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Sample License Agreement Form

The Sample License Agreement is a form that serves as an agreement between the owner of a standard license and the user who would like to use that license.

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TERMS AND 	CONDI	TIONS	 	
 
Section 1 –	General 	
 
1.1 Customer	’s 	Repr	esentations.	  Custom	er 	represents 	and 	
warrants	 th	at (	i) Custo	mer is an entity du	ly o	rganized, va	lidly	 	
existing and in good standing in the 	jurisdiction of its or	ganization 	
and every other jurisdiction where an	y Product is to be located; (ii) 	
Custom	er has obtained all ap	provals, perm	its or other 	
authorizations required for Custom	er to enter in	to and perf	orm its 	
obligations under this A	greem	ent he	reby; (iii) the purchase of any 	
Product contem	plated hereby does not	 violate or conflict with any 	
law	, regulation, decree, order	, judgm	ent, contract, agreement, or 	
other docum	ent applicable to Custom	er or its propert	ies; and (iv) 	
all f	inancia	l statem	ents and 	other inform	ation provided by 	
Custom	er to V	endor are true,	 accu	rate	 and com	plete in all m	aterial 	
respects.   	
 	
 	
1.2 Charges.	  Product char	ges applicable to	 a transaction shall be as 	
set forth in an order or other Ancillary Docum	ent. 	 In the absence 	
of such a docum	ent V	endor	’s then current standard list of c	harges 	
shall apply	.  Unless otherwis	e expressly provided by this 	
Agreem	ent, and regardless of the 	term	s of any lease, licen	se or 	
Service arrangem	ent pursuant here	to, recurring	 char	ges (su	ch as	 	
monthly license or m	aintenance char	ges) m	ay be increased at any 	
tim	e in V	endor	’s sole discretion upon 	thirty (30) days prior written 	
Notice to Custom	er.  Taxes and shipping char	ges (as set forth 	
below) are in addition to all other Product char	ges. 	
 	
Comment	: In or	der to contr	ol costs 	
and avoid nasty surprises, clinics 
should insist that all pur	chases 	
and licenses ar	e listed in an 	
Appendix, along with 
corr	esponding prices and 	
discounts. T	his Appendix 	should 	
specify what items ar	e being 	
pur	chased for a fixed amount or 	
fee, and what services ar	e char	ged 	
hourly	. For hourly services, the 	
clin	ics may want to spec	ify “not to 	
exceed” 	ma	ximums.    	
 	
1.3 	Payment.  (a) 	One-tim	e char	ges are due and payable at th	e time 	
of delivery of the Product.  A	 recurring char	ge is due on the 	
earlier of (i) the fifteenth day follo	wing the date of the inv	oice for 	
such char	ge, or (ii) the thirtieth day of the Period to which such 	
char	ge relates. 	 Recurring char	ges shall be prorated in resp	ect of	 	
partial Pe	rio	ds. 	 (b)	 Th	e paym	ent term	s f	or those item	s set f	orth 	
in the attached Appendices 	shall be as follows: 50% upon 	
Custom	er’s execution of this Agreem	ent and the balance upon the 	
earlier to oc	cur of (a) Software 	installation or (b) 3 m	onths fro	m 	
Custom	er’s execution of this Agreem	ent. 	 (c) 	All char	ges are du	e 	
and payable as set forth above re	gardless of whether or not V	endor 	
invoices Custom	er for such ch	arges.  In the event of a 	
delinquency in the paym	ent when due of any am	ount	 owing 	
Vendor under this Agreem	ent, so	 long as such delinquency 	
rem	ains outstanding in whole or in	 part, interest 	on the delinquent 	
Comment	: Many vendor 	
agr	eements specify tha	t the clin	ics 	
shall pay 50% or mor	e in advance	 	
befor	e the vendor has done 	
anything, and befor	e the clinics 	
can verify th	at the so	ftwa	re even 	
works pr	operly! 	 Just as it would 	
not be wise to pay a construction 
contractor most or all of your 
money befor	e he has even picked 	
up a hamme	r or driven a single 	
nail, it is unwise to pay the 
softwar	e vendor substantial 	
amounts of money befor	e the 	
vendor has performed. Despite 
what softwar	e vendors may say	, 	
installment payments trigger	ed by 	
the successful completio	n of 	
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am	ount shall accrue at the rate of	 one and one-half percent (1.5%) 	
per m	onth (	or, if	 less, the highes	t rate p	erm	itte	d by applic	able 	
law). 	 All accrued delinquency inte	rest shall be due and payable 	
on dem	and, and in the absence of dem	and, on the first day o	f each 	
calendar m	onth.  The accrual an	d collection of delinquency 	
interest sh	all not constitute a cure	 of the contin	uing breach of this	 	
Agreem	ent constituted by such delinquency	, nor a waiver of any 	
other right o	r rem	edy in respect of	 such breach av	ailab	le to V	endor 	
under this 	Agreem	ent, at law	, or in equity	. 	
 	
specified milestone tasks ar	e th	e 	
norm, and clinics should insist 
upon them. 	 Note that just as in a 	
contract to construct a house, 
ther	e should be a significant 	
“withhold” to be paid only upon 
satis	facto	ry completion of the 	
work.    
 	
1.4 T	axes.	  All sales use or other taxes 	or governm	ental fees or levies 	
related to a transaction (other	 than taxes based upon V	endor	’s 	
incom	e) shall be the sole responsib	ility of Custom	er.  If advanced 	
by V	endor	, such taxes shall be reim	bursed by Custom	er 	
imm	ediately upon delivery of th	e Product in question.  Such 	
reim	bursement shall be due an	d payable as set forth above 	
whether or not V	endor invoices Cust	om	er for such taxes. 	 If a 	
certificate of exem	ption or sim	ilar 	do	cum	ent or proceeding	 is	 to be 	
made in order to exe	mpt the tra	nsaction f	rom any tax liability	, 	
Custom	er shall obtain s	uch certifi	cate, docum	ents, and/or initiate 	
such proceeding at Custom	er’s sole cost and expense. 	
 	
 
 
 
 
 
 
 
 
 	
1.5 T	erm 	and 	Termination.	  This Agreem	ent shall comm	ence upon 	
the Ef	fectiv	e Date	 and	 continue u	ntil te	rm	inated a	s prov	ided	 	
below	.  This Agreem	ent shall term	inate upon the first to occur of 	
the followin	g: (1) in the case of 	a breach of this Agreem	ent which 	
rem	ains unc	ured thir	ty 	(30) days after Notice of	 breach was given 	
to the Party in breach, the non-br	eaching Party m	ay ter	minate this 	
Agreem	ent imm	ediately upon written Notice to the Party in	 	
breach	; (2	) either party	 in its so	le discretion (for any or no reason 	
whatsoever) m	ay term	inate th	is Ag	reem	ent upon ninety (90) days 	
Notice of term	ination to the 	other Party	.  Unless V	endor 	
otherwise elects in its sole disc	retion, any term	ination of this 	
Agreem	ent s	hall not be ef	fective as to a Product under an extended 	
term	 transaction	 (such	 as 	 leas	e o	r License where a sep	arately	 	
stated term for such transactio	n is set forth in	 an An	cillary	 	
Docum	ent) until the exp	iration of	 su	ch extended term	. 	
 	
Comment	: This clause allows the 	
Vendor to terminate the 	Agr	eement 	
for no good r	eason on 90 days 	
notice. 	 By the time a clinic 	
enters into an agr	eement with a 	
Vendor	, it w	ill have spent a gr	eat 	
deal of time, money and r	esour	ces 	
identify	ing its softwar	e n	eeds, 	
develop	ing s	pecifications	 (see 	
Addendum for definition of 
Functional Specifications)	, 	
negotiating the business and legal 
terms of the contract with 	Vendor	, 	
and signing and commencing 
implementation. After 	these 	events 	
occur	, the clinic will wa	nt the 	
Agr	eement to be binding on 	
Vendor so it can’	t simply walk 	
away fr	om its obligations. See 	
Addendum for pr	oposed r	evision. 	  	
 	
1.6 	Confidentiality and Pr	oprietary R	ights.	  Except as provided in 	
this Se	ction,	 inf	orm	ation exchanged	 between th	e Parties sh	all 	not	 	
be considered confidential unless 	both Parties agree o	ther	wise in	 	
writing. 	 Each Party sh	all keep con	fidential all term	s, conditions 	
or other provisions of this Ag	reement.  Custom	er 	acknowledges 	
and agrees as follow: 
 	
 	
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(1) The owner of each item	 of In	tellectual Pro	perty em	bodied in	 	
any Product or Product com	ponent sha	ll possess and retain title in 	
and to each Product and its com	ponent parts, including without 	
lim	itation all Intellectual Propert	y em	bodied in (i	) all Software 	
code and docum	entation, (ii) all m	anuals or user inform	ation, (iii) 	
the design and form	at of the inpu	t and output scr	eens,	 graphical 	
user interface, and printable fo	rm	s, reports and other hard copy 	
output incorporated in or genera	ted by the Pr	oduct, and (iv) all 	
additions, enhancem	ents, revisions	, updates or other m	odifications 	
to th	e Produ	ct or any	 part thereof,	 regardless of	 any fee or char	ge 	
paid by Custom	er to V	endor in respect of the Product or the design, 	
creation or use thereo	f.  Custom	er shall not cause or perm	it 	
rem	oval or alteration in any way 	of any Notice, legend or sym	bol	 	
denoting any copyright, tradem	ark, pa	tent or other proprietary right 	
or in	ter	est of	 the In	tellectu	al Property owner appearing on any 	
input or output screen or hard	 copy output incor	porated in or 	
generated by the Product, or	 any documentation, manuals, 	
brochures, or other written or prin	ted m	aterials of any kind related 	
to the Product. 
 	
 	
(2) Each item	 of Intellectual Pr	operty em	bodied in a Product or any 	
com	ponent thereof constitutes valu	able proprietary inform	ation and 	
trade secr	ets of t	he owner	 of	 such Intellectual P	roperty	. 	
Consum	er shall not disclose (nor perm	it any Custom	er e	mployee, 	
independent contractor	, agent, or 	other person under its authority or 	
control, to disclose) to any Person, or allow any Person access to, 
any such proprietary infor	mation or trade secrets in whole or in 	
part; provided, however	, use of th	e Product in accordance with the 	
term	s and conditions of this Agreem	ent shall be perm	itted by 	
em	ployees of Custom	er in the ordi	nary course and scope of their 	
em	ploym	ent by Customer	.  Customer shall not cause or perm	it 	
any Software Product to be reverse engineered, decom	piled, or 	
disassem	bled in whole or in part. 	 Custom	er shall not cause or 	
perm	it the software, docum	entation, 	or other inform	ation related to 	
the Product to be copied or reproduc	ed in any form	 or m	edium, in 	
whole or in part. 	 Custom	er sha	ll take such actions to preserve 	
and protect V	endor	’s proprietary rights and interest of 	
confidentiality in and with respec	t to the Products which are, at a 	
minimum, c	omm	ensurate with those actions taken by Custom	er to 	
preserve and protect its m	ost va	luable trad	e sec	rets	 or other 	
proprietary of conf	idential inform	ation. 	
 	
 	
(3) Custom	er’s conf	iden	tia	lity ob	lig	ations h	ereu	nder do not apply	 	
to any inf	orm	ation which (	i) was lawf	ully	 and r	ightf	ully in	 	
Custom	er’s possession	 at the tim	e of disclosure and was not 	
acquired directly or indirectly fr	om	 V	endor	, (ii) was lawfully and 	
rightfully acquired by Custom	er fr	om others who acquired it by 	
proper m	eans and had no confidentiality obligation to V	endor with 	
 	
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respect to sam	e, or (iii) is now	, or hereafter becom	es, through no 	
fault of 	 Custom	er, pa	rt of the public dom	ain by publication or 	
otherwise. 
 
(4) Custom	er has no right to use any Software Product or any part 	
thereof except as spec	ifically grante	d under the license referred to 	
in Section 3 hereof. 
 	
 	
(5) Neither party shall infringe upo	n or otherwise m	ake use of any 	
tradem	ark, s	ervice m	ark, trad	enam	e, 	or sim	ilar right or interest of 	
the other Party	. 	
 	
 	
1.7 Installation	.  Except as otherwis	e e	xpressly provided in an 	
Ancilla	ry D	ocum	ent, the ins	tallatio	n and se	t-up	 of	 all P	rod	ucts a	t 	
Custom	er’s site shall be the so	le responsibility of Custom	er.	
Custom	er i	s solely responsible for providing an environm	ent 	
corresponding to the Product’	s Specif	ications and that is otherwise 	
suitable for the Product’	s insta	llation and operation.  W	ithout 	
lim	iting the generality of the foregoing, the site for the Product 	
selected by Custom	er shall be su	itable as to s	pace, tem	perature, 	
hum	idity	, and the availability	 of electrical power	, cabling, 	
connectivity devices, and al Hard	ware, Software and supplies not 	
included with the Product but requi	red for its installation operation 	
or use. 	 Where an Ancillary Do	cum	ent expressly requires V	endor 	
to install a Product, such Product 	shall be installed by V	endor at 	
Custom	er’s site at a tim	e that is 	mutually ag	reeab	le to the Parties. 	
 	
Comment	: You will notic	e that 	
Vendor	’s sample License 	
Agr	eement says that installation of 	
the softwar	e is “the so	le 	
responsibility of Customer	,” and 	
ther	efo	re, th	ere is virtually no 	
details as to how the installation 
and implementation will pr	oceed. 	 	
In short, this	 clause a	llo	ws the 	
Vendor to dr	op of	f the softwar	e 	
and the r	est is Customer	’s risk and 	
responsibility	. Fr	om the clinics’	 	
point of view	, this is not 	
acceptab	le. 	 The r	eality is that a 	
softwar	e ins	tallation pr	oject tha	t is 	
not pr	operly managed is likely to 	
fail. 	 Please see the 	Addendum to 	
the License 	Agr	eement, Section 1.7 	
et seq which sets forth an 
“Implementation Plan,”	 detailing 	
some of the key elements	 to be 	
mindful of in	 (1) identifying the 	
tasks that have to be done; (2)	 	
determining the pr	oper sequence 	
for the p	erfo	rmance of th	ose tasks	; 	
(3)	 allocating whose r	esponsibility 	
it is to per	form those tas	ks; (	4) 	
verifying that those tasks have 
been pr	operly performed befor	e 	
allowing the pr	oject to m	ove on to 	
the next phase; and (5)	 developing 	
the management plans to make 
sur	e tha	t th	ese activities all occu	r.  	
As specified in the 	Addendum, the 	
implementation tasks include 
design and configuration of the 
Softwar	e, data conversion, 	
creation of custom softw	ar	e, 	
training clinic’	s staf	f, conducting 	
acceptance testing (ind	ividual 	
components, then conducting 	
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end-to-end system)	, pr	eparation 	
for “Go-Live,” etc. 	 The 	
Implementation Plan should 
include a series of “gr	een light; 	
red light system” which specifies 
that the 	Vendor cannot move on to 	
the nex	t step	 until the c	linic has 	
sign-of	f to verify the su	ccessfu	l 	
completion of prior steps. 	  	
 
Comment	: A	 softwar	e 	
implementation is loo	sely 	
analogous to building a house. 	The 	
tasks fo	r the success	ful completion 	
of both pr	ojects r	equir	es that the 	
tasks be done in pr	oper sequence, 	
each satisfa	ctorily comp	leted, 	
befor	e the next task is commenced. 	 	
For example, just as you would not 
erec	t the wa	lls of	 a house befor	e 	
the foundation is pour	ed and 	
inspected, you would not schedule 
a “go-live date” befor	e the 	
softwar	e has been configur	ed to 	
your satisfaction, and such tasks 
as data conversion, training, and 
testing have success	fully been 	
completed.  Nevertheless, 	many 	
softwar	e ag	reements r	efer to 	
“Go-Live Dates” as a date 
unilaterally set by 	 the 	Vendor	, as 	
if such a date could be 	 scheduled 	
independent of other tasks that 
have to occu	r befor	e the Go-Live 	
Date is se	t. 	  The defin	ition of the 	
“Go-Live Date” as set forth in the 
Addendum is intended to r	equir	e 	
the 	Vendor to have satisfactorily 	
completed k	ey steps b	efore th	e 	
Go-Live Date is se	t. 	   	
 	
1.8 	Other	 Customer	 Responsibilities.	  Except as otherwise 	
express	ly pr	ovided in an	 Ancillary Docum	ent, Custom	er is solely 	
responsib	le for each of the followi	ng: 	 (1) th	e suitability	 of a 	
Product for Custom	er’s purposes and intended use, (2) the use and 	
operation of a Product in accordance with the Specifications and 
the m	anufa	cturer	’s operational inst	ructions, and applicable law; 	
(3) the use of a Product’	s operational 	results; (4) all data input into 	
any Product, and (5) conversion of 	data or other files produced by 	
non-V	endor products into a for	m suitable for use by a Product. 	
 	
 	
Section 2 – Hardw	are and Supplies 	 	
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6

2.1 	Shipping and Delivery	.  All shipping or other transportation 	
char	ges related to a Product shall 	be the sole responsibility of 	
Custom	er.  If advanced by V	endor	, such char	ges shall be due and 	
payable at the tim	e of delivery 	whether or not V	endor invoices 	
Custom	er for such char	ges. 	 In the absence sp	ecific ins	tructions	 	
from	 Custom	er, V	endor	 will select the carrier bu	t shall no	t th	ereby	 	
assum	e any liab	ility in	 connectio	n with shipm	ent, nor sha	ll th	e 	
carrier be construed to be the agent of 	Vendor	. 	
 	
Comment	: Assuming that the clinic 	
will want to incorporate into th	e 	
system softwar	e and har	dwar	e 	
supplied or manufactur	ed by a 	
thir	d party	, clinic will want 	
assurance fr	om 	Vendor that the 	
pr	oposed co	mponents will all be 	
compatible with each other	.  See 	
Addendum Section 2.5 for 
pr	oposed clause r	equiring 	Vendor 	
to pr	ovide such assurance. 	 	
 	
2.2 	Title and Risk of Loss.	  Title to Products so	ld to Custom	er and 	
all risk of loss related to such 	Products passes to Custom	er upon 	
the delivery of the Products to either a carrier or Custom	er, 	
whichever com	es first. 	
 	
 	
2.3 Security 	In	ter	est.	  Custom	er hereby grants to V	endor a first	 	
priority purchase m	one	y security in	terest in each Product sold to 	
Custom	er until su	ch time as all am	ounts due and	 owing V	endor by	 	
Custom	er in respect of such Product have been paid in full. 	
Custom	er hereby constitutes and 	appoints V	endor as Custom	er’s 	
agent and	 attorney in fact for th	e pu	rpose of executing, and filing	 	
with any appropriate authority	, any and all docum	ents (including 	
without lim	itation Unifor	m Co	mm	ercial Code fi	nancing 	
statem	ents) V	endor reasonably deem	s necessary or prudent in	 	
order to per	fect its secu	rity intere	st in such Pro	ducts. 	 All f	ilin	g 	
fees and other out-of-pocket costs 	or expenses rela	ted	 to	 any such	 	
filings shall be re	im	bursed by Custom	er immediately upon 	
dem	and. 	
 	
 	
2.4 Customer	’s Obligation	s.  So long as any a	mount allocable to a 	
given Product and owing hereunde	r rem	ains outstanding, custom	er 	
shall: (i) keep such Product in Custom	er’s sole possession and 	
contro	l at th	e site whe	re origina	lly d	elive	red to Custom	er or such 	
other site as	 V	endor m	ay consent to	 in writing	; (ii) preserve and 	
protect V	endor	’s security interest	 in such Product and keep such 	
Product free of all other liens, secu	rity interests and encum	brances 	
of any kind; (iii) keep	 such Product in good	 co	ndition,	 rep	air and	 	
working order in accordan	ce with th	e m	anufacturer	’s 	
recomm	ended service and m	aintenance pro	cedu	res; (iv) k	eep such	 	
Product insured to the full insurabl	e value thereof against loss due 	
to fire, storm, theft and other cas	ualties and hazards pursuant to a	 	
policy issued by an insurance com	pany and otherwise be in for	m 	
and substance acceptable to V	endor; 	(v) m	aintain and operate such 	
Product in strict confor	mity wi	th all applicable laws and 	
regulations; and (vi) refrain 	from	 making alterations or 	
modifications to such P	roduct (i	ncluding without 	lim	itation adding 	
accesso	ries,	 attachm	ents, or conne	ctions) which deviate from	 or	 	
 	
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otherwise f	ail to com	ply 	with the Spe	cifications.	 	
 	
Section 3 – Softw	ar	e 	 	
3.1 Licensing.	  All Softwa	re m	ade ava	ilable to Custom	er by V	endor 	
is licens	ed, 	not	 sold. 	 Software Products owned by a Person other 	
than V	endor and acquired by Custom	er pursuant to this Agreem	ent	 	
are licensed to Custom	er under the 	owner	’s then current standard 	
for	m end-user licens	e ag	reem	ent. 	 Where a Software package not 	
owned by V	endor is required fo	r the proper operation of any 	
Product acquired by Custom	er, Custom	er is solely responsible for 	
obtain	ing the right to	 use such Software package.  Adverse 	
consequences, if any	, to Cust	om	er or Product performance 	
occasion	ed by Custom	er’s failure to lawfully obtain use rights to	 	
any such required Software is Custom	er’s sole responsibility	. 	
 	
Comment	: This clause says that 	
the clinic is solely r	espo	nsible for 	
securing the licenses to use any 
softwar	e fr	om thir	d parties. 	 	
Assuming th	at the c	lin	ic will want 	
to incorpora	te in	to the s	ystem 	
softwar	e and har	dwar	e supplied or 	
manufactur	ed by a thir	d party	, 	
clinic will want assurance fr	om 	
Vendor that it has r	eceived all of 	
the necessar	y licenses to	 	
incorporate these compo	nents in	to 	
the system. Clinic should r	equir	e 	
the 	Vendor to take on this 	
responsibility as part of its 
installation 	obligations.   	
 	
3.2 	Vendor	 License Grant.	  V	endor hereby grants Custom	er a	 	
non-exclusive non-transferable ri	ght to use each V	endor	-owned 	
Software Product acquired by Custom	er in accordance with this 	
Agreem	ent for the period endin	g on the earlier of (i) th	e 	
term	ination	 of	 this A	greem	ent, or (	ii)	 the	 e	xpira	tion of	 any 	
extended term applicable to such Software Product pursuant to an 
Ancilla	ry d	ocum	ent.  Custom	er’s use righ	ts pursuant to this	 	
licen	se a	re subjec	t to the f	ollowin	g lim	itation	s and Custom	er 	
obliga	tions	: 	
 	
 	
(1) Custom	er has a rig	ht to th	e program	 portion of each V	endor	 	
Software Product only in	 object code for	mat. 	
 	
 	
(2) In the case of a single-user license, Customer m	ay install and	 	
use a V	endor Software P	roduct only	 on one central processing unit 	
(“CPU”) at a tim	e. 	 In the c	ase 	of a m	ulti-use	r lic	ense	 Custom	er 	
may si	multaneously install and us	e a V	endor Software Product on 	
that num	ber of si	multaneous users 	specified in the Product order or 	
other Ancillary 	Docum	ent. 	
 	
Comment	: Vendors naturally will 	
try to maximize r	evenues by 	
limiting the number of work 
stations or the number of medical 
pr	oviders that can access the 	
Softwar	e. 	 In this r	egar	d, if a 	
clin	ic des	ires to exc	eed the 	
arbitrary thr	esholds that the 	
vendor has set for purposes of 
pricing, the clinic is r	equir	ed to 	
pay mor	e money	. Ther	efor	e, the 	
clinics should think thr	ough how 	
many work stations it r	equir	es to 	
have acces	s to the So	ftw	ar	e, how 	
many of its pr	oviders (both 	
full-time and part-time)	 that will 	
need access,	 and how to account 	
for such things as personnel 	
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turnover or incr	eases in staf	f and 	
negotiate accor	dingly	.  See 	
Addendum for one example of how 
a clinic might r	espond to this 	
pr	o-V	endor clause..	 	
 	
(3) Each V	endor Software Product 	shall only be in	stalled on a CPU 	
located at the Custom	er facility identified in	 the Product order or 	
other Ancillary 	Docum	ent. 	
 	
 	
(4) Customer m	ay us	e a V	endor Software Product licensed 	
hereunder only for Custom	er’s 	own internal purposes to 	
manipulate Custom	er’s own data.   Customer shall not use a 	
Vendor Software Product to perform any data or inform	ation 	
processing services for any third pa	rty in retu	rn for a fee	 or other 	
pecuniary benefit of any kind. 
 	
 	
(5) In addition to the licensed num	ber of CPU installations of a 	
Vendor Software Product, Custom	er m	ay keep one back-up copy 	
on arch	ival m	edia.  Otherwise,	 Custom	er shall not copy and 	
Vendor Software Product for any reason. 	
 	
 	
(6) Custom	er sha	ll not re-license,	 sublicense, or otherwise transfer 	
or distribute to any other Person	 all or any part of any V	endor 	
Software Product, or any right, title	 or interest therein of any kind. 	
 	
 	
(7) Custom	er agrees not to m	odi	fy, reverse engineer	, disassemble, 	
or decom	pile any 	Vendor Software	 Product, or any portion thereof.	
 	
 	
(8) Upon term	ination of its li	cense of any V	endor Software 	
Product, Custom	er shall immediatel	y erase all installed copies of 	
such Software from	 all or Customer	’s Hardware, and Custom	er 	
shall erase or return 	to V	endor all copies of such Software on 	
magnetic media.  Upo	n such te	rmination Custom	er shall a	lso 	
destroy or return to V	endor all user m	anuals or other 	
docum	entation in respect of such Soft	ware. 	
 	
 	
(9) Customer shall rep	roduce and	 include in	 all copies of any 	
Vendor Software P	roduct prepar	ed by Custom	er (and in all 	
derivative w	orks thereof	) the copyright Notice(s) and proprietary 	
legend(s) of V	endor and V	endor	’s lice	nsors/vendors (if any) as they 	
appear in the V	endor Softwa	re Products and on the m	edia	 	
containing the 	Vendor Software	 Products supplied hereunder	. 	
 	
 	
(10) Custom	er acknowledges that 	it obtains no right, title, or 	
interest in or to any V	endor copyr	ight, tradem	ark, patent, or other 	
proprietary right relating to the 	Products, and agrees not to remove, 	
alter	, cover or obscure any copyr	ight, patent, tradem	ark or other 	
 	
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proprietary rights Notice on any Pr	oducts or any portion thereof. 	
 
(11) Custom	er shall: (i) No	tify V	endor immediately of the 	
unauthorized possession, use 	or knowledge of any V	endor 	
Software Products, m	aterials, 	other items or confidential 	
inform	ation or trad	e secrets sup	plied	or m	ade availab	le to 	
Custom	er under th	is A	greem	ent, 	by a person or or	ganization not 	
authorized by this Agreem	ent to	 have such possession, use, or 	
knowledge; (ii) assist in corr	ecting any such unauthorized 	
possession, use, or knowledge; and (iii) cooperate with V	endor in 	
any litigation against third partie	s deem	ed necessary by V	endor to 	
protect its proprietary rights. 
 	
 	
(12) T	o Assist V	endor in the pr	otection of its property rights, 	
Custom	er shall p	erm	it re	asonable	 in	spections by representatives of 	
Vendor to review Custom	er’s confidentiality policies and 	
procedures relating to the safegua	rd or V	endor	’s Software Products 	
and proprietary m	aterial, as well as the accounting inform	ation 	
regard	ing th	e sam	e.  Addition	ally	, Custom	er shall allow V	endor to	 	
exam	ine the contents of Custom	er’s hard drives and other storage 	
media to confirm that Custom	er’s use of V	endor Software Products 	
com	plies with this	 Agree	ment. 	
 	
 	
3.3 Derivative 	W	orks.	  Custom	er hereby assigns and conveys to 	
Vendor any and all right, title or	 interest of any kind Custom	er 	
may have or acquire to derivative w	orks of any V	endor Software 	
Product, an	d all such d	erivative wo	rks shall co	nstitu	te works for 	
hire such that title ther	eto shall vest in 	Vendor	. 	
 	
 	
Section 4 – 	W	arrantie	s and Liabilit	y 	 	
4.1 W	arranty 	of 	Noninfringement.	  V	endor warrants that, at the 	
tim	e of	 delivery	, a Prod	uct sha	ll no	t inf	ringe	 th	e paten	t rights or	 	
copyrights of any other Person. 	 Th	is warranty shall not apply to 	
any infringem	ent resulting from	 either: (1) operation or use of the	 	
Product with Hardware, Software	 or equipm	ent not provided by 	
Vendor; (2) operation or use of	 the Product other than in 	
accordan	ce with the Sp	ecifications	 th	erefore; o	r (3) alteration or 	
modification of the P	roduct by Cust	om	er or any other Person other 	
than V	endor	. 	
 	
Comment	: The only warranty that 	
Vendor pr	ovides is that the 	
Softwar	e will not infringe patent 	
or copyrights. 	 Please note that 	
the 	Vendor pr	ovides no warranty 	
whatsoever for defective softwar	e, 	
or other malfunction. 	 Would you 	
pur	chase a new car or other “big 	
ticket item” without a w	arranty? 	
Pr	obably not. Similarly	, why 	
should clinics pay literally 
hundr	eds of thousands of dollars 	
(or mor	e) for complex, p	otentially 	
pr	oblematic softwar	e which has no 	
warranty? 	 They should not. 	 	
Nevertheless	, it is very common 	
for vendor license agr	eements to 	
disclaim all warranties, and to 
state that th	e softwar	e is	 licen	sed 	
“as-is,” meaning that all risk of 	
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softwar	e failing to meet the clin	ics	’ 	
expecta	tions	 (or even failing 	
complete	ly)	 rests with th	e clin	ics. 	 	
In short, clinics should insist upon 
adequate warranties as specified 
in the 	Addendum. 	
 	
W	arranty Disclaimer	.  Except as provided in Section 4.1 above, or 	
except to the extent a warranty of a 	manufacturer other than V	endor m	ay 	
apply	, ALL	 PRODUC	TS AR	E P	ROVIDE	D “	AS IS	” W	ITHOUT	 	
WARRANT	Y OF ANY	 KIND, WHETHER E	XPRESS OR IMPLIED. 	
W	ITHOUT	 LIMITING 	THE GENERA	LITY	 OF THE FOREGOING	, 	
VENDOR	 EXPR	ES	SL	Y DISC	LAIMS ANY	 W	ARRANTY	 OF	 	
MERCHANT	ABILITY	, FITNESS FO	R A	 P	ARTICULAR PURP	OSE,	 	
DA	TA I	NTEGRITY	, ERROR-	FREE	 OPERA	TION, OR	 	
UNINTE	RRUPTED SE	RVICE. 	
 	
Comment:	 This claus	e expr	ess	ly 	
disclaims any warranty coverage, 
specifying th	at the So	ftw	ar	e is 	
pr	ovided “as-is,” whether 	
defective or not. 	 As stated above, 	
the clinics should insist that (1) 
Vendor pr	ovide a warranty (e.g. 1 	
year)	 that the Softwar	e will meet 	
the r	equir	ements of “the 	
Specifications” (a defined term 
which inclu	des the c	lin	ics’	 	
“mission-critical, must have” 
performance r	equir	ements, and (2)	 	
if it fa	ils to d	o so, to r	epa	ir or 	
replace at 	Vendor	’s sole cost, and 	
failing that, r	equir	es Vendor to 	
pr	ovide a full r	efund of the clinic’	s 	
payments.    
 	
4.2 	Custom	er represen	ts and warran	ts that it is a soph	isticated 	
purchaser and acknowledge and agree that the allocations of risks 
in th	is Agr	eem	ent is r	eflected in	 th	e Software licen	se fees,	 that 	
Vendor is unable to test th	e Software under all possible 	
circum	stances, and that the allocation of risks under this 	
Agreem	ent is reasonab	le and appropriate und	er th	e circum	stances.	 	
 	
Comment:	 The purpose of this 	
clause is to pr	otect the 	Vendor in a 	
dispute. By this clause, the clinic 
agr	ees that it is	 “sophisticated,” 	
meaning that it has expertise and 
experience in softwar	e 	
transactions, knows what it 	 is 	
doing, is capable of pr	otecting 	
itself, and fully 	understands the 	
risks o	f th	is ver	y unfair agr	eement, 	
and accepts such risks. In short, 
this c	lause a	ttempts to r	emove 	
from the clin	ic the a	rgum	ent tha	t it 	
was misled by the 	Vendor	. 	
Obviously	, a clinic should delete 	
this type of pr	ovision. 	 	
 	
4.3 Limitation 	of 	Remedies.	  Notwith	standing	 an	y other provisions 	
of this Agreem	ent, Custom	er’s ex	clusive rem	edy in respect of or 	
related (directly or indirec	tly) in any way to any P	roduct 	
(including without lim	itation th	e design, use, suitability	, 	
perform	ance, features, characteri	stics or oth	er aspects th	ereof, 	
whether or not covered 	by any warranty) shall 	be for V	endor	, at its 	
option, to either: (1) repair or co	rrect the non-confor	mity within a 	
reasonab	le tim	e; (2) replace th	e Product in question with an	 	
Comment	: As a mater of standar	d 	
practice, a 	Vendor will a	ttempt to 	
limit its liability fr	om any and all 	
causes whatsoever	, usua	lly to the 	
cost of r	epairing or r	eplacing the 	
Softwar	e, or r	efunding monies. 	
However	, the clinic should exclude 	
from this limitation damages 
arising fr	om	 (1)	 thir	d party claims 	
that th	e Softwar	e infr	ing	es the 	
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identical but operational product;	 (3) replace the Product in 	
question with a dif	ferent Prod	uct whose functionality is 	
substantially the sam	e as the Produc	t being replaced; or (4) refund 	
to Custom	er all char	ges in respec	t of the Product pr	eviously paid 	
by Custom	er to 	Vendor	. 	
 	
intellectual pr	operty rights of 	
others, or (2) claims for personal 
injury	.  See 	Addendum 	for 	an 	
example of exclusions to damages 
limita	tions.  	
4.4 Limitation 	of 	Damages.	  If, notwithstanding the provisions of 	
this Agreem	ent to the c	ontrary	, a c	ourt of	 competent ju	risd	iction	 	
determ	ines that Custom	er is en	titled to dam	ages in resp	ect of	 any 	
claim	 by Custom	er arising under th	is Agreem	ent, the total amount	 	
of such damages shall b	e lim	ited as	 follows: (1) if	 such dam	ages 	
are in respect of the perfor	mance or nonperform	ance of any 	
Product, the am	ount of such dam	ages shall not exceed the 	
aggregate amount of all char	ges in	 respect of such Product that 	
(prio	r to the	 date as of	 which the dam	ages are determ	ined)	 were 	
paid by Custom	er to V	endor; or (2) 	if such damages are in respect 	
of any other breach of this Agreem	ent by V	endor (other than a	 	
breach of the warranty	 of noninfringem	ent set forth in Section	 	
4.1), the am	ount of such dam	ages 	shall not exceed	 the aggregate 	
am	ount of all char	ges which, prior 	to the date as of which such 	
dam	ages are determ	ined, were paid by Custom	er to V	endor in 	
respect of this Agreem	ent. 	 IN NO EVENT	 AND UNDER NO 	
CIRCUMST	ANCE	S SHALL	 VE	NDOR HA	VE ANY	 LIABILITY	 	
FOR C	ONS	EQUE	NTIAL	 DAMAGES (INCLUDING W	ITHOUT	 	
LIMIT	ATION DAMAGES F	OR L	OST	 PR	OF	ITS), PUNI	TIVE 	
DAMAGES	, EXEMPL	AR	Y DAMAGES, OR OTHE	R SP	ECIAL	 	
DAMAGES	 OF 	ANY	 KIND. 	
 	
 
 	
4.5 	Indemnification of V	endor	.  Except as expressly provided by 	
Section 4.1 hereof, Custom	er agrees	 to indem	nify	, defend and hold 	
harm	less V	endor and its Af	filiates, and	 their res	pectiv	e 	
sharehold	ers, directo	rs, of	ficers, employees, agents and	 other 	
representatives from	 a	nd agains	t any dam	age	, loss, expense or 	
other liability arising, di	rectly or indirectly	, out of either: (1) any 	
claim	 by any Person other than Cu	stom	er involving or related to 	
any developm	ent or use of any Pr	oduct by Custom	er (regardless of 	
any flaw or defect of any kind 	in the Product, and regardless of	 	
any wrongful act or om	ission or othe	r fault attributable to any of 	
the above nam	ed inde	mnities	), or (2) any b	reach of any of 	
Custom	er’s obligations 	under this 	Agreem	ent. 	
 	
Comment	: You will notic	e that this 	
is a one-sided indemnity	, r	equiring 	
the clinic to indemnify the 	Vendor	, 	
but ther	e is no r	equir	ement that the 	
Vendor indemnify the clinic. 	 See 	
Addendum for an example of one 
type of a	lte	rnative mo	re fair to the 	
clin	ic. Inde	mnifica	tion pr	ovis	ions 	
ar	e powerfu	l in that if the event 	
requiring indemnity occurs, it is 
usually very expensive to	 the party 	
pr	oviding the indemnity	, and 	
ther	efo	re the	y ar	e ho	tly n	egotia	ted. 	
Indemnity pr	ovisions usually 	
requir	e the indemnifying	 party to 	
hir	e lawyers and to pay damages 	
to pr	otect the indemnified party 	
against claims made by thir	d 	
parties. E	ven a frivolous lawsuit 	
by a thir	d party can be very 	
expensive to defend against. 	 	
Among the bigger risk for clinics 
is that the so	ftwar	e infr	inges the 	
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intellectual pr	operty rights of 	
others, or that the softwar	e (or its 	
malfunction) causes a patient to 
suf	fer 	injury	.   V	endor 	will 	strive 	
to limit its indemnity obligations 
by limiting its obligation to the 
amount of money it ha	s r	eceived 	
from the clinic, or by r	efusing to 	
pr	ovide any indemnity at all. 	 	
Clinics sh	ou	ld try to nar	row their 	
indemnity obligations to specific 
events su	ch as in the event that 	
they b	reach their ob	liga	tions 	
under the 	Agreement. 	 They 	
should try to avoid extending 
br	oad, open-ended indemnity 	
obligations. 	 Prior to signing an 	
agr	eement w	ith ind	emnity 	
pr	ovisions, they should discuss the 	
same with th	eir insu	rance carriers 	
to determine what indemnity 
obligations will be co	ver	ed, and 	
what ar	e not cover	ed. 	
 	
Section 5 – Disputes 	 	
5.1 Arbitration	.  Except as otherwis	e e	xpressly provided in this 	
Agreem	ent, all claim	s, controversie	s or disputes arising out of or 	
related to th	is Agreem	ent, or any 	breach thereof, shall be resolved	 	
by binding arbitration in the c	ity of ABC, state of XYZ a	s 	
provided herein and otherwise in 	accordance with the Commercial 	
Ar	bitration 	rul	es of 	the Ame	rican Ar	bitration As	sociation. 	 Where 	
the am	ount in controversy is less than $100,000.00, the dispute 	
shall b	e sub	mitted to a single arbitr	ator	.  Othe	rwise the d	ispute 	
shall b	e s	ubm	itted to a pane	l of	 three	 arbitra	tors	.  The 	
arbitra	tor(	s) shall str	ictly	 enf	orce all provisions of this Agreem	ent	 	
except to the extent applicab	le law requires otherwise.  The 	
arbitra	tor(	s) shall hav	e no authority to grant eith	er Party pun	itiv	e, 	
exem	plary	, consequential or ot	her special dam	ages of any kind. 	
Judgm	ent upon the award of the arbi	trator(s) m	ay be	 entered in 	
any court of com	petent jurisdiction. 	
 	
Comment	:  Some 	litiga	tors 	will 	
ar	gue that arbitration clauses 	
favor the 	Vendor; e.g. ther	e is no 	
chance for “	a runaway jury	,” 	
damages tend to be much smaller	, 	
and it is sometimes (but not 
always)	 che	aper than court trials. 	 	
All will agr	ee that the pa	rties will 	
have sign	ific	antly less r	ights in 	
arbitration as compar	ed to court 	
pr	oceed	ings,	 and that th	e 	
pr	oceed	ings will be faster than in 	
court.   Clinics 	should 	discuss 	
with the	ir co	unsel wheth	er to 	
reject an arbitration clause, but on 
balance, the issue is generally not 
a “deal-br	eaker	.” 	  	
 	
5.2 Jurisdiction	 and 	Venue.	  The Parties ag	ree that any action or 	
proceed	ing aris	ing out of or related to this A	greem	ent shall be 	
instituted only in the federal district	 court in (o	r closes	t to) the city	 	
of ABC, state of XYZ. 	 Each Party consents and subm	its to the 	
jurisd	iction of	 such cou	rt and	 ag	ree	s tha	t venu	e ther	ein	 sha	ll b	e 	
proper and convenient. 	 In any such action or proceed	ing in such 	
court, each Party waiv	es any ri	ght to raise any	 objection b	ased 	
upon im	proper venue, lack	 of jurisdiction, or inconvenient	forum. 	
In connection with an	y such action or pr	oceeding, each Party 	
Comment:	 The last sentence of this 	
clause specifies that a court 
pr	oceed	ing will only occ	ur if th	e 	
arbitration clause is thr	own out as 	
invalid.  See 	comment 	above.  	
This pr	oposed r	evision to 	Vendor	’s 	
form is in	ten	ded to pr	ovide some 	
balance by stating that the party 
that brings the lawsuit, has to do it 
in the other party’	s neighbor	hood. 	
It is a b	etter alterna	tiv	e for the 	
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consents	 to	 personal ju	risdic	tion	 of	 such court and agrees s	ervice 	
of process	 m	ay be ef	fected by United S	tates	 m	ail. 	
Notwithstanding the foregoing, the Part	ies agree to re	sort to such 	
an action or proceeding 	only	 if (1) the arbitration provision of 	
Section 5.1 is held to be invalid 	or unavailable, or (2) to enforce 	
such an arb	itration award	. 	
 	
clinics than 	Vendor	’s form 	
agr	eement w	hich states that all 	
litigation will be hear	d wher	e the 	
Vendor is headquarter	ed. 	  	
5.3 Attorneys 	Fees.	  In any actio	n, proceeding, or arbitration 	
pursuant to Sections 5.1 or 5.2, the 	court or the arbitration panel, 	
as applicable (the “tribunal”), sh	all award to th	e prevailing	 Party	 	
all of such	 Party’	s co	sts relate	d to the controversy (including 	
without limitation attorneys’	 f	ees and out-of-pocket expenses). 	
Where each Party p	revails in	 part	, th	e tribunal sh	all award to each	 	
Party that part of its costs whic	h the tribunal deem	s allocable to 	
those is	sues as to which such Party p	revailed.	 	
 	
Comment	: Please note that in most 	
litigation, each side usually is 
requir	ed to bear its own costs, 	
including attorneys’	 fees. 	
Generally speaking, ther	e ar	e only 	
two instances entitling the winning 
side to r	eco	ver the cos	ts of its 	
lawyers fr	om the losing	 side: (	1) if 	
ther	e is a s	tatute (written	 law)	 	
expr	essly r	equiring the losing side 	
to pay for the winning side’	s 	
attorneys (e.g. laws pr	ohibiting 	
discrimination and other civil 
rights laws)	, or (2)	 if the parties by 	
agr	eement s	pecify that the 	
pr	evailing party shal	l be	 entitled to	 	
attorneys’	 fees and costs in 	
addition to its damages. 	 Thus, 	
this pr	ovision is a “double-edged 	
swor	d;” if a clinic has been 	
victimized by a 	Vendor	’s br	each, 	
this clause can “level th	e playing 	
field” by r	equiring the 	Vendor to 	
pay for th	e c	linic’	s lawye	rs in 	
addition to paying damages. 	 	
However	, if the clin	ic is the party 	
in br	each, it can be r	equir	ed to pay 	
damages plus the 	Vendor	’s legal 	
fees.  As 	a general 	pr	oposition, 	
some litigators will a	rgue that 	
such attorneys’	 fees pr	ovision often 	
pr	ote	cts the smaller par	ty with le	ss 	
resour	ces. 	Whether to include such 	
a pr	ovision or not is a business 	
risk dec	ision	 for the clin	ic to 	
consider	.  	
 	
5.4 Limitation 	of 	Actions.	  Except as	 set f	orth b	elow	, neithe	r Party 	
shall bring any action or institu	te 	an	y proceedin	g related,	 directly	 	
or indirec	tly	, to this	 Agre	em	ent m	ore than two yea	rs af	ter the P	arty 	
initiating th	e action or proceed	ing	 knew (or reasonab	ly should 	
have known) of the essential f	acts giving rise to the underlying 	
cause of action. 
 	
Comment	: This is another clause 	
that has been inserted to pr	otect 	
the 	Vendor	.  The statute of 	
limita	tions in Californ	ia to sue for 	
br	each o	f a written contract is four 	
(4) years.  This 	clause 	attempts 	to 	
shorten (by agr	eement)	 such 	
period to 2 years. Clinics should 
object.  	
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5.5 Governing 	Law	.  This Agreem	ent shall be g	overned by	 and 	
construed in	 accordan	ce with th	e laws of the S	tate of XYZ. 	
 	
Comment	: While it wou	ld be 	
pr	eferable for a clinic to have 	
disputes governed by the law of 
wher	e the clinic is loca	ted because 	
it will be easier and cheaper to 
access local counsel familiar with 
the law	, the issue of whose state 	
governs the interp	retatio	n of the 	
contract is rar	ely a deal-br	eaker	.  	
 	
Section 6 – Other	 Services	 	 	
Vendor m	ay, in its sole discretion a	nd at Custom	er’s request, perform 	
training, co	nsulting,	 programm	ing or ot	her Services for Cu	stom	er from 	
tim	e to tim	e.  The	 nature and scope of such Services (and a 	
non-binging estim	ate of the total proj	ect cots) shall be set forth in 	
reasonab	le detail in an	 Ancillary Docum	ent.  Except as	 otherwise 	
provided in an 	Ancillary Docum	ent, the following shall apply: 	
 	
 	
6.1 	All work perform	ed in rendering 	the Services (including without 	
lim	itation tim	e reasonably spent by V	endor personnel in 	
for	mulating the scope docum	ent 	referred to above) shall be 	
char	ged in accordance with V	endor	’s then current hourly labor rate	 	
schedule. 	 Billab	le tim	e shall be rounded up to the neares	t half	 	
hour and shall include portal to	 portal travel tim	e of V	endor 	
personnel providing the Services. 	 In addition, V	endor shall be 	
reim	bursed by Customer for the co	st of all parts, m	aterials,	 	
supplies, and other consum	ables rela	ted to the Se	rvices, a	s well as	 	
all other out-of-pocket expenses re	lated to the Services su	ch as 	
travel expenses. 
 	
Comment	: In or	der to contr	ol costs 	
and avoid nasty surprises, clinics 
should insist that all pur	chases 	
and licenses ar	e listed in an 	
Appendix, along with 
corr	esponding prices and 	
discounts.  	 	
6.2 	Where the estim	ated pro	ject co	sts exceed $5,00	0.00, prior to the 	
commence	ment of work Custom	er shall pay V	endor on account 	
twenty perc	ent (20%) o	f the estim	ated project cost as a security 	
deposit (the “Security Funds”). 	 Vendor shall not be obligated to 	
credit  Security	 Funds	 agains	t p	roject billin	gs until the final 	
invoice.  A	ny 	Security 	Funds 	bala	nce rem	aining at 	the end of the 	
project shall be rebated to Custom	er without intere	st.  All 	project 	
related char	ges shall be invoiced m	onthly	.  Vendor shall have the 	
right, in its sole discretion, to 	credit Custom	er Security Funds	 	
against delinquencies. 	 If V	endor 	uses Security Funds to cover 	
delinquencies, V	endor shall have th	e right to cease all work until 	
any rem	aining delinquencies have b	een satisfied and the Security 	
funds accou	nt balance is rep	lenish	ed to equ	al the orig	inal am	ount	 	
thereof. 
 	
Comment	: Clinics should delete 	
this pr	ovision. Many vendor 	
agr	eements specify tha	t the clin	ics 	
shall pay 50% or mor	e in advance	 	
befor	e the vendor has done 	
anything, and befor	e the clinics 	
can verify th	at the so	ftwa	re ev	en 	
works pr	operly! 	 Just as it would 	
not be wise to pay a construction 
contractor most or all of your 
money befor	e he has even picked 	
up a hamme	r or driven a single 	
nail, it is unwise to pay the 
softwar	e vendor substantial 	
amounts of money befor	e the 	
vendor has performed. 	Ther	efor	e, 	
please see the 	Addendum as one 	
example of pr	oposed installment 	
payments payable upon the 
success	ful completion o	f specified 	
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milestones. 	 Note that just as in a 	
contract to construct a house, 
ther	e should be a significant 	
“withhold” to be paid only upon 
satis	facto	ry completion of the 	
work.  Despite 	what 	softwar	e 	
vendors may say	, insta	llment or 	
milestone payments ar	e the norm, 	
and clinics should insist upon 
them. 	  Like virtually all of the 	
terms in the maintenance 
agr	eement a	nd licen	se a	greement, 	
the timing of when payments ar	e 	
due will be the subjec	t of 	
negotiation, and the amount of 
concession	s that th	e clinics will 	
receive will depend upon their 
economic leverage and the level of 
their 	reso	lve.    	
  	
6.3 	W	ith respec	t to	 thos	e S	ervic	es th	at are p	erformed at Custo	mer’s 	
site, during the period of such perform	ance Cus	tom	er shall m	ake	 	
available to V	endor	’s personnel pr	oviding such Services suitable 	
office, work, and sto	rage sp	ace,	 and app	ropriate wo	rking 	
environm	ent, acces	s to	 Hardware as	 necess	ary, and reason	able use 	
of telephones and other s	tandard of	fice am	enities	. 	
 	
 	
6.4 	Either	 Party	 shall have	 the righ	t to term	inate a p	roject at any	 tim	e 	
upon ten (10) days Notice to the 	other Party	.  In such event 	
Custom	er s	hall rem	ain obligated	 to pay all amounts outstanding 	
with respe	ct to char	ges incurred in c	onnection w	ith the p	roje	ct on	 	
or before the term	ination date. 	
 	
Comment	: Like th	e claus	e in 	
Section 1.5 above, this clause 
allows the 	Vendor to terminate the 	
Agr	eement for no good r	eason 	
after delivering notice of 
termination. By the time a clinic 
enters into an agr	eement with a 	
Vendor	, it w	ill have spent a gr	eat 	
deal of time, money and r	esour	ces 	
identify	ing its softwar	e n	eeds, 	
develop	ing s	pecifications	 (see 	
Addendum for definition of 
Functional Specifications)	, 	
negotiating the business and legal 
terms of the contract with 	Vendor	, 	
and signing and commencing 
implementation. After 	these 	events 	
occur	, the clinic will wa	nt the 	
Agr	eement to be binding on 	
Vendor so it can’	t simply walk 	
away fr	om its obligations. See 	
Addendum for pr	oposed r	evision. 	  	
 	
Minami, Lew &	 Tamaki LLP	 © 2005 	
 	
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Section 7 – Miscellaneo	us 	 	
7.1 Document 	Pr	ecedence.	  In the ev	ent of	 a conf	lict be	tween the	 	
Term	s and Conditions and an Anci	llary Docum	ent, or between two 	
more Ancillary Docum	ents, that provision V	endor determ	ines in 	
its sole	 dis	cretion bes	t ref	lec	ts th	e intent of	 the Pa	rties	 shall 	
control. 
 	
 	
7.2 Acceptance.	  A	 docum	ent otherwise constituting an Ancillary 	
Docum	ent becom	es ef	fective as su	ch when (and only when) it is 	
provided by	 one Party to the o	the	r and Accepted by the recipien	t. 	
Such a docu	ment is conclusiv	ely deem	ed Accepted by Custom	er 	
upon (and only upon) the first to occu	r of the following: (1) such 	
docum	ent is signed by Custom	er a	nd returned to V	endor; (2) after 	
receiving such docum	ent 	 Custom	er m	akes a paym	ent or takes 	
any other action that is consis	tent with the term	s of	 such 	
docum	ent; or (3) Custo	mer f	ails to	 provide V	endor written Notice 	
of non-acceptance of su	ch docum	ent 	within ten (10) calendar days 	
after Custo	mer’s initial rec	eipt of	 such docum	ent. 	 A doc	um	ent 	
otherwise c	onstitu	ting an Ancilla	ry Docum	ent and provided by 	
Custom	er to V	endor is conclusi	vely deem	ed Acc	epted by V	endor 	
upon (and only upon) such document (or an unam	biguous and 	
written conf	irm	ation thereof) be	ing signed by V	endor and returned 	
to Custom	er. 	
 	
Comment	: Clinic should r	eject this 	
clause as it would permit the 
Vendor to unilaterally change the 	
terms of th	e Agr	eement. 	 Any 	
pr	oposed change to the 	Agr	eement 	
should r	equir	e the clinic’	s prior 	
written cons	ent as ev	ide	nced by 	
the signing of a writing by a 
person authorized to appr	ove such 	
change.  	
7.3 For	ces 	Majeur	e.  All periods of tim	e specified for perfor	mance 	
of obligatio	ns (other tha	n m	oneta	ry paym	ent obl	igations) by either 	
party hereunder shall be subject 	to an extension for a period of 	
tim	e equal to any delay caused by Forces Majeure. 	 Following 	
the occurrence of any Force Maje	ure, the perfor	mance ef	fected 	
thereby	 sha	ll be extend	ed to a	 num	ber of days equa	l to	 th	e period 	
of such delay	. 	
 	
 	
7.4 Notices.	  All Notices, requests, dem	ands, 	or 	other 	
communications directed to a Part	y shall be in writing, and shall 	
be personally delivered or sent	 by certified	 (return re	ceipt 	
requested) or registered m	ail, pos	tage prepaid, to such Party’	s 	
address specified below such Part	y’s signature hereon, or to such 	
other address as such Party m	ay he	reafter specify in a Notice to 	
the other Party	. 	
 	
 	
7.5 No 	W	aivers.	  The failure of either Party hereto to insist upon 	
strict perform	ance of	 any of the term	s or condition of this 	
Agreem	ent shall no	t be deem	ed to	 be a waiver of any rights or 	
rem	edies of such Party in respec	t of any other provision hereof or 	
in respect of any subsequent breach	 or default under such term	 or 	
condition.	 	
 	
Minami, Lew &	 Tamaki LLP	 © 2005 	
 	
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7.6 	Effect of Agr	eement.	  This Agreem	ent shall be binding upon, 	
and inure to the benefit of, the Pa	rties hereto an	d their su	cc	essors	 	
and perm	itte	d assigns. 	
 	
 	
7.7 Entir	e 	Agr	eement.	  This Agreem	ent (including without 	
lim	itation	 su	bsequently e	ffective Anc	illary Docu	ments) constitutes 	
the en	tire Agreem	ent between th	e Parties with respect to the 	
subject m	atter hereof, and supersed	es and rep	laces any an	d all 	
prior agreem	ents or arrangem	ents between the Parties, w	hether 	
oral or written. 
 	
Comment	: This 	innocent-looking 	
clause is quite powerful. In short, 
it means tha	t if the c	lin	ic’s rights 	
ar	e not specified in writing as part 	
of this 	Agr	eement, the clinics don’	t 	
have such rights. 	 In practice, 	
this means that whatever the 
Vendor salespersons have 	
pr	omised th	e clin	ic, unless it ha	s 	
been r	educed to writing and 	
expr	essly m	ade a part of this 	
Agr	eement, such pr	omises ar	e not 	
enfor	ceable as they ar	e not a part 	
of this 	Ag	reement. Lesso	n: get a	ll 	
pr	omises in writing and 	
incorporate them into th	e 	
Agr	eement!   	
 	
7.8 Assignment.	  A Party m	ay assign its rights and benefits under 	
this Agreem	ent to any other Person upon thirty (30) days prior 	
written Notice to	 th	e o	ther	 Party	 if	 (and only	 if	) the ass	igno	r 	
rem	ains liable in respect of a	ll its obligations outstanding under 	
this Agreem	ent as of the date of such assignm	ent, including 	
without lim	itation obligations in 	respect of extended term	 Pr	oduct 	
transa	ctions	 with ter	ms rem	aining af	ter the date of	 such	 	
assignm	ent. 	
 	
 	
7.9 Amendments.	  V	endor m	ay unilaterally am	end any and all 	
provisions of this Agreem	ent e	ffect	ive as of a day not earlier than 	
one hundred twenty (120) days after Notice of such am	endm	ent i	s 	
given to Custom	er.  Otherwise,	 all am	endments m	ust be in	 	
writing and duly executed by both 	Parties to be ef	fective. 	
 	
Comment	: Outrageous! 	This is one 	
the mor	e unfair clauses of an 	
alr	eady gr	ossly unfair agr	eement. 	 	
It permits the 	Vendor to 	
unilaterally change the 	Agr	eement 	
without the consent 	of the clinic. 	 	
Obviously	, this should be a 	
deal-br	eaker as clinics should not 	
sign any agr	eement which permits 	
the 	Vendor to unilaterally change 	
the te	rms later	.   	
 	
7.10 	Relationship of Parties.	  The Parties	 agree that, in	 perf	orm	ing 	
any and all Services, V	endor is	 acting as an independent 	
contractor	.  V	endor assum	es no 	liability or responsib	ility for	 	
obligations of Custom	er in respec	t of its custom	ers or any other 	
Person.  Nothing 	in 	this 	Agreem	ent shall be construed to m	ake 	
Vendor a partner	, joint venturer 	or em	ployee of the other Party	. 	
Nothing in this Agreem	ent sha	ll be construed to m	ake V	endor 	
responsible for com	plying with an	y disclosure, reporting or other 	
 	
Minami, Lew &	 Tamaki LLP	 © 2005 	
 	
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requirem	ent of the other Pa	rty’	s business or operations. 	
 	
7.11 Nonsolicitation.	  Durin	g the te	rm	 of	 this Agreem	ent Custom	er 	
shall not solicit any V	endor em	ployee to leave the em	ploy of 	
Vendor for any reason. 	
 	
 	
7.12 Definitions.	  All cap	italiz	ed term	s in this Ag	reem	ent ha	ve the 	
following meanings: 
 	
 	
“Acceptance”	 has the m	eaning set forth in Section 7.2 hereof. 	
 	
 	
A Person is an 	“Affiliate”	 of a second Person if	, di	rec	tly o	r indir	ectly 	
(whether through a chain of owners	hip 	or otherwise), either (i) the first 	
Person owns or controls a m	ajority of	 the equity or voting	 intere	sts in	 	
the second P	erson, (ii) the second Person 	owns or controls a m	ajority of 	
the equity or voting interests in the fi	rst Person, or (iii) a m	ajority of the 	
equity or voting interests in both th	e first Person and the second Person 	
are owned or controlled by the sam	e Person(s). 	
 	
 	
“Ancillary	 Document”	 m	eans any docum	ent involving a Product 	
transaction between V	endor and Cust	om	er that becom	es ef	fective in 	
accordan	ce with Sectio	n 7.2 hereo	f.  Such docum	ents m	ay include	 	
Product orders, invoices, confirm	ations, exhibits, schedules, addendas 	
or sim	ilar docum	ents confirm	ing supplem	entary inform	ation (e.g., 	
Product identification; quantity; pr	icing; shipm	ent infor	mation; 	
installation, training or other pr	oject scheduling information; etc.) 	
concerning any such transaction. 
 	
 	
“Effective Date”	 m	eans the date immediately preceding	 the Parties	’ 	
signature above. 
 	
 	
“For	ce Majeur	e”	 m	eans any cause or circ	um	stance beyond the parties’	 	
control, (such as, but not lim	ited to, 	acts of God, changes in governm	ent 	
regulations, acts of governm	ental bodies	 or their em	ployees or agents, 	
weather	, strikes, lockouts, boycotts, a	nd inability to secure labor or any 	
material specified or reasonably ne	cessary in connection with property 	
through ordinary busin	ess channels, fire, unusual delays in 	
transportation, unavoidabl	e casu	alties, etc.). 	
 	
 	
“Hardw	ar	e” m	eans computer	-related ta	ngible personal property such 	
as com	puters, m	onitors, term	inals, storage devices,	 connectivity	 	
devices, printers, etc. 
 	
 	
“Notice”	 means a notice given in accord	ance with Section 7.4 of thi	s 	
Agreem	ent. 	
 	
 	
“Operational”	 m	eans the function of a 	Product without m	aterial 	
deviation from	 its Specifications or	 the m	anuf	acturer	’s m	ost rec	ently 	
 	
Minami, Lew &	 Tamaki LLP	 © 2005 	
 	
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published user docum	entation for such Product. 	
 
“Party”	 m	eans either 	Vendor or Custom	er. 	
 	
 	
“Period”	 means the calendar period (m	onthly	, quarterly or annually) 	
corresponding to the frequency of pa	ym	ents in respect of a recurring 	
char	ge. 	
 	
 	
“Person”	 means a natural person, or a priv	ate or governm	ental entity of 	
any kind. 
 	
 	
“Pr	oduct”	 m	eans any Hardware, Software or Service provided by 	
Vendor to Custom	er. 	
 	
 	
“Service” 	means any service, as	sis	tance,	 or us	e of a resou	rce p	rovided	 	
by 	Vendor to Custom	er. 	
 	
 	
“Softw	ar	e”	 m	eans eith	er: (1	) a set of m	achine-readable instruction	s 	
designed to perform a task or accom	plish a purpose; (2) a set of 	
machine-rea	dable da	ta; (3) a	 se	t of	 m	achine-re	adable ins	tructions	 for 	
for	matting data; or (4) text or graphi	c m	aterial in any form	 de	scribing or 	
otherwise related to any 	of the foregoing item	s, or the use th	ereof, such 	
as program	 listings, flow charts, m	anuals or other docum	entation. 	
 	
 	
“Specifications”	 m	eans the specifications fo	r a Product as published by 	
its m	anufacturer from	 tim	e to ti	me. 	
 
 
 	
 	
[END OF 	TERMS 	AND CONDITIONS]	 	 	
 
Minami, Lew &	 Tamaki LLP	 © 2005 	
 	
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