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Server License Agreement

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SERVER LICENSE AGREEMENT

This Server License Agreement ("Agreement") is entered into as of by and between Licensor: with principal place of business at , and Licensee: with principal place of business at .

WHEREAS

WHEREAS, Licensor develops, maintains and owns proprietary server software and related documentation necessary to operate hosted services and server infrastructure (the "Server Software"); and

WHEREAS, Licensee desires a license to install and operate the Server Software on Licensee's servers in accordance with the terms set forth in this Agreement, and Licensor is willing to grant such license subject to the terms and conditions contained herein.

SCOPE OF WORK

Licensor shall provide Licensee with the Server Software license, related documentation, and any installation or configuration work expressly described below. Licensee's acceptance of deliverables shall be governed by the acceptance criteria set forth in the Scope of Work.

LICENSE GRANT AND RESTRICTIONS

Subject to the terms and conditions of this Agreement and full payment of Fees, Licensor hereby grants Licensee a non-transferable, non-sublicensable license to install and use the Server Software on Licensee-owned or Licensee-controlled server hardware for Licensee's internal business operations only, during the Term.

Licensee shall not: (a) copy, modify or create derivative works of the Server Software except as expressly permitted; (b) reverse engineer, decompile, disassemble or otherwise attempt to derive source code except to the extent permitted by applicable law; (c) rent, lease, sublicense, distribute or otherwise transfer rights to third parties; or (d) remove or alter any proprietary notices.

PAYMENT TERMS

Licensee shall pay Licensor the fees specified below in consideration for the license and services. All amounts are payable in United States dollars unless otherwise agreed in writing.

If any undisputed amount owed hereunder is not paid within fifteen (15) days of the due date, interest shall accrue on the unpaid balance at the rate specified in Late Payment Fee above until paid in full. Licensee shall reimburse Licensor for reasonable collection costs and attorneys' fees incurred in recovering overdue amounts.

TERM AND TERMINATION

Term: This Agreement shall commence on and, unless earlier terminated in accordance with this Agreement, shall continue until (the "Term").

Either party may terminate this Agreement upon written notice if the other party materially breaches any obligation and fails to cure such breach within the notice period specified above. Licensor may terminate immediately if Licensee's use of the Server Software infringes third-party rights or violates law. Upon termination, Licensee shall cease all use of the Server Software, certify destruction or return of all copies, and pay all accrued fees.

CONFIDENTIALITY

Each party acknowledges that in connection with this Agreement it may receive Confidential Information of the other party. "Confidential Information" means non-public information disclosed in any form that is designated as confidential or that reasonably should be understood to be confidential. Each receiving party shall (a) use Confidential Information only to perform its obligations under this Agreement, (b) protect Confidential Information with the same degree of care it uses to protect its own confidential information but in no event less than reasonable care, and (c) not disclose Confidential Information to any third party except to its employees, contractors or advisors who have a need to know and are bound by confidentiality obligations no less restrictive than those herein.

Confidential Information shall not include information that (i) is or becomes public other than by a breach of this Agreement, (ii) was rightfully known to the receiving party prior to disclosure, (iii) is received from a third party without restriction, or (iv) is independently developed without use of the disclosing party's Confidential Information. A receiving party may disclose Confidential Information to the extent required by law, provided it gives prompt notice to the disclosing party and reasonably cooperates in any lawful effort to limit disclosure.

LIMITATION OF LIABILITY

EXCEPT FOR LIABILITY ARISING FROM WILLFUL MISCONDUCT, GROSS NEGLIGENCE, OR BREACH OF CONFIDENTIALITY, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, PUNITIVE OR SPECIAL DAMAGES, INCLUDING LOST PROFITS, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THE AGGREGATE LIABILITY OF EITHER PARTY ARISING OUT OF OR RELATED TO THIS AGREEMENT SHALL NOT EXCEED THE TOTAL FEES PAID BY LICENSEE TO LICENSOR UNDER THIS AGREEMENT DURING THE SIX (6) MONTHS PRECEDING THE CLAIM.

NOTICES

GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of the jurisdiction specified below, without regard to conflict of laws principles.

ENTIRE AGREEMENT

This Agreement, including any exhibits or schedules attached hereto and any written amendments executed by both parties, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, proposals, negotiations and communications, whether oral or written. Any amendment or waiver must be in writing and signed by authorized representatives of both parties.

MISCELLANEOUS

If any provision of this Agreement is determined to be invalid or unenforceable, the remaining provisions shall remain in full force and effect. Neither party may assign this Agreement without the prior written consent of the other, except that Licensor may assign to an affiliate or in connection with a merger or sale of substantially all assets. The headings in this Agreement are for convenience only and shall not affect interpretation.

LICENSOR:

By:

Date:

LICENSEE:

By:

Date:

Enter text✕

What a Server License Agreement Covers

A Server License Agreement is a legally binding contract that grants rights to use, host, or operate software on a server environment under defined terms. It specifies licensed software, permitted users, deployment scope, performance and uptime expectations, maintenance and update obligations, data handling rules, security responsibilities, limitations of liability, payment and renewal terms, and termination conditions. This agreement frames ownership of intellectual property, sublicensing rights, and the parties' obligations for backups, patches, and incident response to reduce operational and compliance risk across on-premises, cloud, or hybrid server deployments.

Why a Clear Server License Agreement Matters

A well-drafted Server License Agreement reduces operational risk, clarifies who is responsible for security and updates, and protects IP and business continuity interests while defining acceptable use, data handling, and payment terms.

Why a Clear Server License Agreement Matters

Who Typically Prepares and Signs This Agreement

Execution authority typically sits with authorized signatories such as the CIO, CTO, CFO, or General Counsel depending on delegated signing limits.

  • IT Management: Drafts technical scope, deployment model, performance and security requirements, and verifies compatibility with existing infrastructure.
  • Legal / Contracts: Reviews IP ownership, indemnity, limitation of liability, governing law, and termination rights.
  • Procurement / Finance: Confirms payment terms, renewal pricing, and invoice processing requirements.

Typical Signatories and Their Roles

IT Manager

Responsible for confirming technical fit, stating server capacity and resource needs, and approving service-level descriptions. The IT Manager documents required integrations, maintenance windows, and acceptance criteria before release to production.

General Counsel

Reviews legal terms including indemnities, IP assignment, data protection clauses, and termination triggers. The General Counsel ensures the agreement aligns with company policies and delegated signature authority.

Core Sections Every Server License Agreement Should Include

A practical agreement separates technical, commercial, and legal obligations into clear sections so both parties understand scope, performance, and remedies.

Grant

Defines license type (perpetual, subscription), permitted servers and users, geographic scope, and whether sublicensing or transfer is allowed; reduces ambiguity about usage rights.

Fees

Specifies pricing model (one-time, recurring, per-core, per-instance), billing schedule, late payment remedies, and audit rights to validate usage-based fees.

Service Levels

Describes uptime targets, maintenance windows, support response and escalation procedures, and remedies such as service credits for missed SLAs.

Security

Sets minimum security controls, patching cadence, incident reporting timelines, and responsibilities for encryption, backups, and access controls.

Data Handling

Specifies data ownership, permitted processing, cross-border transfers, breach notification obligations, and requirements for deletion or return of data post-termination.

Termination

Outlines termination for convenience and for cause, cure periods, post-termination data retrieval, and surviving obligations such as confidentiality and IP clauses.

Essential Information to Include

Parties: Legal names
Licensed Items: Software IDs
Scope: User/server limits
Term: Start/end dates
Pricing: Fee schedule
Signatures: Authorized signers

Step-by-Step: Completing a Server License Agreement

Follow these steps in order to assemble, review, and execute a compliant server license agreement with minimal rework and clear approvals.

  • 01
    Draft Scope: Define software, servers, and permitted users clearly.
  • 02
    Set Commercial Terms: Specify fees, billing, and audit rights.
  • 03
    Legal Review: Run IP, liability, and termination clauses past counsel.
  • 04
    Execute: Have authorized signatories sign and retain originals.

Customizing and Automating the Agreement Workflow

Configure your digital workflow to reduce manual steps: templates, conditional fields, approver routing, and audit logging speed execution.

Field Configuration
Template Create reusable clauses and placeholders for variable data.
Conditional Fields Show fees or modules only when selected by user.
Approval Routing Define multi-step approvers by role or dollar threshold.
Audit Trail Capture timestamps, IP, and signer authentication method.

Where to Send and How Signing Works

Route the document to the right recipients and choose an appropriate authentication level for each signer to balance security and convenience.

  • Upload: Upload the executed template to the eSignature platform.
  • Place Fields: Add signature, initials, and date fields where needed.
  • Select Auth: Choose email, SMS code, or advanced authentication.
  • Distribute: Send signing order or shared link to recipients.

Digital Signing and eSubmission Considerations

Ensure the solution can export a signed PDF and retain an immutable audit record for regulatory or contractual evidence.

  • Supported Formats: PDF, DOCX, and preserved metadata
  • Authentication: Email, SMS, or stronger 2FA
  • Integrations: Connectors for CRM, ERP, and cloud storage

Key Deadlines and Response Timelines

Track renewal, notice, and cure periods carefully—missed deadlines often determine whether the agreement continues or terminates and affect remedies.

Effective and Term Dates:

Enter exact start and end dates using MM/DD/YYYY.

Renewal Notice:

Provide notice period for auto-renewal, commonly 30–90 days.

Cure Periods:

Set cure windows for breaches, typically 30 days unless specified.

Audit Windows:

Document when audits may occur and advance notice required.

Support SLAs:

List response and resolution targets in hours or business days.

Common Mistakes to Avoid

  • Vague scope language that omits server identifiers or permitted instance counts, leading to disputes over overage charges or unauthorized use.
  • Failure to define maintenance windows and patch responsibilities, creating gaps in uptime expectations and security accountability.
  • Using ambiguous payment terms without late fee or audit language, which complicates collection and reconciliation.
  • Omitting data handling or breach notification requirements, increasing regulatory risk in the event of a security incident.

Risks and Legal Consequences of Poor Drafting

Breach Liability: Contract damages and indemnity exposure
Regulatory Risk: HIPAA and data protection fines
Operational Disruption: Service downtime and business loss
IP Disputes: Claims over ownership or misuse
Audit Penalties: Fees from usage noncompliance
Contract Voidance: Enforceability issues from improper signatures

Real-World Examples of Server License Agreements

Practical examples show how organizations tailor clauses for scale, compliance, and integration needs.

Optica Ventures (COO Brian Fitzgibbons)

Optica standardized server licenses across portfolios to speed onboarding and reduce disputes.

  • They reduced negotiation cycles by centralizing terms.
  • The interface is simple and easy-to-use for our team; more importantly, it is just as easy for our customers.

Xerox (NetSuite Director Kodi-Marie Evans)

Xerox integrated licensing with NetSuite to automate billing and usage audits.

  • Automated invoicing cut reconciliation time significantly.
  • airSlate SignNow provides us with the flexibility needed to get the right signatures on the right documents, in the right formats, based on our integration with NetSuite.

eSignature Vendor Comparison for Executing Server License Agreements

Compare common vendor pricing and capabilities for electronic execution; signNow appears first to simplify procurement comparisons.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial 7-day free trial Varies by plan Varies by plan Yes, limited Yes, limited
Bulk Send Yes Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
Envelope Cap No cap 100 envelopes/user/year Varies Varies Varies

Frequently Asked Questions About Server License Agreements

Common questions and practical answers to avoid execution delays and enforceability problems when preparing or signing a server license agreement.


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