AI SOFTWARE LICENSE AGREEMENT

AGREEMENT DATE: [DATE]

AGREEMENT NUMBER: [AGREEMENT-NUMBER]

PARTIES TO THIS AGREEMENT

LICENSOR:
- Company Name: [LICENSOR LEGAL NAME]
- Address: [STREET ADDRESS, CITY, STATE/PROVINCE, POSTAL CODE, COUNTRY]
- Registration Number: [COMPANY REGISTRATION NUMBER]
- Contact Person: [NAME AND TITLE]
- Email: [EMAIL ADDRESS]
- Phone: [PHONE NUMBER]

LICENSEE:
- Company Name/Individual: [LICENSEE LEGAL NAME]
- Address: [STREET ADDRESS, CITY, STATE/PROVINCE, POSTAL CODE, COUNTRY]
- Registration Number: [COMPANY REGISTRATION NUMBER IF APPLICABLE]
- Contact Person: [NAME AND TITLE]
- Email: [EMAIL ADDRESS]
- Phone: [PHONE NUMBER]

RECITALS

WHEREAS, Licensor has developed, owns, and/or controls certain artificial intelligence software, including associated machine learning models, algorithms, documentation, and related intellectual property (collectively, the "AI Software");

WHEREAS, Licensee desires to obtain a license to use the AI Software for the purposes described herein, subject to the terms and conditions set forth in this Agreement;

WHEREAS, the parties acknowledge that AI technology is subject to evolving regulatory requirements, including but not limited to the European Union Artificial Intelligence Act (Regulation (EU) 2024/1689), state-level AI legislation in the United States, and other applicable laws governing artificial intelligence systems;

WHEREAS, the parties intend to establish clear rights, responsibilities, and limitations regarding the use, modification, and deployment of the AI Software;

NOW, THEREFORE, in consideration of the mutual covenants, terms, and conditions set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

ARTICLE 1: DEFINITIONS

1.1 "AI Software" means the artificial intelligence software product(s) identified in Schedule A, including all machine learning models, neural networks, algorithms, source code (if applicable), object code, APIs, user interfaces, documentation, updates, upgrades, modifications, and derivative works provided by Licensor under this Agreement.

1.2 "Authorized Users" means individuals who are employees, contractors, or agents of Licensee who are authorized to use the AI Software pursuant to this Agreement and have agreed to be bound by terms at least as protective as those contained herein.

1.3 "Confidential Information" means any non-public information disclosed by either party to the other, whether orally, in writing, or by other means, that is designated as confidential or that reasonably should be understood to be confidential given the nature of the information and circumstances of disclosure.

1.4 "Derivative Work" means any modification, enhancement, improvement, translation, adaptation, or other work based upon or derived from the AI Software.

1.5 "Documentation" means all user manuals, technical specifications, training materials, API documentation, release notes, and other written materials provided by Licensor relating to the AI Software.

1.6 "Effective Date" means the date first written above or the date of last signature, whichever is later.

1.7 "High-Risk AI System" means an AI system as classified under Article 6 of the EU AI Act or equivalent classification under applicable law, including systems used in biometrics, critical infrastructure, education, employment, essential services, law enforcement, migration, or administration of justice.

1.8 "Intellectual Property Rights" means all patents, copyrights, trademarks, trade secrets, know-how, moral rights, and any other intellectual property or proprietary rights recognized in any jurisdiction.

1.9 "License Fees" means the fees payable by Licensee to Licensor as specified in Schedule B.

1.10 "License Term" means the period during which Licensee is authorized to use the AI Software, as specified in Section 3.1.

1.11 "Model Weights" means the numerical parameters learned by the AI Software during training that determine the model's behavior and outputs.

1.12 "Output" means any data, content, predictions, recommendations, decisions, or other results generated by the AI Software based on inputs provided by Licensee or Authorized Users.

1.13 "Personal Data" means any information relating to an identified or identifiable natural person, as defined under applicable data protection laws including GDPR and state privacy laws.

1.14 "Prohibited Use" means any use of the AI Software that is expressly prohibited under this Agreement or applicable law.

1.15 "Training Data" means the datasets used to train, validate, or test the AI Software, whether provided by Licensor or Licensee.

ARTICLE 2: LICENSE GRANT

2.1 Grant of License

Subject to the terms and conditions of this Agreement and payment of all applicable License Fees, Licensor hereby grants to Licensee a:

☐ Exclusive / ☐ Non-exclusive
☐ Worldwide / ☐ Territory-limited (specify: _____________)
☐ Perpetual / ☐ Term-limited
☐ Transferable / ☐ Non-transferable
☐ Sublicensable / ☐ Non-sublicensable

license to use the AI Software for the following purposes:

☐ Internal business operations
☐ Commercial product/service integration
☐ Research and development
☐ Educational purposes
☐ Government/public sector use
☐ Other (specify): [SPECIFY PURPOSE]

2.2 Scope of Authorized Use

Licensee is authorized to:

(a) Installation and Access:
- Install the AI Software on up to [NUMBER] servers/devices
- Allow up to [NUMBER] Authorized Users to access the AI Software
- Process up to [NUMBER] API calls/transactions per [TIME PERIOD]

(b) Integration:
- Integrate the AI Software with Licensee's existing systems and applications
- Develop interfaces and connectors to enable interoperability
- Create custom workflows incorporating the AI Software

(c) Modification (if applicable):
☐ Fine-tuning of pre-trained models using Licensee's data
☐ Parameter adjustment and configuration
☐ API customization
☐ User interface modification
☐ No modifications permitted

(d) Output Usage:
- Use Outputs for Licensee's authorized business purposes
- Store, process, and analyze Outputs
- Share Outputs with third parties as necessary for authorized purposes

2.3 License Restrictions

Licensee shall NOT:

(a) Prohibited Technical Actions:
- Reverse engineer, decompile, disassemble, or otherwise attempt to derive source code or Model Weights (except as expressly permitted by applicable law)
- Remove, alter, or obscure any proprietary notices or labels on the AI Software
- Circumvent or disable any security features, access controls, or usage limitations
- Use the AI Software to develop competing AI products or services

(b) Prohibited Uses:
- Use the AI Software for any Prohibited Use as defined in Schedule C
- Use the AI Software in violation of applicable laws, regulations, or ethical guidelines
- Process Personal Data without appropriate legal basis and safeguards
- Deploy the AI Software as a High-Risk AI System without complying with applicable requirements

(c) Prohibited Transfers:
- Sublicense, rent, lease, loan, sell, or transfer the AI Software to any third party (unless expressly permitted)
- Share access credentials with unauthorized individuals
- Allow access by competitors of Licensor

(d) Usage Limitations:
- Exceed usage limits specified in this Agreement or Schedule B
- Use the AI Software for purposes outside the scope of the license grant
- Misrepresent the capabilities or limitations of the AI Software

2.4 Reservation of Rights

Licensor reserves all rights not expressly granted to Licensee. No implied licenses are granted by this Agreement. Licensor retains all right, title, and interest in and to the AI Software, including all Intellectual Property Rights therein.

ARTICLE 3: TERM AND TERMINATION

3.1 License Term

This Agreement shall commence on the Effective Date and continue for:

☐ Perpetual term (subject to termination provisions)
☐ Initial term of [NUMBER] years, automatically renewing for successive [NUMBER]-year periods unless terminated
☐ Fixed term ending on [DATE]
☐ Subscription basis: [MONTHLY/QUARTERLY/ANNUAL]

3.2 Termination for Convenience

☐ Either party may terminate this Agreement upon [NUMBER] days' written notice
☐ Only Licensee may terminate for convenience upon [NUMBER] days' written notice
☐ No termination for convenience permitted during the initial term

3.3 Termination for Cause

Either party may terminate this Agreement immediately upon written notice if:

(a) The other party materially breaches this Agreement and fails to cure such breach within thirty (30) days after receiving written notice specifying the breach;

(b) The other party becomes insolvent, files for bankruptcy, or makes an assignment for the benefit of creditors;

(c) The other party ceases to conduct business in the normal course;

(d) Continued performance would violate applicable law or regulation.

3.4 Additional Termination Rights for Licensor

Licensor may terminate this Agreement immediately if:

(a) Licensee uses the AI Software for any Prohibited Use;

(b) Licensee exceeds usage limits and fails to pay applicable overage fees within fifteen (15) days of notice;

(c) Licensee's use poses a security risk or causes harm to Licensor, other customers, or third parties;

(d) Licensee fails to comply with regulatory requirements applicable to the AI Software.

3.5 Effects of Termination

Upon termination or expiration of this Agreement:

(a) All license rights granted hereunder shall immediately cease;

(b) Licensee shall immediately cease all use of the AI Software;

(c) Licensee shall, at Licensor's option, return or destroy all copies of the AI Software and Documentation, and certify such destruction in writing;

(d) Licensee may retain Outputs generated prior to termination, subject to any ongoing restrictions;

(e) All unpaid fees for the period prior to termination shall become immediately due and payable;

(f) The following provisions shall survive termination: Articles 1, 5, 6, 7, 8, 9, 10, 11, and 12.

3.6 Refund Policy

☐ No refunds upon termination
☐ Pro-rata refund of prepaid fees for the unused portion of the term (termination for Licensor's breach only)
☐ Pro-rata refund of prepaid fees for the unused portion of the term (any termination)
☐ Custom refund terms: [SPECIFY]

ARTICLE 4: FEES AND PAYMENT

4.1 License Fees

Licensee shall pay Licensor the License Fees as specified in Schedule B, which may include:

☐ One-time license fee: $[AMOUNT]
☐ Annual license fee: $[AMOUNT]
☐ Monthly subscription fee: $[AMOUNT]
☐ Per-user fee: $[AMOUNT] per Authorized User per [PERIOD]
☐ Usage-based fee: $[AMOUNT] per [UNIT OF MEASUREMENT]
☐ Tiered pricing as detailed in Schedule B

4.2 Payment Terms

(a) Payment shall be due [NUMBER] days from the date of invoice unless otherwise specified.

(b) All payments shall be made in [CURRENCY] by [PAYMENT METHOD].

(c) Late payments shall bear interest at the rate of [PERCENTAGE]% per month or the maximum rate permitted by law, whichever is lower.

(d) Licensee shall reimburse Licensor for all reasonable costs of collection, including attorneys' fees.

4.3 Taxes

All fees are exclusive of taxes. Licensee shall be responsible for all sales, use, value-added, withholding, and other taxes arising from this Agreement, excluding taxes based on Licensor's net income.

4.4 Fee Adjustments

Licensor may adjust License Fees upon [NUMBER] days' written notice:

☐ At each renewal term
☐ Annually, with increases not to exceed [PERCENTAGE]%
☐ Other: [SPECIFY]

4.5 Audit Rights

Licensor may, upon reasonable notice and during normal business hours, audit Licensee's use of the AI Software to verify compliance with this Agreement. Such audits shall occur no more than once per calendar year unless a prior audit revealed material non-compliance. If an audit reveals underpayment, Licensee shall promptly pay the deficiency plus interest.

ARTICLE 5: INTELLECTUAL PROPERTY

5.1 Licensor's Intellectual Property

(a) The AI Software and all copies, modifications, and derivative works thereof are and shall remain the exclusive property of Licensor.

(b) Licensee acknowledges that the AI Software contains valuable trade secrets and proprietary information of Licensor.

(c) Licensee shall not challenge or assist others in challenging Licensor's Intellectual Property Rights in the AI Software.

5.2 Licensee's Intellectual Property

(a) Licensee retains all right, title, and interest in and to any data, content, or materials provided by Licensee for use with the AI Software ("Licensee Data").

(b) Licensor obtains no rights to Licensee Data except as necessary to perform under this Agreement.

5.3 Ownership of Outputs

Ownership of Outputs generated by the AI Software shall be determined as follows:

☐ Licensee owns all Outputs generated during authorized use of the AI Software, subject to any underlying Intellectual Property Rights of Licensor in the AI Software itself

☐ Licensor owns all Outputs, with Licensee receiving a license to use Outputs for authorized purposes

☐ Joint ownership: [SPECIFY TERMS]

☐ Custom arrangement: [SPECIFY]

Notwithstanding the above:

(a) Outputs may not be protectable by copyright or other Intellectual Property Rights under applicable law;

(b) Licensee acknowledges that similar Outputs may be generated for other users;

(c) Licensee shall not claim exclusive rights to Outputs that are substantially similar to outputs generated for others.

5.4 Feedback

If Licensee provides any suggestions, ideas, enhancement requests, or other feedback regarding the AI Software ("Feedback"), Licensor shall have a royalty-free, worldwide, irrevocable, perpetual license to use, modify, and incorporate such Feedback into the AI Software without restriction or obligation.

5.5 Model Training

☐ Licensor may use Licensee Data and usage patterns to improve the AI Software
☐ Licensor may not use Licensee Data for training purposes
☐ Licensor may use only anonymized/aggregated data for training purposes
☐ Custom terms: [SPECIFY]

ARTICLE 6: CONFIDENTIALITY

6.1 Confidentiality Obligations

Each party agrees to:

(a) Hold the other party's Confidential Information in strict confidence;

(b) Not disclose Confidential Information to any third party without prior written consent;

(c) Use Confidential Information only for purposes authorized under this Agreement;

(d) Protect Confidential Information using the same degree of care used to protect its own confidential information, but in no event less than reasonable care;

(e) Limit access to Confidential Information to those employees and contractors who have a need to know and are bound by confidentiality obligations.

6.2 Exceptions

Confidential Information does not include information that:

(a) Is or becomes publicly available through no fault of the receiving party;

(b) Was rightfully in the receiving party's possession prior to disclosure;

(c) Is independently developed by the receiving party without use of Confidential Information;

(d) Is rightfully obtained from a third party without restriction on disclosure;

(e) Is required to be disclosed by law, regulation, or court order (with prompt notice to the disclosing party).

6.3 Duration

Confidentiality obligations shall survive termination of this Agreement for a period of [NUMBER] years, or indefinitely for trade secrets.

ARTICLE 7: DATA PROTECTION AND PRIVACY

7.1 Compliance with Data Protection Laws

Each party shall comply with all applicable data protection and privacy laws and regulations, including but not limited to:

• General Data Protection Regulation (GDPR)
• California Consumer Privacy Act (CCPA) / California Privacy Rights Act (CPRA)
• Other applicable state, national, and international privacy laws

7.2 Data Processing

If Licensor processes Personal Data on behalf of Licensee:

(a) Such processing shall be governed by a separate Data Processing Agreement attached as Schedule D or incorporated by reference;

(b) Licensor shall process Personal Data only as instructed by Licensee and in accordance with applicable law;

(c) Licensor shall implement appropriate technical and organizational security measures;

(d) Licensor shall assist Licensee in responding to data subject requests and regulatory inquiries.

7.3 Data Localization

☐ No data localization requirements apply
☐ Licensee Data shall be processed only in: [SPECIFY LOCATIONS]
☐ Licensee Data shall not be transferred outside: [SPECIFY JURISDICTION]

7.4 Data Security Incident Notification

Licensor shall notify Licensee of any unauthorized access, use, or disclosure of Licensee Data within [NUMBER] hours of discovery, and shall cooperate fully with Licensee in investigating and mitigating any such incident.

ARTICLE 8: REPRESENTATIONS AND WARRANTIES

8.1 Licensor's Representations and Warranties

Licensor represents and warrants that:

(a) Authority: Licensor has the full right, power, and authority to enter into this Agreement and grant the licenses granted herein;

(b) Non-Infringement: To Licensor's knowledge, the AI Software does not infringe any third-party Intellectual Property Rights;

(c) Compliance: The AI Software has been developed in compliance with applicable laws and regulations;

(d) Functionality: The AI Software will perform substantially in accordance with the Documentation for a period of [NUMBER] days from delivery ("Warranty Period");

(e) Malicious Code: The AI Software does not contain any virus, Trojan horse, worm, backdoor, or other malicious code;

(f) Training Data: To Licensor's knowledge, the AI Software was trained on datasets that were properly licensed or otherwise lawfully obtained.

8.2 Licensee's Representations and Warranties

Licensee represents and warrants that:

(a) Authority: Licensee has the full right, power, and authority to enter into this Agreement;

(b) Compliance: Licensee will use the AI Software in compliance with all applicable laws and regulations;

(c) Data Rights: Licensee has all necessary rights to provide any data used with the AI Software;

(d) Authorized Use: Licensee will use the AI Software only for authorized purposes and will not engage in any Prohibited Use.

8.3 Warranty Remedies

If the AI Software fails to conform to the warranty in Section 8.1(d), Licensor shall, at its option:

(a) Repair or replace the non-conforming AI Software; or

(b) Refund the License Fees paid for the non-conforming AI Software.

This shall be Licensee's sole remedy for breach of the foregoing warranty.

8.4 Disclaimer of Warranties

EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH IN THIS ARTICLE 8, THE AI SOFTWARE IS PROVIDED "AS IS" AND "AS AVAILABLE." LICENSOR DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO:

(a) WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NON-INFRINGEMENT;

(b) WARRANTIES ARISING FROM COURSE OF DEALING, USAGE, OR TRADE PRACTICE;

(c) WARRANTIES THAT THE AI SOFTWARE WILL BE ERROR-FREE, UNINTERRUPTED, OR MEET LICENSEE'S REQUIREMENTS;

(d) WARRANTIES REGARDING THE ACCURACY, RELIABILITY, OR COMPLETENESS OF OUTPUTS.

8.5 AI-Specific Disclaimers

LICENSEE ACKNOWLEDGES AND AGREES THAT:

(a) AI SYSTEMS ARE PROBABILISTIC AND MAY PRODUCE UNEXPECTED, INACCURATE, OR BIASED OUTPUTS;

(b) OUTPUTS SHOULD NOT BE RELIED UPON WITHOUT APPROPRIATE HUMAN REVIEW AND VERIFICATION;

(c) THE AI SOFTWARE MAY EXPERIENCE "MODEL DRIFT" WHEREBY PERFORMANCE DEGRADES OVER TIME;

(d) THE AI SOFTWARE IS NOT DESIGNED OR INTENDED FOR USE IN APPLICATIONS WHERE FAILURE COULD RESULT IN DEATH, PERSONAL INJURY, OR SEVERE PROPERTY DAMAGE.

ARTICLE 9: LIMITATION OF LIABILITY

9.1 Exclusion of Consequential Damages

TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, NEITHER PARTY SHALL BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL, EXEMPLARY, OR PUNITIVE DAMAGES, INCLUDING BUT NOT LIMITED TO:

• Loss of profits, revenue, or business
• Loss of data or data corruption
• Loss of goodwill or reputation
• Cost of procurement of substitute goods or services
• Business interruption

WHETHER ARISING FROM CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY, OR ANY OTHER LEGAL THEORY, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

9.2 Cap on Liability

EXCEPT FOR EXCLUDED CLAIMS (DEFINED BELOW), EACH PARTY'S TOTAL CUMULATIVE LIABILITY UNDER THIS AGREEMENT SHALL NOT EXCEED:

☐ The total License Fees paid by Licensee during the [12/24] months preceding the claim
☐ $[FIXED AMOUNT]
☐ [MULTIPLE] times the annual License Fees
☐ Other: [SPECIFY]

9.3 Excluded Claims

The limitations in Sections 9.1 and 9.2 shall not apply to:

(a) Breaches of confidentiality obligations;

(b) Infringement or misappropriation of Intellectual Property Rights;

(c) Licensee's breach of license restrictions;

(d) Indemnification obligations;

(e) Fraud, gross negligence, or willful misconduct;

(f) Liability that cannot be limited by applicable law.

9.4 Essential Purpose

The parties acknowledge that the limitations of liability in this Article 9 are an essential element of the bargain and reflect an appropriate allocation of risk. The limitations shall apply even if any limited remedy fails of its essential purpose.

ARTICLE 10: INDEMNIFICATION

10.1 Indemnification by Licensor

Licensor shall defend, indemnify, and hold harmless Licensee from and against any third-party claims, actions, suits, or proceedings arising from:

(a) Allegations that the AI Software infringes any patent, copyright, trademark, or trade secret of a third party;

(b) Licensor's gross negligence or willful misconduct;

(c) Licensor's violation of applicable law in developing the AI Software.

10.2 Indemnification by Licensee

Licensee shall defend, indemnify, and hold harmless Licensor from and against any third-party claims, actions, suits, or proceedings arising from:

(a) Licensee's use of the AI Software in violation of this Agreement;

(b) Licensee's use of the AI Software for Prohibited Uses;

(c) Licensee Data, including claims that such data infringes third-party rights;

(d) Outputs generated by the AI Software based on Licensee's inputs or customizations;

(e) Licensee's violation of applicable law;

(f) Licensee's failure to obtain necessary consents for data processing.

10.3 Indemnification Procedure

The indemnified party shall:

(a) Promptly notify the indemnifying party in writing of any claim;

(b) Grant the indemnifying party sole control of the defense and settlement;

(c) Cooperate fully with the indemnifying party at the indemnifying party's expense;

(d) Not settle or compromise any claim without the indemnifying party's prior written consent.

10.4 Infringement Remedies

If the AI Software is held or believed to infringe, Licensor may, at its sole option and expense:

(a) Obtain the right for Licensee to continue using the AI Software;

(b) Modify the AI Software to make it non-infringing while maintaining substantially equivalent functionality;

(c) Replace the AI Software with a non-infringing alternative; or

(d) If none of the foregoing is commercially reasonable, terminate this Agreement and refund prepaid fees for the unused portion of the term.

ARTICLE 11: REGULATORY COMPLIANCE

11.1 EU AI Act Compliance

If the AI Software is or may be deployed within the European Union or European Economic Area:

(a) Licensor shall provide information necessary for Licensee to comply with its obligations under Regulation (EU) 2024/1689 (EU AI Act);

(b) If the AI Software constitutes a High-Risk AI System, Licensor shall provide:
- Technical documentation as required by Article 11
- Conformity assessment documentation
- Instructions for use enabling deployer compliance
- Quality management system documentation
- EU Declaration of Conformity
- CE marking (if applicable)

(c) Licensee shall:
- Ensure human oversight as required by Article 14
- Monitor the AI Software for accuracy, robustness, and cybersecurity
- Maintain logs as required by Article 12
- Report serious incidents to relevant authorities
- Conduct fundamental rights impact assessments where required

11.2 US State AI Law Compliance

(a) Colorado AI Act: If applicable, the parties shall comply with the Colorado AI Act (SB 24-205), including:
- Deployer duty of reasonable care
- Impact assessments for high-risk AI systems
- Required disclosures to consumers
- Documentation and recordkeeping requirements

(b) California AI Laws: If applicable, the parties shall comply with California AI laws including:
- AI Transparency Act (SB 942) labeling requirements
- GAI Training Data Transparency Act (AB 2013) disclosure requirements
- California Civil Rights Council regulations on AI in employment

(c) Illinois AI in Employment: If the AI Software is used for employment decisions in Illinois, Licensee shall comply with HB 3773 notice and non-discrimination requirements.

11.3 Sector-Specific Regulations

Licensee acknowledges that use of the AI Software in certain sectors may be subject to additional regulations, including:

☐ Financial services (SEC, FINRA, banking regulations)
☐ Healthcare (HIPAA, FDA regulations)
☐ Education (FERPA)
☐ Housing (Fair Housing Act)
☐ Employment (EEOC guidance, state laws)
☐ Consumer protection (FTC Act Section 5)

Licensee shall be solely responsible for compliance with sector-specific regulations applicable to Licensee's use.

11.4 Export Controls

Licensee shall comply with all applicable export control laws and regulations, including the U.S. Export Administration Regulations (EAR). Licensee shall not export, re-export, or transfer the AI Software to any prohibited destination, entity, or person without proper authorization.

ARTICLE 12: GENERAL PROVISIONS

12.1 Notices

All notices shall be in writing and delivered by:

• Personal delivery
• Recognized overnight courier
• Certified mail, return receipt requested
• Email (with confirmation of receipt)

to the addresses set forth above or such other address as a party may designate in writing.

12.2 Assignment

Licensee may not assign this Agreement without Licensor's prior written consent, except to an affiliate or in connection with a merger, acquisition, or sale of all or substantially all of Licensee's assets. Any attempted assignment in violation of this Section shall be void.

12.3 Entire Agreement

This Agreement, including all Schedules and Exhibits, constitutes the entire agreement between the parties regarding its subject matter and supersedes all prior negotiations, representations, and agreements relating to such subject matter.

12.4 Amendment

This Agreement may be amended only by a written instrument signed by both parties. Licensor may update the Schedules upon [NUMBER] days' written notice to Licensee.

12.5 Waiver

No waiver of any right or remedy shall be effective unless in writing and signed by the waiving party. No waiver shall be deemed a waiver of any subsequent breach or default.

12.6 Severability

If any provision of this Agreement is held invalid or unenforceable, the remaining provisions shall continue in full force and effect. The parties shall negotiate in good faith to replace any invalid provision with a valid provision that achieves the original intent.

12.7 Force Majeure

Neither party shall be liable for any failure or delay in performance due to causes beyond its reasonable control, including natural disasters, war, terrorism, riots, embargoes, acts of government, or failures of third-party services.

12.8 Independent Contractors

The parties are independent contractors. Nothing in this Agreement creates a partnership, joint venture, agency, or employment relationship.

12.9 Third-Party Beneficiaries

This Agreement does not create any third-party beneficiary rights except as expressly provided herein.

12.10 Governing Law

This Agreement shall be governed by and construed in accordance with the laws of [JURISDICTION], without regard to its conflicts of law principles.

12.11 Dispute Resolution

☐ Litigation: Any dispute shall be resolved in the courts of [JURISDICTION], and each party consents to personal jurisdiction therein.

☐ Arbitration: Any dispute shall be resolved by binding arbitration administered by [ARBITRATION BODY] in accordance with its rules. Arbitration shall take place in [LOCATION]. The arbitrator's decision shall be final and binding.

☐ Mediation First: Before commencing litigation or arbitration, the parties shall attempt in good faith to resolve disputes through mediation.

12.12 Counterparts

This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one agreement. Electronic signatures shall be deemed valid.

ARTICLE 13: SIGNATURES

By signing below, each party acknowledges that it has read, understood, and agrees to be bound by the terms and conditions of this Agreement.

LICENSOR:

Signature: _________________________________

Printed Name: [NAME]

Title: [TITLE]

Date: _________________________________

LICENSEE:

Signature: _________________________________

Printed Name: [NAME]

Title: [TITLE]

Date: _________________________________

SCHEDULE A: AI SOFTWARE DESCRIPTION

A.1 Software Identification

A.2 Technical Specifications

A.3 Intended Use Cases

The AI Software is designed for the following use cases:

1. [USE CASE 1]
2. [USE CASE 2]
3. [USE CASE 3]

A.4 Known Limitations

The AI Software has the following known limitations:

1. [LIMITATION 1]
2. [LIMITATION 2]
3. [LIMITATION 3]

A.5 Performance Metrics

SCHEDULE B: LICENSE FEES AND PAYMENT TERMS

B.1 Fee Structure

B.2 Usage Tiers

B.3 Overage Fees

Usage exceeding licensed limits shall be charged at: $[AMOUNT] per [UNIT]

B.4 Payment Schedule

SCHEDULE C: PROHIBITED USES

The following uses of the AI Software are expressly prohibited:

C.1 Illegal Activities

• Any use that violates applicable laws or regulations
• Facilitation of illegal transactions or activities
• Money laundering or terrorist financing

C.2 Harmful Content

• Generation of child sexual abuse material
• Creation of non-consensual intimate imagery
• Harassment, bullying, or intimidation
• Incitement of violence or hatred

C.3 Deception and Fraud

• Creating deepfakes without disclosure
• Impersonation for fraudulent purposes
• Generating misinformation or disinformation
• Manipulation of democratic processes

C.4 Privacy Violations

• Unauthorized surveillance or tracking
• Biometric identification without consent
• Social scoring systems
• Inferring sensitive personal information without consent

C.5 Discrimination

• Systematic discrimination against protected groups
• Denial of essential services based on protected characteristics
• Manipulating individuals' choices in harmful ways

C.6 Weapons and Dangerous Activities

• Development of weapons or military systems
• Nuclear, biological, or chemical weapons applications
• Critical infrastructure attacks
• Autonomous systems causing physical harm

C.7 High-Risk Applications (Without Compliance)

• Medical diagnosis without appropriate oversight
• Legal advice without professional supervision
• Financial decisions affecting consumer creditworthiness
• Employment decisions without human review

SCHEDULE D: DATA PROCESSING AGREEMENT

[INSERT DATA PROCESSING AGREEMENT OR REFERENCE SEPARATE DPA]

SCHEDULE E: SERVICE LEVEL AGREEMENT (IF APPLICABLE)

[INSERT SLA TERMS OR REFERENCE SEPARATE SLA]

APPENDIX 1: COMPLIANCE CHECKLIST

Pre-Deployment Checklist

☐ Verified AI Software is appropriate for intended use case
☐ Reviewed all Documentation and known limitations
☐ Conducted risk assessment for deployment context
☐ Determined if deployment constitutes High-Risk AI System
☐ Implemented required human oversight mechanisms
☐ Established monitoring and logging procedures
☐ Trained relevant personnel on proper use
☐ Prepared incident response procedures
☐ Obtained necessary approvals and authorizations
☐ Documented compliance with applicable regulations

Ongoing Compliance

☐ Regular monitoring of AI Software performance
☐ Periodic review of Outputs for bias or errors
☐ Maintenance of required logs and records
☐ Annual (or more frequent) compliance review
☐ Reporting of serious incidents as required
☐ Update of impact assessments as needed

This AI Software License Agreement template is provided for informational purposes and should be customized to meet specific requirements. Legal counsel review is strongly recommended before use.