March 27,2007CSMS - Savannah Negotiating a Fair Contract for Software and Services John Lateulere.

March 27,2007 CSMS - Savannah

Negotiating a Fair Contract for Software and Services

John Lateulere


IANAL


But …

• We all have to deal with contracts

• Apply a critical eye to vendor supplied contracts

• Most contracts are written to their business advantage

• Consult with counsel


It’s NOT a War

• Vendors want to sell you their product

• They are often willing to change their standard contract

• If you don’t ask …

• But you may need the sledge hammer approach (legal counsel)


To Protect – Them and Me

• All contract references to the company have been replaced with The Company

• Modified identifiable product information


Committed Services

As long as THE COMPANY were ready, willing and able to provide the Committed Services in the time period specified in Exhibit 1, then Licensee’s failure to use the Committed Services within that time period will not excuse Licensee’s obligation to pay THE COMPANY the total fees for the Committed Services, but will excuse THE COMPANY’s obligation to provide any unused Committed Services upon the expiration of that time period.


Negotiated Langauge

Licensee will be obligated to pay THE COMPANY for such services as if THE COMPANY had performed such services on the date scheduled, unless Licensee has notified THE COMPANY that Licensee would like to reschedule or cancel the provision of such services at least thirtyfifteen (3015) days prior to the date which THE COMPANY is scheduled to perform such services


… And had deleted

• Without limiting the foregoing, nothing in this Section 4(f) will act in any way to reduce Licensee’s obligation to THE COMPANY in connection with any Committed Services.

• The Commited Services definition didn’t exist anymore


What documentation?

• “documentation” used in freely in the contract but not defined

• we had a definition added to the definitions section

• Had a list of documentation appended to the contract


Hey we have “confidential” information too!

• As defined confidential information was one sided

• Confidential Information of Licensee includes all “educational records” as that term is defined in 20 U.S.C. 1232 (Family Educational Rights and Privacy Act).


The License

License. Subject to the terms and conditions of this Agreement, THE COMPANY grants Licensee a perpetual, non-exclusive, non-transferable (except as provided herein) license to use and copy for use the Licensed Software on the Equipment within the United States of America for Licensee’s own, non-commercial internal computing operations.


Test vs. Prod vs. Training?

Object Code. Licensee has right to use the Licensed Software in Object Code form. Licensee also has the right to use the Licensed Software in Object Code form temporarily on another THE COMPANY-supported configuration, for testing and disaster recovery of Licensee’s computer operations


Payments and Schedules

• PAYMENT OF LICENSE FEE: The Total License Fee is due on the Execution Date.

• Execution date was February; installation would be in July

jlateulere


PAYMENT OF LICENSE FEE: The Total License Fee shall be due in accordance with the following schedule:


• 35% of the Total License Fee shall be due not later than the Execution Date.

• 40% of the Total License Fee shall be due not later than 90 days after the Execution Date.

• 25% of the Total License Fee shall be due not later than 150 days after the Execution Date.


Services Payments

Licensee will remit payment for the Fixed Fee Services set forth in Table 2, …, as follows: fifty percent (50%) on the Execution Date and the remaining fifty percent (50%) by not later than six (6) months after the Execution Date.


Much Better Licensee will remit payment for all other

Fixed Fee Services (a total of $XXX,XXX) set forth in Table 2 as follows: in eight (8) equal and successive quarterly installments of $XXX,XXX per installment, with the first such installment to be due to THE COMPANY by not later than February 1, 2006.


This payment schedule is based on the presumption that THE COMPANY will provide an equal amount of Fixed Fee Services hours each quarter throughout the Services Period. To the extent Fixed Fee Services are rendered on a more accelerated basis during the Services Period, THE COMPANY reserves the right to adjust the payment amounts above (without increasing the Total Fixed Fee Services Fee), upon written notice to Licensee, to more accurately reflect the rate at which Fixed Fee Services are being rendered during the Services Period


We added …

If fewer hours are expended than expected during a given period, the payment for that period will be adjusted downward.


Although THE COMPANY’s obligation to provide these services for the Fixed Fee set forth in Table 2 is subject to the time limitation provided in Table 2, subject to the parties’ mutual agreement set forth in a writing signed by both parties, and subject to the availability of THE COMPANY resources, THE COMPANY shall provide additional services as may be necessary to complete all Data Migration tasks for additional fees at THE COMPANY’s then-prevailing rates.


Also added:

In the event the assignment of the THE COMPANY Project Manager must change, Licensee shall have the right to pre-approve the new Project Manager, which approval shall not be unreasonably delayed or withheld.


1 year = 7 monthsTHE COMPANY will provide: an

aggregate of 660 service hours of “Short Term” Remote Database Administration Services and on-going support for the THE COMPANY Baseline Component Systems. Service hours must be used within a twelve-month service period from the Execution Date


1 year = 12 months

Execution date changed to:

date of installation of the Licensed Software


Severability – Jurisdiction

• Changed to reflect The Company agrees to the federal court in our state

• Had been subject to the laws of their home state


Limited Liability

The COMPANY’S LIABILITY IN CONNECTION WITH THE LICENSED SOFTWARE, ANY SERVICES, THIS LICENSE OR ANY OTHER MATTER RELATING TO THIS AGREEMENT WILL NOT EXCEED THE FEE THAT LICENSEE ACTUALLY PAID … FOR THE COMPONENT SYSTEM OR SERVICES GIVING RISE TO THE LIABILITY.


A little less Limited

THE COMPANY’S LIABILITY IN CONNECTION WITH THE LICENSED SOFTWARE, ANY SERVICES, THIS LICENSE OR ANY OTHER MATTER RELATING TO THIS AGREEMENT WILL NOT EXCEED THE FULL AMOUNT OF ALL FEES ACTUALLY PAID BY LICENSEE FOR THE BASELINE COMPONENT SYSTEMS AND THE SERVICES


And for other components

WITH REGARD TO ANY COMPONENT SYSTEMS OR SERVICES THAT LICENSEE OBTAINS FROM THE COMPANY SUBSEQUENT TO THE EXECUTION DATE,THE COMPANY’S LIABILITY IN CONNECTION THEREWITH OR WITH ANY OTHER MATTER RELATING TO THE AMENDMENT/WORK ORDER PURSUANT TO WHICH SUCH COMPONENT SYSTEMS/SERVICES ARE BEING OBTAINED WILL NOT EXCEED THE FULL AMOUNT OF ALL FEES ACTUALLY PAID BY LICENSEE FOR THE BASELINE

COMPONENT SYSTEMS


What will it run on?

Added:

THE COMPANY confirms that it supports the use of the Licensed Software on the configuration set forth in Attachment B.


You can find the presentation at:

http://www.otterbein.edu/home/fac/jhnfltlr/csms2007.htm

March 27,2007CSMS - Savannah Negotiating a Fair Contract for Software and Services John Lateulere.

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