes all other communications between the parties. This Agreement also takes precedence over the terms of any Customer order for any licenses.

b. Saving Clause. If any provision of this Agreement is invalid under any applicable statute or rule of law, such provision is deemed omitted, and the balance of this Agreement shall remain binding on the parties.

c. Customer's Remedies. Customer's remedies, as provided in this Agreement, are exclusive.

d. Governing Law. This Agreement is governed by the laws of [state].

Customer

[dated]

By: [signature]

Owner

By: [signature]

*** If Required By State Law ***

This Section for Notary:

Acknowledgment

State of _________

County of ________ [County]

On [Date] before me, [Name of Notary], notary, personally appeared [Name of Person(s) Involved], personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

Witness my hand and official seal.

Signature ________
Notary

My commission expires: _____

(Seal)