1.16 "Tools" means the Object Code provided by Wind River under this Agreement that is intended for Customer's internal use in developing applications and not for incorporation into Target Applications or for distribution.

2. LICENSE GRANTS.

2.1 Operating System. Subject to Customer's compliance with the terms and conditions of this Agreement and payment of any applicable fees, Wind River hereby grants to Customer a restricted, personal, non-transferable, non-exclusive, internal-use license: (i) to use the Operating System at the Authorized Site, on the Approved Host, solely to develop a Run-Time Module in connection with the Project; and (ii) to reproduce the Operating System for archive purposes, consistent with Customer's standard archive procedures. 

2.2 Tools. Subject to Customer's compliance with the terms and conditions of this Agreement and payment of any applicable fees, Wind River hereby grants to Customer a restricted, personal, non-transferable, non-exclusive, internal-use license: (i) to use the Tools at the Authorized Site, on the Approved Host, solely by the number of licensed users specified in the Purchase Order and/or Wind River's final sales quote; and (ii) to reproduce the Tools for archive purposes, consistent with Customer's standard archive procedures.

2.3 Reference Source Code. Subject to Customer's compliance with the terms and conditions of this Agreement and payment of any applicable fees, Wind River hereby grants to Customer a restricted, personal, non-transferable, non-exclusive, internal-use license: (i) to use the Reference Source Code, if any, at the Authorized Site, on the Approved Host, solely to develop a Run-Time Module in connection with the Project; (ii) to modify the Reference Source Code, solely to the extent necessary to support the development of the Target Application and to properly interface with the Run-Time Module; (iii) to compile the Reference Source Code, including any modifications thereof, into Object Code; and (iv) to reproduce the Reference Source Code for archive purposes, consistent with Customer's standard archive procedures.

2.4 Distribution License.  Subject to the terms and conditions of this Agreement, and Customer's payment of the applicable fees, Wind River grants Customer a non-exclusive, non-transferable, royalty-bearing license: (i) to reproduce the number of copies of the Run-Time Modules specified in the Purchase Order and/or Wind River's final sales quote, solely in Object Code at the Authorized Site; and (ii) to distribute such copies of the Run-Time Modules to End Users worldwide solely as inseparably embedded content in the Target Application, subject to an End User License Agreement. 

3. CONDITIONS.

3.1 General. Except as expressly permitted by this Agreement, Customer may not: (i) modify the Operating System or Tools; (ii) translate, reverse engineer, decompile, disassemble (except to the extent applicable laws specifically prohibit such restriction) or attempt to derive the Source Code of Software provided to Customer in Object Code, or create derivative works of the Operating System or Tools or let any third party do any of the foregoing; (iii) reproduce the Software other than as specified above; (iv) sublicense, rent, lease, loan, timeshare, sell, distribute, disclose, publish, assign or transfer any rights, grant a security interest in, transfer possession of the Software or electronically transfer the Software from one computer to another over a network other than Customer's internal network as permitted, if at all, under this Agreement; or (v) alter or remove any of Wind River's or its licensors' copyright or proprietary rights notices or legends appearing on or in the Software and Customer shall reproduce such notices on any copies Customer is permitted to make.

3.2 Third Party Software. The Software licensed under this Agreement may contain or be derived from materials of third party licensors.  Such third party materials may be subject to restrictions in addition to those listed in this Section 3, which restrictions, if any, are set forth at the end of this Agreement.

3.3 Run-Time Module Restrictions.  Customer shall not list or quote a Run-Time Module as a separately priced item or option.  Customer shall configure the Run-Time Module within Customer's Target Applications, so that the Run-Time Module will not operate apart from the operation of the Target Application.

3.4 End User License Agreements.  Customer shall take all steps necessary to protect Wind River's and its licensors' proprietary rights in the Run-Time Module and to ensure that each Run-Time Module distributed by Customer will be accompanied by a localized copy of an End User License Agreement.  Such End User License Agreement shall prohibit the End User from: (i) copying the Run-Time Module, except for archive purposes consistent with the End User's archive procedures; (ii) transferring the Run-Time Module to a third party apart from the Target Application; (iii) modifying, decompiling, disassembling, reverse engineering or otherwise attempting to derive the Source Code of the Run-Time Module; (iv) exporting the Run-Time Module or underlying technology in contravention of applicable U.S. and foreign export laws and regulations; and (v) using the Run-Time Module other than in connection with operation of the Target Application.  In addition, the End User License Agreement shall: (i) state that the Run-Time Module is licensed, not sold and that Customer and its licensors retain ownership of all copies of the Run-Time Module; (ii) expressly disclaim all implied warranties, including without limitation the implied warranties of merchantability, fitness for a particular purpose, title and non-infringement; (iii) exclude liability for any special, indirect, punitive, incidental and consequential damages; and (iv) require that any further distribution of the Run-Time Module be subject to the same restrictions set forth herein.  The End User License Agreement shall also state that, with respect to the Run-Time Module, Wind River and its licensors are third party beneficiaries of the End User License Agreement and that the provisions related to the Run-Time Module are made expressly for the benefit of, and are enforceable by, Wind River and its licensors. 

4. OWNERSHIP.  Wind River and its licensors shall exclusively own all worldwide intellectual property rights in and to the Software.  All rights not expressly granted to Customer in this Agreement are expressly reserved for Wind River and its licensors. 

5. TERM AND TERMINATION.  Either party may terminate this Agreement immediately upon written notice for the material breach of the other party, which material breach is curable and has remained uncured for a period of thirty (30) days from the date of delivery of written notice thereof to the breaching party. Upon termination, Customer shall: (i) not use the Software for any purpose whatsoever; (ii) immediately destroy or return to Wind River all material belonging to Wind River or its licensors, including without limitation all Software, Run-Time Modules and Wind River confidential information then in Customer's possession; (iii) cease the reproduction and distribution of the Run-Time Modules (except as provided below); and (iv) shall promptly certify to Wind River that Customer has done so. Notwithstanding the foregoing, Customer may retain one (1) copy of the Run-Time Module to support existing End Users provided that Customer is then current with payments due to Wind River.  Solely in the event of a termination of this Agreement for Wind River's material breach, Customer shall, for a period not to exceed sixty (60) days after the effective date of termination, have the right to sell, pursuant to the terms of this Agreement, any remaining Target Applications which were in Customer's inventory as of the effective date of the termination.  These remedies shall be cumulative and in addition to any other remedies available to Wind River.  All Sections except Section 2 and 7 shall survive any termination of this Agreement.

6. KEYS AND ACCESS. Wind River agrees to provide to Customer those Software keys which are reasonably necessary to permit Customer to gain access to the Software contained on the media shipped to Customer and which Software has been properly licensed to Customer pursuant to a current license agreement. Notwithstanding anything to the contrary in this Agreement, Customer hereby acknowledges that Customer shall have no right or license to any software shipped to Customer on media as provided above which software is not properly licensed pursuant to a current license agreement, that any such software is included therein, solely as a matter of administrative convenience, and Customer further agrees not to attempt to gain access to, or permit any third party to attempt to gain access to, such software.  Customer shall not disclose the Software keys to any third party.

7. ORDERING.

7.1 Purchase Orders.  In order to obtain the right to reproduce and distribute Run-Time Modules, Customer may submit a Purchase Order to Wind River indicating thereon the number of Run-Time Modules Customer wishes to license from Wind River, or, in the event this distribution license is subject to an annual or other time-based fee, the additional amount of time customer wishes to extend the license.  Such Purchase Order may contain pre-printed or other written terms and conditions and the parties understand and agree that except for the number of licensed Run-Time Modules, or an increase in the amount of time Customer may distribute Run-Time Modules, such terms and conditions shall have no effect whatsoever and that the terms of this Agreement shall control.  Wind River may reject any Purchase Order that is outside the scope of this Agreement.  Wind River will invoice Customer for such Run-Time Modules upon confirmation and acceptance of Customer's Purchase Order.

7.2 Royalty Payments.  In lieu of ordering additional Run-Time Modules by submitting Purchase Orders, Customer may request to make quarterly royalty payments based on the number of Run-Time Modules reproduced by Customer during each quarter. Upon Wind River's approval of such request, Customer shall enclose payment with its quarterly reports.  

8. PAYMENT, TAXES AND RECORDS.  

8.1 Payment Terms.  Customer shall pay to Wind River the applicable Software license fees set forth in Wind River's current price list, unless otherwise agreed to in writing by Wind River.  License fees, other than for royalty payments, will be invoiced upon shipment of the Software.  All payment terms herein are subject to prior credit approval by Wind River.  Customer shall pay all invoices within thirty (30) days of the date of such invoice or, for royalty payments, within thirty (30) days of the end of each calendar quarter, in U.S. dollars.  Interest on any late payments shall accrue at the rate of one and one-half percent (1.5%) per month or partial month during which any sums under any such payment invoices were owed and unpaid, or the highest rate permitted by law, whichever is lower, from the date such amount is due until finally paid. Any failure of Customer to make payment of any payment invoice in the manner described in this Section may, at Wind River's discretion, be deemed a material breach of this Agreement for purposes of Section 5.   

8.2 Taxes.  All payments and amounts due hereunder shall be paid without deduction or set-off or counter claim, free and clear of any restrictions or conditions, and without deduction for any taxes, levies, imposts, duties, fees, deductions, withholdings or other governmental charges.  If any deduction is required to be made by law, Customer shall pay in the manner and at the same time such additional amounts as will result in receipt by Wind River of such amount as would have been received by Wind River had no such amount been required to be deducted. If Customer is claiming sales or use tax exemption, a certified Tax Exempt Certificate must be attached to this Agreement or applicable Purchase Order submitted by Customer.  Customer shall promptly pay or reimburse all federal, state and local taxes (exclusive of taxes on Wind River's net income), duties and assessments, if any, due, arising from or measured by amounts payable to Wind River under this Agreement, or furnish Wind River with evidence acceptable to the taxing authority necessary to sustain any exemption therefrom.

8.3 Records; Distribution Reports.  Customer shall maintain complete, current and accurate records of the location of each copy of the Software in Customer's possession, the location of all users thereof, and the number of all licensed users of the Tools, and of all Run-Time Module copies made and distributed by or for Customer in Target Applications. Customer shall submit to Wind River within thirty (30) days of the end of each calendar quarter a written report which shall set forth the number of Run-Time Modules and Target Applications distributed by Customer and such other information as Wind River may reasonably request (herein, the "Target Report").  Wind River may provide, from time to time, a form Target Report that Customer agrees to follow with respect to carrying out the foregoing obligations.  If no Run-Time Modules Applications were distributed within a given quarter, Customer shall provide to Wind River a statement so certifying.  Except where Customer is reporting Run-Time Modules for which Customer has pre-paid Wind River its applicable per copy license fees, and provided Wind River has authorized Customer to reproduce the Run-Time Modules on a royalty basis, Customer shall enclose with the Target Report Wind River's stipulated per copy royalty for each copy of the Run-Time Module reproduced during the period reported.  Customer's failure to submit an accurate Target Report and any applicable payments may, at Wind River's discretion, be deemed a material breach of this Agreement.

8.4 Audits.  To ensure compliance with the terms of this Agreement, Wind River or its designated representative shall have the right, exercisable upon reasonable notice, to conduct an inspection and audit of all the relevant accounting and sales books and records of Customer, and to obtain true and correct photocopies thereof, during regular business hours at Customer's offices and in such a manner as not to interfere unreasonably with Customer's normal business activities. In no event shall such audits be conducted hereunder more frequently than once every twelve (12) months. If any such audit should disclose any underpayment of fees, Customer shall promptly pay Wind River such underpaid amount, together with interest thereon at a rate of one and one-half percent (1.5%) per month or partial month during which such amount was owed and unpaid, or the highest rate allowed by law, from the date such amount became due until finally paid. If the audit reveals that Customer has underpaid Wind River by five percent (5%) or more of amount owed, then Customer shall immediately reimburse Wind River for Wind River's expenses associated with such audit.