Software Development Agreement
This Software Development Agreement, hereinafter called the Agreement is entered
into as of (date) between (Name of Programmer), of (street address, city, state, zip
code), referred to herein as Programmer, and (Name of Customer), a corporation
organized and existing under the laws of the state of (name of state), with its principal
office located at (street address, city, state, zip code), referred to herein as the
Whereas, Programmer is in the business of designing and developing computer
software applications including (description of software); and
Whereas, Customer is in the business of (describe business); and
Whereas, Customer wishes to have Programmer design and develop certain computer
software according to the terms, specifications, and conditions set forth in this
Agreement, and Programmer desires to perform these services.
Now, therefore, for and in consideration of the mutual covenants contained in this
Agreement, and other good and valuable consideration, the parties agree as follows:
A. Development Services means the software design and development
services to be performed by the Programmer pursuant to this Agreement and as
described in the Scope of Work below.
B. Documentation means all user manuals and other written material to be
created by Programmer pursuant to this Agreement that describe the
functionality or assist in the use of the software, as further described in the Scope
of Work below.
C. Platform means the computer and/or operating system for which
Programmer is developing the software pursuant to this Agreement.
D. Scope of Work means the document attached as Exhibit A to this
Agreement that describes the Development Services, features, functions, and
specifications of the software, contents of the documentation, and other
information necessary to define the work to be performed pursuant to this
E. Software means the computer program or programs to be developed
pursuant to this Agreement, and includes any updates, modification, bug fixes,
update enhancements, or other modifications. The term does not include any
version of the software that constitutes a separate product because of
differences in function or features.
F. Technical Design means the design of the system as described in the
Scope of Work, including, without limitation, a narrative description of the
characteristics and functionality of the software, performance specifications,
hardware and software specifications, and a description of the user interface,
including drawings of significant user interface screens, if appropriate.
II. Development Obligations
A. Generally. Programmer will provide the Development Services and
complete the work described in the Scope of Work.
B. Software Development Phase. On Customer's acceptance of the
Technical Design, Programmer will begin the software development phase as
described in the Scope of Work. The software development phase must be
completed on the schedule, and in accordance with the milestones, set forth in
the Scope of Work.
C. Documentation. Programmer will provide the documentation described in
the Scope of Work no later than (date).
D. Acceptance of Software and Documentation. Customer has thirty (30)
days from the date Programmer delivers the software and documentation in
which to accept or reject it in writing. If Customer rejects the software or the
documentation, Customer must set forth its objections in writing, and
Programmer will use its best efforts to make the software and/or documentation
conform to the specifications set forth in the Scope of Work until such time as
Customer accepts the software or documentation or Customer terminates this
Agreement on written notice to Programmer. If Customer does not respond in
writing within thirty (30) days from the date Programmer delivers the software
and documentation, it will be deemed to have been accepted.
E. Training. Programmer will provide Customer with (number) hours of
training in the use of the software at a mutually agreed on site and time within
sixty (60) days of Customer's acceptance of the software.
F. Maintenance. Programmer will maintain the software after its acceptance
by Customer for a period of (number) years at a price of $__________ per year.
Maintenance includes any modifications or bug fixes necessary so that the
software continues to perform in accordance with the technical design after
acceptance by Customer. These maintenance services may be terminated by
Customer at any time on thirty (30) days' written notice to Programmer.
Maintenance does not include any improvements or enhancements to the
software or any fixes required because of Customer's alteration of the software
after acceptance. Programmer may terminate this obligation to provide
maintenance services on thirty (30) days' written notice if Customer commits any
material breach of this Agreement. However, in the case of a breach that can be
remedied, other than failure to pay the amounts due pursuant to Paragraphs
Sections III-A and III-B, Customer will have thirty (30) days in which to remedy
G. Progress Reports. Programmer agrees to provide Customer with monthly
progress reports and a statement of Programmer's fees and expenses incurred
to date. These progress reports are due on the 15th day of each month for the
prior month. Each report will contain a description of the current status of the
software, the time spent on development services during the month, the tasks on
which the time was spent, the estimated progress to be made in the next month,
any problems encountered and their proposed solutions, and Programmer's
estimated ability to meet milestones and other deadlines.
A. Base Development Fee. Customer agrees to pay Programmer the
amounts set forth on the payment schedule set forth in the Scope of Work on the
dates set forth therein.
B. Additional Development Fees. In addition to the Base Development Fee,
Customer agrees to pay Programmer any and all amounts due pursuant to a
Change Order, as defined below, and any and all amounts due to Programmer
pursuant to any other term of this Agreement.
IV. Term and Termination
A. Term. The term of this Agreement is from (date), until the sooner of (i)
completion of the services provided for in this Agreement, which is estimated to
be (date), or (ii) termination pursuant to Sections IV-B and IV-C.
B. Termination for Convenience. Customer may terminate this Agreement
at any time on (number) days' written notice to Programmer and on payment to
Programmer of all amounts due to date pursuant to this Agreement, and payment
of a termination fee of $[dollar amount of termination fee].
C. Termination for Cause. Either party, as applicable, will have the right, in
addition and without prejudice to any other rights or remedies, to terminate this
Agreement as follows:
1. By Programmer, on Ten (10) days' written notice, if Customer fails
to pay any amounts due to Programmer pursuant to Section III.
2. By Customer, on Ten (10) days' written notice, if Programmer fails
to meet any of the milestones or other deadline required to be met
pursuant to this Agreement;
3. By either party for any material breach of this Agreement, other
than failure to make payments under Sections III-A and III-B, which is not
cured within Ten (10) days of receipt by the party in default of a notice
specifying the breach and requiring its cure; or
4. By either party, effective immediately on written notice if: (i) all or a
substantial portion of the assets of the other party are transferred to an
assignee for the benefit of creditors to a receiver or to a trustee in
bankruptcy; (ii) a proceeding is commenced by or against the other party
for relief under the bankruptcy or similar laws, and such proceeding is not
dismissed within Sixty (60) days; or (iii) the other party is adjudged
D. Obligations on Termination. On termination of this Agreement, the
parties will have no further obligations pursuant to the terms of this Agreement,
except that Sections III, VII, VIII, X and XI will survive termination.
V. Change of Scope.
A. Additional Services. If at any time during the term of this Agreement,
Customer requests that Programmer provide additional services, or requests a
modification or change in the development services, Customer and Programmer
will follow the procedure set forth below:
1. Change Order Request. Customer will submit to Programmer by
means of a written order all requests for additional services that alter,
amend, enhance, add to, or delete from the development services (the
Change Order). A sample Change Order is set forth in Exhibit B, attached
to and made part of this Agreement.
2. Change Order Evaluation. Programmer will evaluate each
Change Order, without charge, within ten (10) days of its receipt and will
provide Customer with: (i) the change in cost as a result of the Change
Order; (ii) the impact, if any, of the Change Order on the completion date
and milestone deadlines; and (iii) the availability of Programmer's
resources to carry out the Change Order. Programmer may, in its sole
discretion, refuse to carry out any proposed Change Order.
3. Change Order Acceptance. If Programmer agrees to carry out the
proposed Change Order, Customer will promptly give Programmer written
authorization to carry out the Change Order by executing the Change
Order in the manner provided on Exhibit C.
B. Performance of Change Order. Programmer will begin performance in
accordance with a Change Order immediately on its execution by Customer.
Programmer has no obligation to perform any additional services before
receiving the executed Change Order and Customer has no obligation to pay
Programmer for any services performed pursuant to a Change Order before that
Change Order is executed by Customer.
C. Change Order as Binding Agreement. Once fully completed and
executed, each Change Order is deemed to be incorporated into and to be part
of this Agreement and will constitute a formal amendment to this Agreement,
adjusting fees, and completion dates to the extent set forth in the Change Order.
VI. Ownership of Software
A. Deliverables. On completion or termination of this Agreement
Programmer will provide Customer with: (i) one copy of the Software, in both
source code and object code form compatible with the platform(s) described in
the Scope of Work; (ii) one copy of the documentation; and (iii) a copy all
notebooks, data, information, and other material acquired or compiled by
Programmer in connection with the software and the development services.
B. Ownership of Deliverables. Customer and Programmer agree that the
software, the documentation, and any and all related copyrights, trademarks,
patents, trade secrets, confidential information, and any other proprietary rights
are the property of Customer as of the date of acceptance of the software and
the documentation. Except to the extent otherwise provided in this Agreement,
Programmer retains no right, ownership, or title in the software, the
documentation, or any related copyrights, trademarks, patents, trade secrets,
confidential information, or any other proprietary rights obtained on the software
or documentation. The parties agree that the software, the documentation, and
all associated intellectual property rights are being sold in their entirety to
Customer for whatever use Customer desires. The materials Programmer
creates are done for Customer on a work made for hire basis. Nothing in this
agreement may be construed to convey a mere license to Customer.
C. Cooperation by Programmer. Programmer agrees to cooperate with
Customer, without additional compensation, in providing information or
performing any necessary actions to register and secure any copyrights, patents,
or trademarks for the benefit of Customer.
D. Programmer's Proprietary Software Programs. Notwithstanding the
provisions of Section VI-B, it i