This agreement, dated as of [indicate the date], is by [indicate the name and legal address of the party], thereinafter ‘Licensor’, and by [indicate the name and legal address of the party], thereinafter ‘Licensee’ and, together with Licensor, the ‘Parties’.

1. License

Licensor grants Licensee a non-exclusive [in alternative: exclusive], non-transferable [in alternative: transferable; in this case the second paragraph of the clause must be drafted accordingly] license to (i) use the software and documentation [to be described in an attached annex] solely for its internal operations and on the computer equipment and software operating system [to be described in an attached annex], and (ii) copy the software and documentation for archival and backup purposes only, provided that all titles, trademarks, and copyright, proprietary and restricted rights notices shall be reproduced in all such copies, and that all such copies shall be subject to the terms of this Agreement.

Except as explicitly provided herein, Licensee shall not: (a) make available nor distribute all or part of the software or documentation to any third party by assignment, sublicense or by any other means; (b) copy, adapt, reverse engineer, decompile, dissemble, or modify, in whole or in part, any of the software or documentation other than to make a legitimate backup copy or for error correction; or (c) use the software to operate in or as time-sharing, outsourcing, or service bureau environment, or in any way that is able to allow third party access to the software.

2. Installation and Acceptance

Licensor shall use reasonable efforts [the parties can agree on a higher degree of care] to deliver the licensed copies of the software and documentation at the Licensee’s offices on the date agreed by the Parties [to be specified]. Licensee shall have [specify, e.g. thirty days] from the delivery date to perform acceptance testing. Licensee’s acceptance of the software shall occur at the earlier of Licensee’s operational use of the software, or the expiration of [specify, e.g. 30 days] from the delivery date without the provision of notice by Licensee to Licensor of any error. If Licensee provides notice to Licensee of any error and Licensor verifies and corrects the alleged error, the software shall be accepted upon Licensor’s correction of such error.

3. Price and Payment

Licensee shall pay the price in accordance with the payment plan [to be specified in an attached annex]. Licensor shall invoice any additional costs reasonably incurred by Licensor in the delivery of the software as they are incurred. Payment of the price and additional costs shall be made by Licensee to Licensor in full and Licensee shall pay the price and such costs within [specify, e.g. thirty days] from the date of the invoice.

Licensee shall be responsible for any applicable taxes or any value added taxes payable with respect to the licensing of the software, or arising out of or in connection with this Agreement, other than taxes levied or imposed based upon Licensor’s income. In the event that Licensor pays any such taxes on behalf of Licensee, Licensor shall invoice Licensee for such taxes and Licensee agrees to pay such taxes in accordance with this Agreement.

Failure by Licensee to pay any amounts invoiced under this Agreement in full in accordance with this Agreement shall make Licensee liable to pay Licensor interest at the rate of [specify] percent per month on the remaining amount due [alternative provision: at the highest amount permitted by applicable law], such interest to accrue on a daily basis after as well before any judgement relating to collection of the amount due.

4. Proprietary Rights

Licensee acknowledges and agrees that the copyright, patent, trade secret, and all other intellectual property rights of whatever nature in the software and documentation are and shall remain the property of Licensor, and nothing in this Agreement should be construed as transferring any aspects of such rights to Licensee or any third party.

5. Confidentiality

Confidential information shall mean the software, the documentation [additional provision: and the terms and conditions of this Agreement]. Licensee acknowledges the confidential and proprietary nature of the confidential information and agrees that it shall not reveal or disclose any confidential information for any purpose to any other person, firm, corporation or other entity, other than Licensee’s employees with a need to know such confidential information to perform employment responsibilities consistent with Licensee’s rights under this Agreement. Licensee shall safeguard and protect the confidential information from theft, piracy or unauthorised access in a manner at least consistent with the protections Licensee uses in order to protect its own most confidential information. Licensee shall inform its employees of their obligations under this Agreement, and shall take such steps as may be reasonable in the circumstances, or as may be reasonably requested by Licensor, to prevent any unauthorised disclosure, copying or use of the confidential information.

Licensee acknowledges and agrees that in the event of the Licensee’s breach of this Agreement, Licensor will suffer irreparable injuries not compensated by money damages and therefore shall not have an adequate remedy at law. Accordingly, Licensor shall be entitled to a preliminary and final injunction without the necessity of posting any bond or undertaking in connection therewith to prevent any further breach of these confidentiality obligations or further unauthorised use of confidential information. This remedy is separate and apart from any other remedy Licensor may have.

Licensee shall notify Licensor immediately upon discovery of any prohibited use or disclosure of the confidential information, or any other breach of these confidentiality obligations by Licensee, and shall fully cooperate with Licensor to help Licensor regain possession of the confidential information and prevent the further prohibited use or disclosure of the confidential information.

6. Warranty

Licensor represents to Licensee that: (i) during the warranty period [to be specified, taking into account the applicable national legal provisions], the software shall operate without any errors; and (ii) upon notification to Licensor during the warranty period of any errors, Licensor shall, during its normal business hours [the parties can agree that the service will be provided twenty-four hours a day, seven days a week] and at no costs to Licensee, use reasonable efforts [the parties can agree on a higher degree of care] to correct such errors which are reproducible and verifiable by Licensor, excluding any errors caused by uses of the software which were not in accordance with the specifications [to be indicated in an attached annex] provided by Licensor.

In the event that Licensee notifies Licensor of an error during the warranty period, Licensor’s sole liability, and Licensee’s sole remedy, will be Licensor’s use of reasonable efforts to correct such errors or [additional provision: in Licensor’s sole discretion] to refund the portion of the prepaid price applicable to the portion of the software which is defective. Licensor’s limited warranty is in lieu of all liabilities or obligations of Licensor for damages arising out of or in connection with the installation, use or performance of the software. Except for the above limited warranty, the entire risk of the software’s quality and performance is with Licensee. [This clause is licensor oriented; the parties can state a different level of liability for the licensor, taking into account the aim and content of the software. In case of applications that imply a great risk, like in some BEs currently under development, it is probably better for the licensor to reduce as much as possible his responsibility.]

7.  Indemnification

Licensor hereby indemnifies Licensee against any claim that the software, furnished and used within the scope of this Agreement, infringes any [specify the country; in alternative, worldwide] registered copyright or patent, provided that: (i) Licensor is given prompt notice of the claim; (ii) Licensor is given immediate and complete control over the defence and/or settlement of the claim, and Licensee fully cooperates with Licensor in such defence and/or settlement; (iii) Licensee does not prejudice in any manner Licensor’s conduct of such claim; and (iv) the alleged infringement is not based upon the use of the software in a manner prohibited under this Agreement, in a manner for which the Software was not designed, or in a manner not in accordance with the specifications [to be indicated in an attached annex].

8. Injunction

If a final injunction is obtained against the use of any part of the software by reason of infringement of [specify the country; in alternative, worldwide] registered copyright or patent, Licensor will, at its option  and  expense [in alternative, at Licensee’s option and at Licensor’s expense], either (i) procure for Licensee the right to continue to use the software; (ii) modify the software so that it becomes non-infringing; or (iii) repurchase the software and documentation [specify the modalities of the operation]. If Licensor [in alternative, Licensee] selects the third option, Licensee shall, immediately upon receipt from Licensor of the payment set forth above, at Licensor’s option destroy or return all copies of the software and documentation in its possession or under its control.

9. Liability

The foregoing states Licensor’s entire obligations and liability with respect to the infringement of any property right.

10. Limitation of Liability

Licensor shall have no liability with respect to its obligations under this Agreement or otherwise for indirect or punitive damages even if it has been advised of the possibility of such damages. In any event, the liability of Licensor to Licensee for any reason and upon any cause of action shall be limited to [specify, in euros or with a different modality, like in the following example: the lesser of the amount paid to Licensor by Licensee under this Agreement]. This limitation applies to all causes of action. [This clause is licensor oriented; the parties can state a different limitation of liability for the licensor, taking into account the aim and content of the software. In case of applications that imply a great risk, like in some BEs currently under development, it is probably better for the licensor to reduce as much as possible his responsibility.]

Licensor shall have no liability for any claim of infringement based on (i) the use of a superseded or altered version of the software if infringement would have been avoided by the use of a current or unaltered version of the software which Licensor made available to Licensee; or (ii) the combination, operation or use of the software with software, hardware or other materials not furnished or approved by Licensor.  

11. Licensee’s Liability

Licensee hereby indemnifies Licensor against any claim for (i) alleged infringement of any [specify the country; in alternative, worldwide] registered copyright or patent, arising out of the use of the software by Licensee in any manner prohibited by this Agreement and (ii) any claim related to or arising out of a financial transaction brought by any third party based on the use of the software.

12. Force Majeure

Neither party shall be under any liability for any loss or for any failure to perform any obligation hereunder due to causes beyond its control including, without limitation, industrial disputes of whatever nature, power loss, telecommunications failure or any other cause beyond its reasonable control.

13. Term

The License granted herein shall remain in effect perpetually unless terminated as provided for in this Agreement.

Or, in alternative

The term of this Agreement shall commence on the delivery date and shall continue until the date immediately preceding the first [or further] anniversary thereof. Unless either party gives the other at least [indicate] months prior written notice that it has elected not to extend the term of this Agreement beyond the date in which the Agreement will end, the term of this Agreement will be automatically extended for successive periods of [one] year each. [Please be aware that the parties can agree on a different, non-automatic, modality of renewal. We nevertheless believe that an automatic extension is the most practical way for both licensor and licensee].

14. Termination

In the event that either party hereto materially or repeatedly defaults in the performance of any of its duties or obligations hereunder (except for a default in payments to Licensor) and does not substantially cure such default within [specify, e.g. thirty] days after being given written notice specifying the default, or, with respect to those defaults which cannot reasonably be cured within [specify, e.g. thirty] days, if the defaulting party fails to proceed promptly after being given such notice to commence curing the default and thereafter to proceed to cure the same, then the party not in default may, by giving written notice thereof to the defaulting party, terminate this Agreement as of a date specified in such notice of termination. [Please be aware that the applicable national legal framework can set forth particular rules, but the clause we provided the reader with can be generally applied in every jurisdiction.]

In the event that Licensee defaults in the payment, when due, of any amount due to Licensor hereunder and does not cure such default within [specify] days of the date of the invoice, then Licensor may, by giving written notice to Licensee, terminate this Agreement as of a date specified in such notice of termination. [The parties should negotiate whether or not including the right for one party to terminate the agreement in case the other party enters into  bankruptcy, or similar, proceedings.] Upon the termination of this Agreement for any reason, Licensor will provide Licensee with such termination assistance, at Licensor’s standard rates, as may be reasonably requested by Licensee. [This clause will be drafted according to the needs and the contracting power of the parties.]

15. Survival

All provisions of this Agreement relating to proprietary rights, confidentiality, warranty and limitation of liability shall survive the expiration or termination thereof.

16. Cessation of use

Upon termination of this Agreement, Licensee shall cease using the software and documentation and promptly return all copies of the software, documentation and all other confidential information in its possession or control. Licensee shall delete all copies of such materials residing in or off-line computer memory, and destroy all copies of such materials which also incorporate Licensee’s confidential information. Licensee shall, within [specify, e.g. five days] from the effective date of termination, certify in writing by an officer or director of the party that all copies of the software and documentation have been returned, deleted and destroyed.

17. Complete Understanding and Headings

This Agreement, including all annexes attached hereto, constitutes the final, complete and exclusive agreement between the Parties with respect to the subject matter hereof, and supersedes any prior proposals, understandings and all other oral and written agreements between the Parties relating to the subject matter hereof.

The headings used in this Agreement are for convenience only and are not intended to be used as an aid to interpretation.

18. Severability

If any provision of this Agreement is declared or found to be illegal, unenforceable or void, then both parties shall be relieved of all obligations arising under such provision, but only to the extent that such provision is illegal, unenforceable or void.

19. Waiver

No delay or omission by either party hereto to exercise any right or power hereunder shall impair such right or power or be construed to be a waiver thereof.

20. Binding

This Agreement will be binding upon and inure to the benefit of the parties hereto, their respective successors and assignees. Licensee may not assign its rights and obligations under this Agreement without the prior written consent of Licensor. [The parties can agree on a non-assignment clause for the Licensor too.]

21. Notices

Wherever under this Agreement one party is required or permitted to give notice to the other, such notice shall be deemed given when delivered in hand, or when mailed by registered or certified mail, return receipt requested, to the [indicate the subject, e.g. CEO] of the party receiving the notice.

22. Solicitation

Licensee shall not solicit the employment or nor employ any Licensor personnel who has been directly involved in the development, sale, installation, or support of the software for a period of [specify, e.g. two years] from the later of the termination of such individual’s employment or the last date of acceptance of any software, as set forth in this Agreement.

23. Governing Law

This Agreement shall be interpreted in the light of and governed by the laws of [indicate the country].

24. Competent Court

All disputes between the parties arising from or relating to this Agreement shall be brought before the Law Court of [indicate the city/country].

Or, in alternative

24. Arbitration

All disputes between the parties arising from or relating to this Agreement shall be settled by final and binding arbitration in accordance with and subject to [indicate the applicable arbitration rules of the competent arbitration chamber] in effect at such time by a panel of [specify the number] arbitrators selected in accordance with those rules. [Optional provision: Judgement upon the award rendered in any such arbitration may be entered in any court of competent jurisdiction, or application may be made to such court for a judicial acceptance of the award and enforcement, as the laws of such jurisdiction may require or allow.]

Or, in alternative

24. Dispute Resolution

In the event of any dispute between the parties hereto arising from or relating to this Agreement, then, upon the written request of either party, each of the parties will appoint a designated representative to endeavour to resolve such dispute. The designated representatives will negotiate in good faith to resolve the dispute. Except for those disputes where injunctive relief may be an appropriate remedy, no formal proceedings relating to such dispute may be commenced until the designated representatives conclude in good faith that amicable resolution through continued negotiation of the matter in issue does not appear likely.

[Names of the parties, date and place, signatures]