PhonEXTM ONE End User License – Terms & Conditions This document (this “EULA”) sets forth the general terms and conditions for the use of the Product (defined below) by an end user licensee (the “End User”), who lawfully acquired a valid license to the Product from an authorized reseller of MIND C.T.I. Ltd. (the “Reseller” and the “Company”, respectively) pursuant to a commercial agreement between the End User and the Reseller (the “Commercial Agreement”). By entering into the Commercial Agreement and/or using the Product, the End User undertakes to comply with the terms and conditions set forth herein, and this document shall be deemed a binding agreement between the Company and the End User (each of which shall be referred to hereinafter as a “party’, and collectively as the “parties”). 1. DEFINITIONS 1.1. “Authorized Extensions” means the maximum number of extensions, for which End User has purchased a license under the Commercial Agreement and paid the corresponding license fees. End User may purchase Licenses for additional Authorized Extensions and other software use options, at the rates effective at the time of the subsequent purchase. 1.2. “OEM Software” means the third party’s OEM software products, if any, as set forth in the Commercial Agreement. 1.3. “Product” means the computer programs compounding the PhonEXTM ONE call accounting software solution in object code form and user manuals. The term “Product” includes any corrections, bug fixes, enhancements, updates, or other modifications and derivative works to such computer program and user manuals, but excludes new components, upgrades or releases that are marketed and sold as new products by Company to its customers. 2. LICENSE 2.1. Grant of License: Subject to the full and timely payment of the license fees by the End User pursuant to the Commercial Agreement, Company shall grant to End User a perpetual (subject to termination as provided herein), nonexclusive, nontransferable license (the “License”) to use the Product for its internal business purposes in accordance with the application description and limited to the Authorized Extensions. OEM Software, to the extent included in Exhibit A, is sublicensed by Company to End User on a perpetual non-exclusive and non-transferable basis, and may be used by End User, solely in conjunction with the other components of the Product and as an integral part thereof. The Product may not be used for the benefit of any third parties not authorized herein, including without limitation, in an outsourcing, timesharing, or application service provider (also sometimes called an “ASP”) arrangement, or in the operation of a service bureau. 2.2. Copies: End User, solely to enable it to use the Product, may make one archival copy and a limited number of additional copies for internal purposes, provided that the copy shall include Company’s copyright and other proprietary notices and that the End User implements and maintains a system to monitor and track the location and use of these copies. The Product delivered by Company to End User and the archival copy shall be stored at End User’s Site. End User shall have no right to copy, in whole or in part, the Product. Any copy of the Product made by the End User is the exclusive property of the Company. 2.3. Restrictions: End User shall not, directly or indirectly, modify, enhance, translate, reverse engineer, decompile, disassemble, transfer, lease, sublicense, assign or sell the Product or create derivative works based upon the Product, or otherwise attempt to derive source code from the Product, and no rights with respect to Product source code are granted. Breach of this provision shall automatically void the license(s) granted herein. End User shall not avoid, circumvent, or disable any security device, procedure, protocol, or mechanism that Company may include, require or establish with respect to the Product. 2.4. Material Terms and Conditions: End User specifically agrees that each of the terms and conditions of this Section 2 are material and that failure of End User to comply with this EULA shall constitute sufficient cause for Company to terminate the License. The presence of this subsection 2.4 shall not be relevant in determining the materiality of any other provision or breach of this EULA by either party. 3. INTELLECTUAL PROPERTY RIGHTS 3.1. Product Ownership: End User acknowledges and agrees that this is a license agreement and not an agreement for sale. As such, Company assigns no copyrights and/or any other rights in/to the Product. End User acknowledges and agrees that the Product, including any patches, corrections, bug fixes, workarounds, updates, upgrades, enhancements or other modifications and derivative works thereto and user manuals provided to End User in connection therewith, and all trade secret, copyright, patent, trademark, trade name and other intellectual and proprietary rights therein, are and at all times shall remain the sole and exclusive property of Company, and shall be subject to the terms and conditions of this EULA. 3.2. Proprietary Notices: End User shall not remove any copyright, trademark or other proprietary rights notices of Company on any Product. 3.3. At Company’s written request, but not more frequently than annually, End User will furnish Company with a signed statement verifying that the Product is being used in full compliance with the provisions of this EULA. 4. DISCLAIMER / LIMITATION OF LIABILITY Notwithstanding anything to the contrary herein or in the Commercial Agreement: 4.1. THE PRODUCT IS WARRANTED TO END USER SOLELY BY RESELLER AND SOLELY UNDER THE COMMERCIAL AGREEMENT. NOTHING IN THIS EULA SHALL BE CONSTRUED TO CONSTITUTE A WARRANTY OF COMPANY, INCLUDING WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY, NONINFRINGEMENT, OR FITNESS FOR A PARTICULAR PURPOSE. COMPANY SPECIFICALLY DISCLAIMS ANY WARRANTY THAT THE PRODUCT SHALL OPERATE UNINTERRUPTED OR ERROR FREE. 4.2. RESELLER SHALL BE EXCLUSIVELY LIABLE TO END USER IN CONNECTION WITH THE COMMERCIAL AGREEMENT AND THE PRODUCT, SUBJECT TO THE TERMS OF THE COMMERCIAL AGREEMENT, AND IN NO EVENT SHALL COMPANY INCUR ANY LIABILITY, OF ANY NATURE WHATSOEVER, TOWARDS THE END USER. 4.3. NOTWITHSTANDING ANYTHING TO THE CONTRATRY HEREIN OR IN THE COMMERCIAL AGREEMENT, IN NO EVENT SHALL COMPANY OR ITS AFFILIATES AND/OR THIRD PARTY LICENSORS BE LIABLE TO END USER FOR ANY REASON, WHETHER ARISING OUT OF BREACH OF EXPRESS OR IMPLIED WARRANTY OR TERM OR CONDITION, BREACH OF CONTRACT, MISREPRESENTATION, NEGLIGENCE, TORT OR OTHERWISE, FOR ANY DIRECT LOSS OR DAMAGES ARISING OUT OF USE OF THE PRODUCT OR THE SUPPORT SERVICES OR OTHERWISE, IN THE AGGREGATE, IN EXCESS OF THE FOLLOWING: 4.3.1. WITH RESPECT TO THE USE OF THE PRODUCT - AMOUNTS RECEIVED FOR THE SPECIFIC PRODUCT GIVING RISE TO SUCH LIABILITY DURING THE TWELVE MONTH PERIOD PRECEDING THE DATE ON WHICH THE CLAIM AROSE, OR 4.3.2. WITH RESPECT TO MAINTENANCE SUPPORT SERVICES - THE ANNUAL FEE ACTUALLY RECEIVED FOR THE SUPPORT SERVICES DURING THE YEAR IN WHICH THE CLAIM AROSE. 4.4. NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN OR IN THE COMMERCIAL AGREEMENT, IN NO EVENT SHALL COMPANY BE LIABLE TO END USER FOR ANY INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL, PUNITIVE, RELIANCE, OR COVER DAMAGES, INCLUDING LOSS OF PROFITS, REVENUE, DATA, USE AND/OR BUSINESS, EVEN IF COMPANY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. 5. INTELLECTUAL PROPERTY INFRINGEMENT 5.1. Without derogating from the generality of Section ‎4 above, it is agreed that Section ‎4.2 shall apply also in connection with any third party’s claim that the Product infringes upon a duly issued patent, copyright, trade secret, trademark or any other intellectual property right of a third party in the country in which End User is located. 5.2. Upon the occurence of any of the following: (i) if all or any part of a Product is or in the opion of Company may become the subject of any claim or suit for infringement of any Intellectual Property Right , or (ii) in the event of any adjudication that a Product or any part thereof does infringe third party’s rights, or (iii) if End User’s use of a Product or any part thereof is enjoined (collectively, “Infringement Claim”); End User undertakes to cooperate with Company, and at Company’s request to use an updated Product provided by Company, if in Company’s opinion this is necessary to avoid or settle such an infringement claim. 6. CONFIDENTIALITY 6.1. Neither party (the “Recipient”) shall, directly or indirectly, use or disclose to any third party all or any part of the Confidential Information heretofore or hereto after disclosed by or obtained from the other party (the “Discloser”), except to the extent reasonably required for the performance of its obligations under this EULA. The foregoing shall not apply to any Confidential Information which the Recipient can show by written records that: 6.1.1. at the time of its disclosure or thereafter is generally available to and known to the public, other than as a result of a disclosure by the Recipient or its Affiliates or their representatives in breach of this EULA; 6.1.2. was or becomes available to the Recipient, on a non-confidential basis from a third party source independent of any restrictions imposed by the Discloser; 6.1.3. has been independently acquired or developed by the Recipient without breaching this EULA; or 6.1.4. has been lawfully in the possession of the the Recipient prior to disclosure by the Discloser. “Confidential Information” means, in this EULA, any information or materials in oral, written, pictorial, magnetic, graphic or maintained or transferred in any other media, which have been previously disclosed or may hereafter be disclosed by the Discloser to the Recipient, relating to the financial, technological and business information, products, services and/or operations of the Discloser, including, but not limited to, business plans, agreements, trade secrets, know-how, patents, formulae, data, source code, object code, product plans, product specifications, technical information, customer lists, and all other information of any kind or nature whatsoever, whether or not contained or incorporated in drawings, photographs, memoranda, operational documents, models, prototypes, designs, quality control and test charts, lists, manuals and methods, whether or not labeled as confidential or proprietary, and including, without limitation, all copies, excerpts, modifications, translations, enhancements and adaptations of all the foregoing, whether made by the Discloser or otherwise. 6.2. In the event that the Recipient shall be legally required (including, without limitation, by formal questioning or, in the written opinion of its legal counsel, by applicable securities laws) to disclose any Confidential Information of Discolsure, it shall immediately notify the Discloser in writing of such request or requirement prior to disclosure, so that the Discloser may seek an appropriate protective order with the reasonable assistance of the Recipient. If such order is not timely obtained, only such portion of the Confidential Information as specifically required shall be disclosed. 6.3. The Recipient shall treat the Confidential Information with the same care as it would exercise in this handling of its own confidential or proprietary information and shall disclose such information on a need-to-know basis only to any of its employees, consultants and/ or contractors, provided that such individual is bound by confidentiality undertakings no less restrictive than the terms of this Section ‎6. 6.4. Upon written request by the Discloser, the Recipient shall promptly return or securely destroy all tangible information (including, without limitation, drawings, specifications, data or samples), which contain or embody any Confidential Information, along with any and all copies thereof, provided that the Recipient may maintain one copy of the Confidential Information disclosed to it hereunder to ensure compliance with the terms hereof. 6.5. The Recipient’s undertakings under this Section ‎6 shall survive the expiration or termination of this EULA for additional 5 (five) years. 7. TERM &TERMINATION 7.1. The term of this EULA shall commence on the Effective Date and continue therefrom unless terminated in accordance with this Section ‎7. 7.2. Either party may terminate this EULA by providing written notice of termination to the other party if such other party fails to comply with any material term or condition of this EULA and fails to remedy such breach within thirty (30) days after the non-breaching party gives the breaching party written notice of the breach. End User’s failure to pay the applicable license fee under the Commercial Agreement shall be deemed also a material breach of this EULA. 7.3. In addition to the foregoing, either party may terminate this EULA if the other becomes insolvent, makes a general assignment for the benefit of creditors, files a voluntary petition of bankruptcy, suffers or permits the appointment of a receiver for its business or assets, becomes subject to any proceedings under any bankruptcy or insolvency law, whether domestic or foreign, or has wound up or liquidated its business voluntarily or otherwise, and same has not been discharged or terminated within sixty (60) days. 7.4. Immediately upon any termination of this EULA, End User shall: (i) cease all use of the Product; (ii) return to Company all copies of the Product and any other Confidential Information or proprietary materials of Company in its possession; and (iii) certify in writing End User’s compliance with (i) and (ii), above. 7.5. The following provisions shall survive the expiration or termination of this EULA: Sections ‎3, ‎4, ‎5, ‎6, ‎8 and ‎9. 8. GOVERNING LAW AND ARBITRATION 8.1. This EULA shall be governed by, and construed in accordance with, the laws of the State of Israel, notwithstanding any contrary choice of law provisions. 8.2. Any disagreement or dispute between the parties arising under this EULA or in connection with the transactions hereunder, which cannot be promptly resolved on an amicable basis, shall be referred to arbitration to be held in Tel-Aviv, Israel, by a single arbitrator in accordance with the rules of the International Chamber of Commerce. The arbitral award including apportionment of fees and expenses shall be final and binding upon the parties. This Section ‎‎‎8.2 shall be deemed to constitute an arbitration agreement between the parties, and the provisions of the Addendum to the Arbitration Law, 1968 shall apply to any arbitration hereunder. 8.3. Neither a party, witness or arbitrator may disclose the contents or results of any arbitration hereunder without the prior written consent of the other party, except to the extent disclosure is required to enforce or challenge the award, or as required by law or as necessary for financial and tax reports and audits. 8.4. Notwithstandng Section ‎8.2, End User acknowledges and agrees that if it fails to perform certain obligations under this EULA, including any of Sections ‎3 and ‎6, it will cause immediate and irreparable harm and injury to Company for which monetary damages would not be adequate remedy. Therefore End User agrees that, in addition to other remedies provided herein, Company shall be entitled to an injunction restraining any violation or threatened violation by End User of the provisions of any of the aforementioned Sections or to a specific performance or other equitable relief to enforce such provisions from any court of competent jurisdiction and, in connection therewith, that Company shall not be obligated to post a bond for or otherwise ensure payment of any damages that might be incurred by End User because of such legal action. Should any such legal action be brought by Company, End User shall not allege, and hereby waives, the defense that an adequate remedy exist without resorting to such legal action. It is agreed that Company may also bring such an action before the arbitrator as set forth above, and the parties agree that the arbitrator may also issue any orders for specific performance and/or injunctive relief or other equitable relief, and End User agrees to have such an order, if issued, enforced by any court of competent jurisdiction 9. Miscelleneous 9.1. Entire Agreement. The Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and there have been no oral or other agreements of any kind whatsoever as a condition precedent or inducement to the signing of the Agreement or otherwise concerning the Agreement or the subject matter hereof. 9.2. Amendments. This EULA shall not be amended, nor shall any waiver, change, modification, consent or discharge be effected, except by an instrument in writing executed by both parties. 9.3. Section Headings. The headings contained in this EULA are for reference purposes only and shall not in any way affect the meaning or interpretation of this EULA. 9.4. Notices. All notices and other communications required or desired to be given or sent by either party to the other shall be in writing, and shall be deemed to have been received the next business day after being successfully transmitted by fax as established by a transmission report, or after 5 (five) days from being mailed by pre-paid first class mail; or at the time of delivery when manually delivered to the respective addresses set forth in the preamble of this EULA, or to such other addresses as may be designated by notice, provided, however, that any notice of change of address shall be effective only upon receipt. 9.5. Neither party will bring a legal action under this EULA more than two years after the cause of action arose unless otherwise provided by law without the possibility of contractual waiver or limitation. I