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General Conditions for Supply of Software and Services



(Note: The following forms and documents are prepared by the above under the laws and practice prevailing as of [Date]. Seldom is a model form or documents directly suitable to a transaction without adaptation to the particularities and circumstances of the matter.)

General Conditions for Supply of Software and Services

XYZ Systems Limited

General Conditions

1. General

These conditions apply to all contracts by XYZ Systems Limited ("XYZ") for the provision by XYZ of computing equipment, software and services. In case of conflict these conditions shall override any terms or conditions imposed by XYZ's clients. These conditions may only be varied on the written authority of XYZ's contracts manager.

2. Acceptance

XYZ's quotations and proposals are without commitment and all orders require XYZ's written acceptance to create a binding contract. Until then XYZ may vary or withdraw quotations or proposals at any time (notwithstanding any purported acceptance by a Client) and in the absence of an order any quotation or proposal shall be deemed withdrawn thirty days after its issue by XYZ.

3. Selection of Computer Configurations, Packages and Services

XYZ may help Clients to specify or choose computer configurations or program products, but the assessment and selection of each Client's chosen equipment's suitability for that Client's purposes and the assessment and selection of software and other services as being suitable for the Client's chosen configuration and purposes must be the Client's ultimate responsibility. XYZ undertakes only that in giving such assistance it has acted in good faith and has not been willfully misleading. Pre-contract representations made by or on behalf of XYZ shall only be relied upon by the Client if they are made in writing and are expressly reproduced and incorporated in the contract between XYZ and

the Client.

4. Charges, Costs and Expenses

XYZ reserves the right to charge for feasibility studies and the preparation of quotations. Unless XYZ expressly states otherwise, quoted charges and rates are exclusive of expenses, third party costs (including the cost of computer time and data transmission costs) and value added and other sales taxes. XYZ reserves the right to payment in reimbursement of these items and to increase quoted charges and rates to cover these items, to cover work not included in estimated cost when the quotation was prepared and to cover increases in third party costs, unforeseen items and cost increases outside XYZ's control where such items and increases are incurred or arise after the date of XYZ's quotation.

5. Payment

Prompt remittance in payment of invoices in accordance with XYZ's contract with the Client is a condition of XYZ's continuing work for that Client. XYZ reserves the right to charge interest on late payments at two per cent per month calculated on a daily basis and compounded monthly, to suspend work pending payment of all overdue amounts and to treat non-payment of an overdue amount as a repudiation by the Client of the Client's contract with XYZ. Unless otherwise stated in XYZ's quotation, payments are due within thirty days following the date of XYZ's invoices.

6. Delivery and Completion

6.1 XYZ will endeavor to meet the Client's delivery requirements but accepts no obligation to deliver equipment or software or otherwise to complete work by any specified date. Delivery and completion dates quoted by XYZ or included in any contract are estimates only and without engagement.

6.2 XYZ deems delivery of software to be effected when software in machine readable form (together with software operating instructions) is supplied at the Client's computer installation. Except for software written or modified to the Client's special order (as to which see Condition 10 below) software is deemed to be accepted by the Client on delivery on the basis that it has first passed XYZ's standard acceptance tests. Except where XYZ specifically undertakes to do so and subject to these Conditions XYZ accepts no obligation to provide software installation or maintenance services or any materials other than machine readable object code with human-readable operating instructions.

7. Program Faults

7.1 Conditionally on the Client's compliance with the Client's responsibilities under 7.2 below, XYZ will without charge use bona fide endeavors to correct any program fault (defined as functions of a program not operating in accordance as supplied by XYZ) in software of XYZ's own production delivered by XYZ to the Client where such fault is reported by the Client to XYZ in writing with fully documented examples of the reported fault within ninety days of first delivery of the software to the Client (or when XYZ agrees to permit a phased implementation of a series of software items than within ninety days of the agreed phased implementation date for the relevant software) and (subject to Condition 12 below) XYZ's liability for program faults in software whether of its own production or of third parties shall be limited to this provision.

7.2 The Client shall be responsible after software delivery for the correct operation maintenance and use of software provided by XYZ and of the equipment on which it is run.





7.3 While XYZ believes that its software will be of value to Clients, XYZ cannot foresee every circumstances in which its software will be used and (in common with most software faults and for negligence. Subject to Condition 12 below, all express and implied conditions and warranties as to quality, suitability or performance in relation to any software supplied or licensed by XYZ and any amendments or enhancements XYZ undertakes are hereby excluded.

7.4 Except as may be expressly otherwise agreed in writing for specific program products, XYZ shall have no obligation to provide error correction or support services (including correction of faults in software) otherwise than in accordance with this Condition 7 and any such services (including services in connection with reports by the Client of claimed faults which do not qualify for correction by XYZ in accordance with this Condition) provided by XYZ and any expenses incurred by XYZ in providing such services shall be chargeable to the Client at XYZ's rates established at the time such services are provided.

8. Staff and Employment

XYZ will use bona fide endeavors to avoid changes in key staff allocated to each Client's work. Because staff continuity is important to XYZ for other projects and because XYZ's staff have access to confidential information, XYZ requires that Clients do not offer employment to any member or former member of XYZ's technical or management staff for so long as they stay in XYZ's employment and (if they leave XYZ) until they have been out of XYZ's employment for at least twelve months, and that Clients do not attempt to persuade any member of XYZ's technical or management staff to leave XYZ's employment.

9. Confidence

XYZ will observe confidence in respect of all confidential information disclosed by Clients about their businesses to XYZ and requires each Client similarly to observe confidence (and to procure its staff to do so) in respect of all confidential information which XYZ may disclosure to the Client. These mutual obligations of confidence shall continue after completion of the Client's contract with XYZ for so long as the information disclosed remains outside the public domain, but shall not restrict XYZ's freedom to copy, re-use and disclose and license to third parties programs and techniques developed by XYZ for or with Clients and whether or not based upon confidential information disclosed by Clients to XYZ.

10. Bespoke Systems Analysis and Programming Services

If XYZ agrees to design, write or modify software to a Client's special order ("Bespoke Software") the following provisions shall apply:

10.1 the Client shall provide and XYZ shall be entitled to require, and rely on, the Client's assistance and cooperation in developing functional and detailed specifications. The Client shall also provide such relevant information and such office, development and testing facilities at the Client's computer installation as XYZ may reasonably require during the development period;

10.2 before delivery of Bespoke Software the Client shall prepare and provide to XYZ comprehensive and accurate test data complying with all applicable current specifications for the Client's projected software (and including the results the Client expects from processing such test data) against which XYZ shall test the Bespoke Software before delivery.

10.3 the Client's approval of any specification prepared by XYZ shall be deemed to have been given if the Client does not in writing request modification of the specification within fourteen days of its delivery to the Client and an approved specification, or a specification deemed to have been approved under this provision, shall supersede all earlier specifications;

10.4 XYZ shall have no obligation to make any modification to a specification when a request for modification is made after approval or deemed approval of the specification by the Client, or to make any program amendment or correction not in accordance with the latest applicable current specification. Any such modification, amendment or correction which XYZ may make shall be charged to the Client as an additional service outside the contract price but on the terms of these conditions;

10.5 acceptance of Bespoke Software shall be deemed on processing of the Client's test data to yield the expected results specified in the test data or (if the Client's test data are not available before delivery of the Bespoke Software or if the Client fails to make its computer available for testing purposes) fourteen days after delivery of the Bespoke Software to the Client. If for any other reason outside XYZ's reasonable control XYZ is unable to run test data, acceptance shall be deemed fourteen days after delivery of the Bespoke Software to the Client unless within that period the Client reports to XYZ in writing specific faults in the Bespoke Software (with examples of faulty output) by comparison with the latest applicable current specifications approved or deemed to have been approved by the Client. Acceptance shall then be deemed when XYZ has either disproved or corrected such faults as reported. Acceptance does not affect the provisions of Condition 7 above relating to program faults;

10.6 the previsions of Condition 11 below shall apply to Bespoke Software; and





10.7 the Client shall indemnify XYZ against any claim made by a third party alleging that bespoke Software infringes any property or right of any third party where the allegation results from XYZ's compliance with the client's instructions.

11. Property and Copyright in Program Products

XYZ reserves property and copyright in all its work, including Bespoke Software and including techniques and software to the development of which Clients may have contributed. The Client shall assign to XYZ all rights, title and interest (if any) which the Client may have in Bespoke Software developed by XYZ with or for the Client, and the Client's entitlement to use and copy any software which XYZ supplies to that Client (whether standard or Bespoke Software) is limited to a right to use and copy such software for that Client's own purposes on its own data and on its own computer installation. Source code, machine listings and other technical information relating to XYZ's work remain XYZ's confidential property and the Client is not entitled to access or to copies. Before delivery by XYZ of any software to the Client (including Bespoke Software) the Client shall enter into a license agreement with XYZ defining and limiting the Client's rights and obligations in respect of the software and setting out circumstances in which XYZ shall be entitled to terminate the Client's license. A copy of XYZ's form of (dollars) license agreement is available for inspection on request.

12. Limitation of Liabilities and Indemnity

12.1 XYZ does not seek to limit or exclude liability for death or for personal injuries arising from XYZ's negligence.

12.2 XYZ accepts liability up to a limit of (dollars) in respect of any one claim for damage to property (other than goodwill, program-carrying media, records, data, programs or other intellectual or intangible property) arising from XYZ's negligence or breach of contract to the extent that such liability is covered by XYZ's public and product liability insurance policies (copies of which are available for inspection on request) but XYZ accepts (and shall have) no further or other liability for damage to property.

12.3 If at any time and for any reason beyond its then reasonable control XYZ is not able to complete a contract XYZ reserves the right to withdraw form it, in which event XYZ's liability shall be limited to the return of any payments already made by the Client to XYZ, less the amount of any costs and expenses incurred by XYZ in relation to the contract and related value added and other sales taxes (if any) down to the date of withdrawal.

12.4 Except as provided under 12.1, 12.2 and 12.3 above and except in respect of indemnities given expressly by XYZ to Clients against claims by third parties for breach of intellectual property rights, XYZ's liability to any Client for loss damage or injury of any kind arising directly or indirectly either from XYZ's negligence or from XYZ's breach of any contract with that Client in respect of any claim or series of claims arising from the same event on circumstances shall be limited to the greater of ( ) or the amount of the contract price paid or payable by the client to XYZ and related to the claim or claims made against XYZ.

12.5 Except as provided in 12.1, 12.2 and 12.4 above, each Client shall indemnify XYZ and its directors and employees (on whose behalf XYZ contracts for the purpose of securing such indemnity) against third party claims relating to work which XYZ undertakes for that Client or relating to equipment or software which XYZ supplies or licenses to that Client.

13. Interpretation

All XYZ's contracts are governed by English law and XYZ's Clients shall submit to the non-exclusive jurisdiction of the English courts.

The headings to these Conditions are included for convenience only and do not affect their interpretation.

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