We have developed a software licensing and implementation checklist. The checklist* is designed to be used to verify that significant issues are considered and, as applicable, addressed.

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Software License Negotiation ChecklistMarcus Harris, Partner

y Correct licensee identified

y Exclusive/nonexclusive license /perpetual

y Sublicensing

y Transferable/nontransferable

y Third party access

y Third party products

y License metric | User based/type of user/scope of use | Revenue | Site/location | Hardware | Operating system | Other

y Access to source code/source code license

y Open source

y Correct/accurately described products licensed

y Documentation licensed

y License to updated, enhancements releases

y Disaster recovery/additional copies/backups

| Scope of coverage | Term | Fees

Scope of License Grant:

y When does delivery occur, pre-live/post-live

y When does acceptance occur pre go-live/post go-live

y Acceptance testing criteria

y Process for accepting/rejecting

y Vendor obligation to remedy

y Effects of failure to accept

Delivery and Acceptance:

y Form of payment, amount, schedule

y What is being purchased

y Payment tied to milestones/acceptance

| Revenue recognition

y Maintenance | Cap on maintenance increases

y Segregation of licenses from services and other fees

y Future options

y Discounts off of list

y Suspension of maintenance

y Ability to shelve unused licenses

Payment Terms:

y Compatibility with software

y Warranties/pass-through

y Indemnity issues

y Upgrade

y Installation

Purchase of hardware:

y Consider separate agreement

y Scope of services to be provided

y Location where services to provided

y Cost of services/discount/cap on fee increases

y Project plan/milestones/deliverables

y Change orders

y Acceptance testing process/criteria

y Dispute resolution process

y Services warranty

y Indemnification

y Definition of vendor implementation team

| Experience | Ability to replace

y Definition of licensee implementation team and scope of involvement

Implementation Services:

y Performance warranty for software

y Services warranty for maintenance services

y Length of warranty

y Scope

y Pass through warranties for third party products

y Express remedies for breach

y Exclusions/carve outs

y Fraud/Negligent misrepresentation issues

y Infringement

Warranty:

y Scope of available remedies

y Events giving rise to remedies

y Failure of essential purpose

Remedies:

y Types

y Scope

y Triggering events

y Limitations

Indemnification:

y Mutual

y Direct Damages cap

| Fees paid | Multiple of fees paid | Is amount of recovery depreciated | Calculation of damages cap | Exclusions from cap

y Carve outs to cap on damages

Limitation of Liability:

y Scope/Definition

y Standard of care

y Duration of obligation

y Disclosure to third parties

y Return/destruction

| Trigging event

y Publicity/Terms of agreement

y Other issues (HIPPA/GLB etc.)

Confidential Information:

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y Escrow agent

y When deposited/updated

y Triggering events

y Fees

Source Code Escrow:

y Perpetual license or term license

y Ability to terminate: | For cause/convenience | Force majeure

� Scope of triggering event | Other

y Termination notice

y Obligations upon termination

| Transitional use rights/support | Return of software | Termination fees

Term and Termination:

y Bankruptcy Code §365(n)

y Force majeure

y Assignment | Fees | Transitional use rights

| Permitted assignee

y Formal mechanism for dispute resolution

y Integration/Entire Agreement | Properly incorporate appendix/

schedules, addenda

y Big boy clause

y Applicable law, venue, forum

y Attorneys fees/costs of litigation/arbitration

y Insurance

y Non-solicitation

y Non-compete

y Survival

y Severability

y Waiver

y Security interest in hardware of software

y Authority to enter into agreement

y Taxes

Miscellaneous:

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For more information, please contact: Marcus S. Harris (312) 876-6685 MSHarris@arnstein.com

Arnstein & Lehr LLP 161 North Clark Street, Suite 4200 Chicago, IL 60601

*This checklist is for informational purposes only, and it should not be construed as legal advice. Receiving the checklist does not constitute or create an attorney-client relationship. You should contact an Arnstein & Lehr attorney to obtain advice with respect to any particular issue or problem.