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Bulk license agreement.
BULK LICENSE AGREEMENT
This Agreement, effective [date], is by and between XYZ, Inc. a [state] corporation with offices at [address] ("XYZ")
and , a [state] corporation with offices at [address], ("Licensee").
1. BACKGROUND.
1.1. XYZ has developed the computer software programs and related products listed in Exhibit 1.1.
1.2. Licensee wishes to acquire licenses to use copies of the Products, as defined below.
2. CERTAIN DEFINITIONS. For the purpose of this Agreement, the following definitions shall apply:
2.1. The "Products" are the software programs listed in Exhibit 1.1, in the form as marketed by XYZ, and including
any documentation packaged with the programs by XYZ. The Products shall include any enhancements, new releases,
updates or other modifications (collectively, "Developments") to the Programs which XYZ may release from
time-to-time under the same product name or names.
2.2. An "Ordering Period" is the 12-month period commencing with the date of this Agreement, and each
succeeding 12-month period.
2.3. The "Delivery Period" for each Ordering Period is the Ordering Period and the following three (3) months.
3. LICENSE.
3.1. XYZ hereby grants Licensee the right to use each copy of a Product acquired from XYZ hereunder on a single
computer. Licensee may permit such use by any of its employees or independent contractors, provided that as to each
copy, either (a) no more than one such party at a time is able to use each copy, or (b) if any copy is installed on a
network or multi-user system where use of one copy by more than one person at a time is possible, whether by
time-sharing, creation of additional copies in the memory of terminals or computers other than the one on which the
software is first installed, or otherwise, Licensee has purchased a copy for each such potential user. XYZ retains title to
each copy of each Product; title to the media on which the Product is provided is transferred to Licensee when payment
is made.
3.2. Licensee may also:
3.2.1. Copy the Product for backup purposes.
3.2.2. Modify the Product and/or merge it into another program, in which case any portion of the Product so
merged shall continue to be subject to this Agreement.
3.2.3. Transfer any copy of the Product which has not been merged or modified to a third party, provided that:
3.2.3.1. If the transferee is to receive fewer than ten (10) copies, each copy is furnished together with a copy
of XYZ's standard Program License Agreement and the transferee agrees in writing to be bound by the terms of
such agreement.
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3.2.3.2. If the transferee is to receive ten (10) or more copies, the transferee must be approved by XYZ and
execute an XYZ Bulk License Agreement.
3.3. Rights After Transfer: If Licensee transfers any copy of a Product, Licensee must transfer or destroy any and all
unmerged and unmodified copies it may have made from that copy, and destroy all modified, merged or backup copies
made from the transferred copy. Any transferred copy shall no longer be counted for the purpose of authorizing use on
networks or multi-user systems under Section 3.1.
4. REPRESENTATIONS AND WARRANTIES OF THE LICENSEE. Licensee represents and warrants that:
4.1. It is a corporation duly organized and validly existing under the laws of the State of
4.2. This Agreement has been duly and validly authorized by Licensee, and is a valid and binding agreement of
Licensee enforceable in accordance with its terms.
5. ORDERS AND PAYMENT.
5.1. Licensee hereby elects the Discount Level shown in Exhibit 5.1. A separate Discount Level may be elected for
each Product covered by this Agreement. At the commencement of each Ordering Period, a new discount level shall be
set by mutual agreement for each Product.
5.2. Upon the commencement of each Ordering Period, Licensee shall pay to XYZ a deposit of 25% of the XYZ list
price for each Product (the "Deposit") multiplied by the maximum number of units in the Discount Level elected for the
Product for the Ordering Period, reduced by the discount applicable to the Discount Level for the Product. To be
eligible for a discount, each order must be received by XYZ during an Ordering Period and specify delivery during the
Delivery Period for that Ordering Period.
5.3. XYZ will use all reasonable efforts to provide, by the delivery dates requested by Licensee, the units of
Products ordered by Licensee. Licensee's orders may be placed in any form, including by telex, but any such order shall
be deemed to incorporate all the terms and conditions of this Agreement. Any additional or inconsistent terms or
conditions in any order are hereby specifically objected to by XYZ and shall not be binding on XYZ unless agreed to in
writing. Licensee acknowledges that XYZ does not retain any significant inventory of Products, and delivery may be
delayed by the time required to prepare the units ordered. Returns of units ordered are not permitted.
5.4. XYZ shall invoice Licensee for each shipment, not earlier than the date of the shipment. The price for each unit
of Product shall be XYZ's standard list price in effect on the date XYZ receives the order for the unit, reduced by the
applicable discount level. Invoices are payable in full within thirty (30) days. The Deposit required under Section 5.2
shall be applied in full to invoices. Late payments shall bear interest at the rate of one and one-half percent (11/2%) per
month, or the highest legal rate, whichever is less. In the event of a late payment by Licensee, or the Licensee
encountering financial difficulties, XYZ reserves the right to require payment in advance. All prices are F.O.B. XYZ's
offices; shipping costs will be stated on the invoices for payment by Licensee, unless shipment is freight collect.
5.5. Adjustments: At the end of each Delivery Period, the following adjustments shall be made:
5.5.1. The Discount Level finally applicable for each Product for the Ordering Period last ended shall be
determined by the number of units of the Product ordered by Licensee during the Ordering Period for which
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delivery was taken within the Delivery Period ("Qualified Units"). This is the "Final Discount Level" for the
Ordering Period.
5.5.2. The price of each order for each Product shall be recalculated using the Final Discount Level. The total of
such prices is the "Final Total."
5.5.3. If the total of the amounts paid (and invoiced but not yet paid) (including the Deposit for the Ordering
Period just ended) for Qualified Units, at the Discount Level elected for each Product for the Ordering Period, is
less than the Final Total, XYZ shall invoice Licensee for the difference. If the Final Total is less than the total of the
amounts paid (and invoiced but not yet paid) (including the Deposit) for Qualified Units, at the Discount Level
elected for each Product for the Ordering Period, the difference shall be refunded to the Licensee.
5.6. Any shipments which are delivered after the Delivery Period for the Ordering Period in which they were
ordered shall be treated as if ordered and delivered in the subsequent Ordering and Delivery Periods.
5.7. XYZ's prices are exclusive of all taxes. Licensee shall pay all taxes relating to the transfer of units of Product
from XYZ to Licensee. Such taxes, except for taxes on XYZ's net income, shall be paid by Licensee directly, or to XYZ
where XYZ is required to collect such tax. In lieu of payment of a tax, Licensee may provide an exemption certificate
acceptable to XYZ and the applicable taxing authority. Should an audit of either party by governmental authorities
result in a claim that any such charges are due, Licensee shall pay the charges, together with all interest, penalties and
other costs on demand by XYZ.
6. OBLIGATIONS OF LICENSEE.
6.1. Licensee will make diligent efforts to ensure that copying and distribution of the Products it obtains shall be in
conformance with the terms of this Agreement. Licensee shall designate a single person or department to administer the
terms of this Agreement and to monitor the use of the Products. Licensee shall inform all of its employees and
consultants who may have access to copies of the Products that no copy other than for backup purposes may be made,
and that copies must be purchased from XYZ.
6.2. Licensee shall not attempt to obtain the source code to any Product by decompilation, disassembly or other
means, and shall make no copies of the software except as specifically authorized. Licensee shall promptly notify XYZ
of any infringement of XYZ's proprietary rights that comes to Licensee's attention.
6.3. Licensee shall not export any unit of Product, directly or indirectly, to any country outside the United States or
Canada without XYZ's prior written approval.
7. WARRANTY AND LIMIT OF LIABILITY.
7.1. XYZ warrants that each disk on which a Product is recorded shall be free from defects in materials and
workmanship under normal use and service for a period of ninety (90) days from the date of delivery. THE
COMPUTER PROGRAMS COMPRISING THE PRODUCTS ARE PROVIDED "AS IS" WITHOUT WARRANTY
OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE AND
INFRINGEMENT. SHOULD ANY PROGRAM PROVE DEFECTIVE, LICENSEE SHALL BEAR THE ENTIRE
COST OF ALL NECESSARY SERVICING, REPAIRER CORRECTION.
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7.2. XYZ's entire liability and Licensee's exclusive remedy shall be the replacement of any diskette which does not
meet XYZ's Limited Warranty and which is returned to XYZ or an authorized XYZ distributor together with
documentation of the date the disk was delivered to Licensee.
7.3. The warranties set forth above are exclusive and are in lieu of all other warranties, express or implied, other
than the warranty regarding infringement in Article 8 below. NO OTHER WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING BUT NOT LIMITED TO THE WARRANTIES OF MERCHANTABILITY, FITNESS, TITLE AND
AGAINST INFRINGEMENT, ARE MADE BY XYZ. The remedies contained in Section 7.2 shall not be deemed to
have failed of their essential purpose so long as XYZ is making good faith efforts to correct defects under the terms of
the warranty, or has made the refunds or replacements provided for. The warranties set forth herein allocate risks of
product nonconformity, and XYZ's prices reflect the allocations of such risk.
7.4. XYZ's entire liability and Licensee's exclusive remedy shall be as follows:
7.4.1. In all situations involving performance or nonperformance of the Products, Licensee's remedy is the
warranties in Sections 7.1 and 7.2.
7.4.2. For personal injury or damage to physical property to the extent caused by XYZ's fault or negligence,
Licensee's remedy shall be as provided under applicable law except as limited by subsection 7.4.3.
7.4.3. For any other claim concerning performance or nonperformance by XYZ pursuant to or in any way
related to the subject matter of this Agreement, or for damages for any causes whatsoever and regardless of the form
of action, whether in contract or in tort including negligence, or any other legal theory, Licensee's remedy shall be
actual damages up to the amount of the payments actually made to XYZ by Licensee hereunder in the most recent
twelve months prior to such damages occurring.
7.5. In no event will XYZ be liable for any lost profits or any other incidental or consequential damages, even if
XYZ has been advised of the possibility of such damages. In no event will XYZ be liable for any claim against Licensee
by any other party, except as provided in Article 8.
8. PATENT AND COPYRIGHT INDEMNIFICATION.
8.1. As between XYZ and Licensee, title and full ownership rights in the software and design of the Products shall
remain in XYZ. It is expressly understood and agreed that the software, including but not limited to proprietary
computer programs, documentation, input formats, generated output, modifications and conversions, constitute
valuable proprietary products and trade secrets of XYZ embodying substantial creative efforts and confidential
information, ideas and expressions which require protection against unauthorized use, transfer, reproduction, or
disclosure.
8.2. XYZ warrants that the Products, when used as intended, do not infringe any patent, copyright or trade secret in
the U.S. XYZ will defend at its expense any action brought against Licensee to the extent that it is based on a claim of
a breach of such warranty, and XYZ will pay any costs and damages finally awarded against Licensee in such actions
which are attributable to such claim, and will reimburse Licensee for attorneys' fees reasonably incurred in connection
therewith, provided that Licensee notifies XYZ promptly in writing of such claim, allows XYZ to fully control the
defense of such claim and does not agree to any settlement of such claim without XYZ's consent.
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8.3. Should any Product become, or in XYZ's opinion be likely to become, the subject of any claim of infringement,
XYZ may (1) procure for the Licensee the right to continue using the Product, (2) replace or modify units previously
sold to Licensee to make them non-infringing, or (3) terminate this Agreement, including the licenses granted
hereunder, and refund to Licensee any amounts (but not in excess of the price per unit paid to the Licensee) paid by
Licensee hereunder, less an allowance for use of each copy purchased based on straight-line depreciation over a
three-year life commencing on the date of delivery.
8.4. XYZ shall have no liability for any claim of infringement based upon (1) use of other than the latest unmodified
version of any Product, if the infringement would have been avoided by the use of such version, (2) use or combination
of any Product with any products not supplied by XYZ, if such infringement would not have occurred without such use
or combination, or (3) use of a Product after having been given notice, or having a reason to believe, that the Product
infringes a trade secret of a third party, unless prompt written notice has been given to XYZ.
8.5. The foregoing states the entire liability of XYZ with respect to infringements of patents, copyrights, trade
secrets or any other proprietary rights.
9. TERM AND TERMINATION.
9.1. The term of this Agreement shall end twelve (12) months from the effective date set forth above. It may be
renewed by mutual agreement for one or more consecutive twelve (12) month terms.
9.2. Either party may terminate this Agreement on thirty (30) days' written notice, for material breach by the other,
unless the said breach is corrected within the said thirty (30) days or a mutually agreed time. Either party may terminate
this Agreement if the other, without curing the condition within thirty (30) days of the event, ceases doing business as
a going concern, becomes insolvent, makes an assignment for the benefit of creditors, admits in writing its inability to
pay its debts as they become due, files a voluntary petition in bankruptcy, is subject to an involuntary petition in
bankruptcy which is not dismissed within ten (10) days, is adjudicated bankrupt or insolvent, or files or has filed against
it a petition seeking any reorganization, arrangement or composition, under any presenter future statute, law or
regulation.
9.3. In the event of termination other than for Licensee's default, Licensee's rights hereunder to use each copy of a
Product previously obtained from XYZ shall survive.
10. CERTAIN REMEDIES. In the event of termination for Licensee's default, XYZ may demand of Licensee,
successively and/or concurrently, anyone or more of the following remedies:
10.1. Without retaking Products delivered to Licensee (a) recover from Licensee all accrued and unpaid payments,
and other amounts then due and owing under the terms hereof, and (b) recover from Licensee from time to time all
payments and other amounts as and when becoming due hereunder.
10.2. Pursue any other remedy XYZ may otherwise have hereunder, at law, in equity or under any statute and
recover such other actual damages as may be incurred by XYZ, including termination of this Agreement. XYZ's pursuit
and enforcement of any one or more remedies shall not be deemed an election or waiver by XYZ of any other remedy.
10.3. Without retaking the Products delivered to and in possession of Licensee, require by written notice that
Licensee immediately cease all use of the Products until all events of default have been fully cured.
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11. ARBITRATION.
11.1. Except for the right of either party to apply to a court of competent jurisdiction for a temporary restraining
order, preliminary injunction, or other equitable relief to preserve the status quo or prevent irreparable harm pending
the selection and confirmation of an arbitrator, and for the right of XYZ to bring suit on an open account for simple
monies due XYZ, any dispute between XYZ and Licensee under this Agreement involving its interpretation or the
obligations of a party thereto, shall be determined by binding arbitration in accordance with the commercial arbitration
rules of the American Arbitration Association, in [city, state], before a single arbitrator.
11.2. The arbitrator shall be an attorney at law with a background or training in either computer law or marketing of
computer industry products.
11.3. The arbitrator shall have the authority to permit discovery, to the extent deemed appropriate by the arbitrator,
upon request of a party. The arbitrator shall have no power or authority to add to or detract from the agreements of the
parties, and the cost of the arbitration shall be borne equally. The arbitrator shall have the authority to grant any
temporary, preliminary or injunctive relief in a form substantially similar to that which would otherwise be granted by
a court of law. The arbitrator shall have no authority to award punitive or consequential damages. The resulting
arbitration award may be enforced, or injunctive relief may be sought, in any court of competent jurisdiction. The
parties expressly stipulate that the Superior Court of [city, state], or the United States District Court for are
courts of competent jurisdiction for this purpose.
12. FORCE MAJEURE.
12.1. Neither party shall be responsible for delays or failures in performance resulting from causes beyond the
control of such party. Such causes shall include, but not be limited to, inability to obtain export licenses or import
authorization, acts of God, strikes, lockouts, riots, acts of war, epidemics, government regulations imposed after the
fact, fire, communications line failures, equipment failures, power failures, or earthquakes. However, in the event that
Licensee's performance of any of its obligations hereunder is so delayed for more than thirty (30) days, XYZ may
perform such obligations and deduct the cost of such performance from the royalties otherwise payable.
13. GENERAL.
13.1. Notices: All notices shall be in writing and deemed given and received (i) when delivered, if delivered in
person, (ii) five (5) business days after mailing, if by certified or registered mail, return receipt requested, unless the
receipt shows a different date of receipt, or (iii) the next business day after delivery, if by commercial overnight courier,
unless the courier's records indicate a different date of receipt. Notices shall be addressed to each party at its address set
forth above, or such other address as the recipient may have specified by earlier notice to the sender. Notice to XYZ
shall be to the attention of the President, with a copy to the General Counsel; notice to Licensee shall be sent to the
attention of: .
13.2. Assignment; Successors: This Agreement shall not be assigned by either party without the advance written
consent of the other, provided that either party may assign this Agreement in its entirety to a successor to all or a
substantial portion of its business. This Agreement shall be binding upon and inure to the benefit of the parties, their
successors and permitted assigns.
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13.3. Entire Agreement: This Agreement constitutes the entire Agreement between the parties with respect to its
subject matter; except as provided herein, all other prior agreements, representations, statements, negotiations and
undertakings are terminated and superseded hereby.
13.4. Independent Contractors: The parties shall at all times be independent contractors with respect to each other in
carrying out this Agreement.
13.5. Amendments: No amendment to this Agreement shall be effective unless it is in writing and signed by a duly
authorized representative of each party. The term "Agreement," as used herein, includes any future written
amendments, modifications, or supplements made in accordance herewith.
13.6. Headings Not Controlling: Headings used in this Agreement are for reference only and shall not be deemed a
part of this Agreement.
13.7. Survival: After expiration or termination of this Agreement, all provisions relating to payment shall survive
until completion of required payments. In addition to those provisions which specifically provide for survival beyond
expiration or termination, all provisions regarding indemnification, warranty, liability and limits thereon, and
confidentiality and/or protection of proprietary rights and trade secrets shall survive, unless and until the expiration of
any time period specified elsewhere in this Agreement with respect to the provision in question.
13.8. Consent to Breach Not Waiver: No term or provision hereof shall be deemed waived and no breach excused,
unless such waiver or consent shall be in writing and signed by the party claimed to have waived or consented. Any
consent by any party to, or waiver of, a breach by the other, whether express or implied, shall not constitute a consent to,
waiver of, or excuse for any other different or subsequent breach.
13.9. Severability: In the event any provision of this Agreement is held illegal, void or unenforceable, to any extent,
in whole or in part, as to any situation or person, the balance shall remain in effect and the provision in question shall
remain in effect as to all other persons or situations, as the case may be.
13.10. Governing Law: This Agreement shall be deemed to have been made in [state], and shall be governed by and
construed in accordance with the laws of [state], exclusive of its rules governing choice of law and conflict of laws.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized rep-
resentatives:
XYZ, INC. LICENSEE
By: By:
Title: Title:
Date: Date:
Exhibit 1.1.
List of Products
Exhibit 5.1.
Discount Levels
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Level Number Number of Units Discount Percentage
1 x–y z%
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