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Use this TEMPLATE for a SERVICE AGREEMENT entered into by and between illustrative designs (iD) and __________ (Client).  iD and Client agree as follows:

SCOPE OF iD DUTIES. Client engages iD to perform certain design and engineering services related to ________________________________________________________.

The proposal of <date> is an integral part of this Agreement. iD is being retained to perform design services and the coordination of some of the fabrication and testing processes. It is Client’s responsibility to supply available and on-going technical, marketing, and test information as necessary and be available to support the project.

INDEPENDENT CONTRACTOR.  iD is being engaged as an independent contractor and is not, except to the extent required for performance of it duties here under, to be considered Client’s agent.

TERM.  Unless terminated earlier (See Section 12), the term of iD’s obligations under this Agreement shall exist for the duration of the project.

COMPENSATION.  Normal Compensation. iD is to be compensated by Client on an hourly basis for all services iD performs here under according iD’s on-going cost estimates for work to the following fee schedule. Time spent traveling on Client’s behalf (up to a maximum of eight hours per day) will be billed at the normal hourly Designer rate of TBD.

RETAINER.  A retainer of $500 is suggest to secure project start. The Client must execute this Agreement and may provide a purchase order and additional project description and tasks expected to be performed by iD.

BILLING.  iD will submit invoices to the Client on a weekly basis. All invoices are due and payable at 1% 10 Net 15 from the invoice receipt date. All iD billings which are not paid within this period shall accrue interest at the rate of 20% interest per annum. Uncontested invoices greater than 30 days old will not be reduced or otherwise negotiated. Client specifically agrees to pay 20% per annum interest charges compounded daily on all billings which are not paid within 30 days from the date of the invoice.

PURCHASE OF MATERIALS.  Upon Client’s prior approval, iD shall have the authority to purchase materials, parts, components, tooling and services that are necessary to fabricate any models, prototypes or final versions of any products or machines to be designed and fabricated. All of these items shall be considered the Client’s property upon purchase. The purchase price of these items to the Client from iD are at iD’s cost plus 15%. All purchased items individually greater than $500 will first be quoted to the Client and the Client shall execute a separate Client purchase order for these prior to iD’s release for fabrication.

SECURITY INTEREST.  The Client grants iD a security interest in all tangible and intangible property created or incorporated by iD. This includes any machines or products designed here under, including all project plans, specifications, drawing, models, prototypes and final versions thereof, as well as intellectual property rights, including devices, methods, drawing, soft-ware, and firmware and all improvement therein that are developed under this agreement, until all sums due here under are paid. iD may/will retain possession of such items and/or rights pending final payment. Provided all payments have been made to iD and upon Client’s written request, iD will return all materials and information to the Client.

STANDARD OF PERFORMANCE; LIMITED WARRANTY; LIMITATION OF REMEDIES. The sole standard of iD’s performance is expressly set forth herein. iD warrants that the work product produced herein shall comply with written and agreed-to specifications and CAD drawing that iD will complete in the future with Client’s direction and approval. iD agrees to perform all work in a professional and workmanlike manner exerting best efforts to perform the work tasks directed by Client or his agent. iD is not responsible for any problems that extend the schedule or add cost to the project, which are outside of iD’s control. The integral proposal contains estimated costs and schedule which are not firm or fixed. iD does not guarantee or warrant the actions, responses, or requirements of Client’s agent, testing results, approval or regulatory agencies. iD does not guarantee a specific schedule will be met or that any firm budget will be met. However, iD will provide advanced notice with explanation and recommendations to the Client that an estimated schedule or cost is not expected to be achieved. No other warranty, express or implied, is given by iD, including the implied warranties of merchantability and fitness for particular purpose. iD is not guaranteeing or warranting the design of fabricated item(s) will meet Client expectations or make improvements to Client’s product line, process, process requirements, or other.

Furthermore, the parties agree that in the event the work product being designed and fabricated by iD and in conjunction with the Client’s input shall not comply with Clients’ expectation or the written specifications, costs, schedule, or any other parameters, the parties shall take such steps to remedy such non-conformity as may be reasonable, at Client’s expense. iD is not responsible for changes in the design not supervised or approved by iD or for changes that are initiated by or for direction of or at the request of the Client. All iD work is completed only on an hourly charge basis. Estimates of work tasks and/or costs to be completed are only estimates and are not meant to be construed as firm or fixed prices to complete any list of tasks. A list of tasks is only meant to be a general guideline of services offered.  Hourly service fees increase %7 percent per annual new year!

iD CONFIDENTIALITY. For a period of two (2) years following the end of the term of this Agreement, iD shall keep confidential all works of invention which it discovers, invents or formulates solely as a result of services it performs here under. All other technical innovations not relating to the specific project herein and occurring during the course of performance of iD’s duties defined herein shall be used by iD in whatever fashion it reasonably deems appropriate with the intent of not harming the Client. In addition, anything in this Agreement notwithstanding, the following information shall not be deemed proprietary or confidential to the Client: (a) Information which at the time of disclosure is in the public domain; (b) Information which, after disclosure, becomes part of the public domain by publication or otherwise through no conduct of iD; (c) Information which iD establishes was in its possession prior to disclosure by Client; (d) Information received by iD from a third party, provided that such information did not originate with Client; (e) Information developed independently by iD outside of the services performed here under; (f) Information received by iD through operation of law; and (g) Information disclosed by Client, with Client’s written approval to iD to use such information outside of the scope of this Agreement.

WORKS FOR HIRE. iD agrees that all works of invention, whether or not patentable, but created by iD solely as a result of its work here under that relate to the product(s) or machine(s) shall be “works for hire” as that term is commonly understood under patent law. iD shall cooperate with Client in securing patents and other trade protection, at iD’s standard billing rates. It is further understood that Client will own all intellectual property rights, including devices, methods, drawing, soft-ware, and firmware and all improvement therein that are developed under this agreement and the Client has the right to modify, sell, distribute, manufacture, sub-contract, or transfer any of these items to other products that it chooses.

CLIENT CONFIDENTIALTIY. Client shall not, during the term hereof and for a period of two (2) years thereafter: (a) Discuss iD’s compensation here under with any of iD’s present or past employees, contractors, competitors, or suppliers; (b) Discuss, initiate or complete the hiring or potential hiring, whether as an employee or independent contractor, directly or indirectly, by Client with any of iD’s present or past employees or contractors related to any of the duties to be performed by iD here under, except with written consent of iD.

INDEMNIFICATION. Client shall indemnify and hold iD harmless from any claims, demands or actions arising out of the use of the products being designed here under, unless such claims are established as claims due to iD’s gross negligence in any of its design, specification or application services to be performed here under, in which case iD shall indemnify and hold Client harmless. The cost of and responsibility to provide a defense to any claim subject to indemnification shall be at the party’s expense that has the duty to indemnify. Notwithstanding the foregoing, Client specifically agrees that iD’s performance of its services here under which satisfy the incorporated or agreed-to proposal and its future revisions shall be conclusively presumed to not constitute negligence or gross negligence.

TERMINATION. iD or Client may terminate this Agreement upon written notice to the other for any reason at any time. Termination by either party shall not relieve either party of any obligations incurred during the term hereof, including but not limited to Client’s obligation to pay iD for services rendered through termination and each party’s confidentiality obligations. iD shall not be obligated to return to Client any payments made to iD, regardless of the reason for termination. Client shall pay iD for documented work performed and expenses incurred to date of cancellation. Cancellation date shall be the date on which a notice of termination by registered mail is received by the party being notified. Charges by either party will be billed within ten (10) days of receipt of termination notice.

ATTORNEYS’ FEES. In the event any demand or claim is made or any litigation is instituted to enforce any provision hereof, or to collect any sum due hereunder, if iD is the prevailing party, iD shall be entitled to reasonable attorneys’ fees, expenses and costs incurred therein.

APPLICABLE LAW. This Agreement shall be construed according to the laws of the State of Colorado. Any action to enforce the provisions hereof or to collect any sum due here under shall be filed in the Courts of the State of Colorado.

AUTHORITY. The parties warrant that they possess the requisite authority to enter into this Agreement.

SUCCESSORS AND ASSIGNS. This Agreement shall be binding on the parties hereto and their successors. If any duties to be performed hereunder are assigned, in whole or in part, the party carrying out such assignment shall provide written notice to the other.

ENFORCE-ABILITY. The provisions of this Agreement shall be deemed severable, and the invalidity or un-enforceability of any provision shall not affect the validity or enforceability of the other provisions hereof.

NOTIFICATIONS. Notifications are to be sent to;
<Company Name>
<Client Name>
ENTIRE AGREEMENT. This written Agreement constitutes the entire agreement and supersedes any prior, extemporaneous or oral understanding or agreements and cannot be modified except in written form signed by both parties.
We the undersigned, have both read, understand, and agree to abide by the terms and conditions of this Agreement.

Signed this ______day of ______, 200_

iD. <Company Name>
By: ____________________ By:______________________
<Client Name>

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