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The following sample Web Development Agreement is typical of Silicon Valley practice, in that it is short and not terribly aggressive. Overall, the terms favor the developer.
WEB SITE DEVELOPMENT AGREEMENT
This Web Site Development Agreement (” Agreement“) is entered into as of _____________, 1999 (” Effective Date“) by and between ____________, a ______________ corporation with offices at ____________________________ (“[ Company]“), and ______________ (” Customer“), a _________________ corporation, with offices at ________________________. In consideration of the mutual promises and upon the terms and conditions set forth below, the parties agree as follows: 1. DEFINITIONS 1.1 ” Alpha Test” means a test of the Web Site to be performed in accordance with the Statement of Work, as described in Section 2.2(d). 1.2 ” Content” means (a) any picture, image, figure, graphical material, videos, charts, writings or other text and any other materials and works of authorship provided by Customer for the Web Site; (b) any derivative works thereof provided by Company in accordance with the Statement of Work; and (c) any new such materials provided by Company in accordance with the Statement of Work. 1.3 ” HTML” means any materials provided by Company in accordance with the Statement of Work that are written in hypertext mark-up language, as such term is currently understood in the industry. 1.4 ” Launch” means to place the Web Site on Customer’s computer servers and make the Web Site generally available on the World Wide Web. 1.5 ” Maintenance Services” means correcting material non-conformities to the Statement of Work that Customer identifies in the Software or HTML, and providing second-tier technical support services [ by telephone, fax-back and e-mail] during Company’s regular business hours to Customer’s employees. Maintenance Services do not include providing technical support to members of the general public who use the Web Site. 1.6 ” Milestone” means a progress point to be completed in the development of the Web Site, as identified in the Statement of Work. 1.7 ” Software” means any computer software code provided by Company for the Web Site, in object code format, including without limitation any previously existing code and any code developed for the Web Site under this Agreement. Software does not include HTML. 1.8 ” Statement of Work” means the statement of work attached as Exhibit A. 1.9 ” Web Site” means a set of HTML-based compilations of integrated Content or other materials, which may, through software known as a browser, be displayed on client computers by means of a download to local cache memory, using the HTTP protocol service of the Internet. 2. DEVELOPMENT, DELIVERY AND ACCEPTANCE 2.1 Statement of Work. Each party shall complete its respective obligations ( ” Milestones“) described in the Statement of Work, as follows: the party listed in the “Responsible Party ” column shall perform the associated Milestone (including, if applicable, delivery of a specified Deliverable) to the other party by the date listed in the “ Due Date ” column for that Deliverable. 2.2 Development and Delivery. Acceptance and completion of Milestones will be governed by the following: (a) Milestones of Customer. Any Milestone for which Customer is identified as the “Responsible Party ” in the Statement of Work will be considered complete upon delivery to Company by Customer in accordance with the Statement of Work. The parties acknowledge that it is difficult for Company to reallocate and reschedule development resources due to delays in completion of Milestones caused by Customer. Therefore, if Customer fails to complete a Milestone or deliver a Deliverable by the due date listed in the Statement of Work, the parties shall negotiate new Milestone due dates and payments for each of the uncompleted Milestones. (b) Deliverables of Company. Any Milestone for which Company is identified as the “Responsible Party ” in the Statement of Work, and which requires a Deliverable, will be considered complete upon acceptance of the Deliverable by Customer, as follows: Customer shall review the Deliverable promptly upon delivery by Company. Customer’s refusal to accept a Deliverable must be reasonable, must be in writing and must be accompanied by reasons given in sufficient detail that the deficiencies can be rectified. Any Deliverable will be deemed accepted if Company has not received from Customer notification of rejection of the Milestone within 10 days after delivery thereof. (c) Milestones of Company. Any Milestone for which Company is identified as the responsible party in the Statement of Work, and which does not require a Deliverable, will be considered complete if Company has not received from Customer notification of refusal of the Milestone within 15 days of notification of Customer by Company that the Milestone is complete. (d) Alpha Test. For the Alpha Test Milestone, Company shall provide Customer with a password to allow Customer to access and test the Web Site on Company’s secure computer server in accordance with the description of the Web Site contained in the Statement of Work. After completion of the Alpha Test Milestone, Company shall deliver to Customer all Content, Software and HTML described in the Statement of Work, for Launch on Customer’s computer servers. All Software will be provided in object code form. 3. PAYMENT Customer shall pay Company, upon the completion of each Milestone as described in Section 2, the applicable amount designated in the Statement of Work. In the event of a late payment, Company may, in addition to any other remedies it may have: (a) charge a late fee of 1% per month, or the maximum rate allowed under law, whichever is less, to any unpaid balance; and (b) cease work on the Web Site, and re-negotiate all uncompleted Milestone payments and due dates. 4. OPERATION AND MAINTENANCE SERVICES 4.1 Launch. As between the parties, Customer will have the obligation to Launch, host or otherwise operate the Web Site on its own computer servers. Company will not be obligated to provide a computer server for the Web Site after completion of the Alpha Test Milestone, unless the parties agree on the prices, terms and conditions for any hosting services to be provided by Company. 4.2 Maintenance During Warranty Period. Company will provide Maintenance Services for the first 30 days after Launch under the warranty terms of Section 8.1. 4.3 Continuing Maintenance. Customer may, in its sole discretion, request continuing Maintenance Services by written notice and payment therefor no later than 30 days after Launch. The term for such Maintenance Services will commence 30 days after Launch and continue for one year. Maintenance Services for the first year will be priced at an annual rate of 15% of the total price for development of the Web Site under the Statement of Work. 4.4 Renewal. Customer may renew Maintenance Services for additional one-year periods by written request no later than 30 days prior to the expiration of the current annual period for Maintenance Services. Company may increase the price of Maintenance Services, by giving Customer notice of such increase no less than 45 days prior to the expiration of the current period for Maintenance Services. 4.5 Discontinue of Maintenance Services. If Customer at any time discontinues or fails to renew Maintenance Services, Company will not be obligated to provide further Maintenance Services except after agreement between the parties as to the prices, terms and conditions therefor. Customer may at any time discontinue Maintenance Service upon written notice to Company, however, Company will have no obligation to reimburse Customer for any fees for Maintenance Service for the remainder of the current annual maintenance term. 4.6 Other Services. Company may provide services other than Maintenance Services, upon request from Customer. These services may include without limitation updating and refreshing the Content or modifying the Web Site. Terms and payment for any such additional services must be agreed upon by the parties. 5. LICENSES 5.1 Content. Subject to the terms and conditions of this Agreement, Customer hereby grants to Company a non-exclusive, non-transferable, non-sublicenseable, worldwide license during the Term of this Agreement: 5.2 Software. Company hereby grants to Customer a non-exclusive, non-transferable, non-sublicenseable, worldwide license: 5.3 Reverse Engineering. Customer shall not cause or permit the reverse engineering, disassembly or decompilation of the Software. 6. OWNERSHIP 6.1 Content. As between Customer and Company, Customer will own the Content and any additions, changes, modifications, enhancements, translations, or other derivative works of the Content prepared by Company under this Agreement, and Company hereby assigns and shall assign all right, title and interest in the Content and such derivative works to Customer. 6.2 HTML. Each party will jointly own the HTML, and each party assigns and shall assign an undivided one-half interest in the HTML to the other party. Each party may exploit the HTML without accounting to or paying royalties to the other. 6.3 Software. As between Customer and Company, Company will retain ownership of the Software, including without limitation, any updates, releases or modifications thereof and Customer assigns and shall assign all right, title and interest it may have in the Software to Company. 6.4 Further Assurances. Customer and Company shall, and shall cause its employees and agents to, sign, execute and acknowledge or cause to be signed executed and acknowledged any and all documents and perform such acts as may be necessary for the purposes of perfecting the assignments described in this Section 6 and obtaining, enforcing and defending the rights performed thereto. 7. TERM AND TERMINATION 7.1 Term. This Agreement will commence on the Effective Date and will continue until 30 days after Launch, unless earlier terminated under Section 7.2. Customer may extend the term of this Agreement for additional one-year terms by paying the fees for Maintenance Services described in Sections 4.3 and 4.4. The initial term and any additional one-year terms shall be referred to collectively as the ” Term“. 7.2 Automatic Termination. This Agreement will terminate automatically upon notice if and when Customer admits in writing to its inability to pay its debts in the ordinary course of business as they come due, or makes an assignment for the benefit of creditors, or ceases business in the ordinary course. 7.3 Termination by Customer. Customer may terminate this Agreement upon written notice to Company if Company: 7.4 Termination by Company. Company may terminate this Agreement upon written notice to Customer in the event that: 7.5 Limitation on Company’s Right to Terminate. After payment for the final Deliverable under this Statement of Work, Company’s right to terminate this Agreement will not include the right to terminate the license to the Software granted to Customer under Section 5.2. 7.6 Survival. The obligations in the following Sections will survive any expiration or termination of this Agreement: 1 (Definitions), 5.3 (Reverse Engineering), 6 (Ownership), 8 (Representations and Warranties), 9 (Indemnities), 10 (Limitation of Liability), 11 (Confidentiality), and 12 (General). Section 3 (Payment) will survive as to any payment obligations accruing before the effective date of termination. If this Agreement expires, or is terminated to due breach by Company, Section 5.2 (Software License) will survive. All other obligations will terminate as of the effective date of expiration or termination. 8. REPRESENTATIONS AND WARRANTIES 8.1 Software Performance. Company represents warrants to Customer that for a period of 30 days following Launch, the Software will perform substantially as set forth in the Statement of Work. 8.2 Content Warranty. Customer hereby represents and warrants that the Content and operation of the Web Site incorporating such Content, does not and will not (a) be libelous, obscene, or violate rights of privacy or publicity of any third party, or (b) constitute fraud, misrepresentation, unlawful business practices or unfair competition. 8.3 Clearances. Customer hereby represents and warrants to Company that Customer has (i) secured all necessary licenses or clearances for the use of the Content, including all rights to copy, distribute, perform and display the Content and to create derivative works of the Content; and (ii) the use of Content as contemplated by this Agreement will not infringe the copyright, patent, trademark, trade secret or other intellectual property right of any third party, or constitute defamation, invasion of privacy, or the violation of any right of publicity, moral or any other right of any party. 8.4 Disclaimer. EXCEPT FOR THE WARRANTIES EXPRESSED IN THIS SECTION 8, EACH PARTY DISCLAIMS ANY AND ALL WARRANTIES, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. COMPANY DOES NOT WARRANT THAT THE SOFTWARE WILL MEET ALL OF CUSTOMER’S REQUIREMENTS, OR THAT THE USE OF THE WEB SITE AND THE SOFTWARE WILL BE UNINTERRUPTED OR ERROR FREE. 9. INDEMNITIES 9.1 Company. Company shall, at its own expense, defend or at its option settle any claim brought against Customer on the issue of infringement of any copyright or trade secret of any third party by the Software, or any Content provided or modified by Company under this Agreement, provided that Customer provides Company with (i) prompt written notice of such claim, (ii) control over the defense and settlement of such claim and (iii) proper and full information and assistance to settle or defend any such claim. 9.2 Customer. Customer shall, at its own expense, defend or at its option settle any claim brought against Company on the issue of infringement of any copyright or trade secret of any third party by the Content provided by Company under this Agreement, provided that Company provides Customer with (i) prompt written notice of such claim, (ii) control over the defense and settlement of such claim and (iii) proper and full information and assistance to settle or defend any such claim. 9.3 Exclusions. Company will not be liable for any infringement based on (i) Customer’s use of other than the most recent version of the Software; (ii) modification of the Software or Content by any party other than Company; (iii) the combination of the Software with other software, items or processes not furnished by Company if such infringement would have been avoided by the use of the Software alone; and (iv) modification of the Content, where such infringement would have been avoided by use of the Content alone. 9.4 Company’s Options. Without limiting Customer’s rights under Section 5.2, should the Software, or any Content provided by Company hereunder become, or in Company’s opinion be likely to become, the subject of any infringement claim or suit, Company may, at its option (i) procure for Customer the right to continue using the infringing material, pursuant to the rights granted in this Agreement, or (ii) modify such material such that it no longer infringes the proprietary rights of any third party, provided that any modifications to the Software must not result in loss of functionality of the Software. 9.5 Customer’s Options. Without limiting Company’s rights under Section 5.1, should the Content become, or in Customer’s opinion be likely to become, the subject of any infringement claim or suit, Customer shall, at its option (i) procure for Company the right to continue reproducing, and making and reproducing derivative works of the Content, as described in this Agreement, or (ii) modify the Content such that it no longer infringes the proprietary rights of any third party; or (iii) request Company to remove the Content from the WebSite. Customer shall pay Company any costs or development fees associated with any change to the Content under this Section 9.5. 9.6 Exclusive Remedy. THE FOREGOING PROVISIONS OF THIS SECTION 9 STATE THE ENTIRE LIABILITY AND OBLIGATIONS OF EACH PARTY, AND THE EXCLUSIVE REMEDY OF EACH PARTY, WITH RESPECT TO ANY ACTUAL OR ALLEGED INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHT. 10. LIMITATION OF LIABILITY NEITHER PARTY WILL BE LIABLE TO THE OTHER FOR ANY INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES, OR DAMAGES FOR LOSS OF PROFITS, REVENUE, DATA, OR USE, INCURRED BY EITHER PARTY OR ANY THIRD PARTY, WHETHER IN AN ACTION IN CONTRACT OR IN TORT, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. EXCEPT FOR LIABILITY FOR THIRD PARTY CLAIMS ARISING OUT OF SECTION 9, COMPANY’S AGGREGATE LIABILITY FOR DAMAGES HEREUNDER WILL IN NO EVENT EXCEED THE AMOUNT OF FEES PAID BY CUSTOMER UNDER THIS AGREEMENT. 11. CONFIDENTIALITY 11.1 “Confidential Information “means any proprietary information of a party to this Agreement, including, without limitation, any such information related to the Content, the Software or any other software, products, research, customers, customer lists, markets, marketing, finances or other business information. 11.2 Exceptions. Confidential Information will not include any information which (i) was publicly known and made generally available prior to the time of disclosure by the disclosing party; (ii) becomes publicly known and made generally available after disclosure by the disclosing party to the receiving party through no action or inaction of the receiving party; (iii) is already in the possession of the receiving party at the time of disclosure; (iv) is obtained by the receiving party from a third party without a breach of such third party’s obligations of confidentiality; (v) is independently developed by the receiving party without use of or reference to the disclosing party’s Confidential Information; or (vi) is required by law to be disclosed by the receiving party, provided that the receiving party gives the disclosing party prompt written notice of such requirement prior to such disclosure and assistance in obtaining an order protecting the information from public disclosure. 11.3 Non-Disclosure and Non-Use. Each party (a) shall treat as confidential all Confidential Information of the other party; (b) shall not disclose such Confidential Information to any third party, except on a “need to know ” basis to third parties that have signed a non-disclosure agreement containing substantially the terms of Sections 11.1 and 11.2; and (c) shall not use such Confidential Information except in connection with performing its obligations or exercising its rights under this Agreement. 11.4 Confidentiality of Agreement. Neither party to this Agreement shall disclose the terms of this Agreement to any third party without the consent of the other party, except as required by securities or other applicable laws. Notwithstanding the previous sentence, a party may disclose the terms of this Agreement to its accountants, attorneys or other professional advisors acting under a duty of confidentiality. 11.5 Press ReleaseNotwithstanding the provisions of Section 11.4, the parties shall issue a mutually acceptable press release regarding the Web Site and its Launch on or before the Launch date. 12. GENERAL 12.1 Notice. Any notice required or permitted under the terms of this Agreement or required by law must be in writing and sent, by any reasonable means, to the address of the recipient party first written above. 12.2 Arbitration and Governing Law. The laws of the state of California, except its conflicts of law provisions, will govern this Agreement. In the event a dispute arises between the parties hereto arising out of this Agreement or any breach thereof, such dispute must be determined and settled by binding arbitration in [San Francisco, California], in accordance with the rules of the American Arbitration Association ( “AAA “). The award rendered thereon by the arbitrator shall be final and binding on the parties thereto, and judgment thereon may be entered in any court of competent jurisdiction. Nothing in this Section will prevent either party from applying to a court of competent jurisdiction for equitable or injunctive relief. 12.3 Force Majeure. Neither party will be liable to the other party for any loss or damage resulting from any delay or failure to perform all or any part of this Agreement (except failure to pay monies due) if such delay or failure is caused, in whole or in part, by circumstances beyond the control and without negligence of the party. Such circumstances include, without limitation, acts of God, strikes, lockouts, riots, acts of war, acts of deadly violence, earthquakes, floods, fire and explosions. 12.4 Severability. If any provision or part of this Agreement is found to be invalid, unlawful or unenforceable, such provision or part will be severed from this Agreement and the remainder of the provisions, terms and conditions of this Agreement will continue to be valid and enforceable. The parties shall make reasonable and good faith efforts to amend any severed provision or part of this Agreement so as to preserve the intentions of the Agreement as much as possible. 12.5 Waiver. A waiver of any provision of this Agreement or of a party’s rights or remedies under this Agreement must be in writing and signed by an authorized representative of the waiving party to be effective. Failure, neglect or delay by a party to enforce the provisions of this Agreement or its rights or remedies under this Agreement will not be construed or deemed to be a waiver of such party’s right to do so and will not affect the validity of all or any part of this Agreement or prejudice such party’s right to take subsequent action. Neither a waiver of any provision of this Agreement or any right or remedy hereunder, nor the exercise or enforcement of any right or remedy under this Agreement, will preclude the validity and enforceability of any other provision, right or remedy under this Agreement or that a party is entitled to by law. 12.6 Integration. This Agreement, including the Statement of Work and any other Exhibits hereto, constitutes the entire agreement between Company and Customer and supersedes all prior or contemporaneous agreements or representations, written or oral, concerning the subject matter of this Agreement. This Agreement may not be modified or amended except in writing and signed by a duly authorized representative of each party to this Agreement; no other act, document, usage or custom may be deemed to amend or modify this Agreement or otherwise affect the rights, duties or obligations of the parties under this Agreement. 12.7 Assignment. This Agreement will be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided, however, that neither party shall assign any of its rights, obligations, or privileges (by operation of law or otherwise) hereunder without the prior written consent of the other party. Notwithstanding the foregoing, however, either party may assign all of its relevant assets, in connection with an asset sale, merger, or corporate reorganization. Any attempted assignment in violation of this Section 12.7 will be void. The parties have signed below to indicate their acceptance of the terms and conditions of this Agreement. “Company “: —————— Signature: —————— Name: —————— Title: —————— “Customer “: —————— Signature: —————— Name: —————— Title: ——————
Exhibit A
Statement of Work � Web Site Development
Milestone: Deliverables: Responsible Party Customer/Company: Date: Payment: Heather Meeker is an attorney in the Technology Transactions Group at Wilson, Sonsini, Goodrich & Rosatiin Palo Alto, Calif. She teaches a seminar in Intellectual Property Licensing at Hastings College of the Law in San Francisco. This agreement was developed as part of her seminar, and incorporates the work of her students. This sample agreement is intended to serve solely as an exemplar and may need to be modified to conform to the legal requirements of your jurisdiction. It in no way constitutes legal advice.

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