Preview of our top selling OEM Agreement
Toshiba / Artisoft - OEM/Reseller Agreement
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CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS. ================================================================================
OEM/RESELLER AGREEMENT
This OEM/Reseller Agreement ("Agreement") is entered into by and between Artisoft, Inc. ("Artisoft"), a Delaware corporation having a place of business at 5 Cambridge Center, Cambridge, Massachusetts 02142, and the Telecommunication Systems Division of Toshiba America Information Systems, Inc. ("TAIS"), a California corporation having a place of business at 9740 Irvine Boulevard, Irvine, California 92618. The effective date of this Agreement shall be January 18th, 2000 ("Effective Date").
RECITALS
Artisoft and TAIS desire to enter into an arrangement under which, subject to the terms of this Agreement, Artisoft will create custom versions of Artisoft's TeleVantage(TM) or equivalent product or any successors, replacements or enhanced versions of such product (the "Software") for TAIS, TAIS will brand and market the custom versions of the Software, and the parties desire to mutually pursue opportunities in the communication server and software PBX market.
Therefore, in consideration of the mutual covenants herein, and for other good and valuable consideration, the receipt and sufficiency of which is acknowledged by the parties, the parties agree as follows:
AGREEMENT
1. DEFINITIONS. Defined terms are as set forth in the Glossary attached hereto and incorporated herein.
2. GRANT OF LICENSE TO RESELL THE SOFTWARE
2.1 LICENSE. Artisoft hereby grants to TAIS a worldwide, perpetual (subject only to termination pursuant to Section 14) license to use, reproduce, have reproduced, market, have marketed, distribute and have distributed the customized versions of the Software prepared for TAIS by Artisoft under Section 3 hereof (only in object code form), including, without limitation, all Updates and Software Fixes and (collectively, the "Licensed Software"), in accordance with the terms of this Agreement (the "License"). The License shall be perpetually exclusive to TAIS with respect to the Branded Version and Proprietary Version as defined in Sections 3.1 and 3.2, and exclusive to TAIS for certain periods with respect to the [**] versions of the Software as set forth in Sections 6.2 and 6.3. Artisoft hereby acknowledges and agrees that the rights granted to TAIS hereunder shall include the right of TAIS to enter into sublicense agreements with End Users; Dealers; TAIS Affiliates; and, with respect to the OEM-branded Licensed Software described in Section 3.5 only, the single TAIS original equipment manufacturer ("OEM") currently in TAIS' distribution channel ("Current OEM") under End User License Agreements (as defined in Section 2.2).
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2.2 END USER LICENSE AGREEMENT. TAIS will distribute each copy of the Licensed Software only in connection with an End User license agreement containing terms and conditions substantially equivalent to those set forth in Exhibit A, plus any additional nonconflicting terms and conditions to be determined by TAIS. ("End User License Agreement"). TAIS will use commercially reasonable efforts to enforce the terms of such End User License Agreements in a manner consistent with TAIS' standard end user license agreement enforcement policies and practices.
2.3 COPYRIGHT NOTICE AND LEGENDS. TAIS will not remove any copyright or other proprietary rights or confidential notices or legends appearing on the Licensed Software, User Documentation, Documentation or any other documentation provided by Artisoft to TAIS under this Agreement, but may move such notices or legends for the purpose of formatting.
3. SOFTWARE CUSTOMIZATION. Artisoft shall customize the Licensed Software for TAIS, at no cost or expense to TAIS, in accordance with the specifications and delivery dates set forth in Schedule 3, and shall provide TAIS with a Master Copy of such software.
3.1 TOSHIBA NAME IDENTIFICATION. Artisoft shall customize a version of the Software by [**] or other mutually agreed upon date that brands the Software as a TAIS product in accordance with the specifications set forth in Schedule 3 ("Branded Version"). TAIS shall have the final right of approval over all use and placement of its trademarks in the Licensed Software. Nothing in this Agreement shall transfer any rights in any TAIS trademarks to Artisoft.
3.2 TOSHIBA PROPRIETARY PHONE SUPPORT. Artisoft shall customize a version of the Branded Version of the Software by [**] or on a schedule mutually agreed to by the parties to support TAIS' proprietary telephones and other features in accordance with the specifications mutually agreed to in writing and appended hereto as a supplement into Schedule 3 ("Proprietary Version"). To the extent feasible, Artisoft shall provide TAIS with a mechanism for adding support for additional TAIS proprietary telephones without modification of the Proprietary Version through the use of product definition files that may be edited or added by TAIS and TAIS is hereby granted all rights necessary to edit or add such files to the Proprietary Version.
3.3 [**] VERSION. Artisoft shall customize a version of the Software by [**] or on a schedule mutually agreed to by the parties to support and implement a [**] Extension Feature Set I [**] in accordance with the specifications mutually agreed to in writing and appended hereto as a supplement into Schedule 3 ("[**] Version"), provided that TAIS makes [**] pre-release code available to Artisoft at least 180 days prior to the mutually agreed delivery date. In the event that [**] is not made available to Artisoft at least 180 days before the mutually agreed to delivery date, Artisoft shall (i) provide TAIS with TAIS' choice of (1) a Proprietary Version (as described in Section 3.2) of the [**] or later based version of the Software, or (2) a Proprietary Version (as described in Section 3.2) of the most advanced TeleVantage(TM) software version, in accordance with thE provisions of Section 3.7; and (ii) provide the [**] Version to TAIS within one year of the date on which TAIS makes [**]
2 pre-release code available to Artisoft. The [**] Version shall implement all features and other specifications reasonably requested by TAIS, which specifications shall be added to Schedule 3.
3.4 [**] VERSION. Artisoft shall customize a version of the Software by [**] or on a schedule mutually agreed to by the parties to support and implement a [**] Extension Feature Set 2 [**] in accordance with the specifications mutually agreed to in writing and appended hereto as a supplement into Schedule 3 ("[**] Version"), provided that TAIS makes [**] pre-release code available to Artisoft at least 180 days prior to the mutually agreed delivery date. In the event that [**] is not made available to Artisoft at least 180 days prior to the agreed to delivery date, Artisoft shall (i) provide the [**] Version to TAIS within 180 days of the date on which TAIS makes [**] pre-release code available to Artisoft, and (ii) if Artisoft has not previously provided TAIS with the [**] Version as required herein, shall provide TAIS with TAIS' choice of (1) a Proprietary Version (as described in Section 3.2) of the [**] or later based version of the Software, or (2) a Proprietary Version (as described in Section 3.2) of the most advanced TeleVantage(TM) software version, in accordance with the provisions of Section 3.7. The [**] Version shall implement all features and other specifications reasonably requested by TAIS, which specifications shall be added to Schedule 3.
3.5 OEM CUSTOMIZATIONS. Artisoft shall create versions of the Licensed Software as defined in Sections 3.1, 3.2, 3.3, and 3.4 that brand the Licensed Software as an OEM product as required by TAIS for its Current OEM. [**] shall [**].
3.6 OWNERSHIP OF TAIS CUSTOMIZATIONS. All modifications to the Software under Sections 3.1 and 3.2, including, without limitation, the TAIS Customizations, shall be owned by TAIS. All TAIS Customizations are a "work for hire" for the benefit of TAIS. In the event that any TAIS Customizations are not for any reason deemed a work for hire, Artisoft hereby assigns all its right, title and interest in and to the TAIS Customizations to TAIS, including, without limitation, all patent rights, copyrights and trade secrets therein. Artisoft shall cooperate with TAIS in any reasonable manner to perfect, secure and evidence TAIS' ownership and rights in the TAIS Customizations.
3.7 MOST CURRENT TECHNOLOGY AND FEATURES. During the term of this Agreement, Artisoft shall incorporate the most current technology and features in the Licensed Software. Notwithstanding the previous sentence, Artisoft shall have no obligation to incorporate any technology or features in the Licensed Software that (i) TAIS has previous rejected in writing, or (ii) are necessary to implement third party proprietary technology or interfaces. Artisoft shall not license to any person any technology or features more advanced or more efficient than those which exist in the Licensed Software. Artisoft shall not remove any features or functionality from the Licensed Software without the express written consent of TAIS.
3.8 If Artisoft fails to deliver any of the deliverables identified in this Section 3 as required by this Agreement or to cure Defects in such deliverables in accordance with Section 4.2 within [**] of the delivery date for each such deliverable as set forth in Section 3 or as mutually agreed to by the
3 parties ("[**]"), as the sole remedy, for failure to deliver or cure Defects in accordance with Sections 4.2, TAIS shall have the right to terminate this Agreement and obtain a payment determined by the Joint Management Team.
4. SOFTWARE ACCEPTANCE
4.1 ACCEPTANCE TESTING. Upon delivery by Artisoft to TAIS, and notice of such delivery, of each of the Branded Version, Proprietary Version, [**] Version, [**] Version, and [**] Version ("Delivered Software"), TAIS shall have [**] to inspect and test the Delivered Software to determine whether the Delivered Software materially conforms to the Specifications. During such time, TAIS shall either (i) accept the Delivered Software by written notice of its approval to Artisoft, or (ii) provide Artisoft with notice of any Defects in the Delivered Software. TAIS shall accept the Delivered Software if the software materially conforms to the Specifications.
4.2 CORRECTION OF DEFECTS. If TAIS provides Artisoft with notice of any Defects in accordance with Section 4.1, Artisoft shall use commercially reasonable efforts to repair or remedy the Defects, deliver the repaired software to TAIS, and provide notice of such to TAIS within [**] of such notice. As TAIS' sole remedy for Artisoft's breach of this Section 4.2, TAIS may terminate this Agreement and obtain the payments set forth and in accordance with Section 3.8.
5. ROYALTY FEES, REPORTS AND AUDITS
5.1 ADJUSTMENTS TO ROYALTIES. If during the term of this Agreement, the published, public list price of the Artisoft version of the Software (measured by a standard configuration of [**] and [**], not to include [**] or [**]) is [**] under this Agreement shall be [**]. In addition, all royalty fees shall be adjusted in accordance with the provisions of Section 5.11.
5.2 EVALUATION, DEMO AND INTERNAL USE COPIES. TAIS shall have no obligation to pay royalties on (i) a reasonable number of TAIS evaluation or demonstration copies of the Licensed Software or (ii) a reasonable number of copies used internally by TAIS, provided that TAIS shall reimburse Artisoft for any Microsoft royalties paid by Artisoft in connection with the use of Microsoft's SQL Server for such uses.
5.3 LICENSED SERVER VERSIONS AND SOFTWARE FIXES. No royalties shall be due upon any distribution or sublicense of any Licensed Server Versions or Software Fixes, provided that TAIS has already paid a royalty to Artisoft for the copy of the software being updated.
5.4 ROYALTY FEES. Subject to Sections 5.1 and 5.11, TAIS shall pay royalties to Artisoft as set forth in subsections (a) through (e) below.
(a) LICENSED CLIENT VERSION ROYALTY FEE. TAIS agrees to pay Artisoft a royalty fee of $[**] for each copy of the Licensed Client Versions
4 licensed by TAIS or its sublicenses to their respective Dealers and End Users ("Initial Royalty Fee") and TAIS shall have the right to obtain a minimum of [**] copies of Licensed Client Versions at such a royalty rate.
(b) ADDITIONAL ROYALTY FEE. TAIS agrees to pay Artisoft an additional $[**] royalty for each copy of the Licensed Client Versions licensed by TAIS or its subsidiaries through Qualified Artisoft Dealers ("Additional Initial Royalty Fee").
(c) VOIP AND REPORTER APPLICATION ROYALTY FEES. TAIS agrees to pay Artisoft (i) a royalty fee in the amount of the royalty for [**] Licensed Client Versions for each Voice Over Internet Protocol connection ("VoIP Connection") licensed by TAIS or its sublicensees, and (ii) a royalty fee in the amount of the royalty for [**] Licensed Client Versions for each Reporter Application licensed by TAIS or its sublicensees (each as applicable, a "Special Royalty Fee").
(d) INITIAL PAYMENT SCHEDULE. Subject to subsection 5.4(e), until such time as TAIS has paid to Artisoft the aggregate amount of $[**] under this Agreement, all royalty payments shall be made in accordance with the following schedule:
(1) At the end of the first six-month period after the Effective Date, TAIS shall pay the greater of (i) the total of the Initial Royalty Fees, Additional Initial Royalty Fees and Special Royalty Fees applicable under the provisions of Section 5.4 ("Applicable Royalties") for products licensed in the preceding six-month period in accordance with Section 5.4, or (ii) $[**]; provided, however, that if the amount in subsection (ii) is greater than the amount in subsection (i), the difference shall be considered a prepayment of future royalties and shall reduce any royalties owed to Artisoft in any future period accordingly until exhausted.
(2) At the end of the second six-month period after the Effective Date, TAIS shall pay the greater of (i) the Applicable Royalties for products licensed in the preceding six-month period in accordance with Section 5.4, less any unused prepayments made in any previous period; or (ii) $[**]; provided, however, that if the amount in subsection (ii) is greater than the amount in subsection (i), the difference shall be considered a prepayment of future royalties and shall reduce any royalties owed to Artisoft in any future period accordingly until exhausted.
(3) At the end of the third six-month period after the Effective Date, TAIS shall pay the greater of (i) the Applicable Royalties for
5 products licensed in the preceding six-month period in accordance with Section 5.4 less any unused prepayments made in any previous period; or (ii) $[**]; provided, however, that if the amount in subsection (ii) is greater than the amount in Subsection (i), the difference shall be considered a prepayment of future royalties and shall reduce any royalties owed to Artisoft in any future period accordingly until exhausted.
(4) At the end of the fourth six-month period after the Effective Date, TAIS shall pay the greater of (i) the Applicable Royalties for products licensed in the preceding six-month period in accordance with Section 5.4, less any unused prepayments made in any previous period; or (ii) $ [**]; provided, however, that if the amount in subsection (ii) is greater than the amount in subsection (i), the difference shall be considered a prepayment of future royalties and shall reduce any, royalties owed to Artisoft in any future period accordingly until exhausted.
(5) At the end of the fifth six-month period after the Effective Date, TAIS shall pay the greater of (i) the Applicable Royalties for products licensed in the preceding six-month period in accordance with Section 5.4, less any unused prepayments made in any previous period; or (ii) $[**]; provided, however, that if the amount in subsection (11) is greater than the amount in subsection (i), the difference shall be considered a prepayment of future royalties and shall reduce any royalties owed to Artisoft in any future period accordingly until exhausted.
(6) At the end of the sixth six-month period after the Effective Date, TAIS shall pay the greater of (i) the Applicable Royalties for products licensed in the preceding six-month period in accordance with Section 5.4, less any unused prepayments made in any previous period; or (ii) $[**]; provided, however, that if the amount in subsection (ii) is greater than the amount in subsection (i), the difference shall be considered a prepayment of future royalties and shall reduce any royalties owed to Artisoft in any, future period accordingly until exhausted.
(e) SUBSEQUENT PAYMENT SCHEDULE. Upon such time as TAIS has paid to Artisoft the aggregate amount of $[**] under this Agreement, subsection 5.4(d) shall no longer apply and TAIS shall pay, within thirty (30) days of the end of each month, royalties to Artisoft for each Licensed Client Version, VoIP Connection and Reporter Application licensed in such month in accordance with the provisions of subsections 5.4 (a) through (c).
5.5 CONDITION TO TOTAL SALES COMMITMENT. Notwithstanding the payment provisions set forth in Section 5.4, TAIS shall not be obligated to pay the Minimum Commitment upon the termination or expiration of this Agreement, for any reason.
5.6 RENEGOTIATION OF ROYALTY FEES. The parties shall, in good faith and at the earliest possible time, renegotiate the Initial Royalty Fees applicable to the [**] Version, [**] Version, and (if provided under Section 3.3) the [**] version after shipment of the first [**] Licensed Client Versions. The parties shall also, in good faith, renegotiate the Initial Royalty Fees applicable to the Branded Version and the Proprietary Version after shipment of the first [**] Licensed Client Versions, provided that the royalties set forth in subsections 5.4(a) through (c) shall remain in effect until such time as the parties agree in writing on different royalty rates.
5.7 RETURNED PRODUCTS. Artisoft agrees to allow TAIS and its Dealers to pass along Artisoft's 30-day money-back guarantee on the Licensed Software to End Users. TAIS shall be credited the full amount of any royalty fees associated with Licensed Client Versions returned from End Users tinder such money-back
6 guarantee. If such royalty fees have already been paid to Artisoft with respect to the returned copy, TAIS may deduct them from the amount of any future payments of royalty fees to Artisoft.
5.8 OTHER CHARGES. Fees stated are inclusive of any federal, state, municipal or other governmental taxes, duties, licenses, fees, excises or tariffs ("Charges") imposed on the licensing of the Licensed Software by Artisoft to TAIS; however, Artisoft shall not be responsible for taxes based on TAIS' income or sales by TAIS. Each party agrees to pay, and to indemnify and hold the other party harmless from any Charges for which a party is responsible under this Section 5.7 and shall provide the other party an exemption certificate as necessary.
5.9 REPORTS. With each payment of royalties, TAIS shall include a written summary of the number and type of Licensed Software licensed or sublicensed by TAIS or its Dealers, TAIS Affiliates or OEMs in the relevant period. TAIS shall maintain an accurate record of the number and type of Licensed Software licensed or sublicensed by TAIS or its Dealers, TAIS Affiliates or OEMs and documents reasonably necessary to demonstrate any basis for any returns under Section 5.7.
5.10 [**]. For the complete period covered by this Agreement, [**] agrees to [**] represents that the [**] hereunder are [**] in any arrangement whereby [**] to a [**] terms and conditions. If, during the term of this Agreement, [**] shall [**] with [**], this Agreement shall thereupon be deemed [**] during the term of this Agreement, an [**] shall [**] that [**] with this section. [**] shall maintain an [**] of such [**].
5.11 UPDATE ROYALTIES. In accordance with Section 5.10, if Artisoft shall provide any Updates to any customer for free, TAIS shall have no royalty obligations with respect to its distribution and license of such Updates. If Artisoft charges its customers an update fee specifically for a particular Update, then TAIS' royalty obligation with respect to its distribution and license of such Update shall be calculated at the [**] rate provided to Artisoft's customers from the royalty rate hereunder applicable to the product being updated.
6. MARKETING
6.1 SHARED DEALERS. TAIS may and shall offer Shared Dealers a proposal to obtain the Licensed Software from TAIS, and Artisoft shall assist TAIS in the development of any such proposal and assist TAIS in marketing any such proposal.
6.2 EXCLUSIVE FEATURES. The Branded Version and the Proprietary Version of the Software shall be exclusive to TAIS. Artisoft shall not license or sell the Branded Version, the Proprietary Version or any version of the Software containing any TAIS Customizations to any other person or entity. The features in the [**] Version and [**] Version that are related to [**] and [**] extension sets ("[**]") will be exclusive to TAIS for one year after the date that TAIS accepts (pursuant to Section 4) the respective final, completed [**] Versions. During each such one-year period, Artisoft shall not license, sell or
7 otherwise transfer the [**] Version or [**] Version or any version of the Software containing any [**] Features to any other person or entity.
6.3 EXCEPTION FOR ARTISOFT-BRANDED SOFTWARE. Notwithstanding, the provisions of Section 6.2, if Artisoft licenses the [**] or [**] directly from [**], Artisoft may include the [**] Features in Artisoft's own Artisoft-branded version of the Software ("Artisoft Software"); provided that:
(a) Artisoft may not sell, license, sublicense or otherwise transfer the Artisoft Software to any TAIS Dealers, or to any Shared Dealers who elect to become TAIS Dealers. Such Dealers shall be listed on Schedule 6.3(a), as such may be amended from time to time;
(b) In light of the [**] does not and shall not [**] with [**] or [**];
(c) Neither [**] nor [**]; and
(d) Artisoft agrees to comply with guidelines established by the Joint Management Team regarding distribution through the Interconnect channel.
6.4 ARTISOFT SUPPORT. Artisoft will proactively support TAIS' sales of the Licensed Software through Artisoft Dealers as reasonably requested by TAIS in recognition of the Additional Initial Royalty Fee of $[**] paid to Artisoft under the provisions of Section 5.4(b).
6.5 ADDITIONAL COVENANTS. Artisoft agrees as follows and agrees to cause [**] the following provisions:
(a) [**] shall be limited to [**];
(b) As mutually agreed in good faith, [**] will [**]; and
(c) [**] will [**] before [**].
6.6 DEALER LISTS. Each party shall provide to the other a complete listing of its Dealers at the beginning of each calendar quarter. Such lists shall be considered Confidential Information and shall be disclosed only as directed by the Joint Management Team (as defined in Section 7.1 (a) below).
6.7 LIMITATIONS ON UPGRADES. TAIS agrees that, during the term of this Agreement, TAIS and its sublicensees will not sell (license) upgrades of the Artisoft-branded software to End Users. Notwithstanding the preceding sentence, TAIS and its sublicensees may sell (license) Licensed Software to any End Users in accordance with the royalty and other provisions of this Agreement.
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7. MANAGEMENT, PERSONNEL AND ASSETS
7.1 JOINT MANAGEMENT TEAM.
(a) APPOINTMENT OF JOINT MANAGEMENT TEAM. TAIS and Artisoft shall each appoint an equal number of members, which number shall be mutually agreed in writing, to a team which shall consist of management representatives (the "Joint Management Team"). The task of the Joint Management Team will be to meet as needed, but at least quarterly, for the purpose of providing for efficient operation under this Agreement and to resolve any continuing dispute between the parties that has not been resolved after reasonable attempts between the parties.
(b) MEETINGS OF THE JOINT MANAGEMENT TEAM. The Joint Management Team shall meet as often as either party reasonably deems necessary in order to gather and furnish to the other all information with respect to the matter at issue which the parties believe to be appropriate in connection with its resolution. Such representatives shall discuss the problem and negotiate in good faith in an effort to resolve the dispute without the necessity of any formal proceeding relating thereto. During the course of such negotiation, and subject to non-disclosure agreements with third parties, all reasonable requests made by one party to the other for information will be honored in order that each of the parties maybe fully advised as to the details of the dispute. The specific format for such discussions will be left to the discretion of the Joint Management Team. In the event any issue or dispute is not resolved for whatever reason within thirty (30) days after the initial request to negotiate such dispute or issue is given, either party may pursue formal legal remedies. Except where prevented by the dispute, both parties agree to continue performing their respective obligations under this Agreement while the dispute is being resolved.
8. TECHNOLOGY
8.1 TECHNOLOGY TRANSFER. Upon or prior to the execution of this Agreement, TAIS has delivered or will deliver to TAIS the Master Copy of the current version of the Software (in object code form), User Documentation, Documentation and any technical documentation reasonably sufficient to permit programmers skilled in the art to understand the Software, excluding the source code for the Software, provided that the delivery of such technical documentation for the Software shall not require Artisoft to create any new documentation specifically for TAIS ("Technical Documentation"). TAIS hereby acknowledges and agrees that the Technical Documentation provided to TAIS by Artisoft hereunder is, and shall remain, the sole and exclusive property of Artisoft.
9. REPRESENTATIONS AND WARRANTIES
9.1 RIGHTS AND AUTHORITY. Each party, represents and warrants that the execution, delivery and performance of this Agreement (i) are within its corporate powers, (ii) have been duly authorized by all necessary corporate action under its organizational documents, (iii) require no action by or in respect of, or filing with, any governmental body, agency or official other than those which have already been duly taken or made or will be duly taken or made as and when required, (iv) do not contravene or constitute a default under any provision of applicable law or regulation or of the organizational documents of
9 it or any agreement, judgment, order, decree or other instrument binding upon it, and (v) this Agreement constitutes a legal, valid and binding obligation of each party hereto.
9.2 SERVICES. Artisoft represents and warrants that, in rendering any services hereunder, it employees shall have the proper skill, background and training so as to be able to perform in a competent and professional manner and that all work will be so performed.
9.3 TITLE. Artisoft represents and warrants that it has sufficient right, title and interest in the Licensed Software, User Documentation and Documentation to enter into this Agreement and perform all of its obligations hereunder. TAIS' sole remedy for any breach of this section shall be as set forth in Section 11.
9.4 NO INFRINGEMENT. Artisoft represents and warrants that the Licensed Software and the license granted herein do not and will not infringe the intellectual property rights of any party, including, without limitation, copyrights, patents, trademarks, and trade secrets. TAIS' sole remedy for any breach of this section shall be as set forth in Section 11.
9.5 SOFTWARE QUALITY. Artisoft represents and warrants that the Licensed Software will operate in material conformance with the Specifications.
9.6 YEAR 2000. Artisoft represents and warrants that the Licensed Software shall accurately process date data (including, without limitation, calculating, comparing and sequencing) from, into and between the twentieth and twenty-first centuries, including leap years and shall provide all of the following functions: (i) properly process and store date information before, during, and after January 1, 2000, including, but not limited to, accepting date input, providing date output, and performing calculations on dates or portions of dates; (ii) function accurately and without interruption before, during and after January 1, 2000, without any change in operations associated with the advent of the new century; (iii) respond to two-digit year-date input in a way that resolves the ambiguity as to century in a disclosed, defined, and predetermined manner; and (iv) store and provide output of date information in ways that are unambiguous as to century.
9.7 COMPLIANCE, WITH LAWS. Artisoft represents and warrants that the Licensed Software, Documentation, and User Documentation shall comply with all applicable federal, state and local laws, rules, regulations and certification requirements.
9.8 DOCUMENTATION. The Documentation and User Documentation shall be sufficient to operate all features and functions of the Licensed Software.
9.9 MARKETING. TAIS makes no representation or warranty, express or implied, regarding the amount, effectiveness or sufficiency of the marketing and sales efforts of TAIS related to this Agreement.
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9.10 FULFILLMENT OF WARRANTY, OBLIGATIONS TO TAIS. At any time after acceptance of the Licensed Software by TAIS, if either party shall discover one or more Defects in the Licensed Software, Documentation, Technical Documentation or User Documentation or any other respect in which the Licensed Software, Documentation, Technical Documentation or User Documentation materially fails to conform to the provisions of any warranty contained in this Agreement, Artisoft shall, entirely at its own expense, use commercially reasonable efforts to correct such Defects and nonconformity's in accordance with the problem severity assignments and response time requirements established by the Joint Management Team in accordance with Section 12.4, by, among other things, supplying TAIS with such corrective code and making such additions, modifications or adjustments to the Licensed Software, Documentation, Technical Documentation or User Documentation as may be necessary to keep the Licensed Software, Documentation, Technical Documentation and User Documentation in material conformity with the Specifications and the warranties herein.
10. LIMITATIONS ON WARRANTIES AND LIABILITY
10.1 LIMITATIONS ON WARRANTIES. EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, BOTH PARTIES DISCLAIM ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY AND ALL, WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
10.2 LIMITED LIABILITY. SUBJECT TO SECTION 11, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL OR CONSEQUENTIAL DAMAGES, LOSS OF PROFITS OR REVENUE, OR INTERRUPTION OF BUSINESS IN ANY WAY ARISING OUT OF OR RELATED TO THIS AGREEMENT, REGARDLESS OF THE FORM OF THE ACTION, WHETHER IN CONTRACT OR TORT, EVEN IF ANY REPRESENTATIVE OF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
11. INDEMNITY
11.1 INDEMNITY BY ARTISOFT. Artisoft agrees at its expense to indemnify, defend, protect and hold harmless TAIS and its Dealers, customers, TAIS Affiliates, officers, directors, employees and agents from and against any third party suits, claims, proceedings and causes of action, and the resulting damages, costs (including attorneys' fees and expenses) or expenses arising or resulting from (i) any third party claim that the Licensed Software infringes any intellectual property right of any third party, including, without limitation, patent rights, trademark rights, copyrights, or trade secrets, but excluding claims to the extent they arise from modifications made to the Licensed Software directly by TAIS or which are made by Artisoft but are necessary and unavoidable to implement ideas, features, techniques, interfaces or processes requested by TAIS, or (b) combinations of the Licensed Software with third party hardware or software, which combinations could not reasonably be anticipated by reference to the Specifications; or (ii) any third party claim arising out of the fault or negligence of Artisoft in connection with this Agreement, provided that, in the event of any such claims, Artisoft is promptly
11 notified, rendered reasonable assistance as required, and permitted to direct the defense or settlement negotiations. Notwithstanding the foregoing, TAIS shall have approval rights of any settlement, which approval shall not be unreasonably withheld or delayed. Should the use of the Licensed Software by TAIS be enjoined or, in the event that Artisoft desires to minimize its liabilities hereunder, Artisoft may at its option and expense (a) substitute a functionally equivalent non-infringing version of the Licensed Software, (b) modify the infringing item so that it no longer infringes but remains functionally equivalent, or (c) obtain for TAIS the right to continue use of Such item. If Artisoft is unable after commercially reasonable efforts to obtain one of the foregoing alternatives, Artisoft shall have the right to terminate this Agreement and refund any Minimum Commitment that TAIS has paid in excess of the actual royalty payments that would have been owed hereunder by TAIS to Artisoft absent the Minimum Commitment.
11.2 INDEMNITY BY TAIS. TAIS agrees at its expense to indemnify, defend, protect and hold harmless Artisoft and its officers, directors, employees and agents from and against any Suits, claims, proceedings and causes of action, and the resulting damages, costs (including attorneys' fees and expenses) or expenses arising or resulting from (i) any third party claim that (a) modifications made to the Licensed Software directly by TAIS or (b) modifications made to the Licensed Software by Artisoft that are necessary and unavoidable to implement ideas features, techniques, interfaces or processes requested by TAIS infringe any intellectual property right of any third party, including, without limitation, patent rights, trademark rights, copyrights, or trade secrets; or (ii) any third party claim arising out of the fault or negligence of TAIS in connection with this Agreement; provided that, in the event of any such claims, TAIS is promptly notified, rendered reasonable assistance as required, and permitted to direct the defense or settlement negotiations. Notwithstanding the foregoing, Artisoft shall have approval rights of any settlement, which approval shall not be unreasonably withheld or delayed.
12. SUPPORT AND ERROR CORRECTION
12.1 TRAINING. Artisoft shall provide training on the operation, support and maintenance of the Licensed Software for the number of TAIS employees reasonably deemed necessary for TAIS to meet its obligations hereunder. The schedule for such training shall be determined by mutual written agreement of the parties. Artisoft shall make such TAIS employees aware of all diagnostics and tools available to support the Licensed Software.
12.2 STRUCTURE OF SUPPORT. TAIS' Dealers shall provide the first line of support for the Licensed Software sublicensed by TAIS; that is, TAIS' Dealers shall be the initial interface, responding to telephone or other inquires from such customers. TAIS shall provide the second line of support for the Licensed Software. Artisoft will provide to TAIS know-how, tools and diagnostics such that resolution of problems can be adequately addressed by TAIS. Artisoft shall provide the third line of support for the Licensed Software, which support obligations shall be further defined by mutual written agreement of the parties
12 and which shall include, without limitation, the support obligations of Artisoft set forth in this Section 12.
12.3 ARTISOFT SUPPORT. Artisoft technical/engineering support staff will provide support to TAIS in those instances where TAIS support engineers cannot successfully resolve problems relating to the License Software. Artisoft is obligated to have testing and debugging tools that are typical for the software industry.
12.4 SEVERITY ASSIGNMENT AND RESPONSE TIME. Problem severity assignments and response time requirements will be defined by the Joint Management Team.
12.5 UPDATES AND SOFTWARE-FIXES. Artisoft shall provide TAIS with all Software Fixes and Updates of the Licensed Software at the same time as their public release.
12.6 SUPPORTED VERSIONS. Artisoft shall meet its support obligations described...
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