FACTORY TERMS AND CONDITIONS

1.1 In consideration of (and subject to) payment of the fees and marketing obligations listed herein and on the applicable Order, as defined below (the “Fees”) and subject to full compliance with all the terms and conditions of this Agreement, Factory will use reasonable commercial efforts to provide Customer the Services set forth on the Order .  As part of the registration process, Customer will identify an administrative username and password for Customer’s Factory account (the “Account”).  Customer may use the administrative username and password to create standard users (each with a user password) up to the maximum number permitted in the Order.  Factory reserves the right to refuse registration of, or cancel passwords it deems inadequate to protect the security of the Service. By entering into this Agreement and using the Services, Customer accepts and agrees to be bound by the Factory’s privacy policies located at https://www.factory.ai/privacy-policy.

1.2 From time to time, Factory may provide upgrades, patches, enhancements, or fixes for the Services to its customers generally without additional charge (“Updates”), and such Updates will become part of the Services and subject to this Agreement; provided that Factory shall have no obligation under this Agreement or otherwise to provide any such Updates. Customer understands that Factory may cease supporting old versions or releases of the Services at any time in its sole discretion; provided that Factory shall use commercially reasonable efforts to give Customer sixty (60) days prior notice of any major changes.

2.1 This is a contract for Services and the applicable hosted software will be installed, accessed and maintained only by or for Factory.  Subject to all terms of this Agreement, Factory hereby grants to Customer, for the term of this Agreement, a non-exclusive, non-sublicensable, non-transferable, non-assignable, royalty free license to use, reproduce and distribute internally within Customer’s business, and for Customer’s internal use only, and only in accordance with any applicable user documentation provided by Factory (the “Documentation”), the product(s) and service(s) specified in each Order (the “Service” or “Services”). Customer will not (and will not allow any third party to), directly or indirectly: reverse engineer, decompile, disassemble or otherwise attempt to discover the source code, object code or underlying structure, ideas or algorithms of the Services (or any underlying software, documentation or data related to the Services); modify, translate, or create derivative works based on the Services or any underlying software; or copy (except for archival purposes), rent, lease, distribute, pledge, assign, or otherwise transfer or encumber rights to the Services or any underlying software; use the Services or any underlying software for timesharing or service bureau purposes or otherwise for the benefit of a third party; or remove any proprietary notices or labels from the Service or any portion thereof. In connection with providing the Services, Customer hereby grants to Factory a non-exclusive, non-sublicensable, non-transferable, non- assignable, royalty free license to Customer’s codebase via GitHub, Gitlab, and/or Bitbucket, as well as to Customer’s Jira, Linear, and/or Slack accounts (collectively, the Customer Code and Accounts”). 

2.2 Customer may not use or display the Service in competition with Factory, to develop competing products or services, for benchmarking or competitive analysis of the Service, or otherwise to our detriment or disadvantage.

2.3 As between the parties, (i) Customer retains all right, title and interest in and to the Customer Data (as defined below) and Customer Outputs (as defined below), and (ii) Factory retains all right, title, and interest in and to the Service and all software, products, works, and other intellectual property and moral rights related thereto or created, used, or provided by Factory for the purposes of this Agreement, including any copies and derivative works of the foregoing.  Any software which is distributed or otherwise provided to Customer hereunder (including without limitation any software identified on an Order) shall be deemed a part of the “Services” and subject to all of the terms and conditions of this Agreement.  No rights or licenses are granted except as expressly and unambiguously set forth in this Agreement.  Customer may (but is not obligated to) provide suggestions, comments or other feedback to Factory with respect to the Service (“Feedback”). Factory acknowledges and agrees that all Feedback is provided “AS IS” and without warranty of any kind.  Notwithstanding anything else, Customer shall, and hereby does, grant to Factory a nonexclusive, worldwide, perpetual, irrevocable, transferable, sublicensable, royalty-free, fully paid up license to use and exploit the Feedback for any purpose.  Nothing in this Agreement will impair Factory’s right to develop, acquire, license, market, promote or distribute products, software or technologies that perform the same or similar functions as, or otherwise compete with any products, software or technologies that Customer may develop, produce, market, or distribute. Customer acknowledges and agrees that Factory may (i) internally use and modify (but not disclose) Customer Data for the purposes of (A) providing the Service to Customer and (B) generating Aggregated De-Identified Data (as defined below), and (ii) freely use, retain and make available Aggregated De-Identified Data for Factory’s business purposes (including without limitation, for purposes of improving, testing, operating, promoting and marketing Factory’s products and services). “Aggregated De-Identified Data” means data submitted to, collected by, or generated by Factory in connection with Customer’s use of the Service, but only in aggregate, de-identified form which can in no way be linked specifically to Customer. Notwithstanding the foregoing, in no event shall Factory use any Customer Data to develop or train AI models without Customer’s prior written consent.

2.4 For purposes of this Agreement, “Customer Data” shall mean any data, information or other material provided, uploaded, or submitted by Customer to the Service or collected by Factory in the course of Customer using the Service (including Customer Inputs, as defined below). Customer shall retain all right, title and interest in and to the Customer Data, including all intellectual property rights therein. Customer, not Factory, shall have sole responsibility for the accuracy, quality, integrity, legality, reliability, appropriateness, and intellectual property ownership or right to use of all Customer Data. Customer represents and warrants that it has all rights necessary to provide the Customer Data to Factory as contemplated hereunder, in each case without any infringement, violation or misappropriation of any third party rights (including, without limitation, intellectual property rights and rights of privacy). Factory shall use commercially reasonable efforts to maintain the security and integrity of the Service and the Customer Data. Factory is not responsible to Customer for unauthorized access to Customer Data or the unauthorized use of the Service unless such access is due to Factory’s gross negligence or willful misconduct.  Customer is responsible for the use of the Service by any person to whom Customer has given access to the Service, even if Customer did not authorize such use. 

2.5 For purposes of this Agreement, “Customer Input” means information, data, and other content that Customer submits or inputs into the Service to be processed by the Service, including prompts used to instruct the Service, and “Customer Output” means the output generated and returned by the Service in response to the Customer Input. Customer is solely responsible for the accuracy, completeness, quality and legality of the Customer Inputs, including complying with all applicable laws, rules or regulations and having all rights and permissions required to submit Customer Inputs to the Service. Customer acknowledges and agrees that Customer Outputs are generated through machine learning processes and are not tested, verified, endorsed or guaranteed to be accurate, complete or current by Factory. Customer should independently review and verify all Customer Outputs as to the appropriateness for their use cases or applications. Factory is not responsible for verifying the accuracy or completeness of any Customer Inputs or Customer Outputs and is also not responsible for any inaccuracies or other errors in the Customer Outputs resulting from any errors in the Customer Inputs. 

2.6 Portions of the Service may operate through a local server software provided by Factory and installed and executed within Customer's local computing environment (such software, the “Local Software” and such computing environment, the "Customer Environment"). When the Service is “Agent-Enabled”, as specified on the Order, Customer acknowledges and agrees that: (a) Customer will install and maintain the Local Software, which enables the Service to propose and execute local commands through a secure, authenticated connection (the “Commands”), and Factory shall not be responsible for Service limitations arising from Customer’s failure to properly install, operate or maintain the Local  Software; (b) Customer is responsible for ensuring that the installation and operation of the local server within the Customer Environment does not conflict with or violate any agreement between Customer and any third party; and (c) Customer retains sole responsibility of the Customer Environment, including without limitation security of executed Commands, system integrity, and data protection. Factory's liability shall be limited to the proper functioning of the Local Software itself, and shall not include, without limitations, the consequences of Commands executed within the Customer Environment, except to the extent caused by the gross negligence or willful misconduct of Factory. Customer acknowledges that all Commands proposed by the Service require explicit Customer approval before execution. Upon termination or expiration of this Agreement, Customer agrees to immediately cease use of the Services and uninstall the Services from the Customer Environment.

2.7 Customer represents, covenants, and warrants that Customer will   access and use the Services only in compliance with Factory’s standard access and security policies then in effect.  Customer shall be responsible for obtaining and maintaining any equipment and ancillary services needed to connect to, access or otherwise use the Services, including, without limitation, modems, hardware, server, software, operating system, networking, web servers, long distance and local telephone service (collectively, “Equipment”).  Customer shall be responsible for compliance with any and all applicable third party terms of service and privacy policies for platforms, networks and/or websites that they run their applications on, including but not limited to, Facebook, Android, Blackberry or iOS/App Store.

2.8 Customer shall be responsible for ensuring that such Equipment is compatible with the Services and complies with all configurations and specifications set forth in Factory’s published policies then in effect.  Customer shall also be responsible for maintaining the security of the Equipment, the Account, passwords (including but not limited to administrative and user passwords) and files, and for all uses of the Account or the Equipment with or without Customer’s knowledge or consent.

2.9 Upon approval by Customer, Factory may (i) produce and publish a case study on its website regarding the Customer’s use of the Services, and (ii) create self-promotional materials such as press releases, advertisements, brochures, etc.  Upon approval by Customer, Customer shall provide a mutually agreeable quote with respect to Factory and the Services, to be used for Factory’s marketing and publicity purposes.

3.1 Each party (the “Receiving Party”) understands that the other party (the “Disclosing Party”) has disclosed or may disclose information relating to the Disclosing Party’s business (hereinafter referred to as “Proprietary Information” of the Disclosing Party).  

3.2 The Receiving Party agrees: (i) to take the same security precautions to protect such Proprietary Information that the Receiving Party takes with its own proprietary information, and (ii) not to use  or divulge to any third person (except for employees, affiliates, agents, or service providers of the Receiving Party with a need to have access thereto for purposes of this Agreement) any such Proprietary Information (except as expressly permitted herein).  The Disclosing Party agrees that the foregoing shall not apply with respect to any information after three (3) years following the disclosure thereof (except the Services and underlying software, algorithms and information embodied therein which shall remain confidential indefinitely) or any information that the Receiving Party can document (a) is or becomes generally available to the public, or (b) was in its possession or known by it without restriction on disclosure prior to receipt from the Disclosing Party, or (c) was rightfully disclosed to it without restriction by a third party, or (d) was independently developed without use of any Proprietary Information of the Disclosing Party. Nothing in this Agreement will prevent the Receiving Party from disclosing the Proprietary Information pursuant to any judicial or governmental order, provided that the Receiving Party gives the Disclosing Party reasonable prior notice of such disclosure to contest such order.  be disclosed.  In the performance of the Services, Factory is expressly authorized to collect general user data and report on the aggregate response rate and other aggregate measures of the Services’ performance, provided that the user data is Aggregated De-Identified Data.  

4.1 Customer will pay Factory the Fees for the Services as listed on the applicable Order. The fees for any renewal term shall be at Factory’s then standard rates currently in effect, or if applicable, as otherwise stated in the Order.

4.2 Factory may choose to bill through an invoice, in which case, full payment for invoices issued in any given month must be received by Factory thirty (30) days after the mailing date of the invoice, or the Services may be terminated.  Unpaid invoices are subject to a finance charge of 1.5% per month on any outstanding balance, or the maximum permitted by law, whichever is lower, plus all expenses of collection. Customer shall be responsible for all taxes associated with Services other than U.S. taxes based on Factory’s net income.

5.1 Subject to earlier termination as provided below, this Agreement is for the initial Service Term as specified in the applicable Order (the “Initial Service Term”), and shall be automatically renewed for additional periods of the same duration as the Initial Service Term (each, a “renewal Term” and together with the Initial Service Term, the “Term”), unless either party requests termination at least thirty (30) days prior to the end of the then current term.    

5.2 In addition to any other remedies it may have, Factory may also terminate this Agreement upon ten (10) days’ notice if Customer materially breaches any of the terms or conditions of this Agreement, and if the breach is capable of remedy, fails to promptly remedy that breach within five (5) business days of notice.   

5.3 Termination (which includes expiration or non-renewal) of this Agreement shall not limit either party from pursuing other remedies available to it, including injunctive relief, nor shall such termination relieve Customer’s obligation to pay all fees that have accrued or are otherwise owed by Customer under any Order.

5.4 Upon termination or expiration of this Agreement, Customer shall immediately cease use of the Service and delete all Factory Proprietary Information including software or other materials provided by Factory from its systems (and, upon request, shall certify such destruction in writing to Factory). 

5.5 The parties’ rights and obligations under Sections 2 (“Restrictions and Responsibilities”), 3 (“Confidentiality”), 4 (“Payment of Fees”), 6 (“Indemnification”), 7 (“Warranty and Disclaimer”), 8 (“Limitation of Liability”), 9 (“Miscellaneous”) and 10 (“Dispute Resolution”) shall survive termination. 

6.1 Factory agrees, at its own expense, to indemnify, defend and hold harmless Customer against any damages, losses, liabilities, settlements and expenses paid or payable to a third party in connection with any suit, claim, or proceeding (“Claim”) brought by a third party against Customer alleging that the use of Services in accordance with this Agreement infringes any U.S. copyright, U.S. trademark or U.S. patent.  The foregoing obligations do not apply with respect to the Services or any information, technology, materials or data or portions or components thereof to the extent (i) not supplied by Factory, (ii) made in whole or in part in accordance to Customer specifications, (iii) combined with other products, processes or materials where the alleged infringement would not have occurred without such combination, (iv) modified after delivery by Factory, (v) where Customer continues allegedly infringing activity after being notified thereof or after being informed of modifications that would have avoided the alleged infringement, or (vi) Customer’s use of the Service is not strictly in accordance herewith.  This section states Factory’s entire liability and Customer’s exclusive remedy for infringement or misappropriation of intellectual property of a third party.  

6.2 Customer hereby agrees, at its own expense, to indemnify, defend and hold harmless Factory against any damages, losses, liabilities, settlements and expenses (including without limitation costs and attorneys’ fees) in connection with any Claim that arises from an alleged violation of Section 2, or otherwise from Customer’s use of Services.  

6.3 Each party’s (the “Indemnitor”) indemnification obligations hereunder shall be conditioned on the indemnified party (the “Indemnitee”) providing the Indemnitor with (x) prompt written notice of any claim (provided that a failure to provide such notice shall only relieve the Indemnitor of its indemnity obligations if the Indemnitor is materially prejudiced by such failure); (y) the option to assume sole control over the defense and settlement of any claim (provided that the Indemnitee may participate in such defense and settlement at its own expense); and (z) at the Indemnitor’s written request and expense, reasonable information and assistance in connection with such defense and settlement.

FACTORY DOES NOT WARRANT THAT THE SERVICES WILL BE UNINTERRUPTED OR ERROR FREE OR MEET CUSTOMER’S REQUIREMENTS; NOR DOES IT MAKE ANY WARRANTY AS TO THE RESULTS THAT MAY BE OBTAINED FROM USE OF THE SERVICES.  THE SERVICES ARE PROVIDED “AS IS” AND “AS AVAILABLE” AND FACTORY EXPRESSLY DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, IMPLIED WARRANTIES OF TITLE, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT AND ANY WARRANTIES IMPLIED BY ANY COURSE OF PERFORMANCE, USAGE OF TRADE, OR COURSE OF DEALING.

NOTWITHSTANDING ANYTHING TO THE CONTRARY, EXCEPT FOR BODILY INJURY OF A PERSON, NEITHER PARTY SHALL BE RESPONSIBLE OR LIABLE WITH RESPECT TO ANY SUBJECT MATTER OF THIS AGREEMENT OR TERMS AND CONDITIONS RELATED THERETO UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY: (A) FOR ERROR OR INTERRUPTION OF USE OR FOR LOSS OR INACCURACY OR CORRUPTION OF DATA OR COST OF PROCUREMENT OF SUBSTITUTE GOODS, SERVICES OR TECHNOLOGY OR LOSS OF BUSINESS OR PROFITS; (B) FOR ANY INDIRECT, EXEMPLARY, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES; (C) FOR ANY MATTER BEYOND A PARTY’S REASONABLE CONTROL; (D) FOR ANY BUGS, VIRUSES, TROJAN HORSES, OR THE LIKE (REGARDLESS OF THE SOURCE OF ORIGINATION); OR (E) FOR ANY AMOUNTS THAT, TOGETHER WITH AMOUNTS ASSOCIATED WITH ALL OTHER CLAIMS, EXCEED THE FEES ACTUALLY PAID BY CUSTOMER TO FACTORY FOR THE APPLICABLE SERVICES UNDER THIS AGREEMENT OR RELATING TO ANY SUBJECT MATTER OF THIS AGREEMENT IN THE 12 MONTHS PRIOR TO THE ACT THAT GAVE RISE TO THE LIABILITY, EVEN IF THE PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF ANY OF THE FOREGOING TYPES OF  LOSSES OR DAMAGES. CUSTOMER ACKNOWLEDGES THAT AN INTERRUPTION IN SERVICE(S) DUE TO CIRCUMSTANCES BEYOND THE REASONABLE CONTROL OF FACTORY, SUCH AS A FAILURE OF TELECOMMUNICATIONS OR NETWORK SYSTEMS NOT CONTROLLED BY FACTORY, SHALL NOT BE CONSIDERED A SERVICE OUTAGE OR SERVICE DEFICIENCY FOR PURPOSES OF ANY REMEDY PROVIDED IN THIS AGREEMENT. 

If any provision of this Agreement is found to be unenforceable or invalid, that provision will be limited or eliminated to the minimum extent necessary so that this Agreement will otherwise remain in full force and effect and enforceable.  Neither party may assign any of its rights or obligations hereunder without the other party’s consent; provided that (i) either party may assign all of its rights and obligations hereunder without such consent to a successor-in-interest in connection with a sale of substantially all of such party’s business relating to this Agreement, and (ii) Factory may utilize subcontractors in the performance of its obligations hereunder. Both parties agree that this Agreement is the complete and exclusive statement of the mutual understanding of the parties and supersedes and cancels all previous written and oral agreements, communications and other understandings relating to the subject matter of this Agreement, and that all waivers and modifications must be in a writing signed on behalf of both parties by their duly authorized representatives, except as otherwise provided herein.  No agency, partnership, joint venture, or employment is created as a result of this Agreement and Customer does not have any authority of any kind to bind or attempt to bind Factory in any respect whatsoever.  In any action or proceeding to enforce rights under this Agreement, the prevailing party will be entitled to recover costs and attorneys’ fees.  All notices under this Agreement will be in writing and will be deemed to have been duly given when received, if personally delivered; when receipt is electronically confirmed, if transmitted by facsimile or e-mail; the day after it is sent, if sent for next day delivery by recognized overnight delivery service; and upon receipt, if sent by certified or registered mail, return receipt requested.  The parties agree that any material breach of Section 2 or 3 will cause irreparable injury and that injunctive relief in a court of competent jurisdiction will be appropriate to prevent an initial or continuing breach of Section 2 or 3 in additional to any other relief to which the owner of such Proprietary Information may be entitled.   This Agreement shall be governed by the laws of the State of California without regard to its conflict of laws provisions.  Any action or proceeding arising from or relating to this Agreement must be brought in a federal court in the Northern District of California, or in a state court in San Francisco, California, and each party irrevocably submits to the jurisdiction and venue of any such court in any such action or proceeding.  The parties agree that the United Nations Convention on Contracts for the International Sale of Goods is specifically excluded from application to this Agreement. 

PLEASE READ THIS SECTION CAREFULLY. IT IMPACTS THE RIGHTS THAT CUSTOMER MAY OTHERWISE HAVE. IT PROVIDES FOR RESOLUTION OF MOST DISPUTES THROUGH INDIVIDUAL ARBITRATION INSTEAD OF TRIAL COURTS AND CLASS ACTIONS.  THIS SECTION SURVIVES ANY EXPIRATION OR EARLIER TERMINATION OF THIS AGREEMENT.

10.1 As a condition precedent which must be satisfied prior to initiating any arbitration or other action against the other party, both Customer and Factory agree to the following dispute resolution procedure: In the event of any Claim arising out of or related to the Service(s), or the breach, enforcement, interpretation, or validity of the Agreement, the party asserting the Claim must first try in good faith to settle such Claim by providing written notice, by first class or registered mail, to the other party describing the facts and circumstances (including any supporting documentation) of the Claim. The party asserting the Claim must allow the receiving party 30 days in which to respond to or settle the Claim.

10.2 To the extent the parties cannot resolve a Claim through the informal dispute resolution procedure set forth above, and except as otherwise expressly set forth herein, all Claims must be resolved through binding individual arbitration in San Francisco, California, using the English language in accordance with the Arbitration Rules and Procedures of JAMS then in effect, by one commercial arbitrator with substantial experience in resolving intellectual property and commercial contract disputes, who shall be selected from the appropriate list of JAMS arbitrators in accordance with the Arbitration Rules and Procedures of JAMS. A printed version of the Agreement and of any notice given in electronic form shall be admissible in judicial or administrative proceedings based upon or relating to the Agreement to the same extent and subject to the same conditions as other business documents and records originally generated and maintained in printed form. The prevailing party in the arbitration shall be entitled to receive reimbursement of its reasonable expenses (including reasonable attorneys’ fees, expert witness fees and all other expenses) incurred in connection therewith. Judgment upon the award so rendered may be entered in a court having jurisdiction or application may be made to such court for judicial acceptance of any award and an order of enforcement, as the case may be. Notwithstanding the foregoing, each party shall have the right to institute an action in a court of proper jurisdiction for injunctive or other equitable relief pending a final decision by the arbitrator. For all purposes of the Agreement, the parties consent to exclusive jurisdiction and venue in the United States Federal Courts located in the Northern District of California. Use of the Service(s) is not authorized in any jurisdiction that does not give effect to all provisions of the Agreement, including without limitation, this section. Each party agrees it shall bring any dispute against the other in its respective individual capacity and not as a plaintiff or class member in any purported class, representative proceeding or as an association. In addition, each party agrees that disputes shall be arbitrated only on an individual basis and not in a class, consolidated or representative action. The arbitrator shall not have the power to vary these provisions. If any part of this provision is ruled to be unenforceable, then the balance of this provision shall remain in full effect and construed and enforced as if the portion ruled unenforceable were not contained herein.

10.3 Notice. For purposes of this Section, notices must be sent as follows:

• 10.3.1 If to Factory, to legal@factory.ai.
• 10.3.2 If to Customer, the email address listed in its Account.

All notices under this Agreement will be in writing and will be deemed to have been duly given when received, if personally delivered; when receipt is electronically confirmed, if transmitted by facsimile or e-mail; the day after it is sent, if sent for next day delivery by recognized overnight delivery service; and upon receipt, if sent by certified or registered mail, return receipt requested.