Termination: Wind Down
Commercial Contract
Table of Contents:
Transition to End of License Rights
Transition to End of Services and Supply
Termination: Wind Down
Projects usually do not and cannot neatly stop on a dime because an abrupt termination of products or services or license rights could wreak havoc on a party’s operations, including obligations owed to subcontractors, end users, and customers. Accordingly, the parties may agree to terms for a “wind down” or transition period in which to terminate a project and related services in an orderly manner to avoid unnecessary disruption to operations.
Transition to End of License Rights
The parties may agree to transition the end of the licensee’s rights to provide the licensee with reasonable time to obtain replacement rights without undue disruption to the licensee’s end users. In the following exemplars, the parties agree to give the licensee a certain temporary “wind down” period to enable the licensee to avoid breach of its obligations to third-party customers and/or to allow for such customers to transition to a new platform in an orderly manner to avoid unnecessary disruption to their operations:
Exemplar C71C-1
Except for uncured material breach of this Agreement by Licensee, upon the expiration or termination of this Agreement by either party Licensee will immediately cease to produce, license, market, or pursue future licenses of the Licensed Product and will not renew, extend or enter into any new agreement for the distribution of the Licensed Product, provided however, that in the event Licensee is contractually obligated to provide the Licensed Product beyond the effective date of the termination or expiration of this Agreement, Licensee may continue to fulfill such obligations during the Wind Down Period. The Wind Down Period will be the period wherein: (i) Licensee may fulfill only those contractual obligations that Licensee has entered into prior the effective date of the termination or expiration of this Agreement and once Licensee’s obligations are satisfied, Licensee’s rights under this Agreement will terminate; (ii) this Agreement will remain in effect, and Licensee will comply with terms hereof during the Wind Down Period, provided that Licensee will not directly or indirectly solicit any new users or assume any new obligations regarding the Licensed Product; (iii) if during the Wind Down Period Licensee is in material and uncured breach of this Agreement any and all rights granted during the Wind Down Period will immediately terminate; and (iv) in no event will the Wind Down Period extend beyond six (6) months from the effective date of the termination or expiration of this Agreement without the written consent of Contractor.
Exemplar C71C-2
If Provider has commercially released an approved Solution, then a transition period of time of at least one hundred eighty (180) days, or a period of time that has been mutually agreed by the Parties, will apply following any termination or expiration of this Agreement (“Wind Down Period”). During the Wind Down Period: (i) each Party shall continue to perform its respective obligations under this Agreement; (ii) each Party shall have the same rights and obligations under this Agreement as such Party had under this Agreement during the term of the Agreement; and (iii) the Parties shall cooperate in good faith to ensure the orderly wind-down of the Solutions.
Transition to End of Services and Supply
In the following exemplar, the supplier agrees to a finite “wind down period” to transition the end of the buyer’s access to ordered products to provide the buyer with time to obtain replacement products without undue disruption to the buyer’s customers:
Exemplar C71C-3
Upon expiration and non-renewal or termination of this Agreement or any Order, Vendor shall:
(i) where Customer has terminated this Agreement or an Order in accordance with the terms set forth herein due to Vendor’s material breach, (i) cooperate with Customer as commercially reasonable to wind down all work and Services and access to Products under this Agreement, (ii) continue to make the Services and Products available to Customer and otherwise allow access to, and use of, the Services and Products for a duration determined by Customer but not to exceed three (3) months absent the express written agreement of Vendor (the “Wind Down Period”), and (iii) provide other commercially reasonable services and cooperation appropriate for an orderly transition of the Services and Products and the Customer materials to Customer or Customer’s designee at no additional cost to Customer;
(ii) where Customer has terminated this Agreement or an Order in accordance with the terms set forth herein for non-renewal, (a) cooperate with Customer as commercially reasonable to wind down all work and Services and access to Products under this Agreement, (b) continue to make the Services and Products available to Customer and otherwise allow access to, and use of, the Services and Products for a duration determined by Customer but not to exceed the Wind Down Period, and (c) provide other commercially reasonable services and cooperation appropriate for an orderly transition of the Services and Products and the Customer materials to Customer or Customer’s designee for a cost agreed to by the parties;
(iii) deliver to Customer all Products ordered by Customer during the Wind Down Period;
(iv) deliver to Customer the output of all Services and any remaining requested reports in a medium agreed to by both parties;
(v) promptly return all Customer materials and copies thereof in the medium originally provided by Customer, or, in the event that the original medium is no longer available, in a medium agreed to by both parties; and
(vi) remove all copies of the applicable Customer materials from servers within its control.