Software Development Agreement

SOFTWARE DEVELOPMENT AGREEMENT

___________________[Name of party contracting for program development],

___________________[address] ("Company"), and ___________________[name of
designer], ___________________[address] ("Designer"), in consideration of the
promises made herein, hereby agree as follows:

1. Work Product Defined. The term "Work Product," as used in this Agreement, means
all programs, systems, processes, inventions, concepts, techniques, data, materials, or
work of authorship in any form, first produced or created by Designer or for Designer as
a result of, or related to, directly or indirectly, the performance of work or services under
this Agreement, including all works that may have copyrights, trade secrets, patents, and
all other intellectual property rights, and that shall, to the fullest extent permissible under
law, be considered works made for hire.

2. Work Product Description. Company desires to have Designer perform all services
and produce Work Product as described ___________________ [below:
___________________ (describe projected features and function) or in Appendix A
attached to this Agreement and incorporated herein by reference].

3. Services. Designer agrees to provide all services necessary to produce the Work
Product as described in ___________________[Paragraph 2, above or Appendix A].

4. Term of Agreement. This Agreement shall be effective from the date upon which it is
executed until terminated by Company upon ___________________[specify period]
prior written notice or by Designer on ___________________[specify period] prior
written notice, terminated pursuant to any other provision of this Agreement, or until
completion of all services contemplated by this Agreement.

[For periodic charges, use the following provision:]

5. Periodic Payment. Company shall pay Designer for all services rendered in
accordance with Designer's established rates contained in its rate schedule dated
___________________ which are attached to this Agreement as Exhibit B and
incorporated by reference, and all applicable taxes, including sales or use taxes. Company
also shall pay Designer for ___________________[specify extra items, e.g.: travel costs,
including travel time, meals, and lodging, related to performance of this Agreement].
Company shall also reimburse Designer for special or unusual expenses incurred at
Company's specific request. All rates are subject to change by Designer on
___________________[specify period, e.g., 30 days] prior written notice. Charges shall
be billed ___________________[specify period, e.g.: monthly] and shall be payable
immediately upon receipt of each invoice. Payment is contingent upon completion of the
Work Product and acceptance of the Work Product by Company. [Concurrent with the
execution of this Agreement, Company shall deposit with Designer the sum of
$____________________ as an advance to be applied against the charges billed to
Company by Designer as specified above.]

[Or, for a lump-sum purchase price:]

5. Purchase Price. Company shall pay Designer the sum of $____________________

as the purchase price for all services rendered. Concurrent with the execution of this
Agreement, Company shall deposit with Designer an amount equal to
___________________ percent of that purchase price to be applied against the purchase
price. Payment of the balance shall be made upon completion of the Work Product and
acceptance of the Work Product by Company.

[Continue with the following:]

6. Development and Acceptance of Specifications. (a) Within ___________________

working days after the date of this Agreement, the parties shall meet and discuss the basic
purpose and functions of the Work Product and the specific features necessary in order to
accomplish its specific purpose. Following agreement on the purpose and basic features
of the Work Product, Designer shall prepare specifications for any software portion of the
Work Product. If these specifications are acceptable to Company, Company shall execute
a copy of the Specifications Acceptance Agreement attached to this Agreement as Exhibit
C.

(b) If Designer and Company are unable to agree upon specifications for the software
portion of the Work Product, this Agreement shall be terminated and all copies of any
specifications or other materials furnished by Designer to Company shall be returned
immediately [add if lump sum purchase price provision was used and parties agree that
designer will be entitled to retain deposit:, but Designer shall retain that portion of the
purchase price deposited by Company at the time this Agreement was executed].

7. Completion and Acceptance of Work Product. When Company accepts the

specifications for the software portion of the Work Product, Designer shall commence
preparation and development of the program in accordance with those specifications. If
the final complete program meets the specifications in all material respects, Company
shall promptly accept it and Designer shall complete the additional portion of the Work
Product.
 8. Failure to Complete Work Product. Designer's failure to complete the Work
Product in accordance with the specifications adopted under Paragraph 6 shall constitute
a breach of this Agreement for which Company may seek damages.

9. Confidential Information. (a) Designer agrees that all information communicated to

it with respect to the proposed Work Product, including any confidential information
relating to the proposed Work Product gained by Designer or its personnel, whether or
not that information was directly or intentionally communicated, is confidential. Designer
further agrees that all information, conclusions, recommendations, reports, advice, or
other documents generated by Designer pursuant to this Agreement is confidential.

(b) Designer promises and agrees that it shall not disclose any confidential information to
any other person unless specifically authorized in writing by Company to do so. If
Company gives Designer written authorization to make any disclosures, Designer shall
do so only within the limits and to the extent of that authorization.

(c) Designer shall use its best efforts to prevent inadvertent disclosure of any confidential
information to any third party. Designer shall instruct its personnel to keep that
information confidential by using the same care and discretion that they use with similar
data designated by Designer as confidential.

(d) Designer acknowledges and agrees that all information concerning the Work Product
and any future and proposed products of Company or any of its associates constitutes an
exceptionally valuable trade secret of Company. That information includes, among other
matters, the facts that the Work Product is planned, under consideration, or in production,
as well as any descriptions of the features of the Work Product.

10. Use and Disclosure of Confidential Data. Designer shall not use any confidential
information or circulate it to any other person or persons, except when specifically
authorized in advance by Company and then only to the extent necessary for any of the
following:

(a) Conducting negotiations, discussions, and/or consultations with designated Company

representatives.

(b) Supplying Company with goods or services at its order.

(c) Preparing confidential estimates, bids or proposals, and invitations for bids or requests
for proposals for submission to Company.

(d) Accomplishing any purpose Company may later specify in writing.

 11. Copies of Confidential Data. Designer agrees that copies of confidential
information shall not be made without the express written permission of Company and
that all such copies shall be returned to Company along with the originals.
[Notwithstanding the foregoing, Company agrees that Designer, subject to the other
terms and conditions of this Agreement, may make one and only one copy of any
materials supplied by or to Company and retain those copied materials solely for its use
as historical and legal references.]

12. Return of Materials. Designer shall return to Company, promptly at Company's

request, all confidential materials [other than material that Consultant may retain under
Paragraph 11 of this Agreement]. Any materials that Company specifically requests to be
returned shall be returned promptly at the conclusion of the work on the project to which
the materials relate, or, if no work is performed, at the time Designer ceases to be
involved with that project.

[If buyer is to have exclusive rights to the work product:]

13. Property Rights in Work Product. Company and Designer agree that all original
material, including all computer programs and all related printed materials comprising the
Work Product, originated and prepared for Company by Designer pursuant to this
Agreement, shall belong exclusively to Company and shall constitute a trade secret
owned exclusively by Company. Designer acknowledges and agrees that the sale or
unauthorized use or disclosure of information concerning the Work Product [and any
future proposed products of Company or any of its associates, the facts that those
products are planned, under consideration, or in production,] as well as any descriptions
of the features thereof shall constitute unfair competition. Designer promises and agrees
not to engage in any unfair competition with Company.

[Or, if rights are to be retained by designer:]

13. Property Rights and License. Company and Designer agree that all original
material, including all computer programs and all related printed materials comprising the
Work Product, originated and prepared for Company by Designer pursuant to this
Agreement, shall belong exclusively to and be the property of Designer, and that
Designer shall have the exclusive right to protect the Work Product by copyright or any
other means. However, Designer agrees that upon receipt of payment in full pursuant to
the terms of this Agreement, Designer shall convey to Company
___________________[a nonexclusive or an exclusive]
___________________[assignable or nonassignable] license for the use of the Work
Product which ___________________[shall or shall not] include the right to reproduce,
publish, or sublicense the Work Product to other parties. Company acknowledges and
agrees that the Work Product is confidential and agrees to use all reasonable means
necessary to protect its confidentiality. [Optional: Designer agrees to pay Company a
royalty of ___________________[specify dollar or percentage amount] on each license
Designer grants with respect to the Work Product or any modification or amendment it
makes thereto.]

[Continue with the following:]

14. Joint Use of Concepts. Company and Designer acknowledge and agree that the
technical expertise developed during the course of this Agreement by Designer's
personnel or jointly by Designer's personnel and Company's personnel may be used by
either party in any way that party deems appropriate.

15. Indemnification. Consultant shall indemnify Company against all losses and
expenses incurred by Company, including but not limited to reasonable attorneys' fees,
resulting from any breach of this Agreement by Designer. Designer agrees to indemnify
and hold Company harmless from all claims for bodily injury or property damage that
may arise from Designer's performance of services for Company. Designer waives all
rights against Company for damages covered by other insurance.

16. Liability Limitation.

NOTWITHSTANDING ANYTHING TO THE CONTRARY WITHIN THIS

AGREEMENT, ALL LIABILITY OF COMPANY UNDER THIS AGREEMENT
SHALL BE LIMITED TO THE AMOUNTS OWED TO DESIGNER BY
COMPANY FOR WORK ACTUALLY PERFORMED BY DESIGNER.

17. Independent Contractor Status. Company and Designer agree that Designer shall
perform its duties under this Agreement as an independent contractor. Personnel
employed by Designer who perform duties related to this Agreement shall remain under
the supervision, management, and control of Designer.

18. Governing Law. This Agreement shall be construed according to, and the rights of
the parties shall be governed by, the law of the State of California.

19. Attorneys' Fees. If any legal action is necessary to enforce the terms of this
Agreement, the prevailing party shall be entitled to reasonable attorneys' fees in addition
to any other relief to which that party may be entitled. This provision shall be construed
as applicable to the entire Agreement.

20. Entire Agreement. This Agreement sets forth the entire agreement between the
parties with regard to the subject matter hereof. No other agreements, representations, or
warranties have been made by either party to the other with respect to the subject matter
of this Agreement.

21. Severability. If any of the provisions of this Agreement are found or deemed by a
court of competent jurisdiction to be invalid or unenforceable, they shall be severable
from the remainder of this Agreement and shall not cause the invalidity or
unenforceability of the remainder of this Agreement.

22. Amendment.

This Agreement may be amended only by a written agreement signed by both parties.

Executed at ___________________, California, on ___________________.

COMPANY
______________________ [name of company]
By ______________________ [signature]
[typed name and title]
DESIGNER
______________________ [name of company]
By ______________________ [signature]
[typed name and title]

EXHIBIT A
Description of Work Product to Be Produced by Designer

[If work product to be produced by designer is not specified in agreement itself, attach
description here; include general discussion of what the software must do, and include
any reference to manuals or other documentation that is required in connection with the
software.]

EXHIBIT B
Designer's Rate Schedule

[If designer is to be paid in accordance with a standard rate schedule, attach a copy of
that schedule here.]
EXHIBIT C
Acceptance of Specifications

[Attach copy of form document accepting specifications for work product.]