X-Cart 5 Custom Development Agreement

THIS AGREEMENT is made this %DAY% day of %MONTH% , %YEAR% by and between Qualiteam Corp (“Developer”) and %COMPANY_NAME% (“Customer”).

Recitals

A. Customer has obtained a license of X-Cart 5 (“Software Program”) from the Developer.

B. Customer requires certain custom functionality (the “Module”) to be developed for the Software Program in accordance with the functional and technical specifications set forth in Order description #%SPECIFICATION_NUMBER% (“Specification”) also accessible via the following URL %SPECIFICATION_URL% and wishes to retain the services of the Developer to make such Module.

C. Developer wishes to retain all copyrights in and to the Module and Customer wishes to receive a perpetual license to use the Module.

D. The Developer has expertise in the areas desired by the Customer and Developer wishes to accept the assignment to provide services to the Customer pursuant to the terms and conditions set forth in this Agreement.

1. Provision of service

1.1 Definition of Specifications. The technical and functional aspects of the Module is as set forth in Order description. Developer shall perform all necessary programming in order to create the Module for the Software Program in substantial compliance with the Specifications.

1.2 Commencement of Development. Developer shall commence development work on the Module within the term specified in Project’s timeframe after payment of the development fee specified in the invoice provided with these Conditions. Such Module shall be created substantially in conformance with the Order description.

1.3 Changes To Specifications. The parties expect that there will be some changes to the Specifications after acceptance by both parties. Requests for changes shall be proposed by the Customer, but shall not be effective without the written consent of both parties. Prior to acceptance of any change requests, the parties shall cooperate to equitably determine the impact on pricing, time commitments, scheduling and deadlines and other project factors and reflect these changes in the change order. All change orders must be approved and executed by the parties.

1.4 Plan of Development.The development of the Module shall be conducted substantially in compliance with the Plan of Development attached hereto as Project timeframe (hereinafter referred to as “Plan of Development”). The Plan of Development includes a description of various steps involved in the development process, various development phases with a description of the milestones to be achieved in each stage, estimated dates of completion for each phase of development, allocation of tasks for each phase and a listing of items and input to be provided by the Customer for each phase, and definition of the Deliverables to be provided at the end of each phase and upon completion of the development process. The parties shall periodically review the Plan of Development during the project and discuss any necessary revisions as the project moves forward. Developer shall devote sufficient time and effort and shall allocate sufficient personnel resources to the project as may be required for the development and testing thereof. Developer shall conduct and conclude such development and tests in a professional manner, incorporate into the final version such modifications as the tests indicate are necessary, and conduct such further tests as may be required under the circumstances. Developer shall not be in default for failure to meet these timetable goals provided that the overall project is proceeding in a reasonable fashion and Developer is substantially achieving project objectives. Developer shall inform the Customer of factors that will lead to delays such as labor shortages, technical difficulties, competing projects, mechanical problems and other factors.

1.5 Delivery. Upon completion of the Module, Developer shall notify the the Customer. The parties shall then arrange the logistics of making delivery of the Deliverables (as defined herein) and for performing acceptance testing.

1.6 Performance of Acceptance Testing. Upon delivery, the parties shall reasonably cooperate in good faith to perform the agreed acceptance testing procedures. If according to the Specification a project has more than one phase, after finishing each phase Developer presents the results of his work to the Customer for acceptance testing. In no event shall the acceptance testing process last more than 7 (seven) days following delivery, unless specifically provided in the agreed acceptance testing procedures for the project. Following the performance of acceptance testing, Customer shall, acting in good faith, give written notice of acceptance or rejection of the Deliverables. In the event the Deliverables are rejected, Customer shall detail the reasons for such rejection in the written notice. Additionally, the Customer shall identify with specificity the portions of the acceptance tests that form the basis for the rejection. In the event that such written notice is not provided within 7 (seven) days following delivery, the Customer shall be deemed to have accepted the Deliverables. Following receipt of notice of rejection, Developer shall use reasonable diligence to correct any deficiencies cited in good faith by the Customer and to resolve any Customer concerns over the Deliverables.

2. Compensation

2.1 Project Pricing. Customer shall pay to the Developer a Development Fee equal to $ %SUM_FOR_ITEM% for the development of the Module. Such Development fee shall be paid in the installments set forth in the Plan of Development based upon project milestones indicated therein.

2.2 Timing of Payments. All payments shall be due upon achievement of the milestones set forth in the Plan of Development and performing necessary acceptance testing by the Customer. In case if project has more than one phase, the fact of payment for the next phase indicates the acceptance of the previous phase. Customer shall be in default under these Conditions if payment is not received within 5 days following such dates unless the Customer disputes the invoice in good faith. Upon default in payment, Developer is authorized to suspend work hereunder until the default is cured by payment in full. In the event that such default is not cured within 15 days following the invoice, the Developer may terminate supply of customization services by written notice to the Customer. Upon such termination, Developer shall have no further obligations under these Conditions but all payments due through the date of such termination shall remain due and payable and Developer may take any and all actions necessary to collect the same, including but not limited to withholding delivery of any work product produced.

2.3 Project Expense Reimbursement. The fee to be paid to the Developer shall be exclusive of expense reimbursement which shall be treated separately. All such expenses shall be due and payable upon invoice to Customer. Alternatively, Developer may request that such expenses be paid directly by the Customer or paid in advance to the Developer. The parties shall use their reasonable efforts to estimate expenses when creating the Plan of Development. Expenses may include such items as (i) postal charges, federal express, facsimile charges, long distance telephone charges, and other costs of project specific communications, (ii) costs of purchasing or licensing graphics, sound, or other content form third parties, (iii) costs of any special software or hardware that is necessary to complete the specific development task for the project, (iv) travel expenses, (v) costs of acquiring or leasing any special development tools made necessary by the nature of the project, and (vi) all other expenses identified by the parties in the Plan of Development. Expense items shall not include items within the normal overhead and operating expenses of the Developer.

2.4 Verification Records. Developer shall maintain accounting, time, and other records as are necessary to verify any amount to be paid by the Customer hereunder. Upon any dispute of any invoice, Developer shall provide backup records to support the invoice that is questioned if applicable.

3. Proprietary rights

3.1 License of Software. Upon payment in full of all amounts due to the Developer, the Developer shall grant to the Customer a perpetual, world-wide license to use the Module. Such license shall be limited to the right to: a) install the computer software portion of the Software Program containing the Module on computer systems owned, leased, or controlled by Customer, b) utilize the Software Program containing the Module for its own internal purposes, c) make sufficient copies of the Software Program containing the Module for backup purposes and as reasonably necessary to exercise the right to use the Software Program as permitted hereunder d) transfer the Module and license to another party if the other party agrees to accept the terms and conditions of this Agreement. This Agreement shall not provide Customer with the right of ownership or title in and to the Software Program containing the Module but rather, Customer’s rights shall be limited to the scope of license provided herein. Customer shall not take any action or permit any occurrence that would create a lien or encumbrance on the Software Program containing the Module or the copyright thereto, or create any cloud on Developer’s title thereto. Customer shall not use the Software Program containing the Module in such a manner that may infringe upon the rights of any other party.

3.2 Exclusivity. The license granted to the Customer hereunder shall not be exclusive to the Customer.

3.3 Pre-Existing Works. In the event that the Module include any pre-existing works created by the Developer or any other party, the Developer hereby grants, and shall arrange for applicable third parties to grant, a perpetual, non-exclusive, royalty free license to use such pre-existing works in connection with the Module.

3.4 Infringement On Third Party Rights. The Developer agrees to use reasonable diligence to avoid infringement on the proprietary rights of any third party in performance of the creation of Module. The Developer agrees that all aspects of the Module shall be original works of creation and shall not use, in whole or in part, any work created by any other party, except, where specifically disclosed by the Developer to the Customer and where a License to use such items is obtained for the benefit of the Customer. All such licenses shall be royalty free, perpetual, world-wide licenses, sufficient in scope to permit Customer’s full use and enjoyment of the Module, except where specifically agreed in writing by the Customer.

3.5 Inventions. The parties intend that all inventions and creations developed by Developer in the course of the development project, conditioned on full and complete payment of all amounts due to Developer hereunder, shall be the property of the Developer, subject only to the license granted hereunder. For purposes of this Agreement, Inventions shall mean and include any and all ideas, concepts, discoveries, designs, improvements, and creations, regardless of whether the same are patentable or protected under any Federal or State law, rule or regulation or under the common law of any state, or under International law.

3.6 Reservation of Proprietary Rights In Developer. Customer acknowledges and agrees that the Development Fee applicable to this project was negotiated based upon the Developer retaining the copyright and all other proprietary rights in and to the Software and other Inventions created hereunder and that the Development Fee would have been substantially greater had the Developer not retained the copyright in and to such items. Therefore, Customer represents, acknowledges and agrees that the Module is valuable trade secrets and proprietary property of the Developer. Customer further acknowledges and agrees that Developer retains all copyrights and proprietary rights in and to the Module. Customer agrees to refrain from any copying, distribution, or other infringements on the exclusive rights of the Developer as the copyright owner of the Module, except as specifically permitted in the license granted hereunder. Customer agrees to maintain the confidentiality of the Module and to protect the same as trade secrets of the Developer. Customer further agrees to immediately notify the Developer of any third party infringement on the Developer’s rights of which the Customer may become aware.

3.7 Confidential Information. Customer shall not, at any time, disclose or disseminate the trade secrets embodied in the Module or any supporting program documentation to any other person, firm, organization, or employee who does not need to obtain access thereto consistent with Customer’s rights under this Agreement. Under no circumstances may Customer disclose or disseminate such trade secrets to any competitor of Developer. Customer shall devote Customer’ s best efforts to ensure that all persons afforded access to the Module and all supporting program documentation protect Developer’s trade secrets against unauthorized use, dissemination, or disclosure.

3.8 Customer’s Proprietary Material. Notwithstanding the above, Customer shall retain and, Developer shall have no proprietary rights whatsoever in all of Customer’s intellectual property rights in any and all text, images or other components and/or materials owned by Customer, or which Customer has the legal right to use, that are delivered to Developer, including but not limited to software, related documentation, Customer marketing material, logos, and tag lines (“Customer’s Proprietary Material”). Developer agree that shall not use Customer’s Proprietary Material for any other purpose than those expressly set forth in this Agreement.

4. Maintenance

4.1 Consulting and maintenance. For a period of 6 (six) months (the “Subscription period”) following delivery of the Deliverables to the Customer, Developer shall at no charge provide support services to the Customer related to the Module limited to the following: (i) web-based consultations regarding operation and use of the Module during the Developer’s normal business hours, (ii) such further programming services to correct demonstrated errors in the operation of the Module which are the result of incorrect implementation of the requested Module and necessary to enable the Module to operate substantially in accordance with the Specifications. DEVELOPER SHALL NOT HAVE ANY OBLIGATION TO CORRECT ERRORS IN THE OPERATION OF THE MODULE IF THE PROGRAMMING CODE HAS BEEN MODIFIED BY CUSTOMER OR BY ANY OTHER PARTY and (iii) modifications required to keep the Module compatible with newer versions of Software Program.

4.2 Subscription period renewal and compensation for Maintenance. Upon expiration of the Subscription period, the Developer shall have no any further obligations to provide consulting and maintenance to the Customer. Customer may renew the Subscription for another period as set forth on Developer’s web site. Customer shall compensate Developer at Developer’s published rates for providing such support services that are necessary after acceptance of the Module. Additionally, Customer shall be responsible for paying or reimbursing Developer for all costs and expenses reasonably incurred by the Developer resulting from the provision of the support services. All compensation for support services shall be paid within 10 days following invoice therefore. Developer may require the Customer to pay the estimated amount for such services in advance of performing any support services hereunder. In the event that the Customer fails to make any payment within 10 days of invoice, or if the Customer fails to pay any amount required by the Developer in advance, Developer shall not have any obligation to perform support services.

4.3 Customer Responsibilities. Customer shall not attempt to correct any errors in the Module or do anything to alter or modify any programming code. Customer shall promptly report any errors in the operation of the Module to the Developer and shall not take any actions that would increase the severity of the error. Customer shall use the Module only for its intended purpose and only in the manner intended. IN THE EVENT THAT THE CUSTOMER VIOLATES ANY OF THE REQUIREMENTS OF THIS SECTION, THE DEVELOPER SHALL HAVE NO RESPONSIBILITY TO PROVIDE SUPPORT SERVICES, THESE REQUIREMENTS EXPRESS PRECONDITIONS TO THE AVAILABILITY OF DEVELOPER SUPPORT SERVICES HEREUNDER.

4.4 Place of Support Services. All support services shall be provided by the Developer from the Developer’s facility, or through electronic access to the Customer’s computers.

5. Representations and warranties of the developer

5.1 Software Version & Components. Software Customizations are based on a certain version of the Software Program as well as on certain set of add-on modules and skin installed. Developer DOES NOT GUARANTEE that Module will be suitable for:
a) the other versions of the Software
b) the Software with different set of add-on modules
c) the Software with different skin

5.2 Performance. Developer represents and warrants that service hereunder shall be performed in a workmanlike manner consistent with industry standards, that all Module shall function substantially in compliance with agreed specifications, and that it shall perform all development tasks in compliance with all applicable state, federal and local laws, rules and regulations.

5.3 Software Upgradeability. Once installed the Module shall keep the Software Program’s ability to upgrade by using Software Program’s built-in tool.

5.4 Pre-Existing Works. Developer represents and warrants that Customer, upon payment in full of all amounts due hereunder, shall have a perpetual, royalty free, worldwide license to use and pre-existing works, whether developed by the Developer or by and other party, which are used in connection with the Module.

5.5 Warranty Disclaimers. Other than as specifically set forth in this Agreement, THE MODULE IS DELIVERED TO CUSTOMER ON “AS IS” BASIS, WITHOUT ANY WARRANTIES OR REPRESENTATIONS EXPRESS, IMPLIED, INCLUDING, WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, QUALITY, PERFORMANCE OR NONINFRINGEMENT UPON THE RIGHTS OF ANY OTHER PARTY. DEVELOPER MAKES NO WARRANTY THAT THE MODULE WILL MEET CUSTOMER’S SPECIFIC OBJECTIVES OR NEEDS OR THAT THE MODULE WILL BE FREE FROM ERRORS OR BUGS. DEVELOPER MAKES NO WARRANTY THAT THERE WILL BE UNINTERUPTED OPERATION OF THE MODULE. CUSTOMER ACKNOWLEDGES AND AGREES THAT THE FOREGOING EXCLUSIONS AND DISCLAIMERS OF WARRANTIES ARE AN ESSENTIAL PART OF THIS AGREEMENT AND FORMED THE BASIS FOR DETERMINING THE PRICE CHARGED FOR THE PRODUCTS.

5.6 Limitation On Damages. In no event will Developer be liable for any incidental, special or consequential damages in spite of the fact that the Customer acknowledges that Customer has been fully advised that such damages are possible. Under no circumstances will damages assessed against Developer exceed the development fee (exclusive of costs and expenses) actually paid to the Developer.

5.7 Third Party Claims. Developer shall not liable for claims made against the Customer or the Developer arising out of Customer’s use or ownership of the Module and Customer hereby indemnifies and holds the Developer harmless from and against any and all claims, of every nature or type that may be brought or asserted by any other party.

6. Terms and terminations of provision of service

6.1 Term. The license to use the Module contained herein shall be perpetual unless sooner terminated pursuant to the terms hereof. The obligation to provide support services following acceptance shall terminate following the expiration of the period described in the Article applicable to support services.

6.2 Termination Without Cause. Either party may terminate the provision of Customization Services prior to completion of the development project, with or without cause, by giving 10 (ten) days prior written notice of termination to the other party.

6.3 Termination For Cause. Either party may terminate the provision of Customization Services for cause in the event that the other party substantially defaults under any term or condition contained herein; provided that if the termination is against the Developer based upon the performance or lack of performance of the Developer’s development responsibilities, the Developer shall first be given thirty (30) days advanced written notice specifying the alleged deficiency in detail and Developer shall have such thirty (30) day period to reasonably cure the alleged default.

6.4 Termination Prior To Completion. Upon any early termination prior to completion of development, the Developer shall immediately cease work on the relevant project and shall issue an invoice to the Customer for all work performed through the date of termination. The final invoice shall be due and payable by the Customer upon receipt thereof.

6.5 Survival of Certain Provisions. In the event of any termination, the following provisions shall continue in full force and affect: (i) the obligation of the Customer to make payments due hereunder to the Developer, (ii) confidentiality provisions, and (iii) representations and warranties as to proprietary rights of the Module.

7. Miscellaneous provisions

7.1 Excusable Delays. Any delay or nonperformance of any provision of these Conditions caused by conditions beyond the reasonable control of Developer shall not constitute a breach of these Conditions, provided that Developer has taken reasonable measures to notify Customer of the delay in writing and uses reasonable efforts to perform in accordance with these Conditions notwithstanding such conditions. The delayed party’s time for performance shall be deemed to be extended for a period equal to the duration of the conditions beyond its control. Conditions beyond a party’s reasonable control include, but are not limited to disease of the responsible person, natural disasters, acts of government after the date of acceptance of these Conditions, power failure, fire, flood, acts of God, labor disputes, riots, acts of war and epidemics.

7.2 Non-solicitation. Both the Customer and the Developer agree that while this Agreement is in force and for a period of twelve (12) months thereafter, they shall not directly or indirectly solicit or offer employment to any of the other’s officers, employees, third party contractors and associates who have been involved in or associated with this Agreement without the other’s prior written consent.

7.3 Notices. Any notification or written communication required by or contemplated under the terms of this Agreement shall be in writing and shall be deemed to be delivered via Support Helpdesk (https://secure.x-cart.com/).

7.4 Governing law. This agreement (and any dispute or claim relating to it or its subject matter) is governed by and is to be construed in accordance with the laws of the Republic of Cyprus. All disputes arising out of or in connection with this Agreement shall be finally settled under the Rules of the Arbitration Institute of the Stockholm Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules. The place of arbitration shall be Nicosia, Cyprus.

I have read and understood the Conditions of Supply of Services and “ordered products”, “order description” and “project timeframe” attached hereto. I accept these Conditions of Supply of Services in aggregate with the information containing in and “ordered products”, “order description” and “project timeframe” and hereby agree to abide by them.

Signed by %COMPANY_NAME%.