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ApplyThis Source Code License Agreement (the “Agreement”) is entered into as of [Effective Date] by and between:
Licensor: [Licensor Legal Name], with an address at [Address] (“Licensor”).
Licensee: [Licensee Legal Name], with an address at [Address] (“Licensee”).
Licensor and Licensee may be referred to individually as a “Party” and collectively as the “Parties.”
1.1 Source Code. “Source Code” means the human-readable code and related materials described in Exhibit A.
1.2 Software. “Software” means the Source Code and any compiled versions, documentation, and updates provided under this Agreement.
1.3 Derivative Works. “Derivative Works” means modifications, enhancements, and works based on the Source Code.
2.1 License Grant. Licensor grants Licensee a ☐ non-exclusive ☐ exclusive license to access and use the Source Code solely for: [Permitted purpose].
2.2 Scope. Licensee may: ☐ Compile/build ☐ Run internally ☐ Modify ☐ Create Derivative Works ☐ Deploy to production for internal use.
2.3 Sublicensing (Optional). Sublicensing is: ☐ Not allowed ☐ Allowed to affiliates/contractors under restrictions: [Terms].
2.4 Territory. Territory: ☐ Worldwide ☐ Limited to [Territory].
2.5 Term. License term: [__] years or ☐ Perpetual (subject to termination).
3.1 No Redistribution. Licensee may not sell, distribute, publish, or share the Source Code or Software, except as expressly permitted.
3.2 No Reverse Engineering (Optional). Licensee may not reverse engineer compiled Software (if applicable).
3.3 No Removal of Notices. Licensee will not remove copyright or proprietary notices.
3.4 Compliance. Licensee will comply with applicable laws and third-party license obligations.
4.1 Delivery Method. Licensor will provide the Source Code via: ☐ Secure repository ☐ Encrypted download ☐ Physical media ☐ Other: [Method].
4.2 Access Controls. Only authorized personnel may access the Source Code, and Licensee will maintain reasonable security controls.
4.3 Updates (Optional). Updates are: ☐ Included ☐ Not included ☐ Available for an additional fee.
5.1 License Fee. License fee: ☐ $[Amount] one-time ☐ $[]/month ☐ Royalty: []% of revenue ☐ Other: [Structure].
5.2 Payment Terms. Payment due within [__] days of invoice.
5.3 Taxes. Licensee is responsible for applicable taxes.
6.1 Licensor Ownership. Licensor retains ownership of the Source Code and Software.
6.2 Licensee Improvements (Choose One).
☐ Licensee owns its Derivative Works but grants Licensor a license to use them.
☐ Licensor owns all Derivative Works created by Licensee.
☐ Ownership is shared as follows: [Terms].
6.3 Feedback (Optional). Licensee may provide feedback; Licensor may use it without obligation.
7.1 Confidential Information. The Source Code is Confidential Information. Licensee will protect it and not disclose it except as allowed under this Agreement.
7.2 Permitted Disclosures. Licensee may disclose Source Code only to employees/contractors who need access and are bound by confidentiality obligations.
8.1 Support. Support is: ☐ Included ☐ Not included ☐ Available per Exhibit B.
8.2 Service Levels (Optional). Response targets: [Critical/High/Medium/Low].
8.3 Maintenance Fees (Optional). Maintenance fee: $[__] per [month/year].
9.1 Authority. Licensor represents it has the right to license the Source Code.
9.2 Disclaimer. Except as stated, the Software is provided “as is,” without warranties, to the extent permitted by law.
10.1 IP Indemnity. Licensor will: ☐ Indemnify Licensee for third-party IP claims ☐ Not provide indemnity.
10.2 Conditions. Indemnity conditions: prompt notice, control of defense, cooperation.
11.1 Limitation. Neither Party is liable for indirect damages to the extent permitted by law.
11.2 Liability Cap (Optional). Total liability cap: $[] or fees paid in last [] months.
12.1 Termination for Breach. Either Party may terminate for material breach not cured within [__] days after notice.
12.2 Effect of Termination. Upon termination, Licensee must stop using the Source Code and: ☐ Return it ☐ Destroy it ☐ Certify destruction.
12.3 Transition (Optional). Transition assistance: [Terms].
13.1 Governing Law. This Agreement is governed by the laws of [State/Country].
13.2 Notices. Notices must be sent to the addresses above.
13.3 Entire Agreement. This Agreement and exhibits are the entire agreement about the Source Code license.
13.4 Amendments. Amendments must be in writing and signed by both Parties.
13.5 Severability. If any provision is unenforceable, the remainder remains effective.
13.6 Electronic Signatures. Electronic signatures are effective.
By signing below, the Parties agree to this Source Code License Agreement as of the Effective Date.
Licensor: [Licensor Legal Name]
Authorized Signatory: [Name]
Title/Role: [Title]
Date: [Date]
Signature: ___________________________
Licensee: [Licensee Legal Name]
Authorized Signatory: [Name]
Title/Role: [Title]
Date: [Date]
Signature: ___________________________
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For quick answers, scroll below to see the FAQ.
Frequently asked
A Source Code License Agreement is a contract where the owner of software source code (the “Licensor”) grants another party (the “Licensee”) limited rights to access and use the source code under defined terms. It sets what the Licensee can do (use, modify, compile, deploy), what is prohibited (redistribution, sublicensing), and who owns improvements.
A source code license agreement is usually a private, negotiated license between specific parties. Open-source licenses (like MIT, Apache, or GPL) are public licenses with standardized terms. This template is for proprietary source code licensing, not an open-source release.
Key terms include: licensed code description, scope of license, permitted uses, restrictions, confidentiality, IP ownership, treatment of modifications/derivative works, support and maintenance (optional), fees and payment, warranties/disclaimers, and termination.
Yes. Many licenses allow internal modifications but restrict redistribution. This template includes options to allow or restrict modifications, and to specify whether improvements are owned by the licensee, licensor, or shared.
Include confidentiality obligations, access controls, and limits on who can view the code. This template includes a confidentiality section and a permitted personnel clause.
AI Lawyer is an AI-powered assistant that helps you create and customize legal and business document templates online. It guides you through key sections, suggests wording, and explains complex concepts in simple language. AI Lawyer does not replace a licensed attorney or provide legal advice, but helps you prepare better documents faster and more confidently.
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