AvaTax 1099 Master Services Agreement

AvaTax 1099 Master Services Agreement
This AvaTax 1099 Master Services Agreement (this “Agreement”) sets forth the terms under which Avalara agrees to grant Customer access to and use of the Services (defined below). Customer accepts and agrees to be bound by this Agreement by clicking a box or other function indicating Customer’s acceptance, executing a Sales Order that references this Agreement, or by using the Services. Any individual who executes a Sales Order or uses the Service on behalf of an entity represents and warrants to Avalara that such individual has the legal authority to bind that entity as a Customer to this Agreement.
1. DEFINITIONS
Capitalized terms have the following meanings:
“Affiliate” means an entity that controls, is controlled by or is under common control with a party to this Agreement at any time during the Term; for these purposes, “control” means a direct or indirect ownership or control of more than 50% of the voting interests of the subject entity.
“Aggregate Data” means de-identified and anonymized sets of data that have been compounded for the purpose of expressing such information in summary form. For example, price index numbers are aggregative, in contrast to the price of a single commodity. Aggregate Data does not include any information that could identify or re-identify a Customer, a Customer’s customer or any products, goods, locations or services provided by Customer.
“Authorized User” means any employee, contractor, subcontractor, representative, consultant, agent, or third parties acting for your benefit or on your behalf or members of an Affiliate who are authorized (i) by Customer to use the Services and who have been supplied with a username/password or access to the Services by the Customer, or (ii) by Avalara at Customer’s written request.
“Avalara” means Avalara, Inc., a Washington corporation, its Affiliates and their respective successors and assigns. Avalara may be referred to as “we”, “our” or a “party”.
“Avalara Distributor” means an entity that Avalara has authorized as a distributor or other ‘reseller’ of Avalara’s Service offerings.
“Avalara Website” means www.avalara.com, www.taxrates.com, or any other website that Avalara may own or manage.
“Confidential Information” has the meaning ascribed to it in section 7.
“Contract Effective Date” means the earliest of: (i) the date Avalara enters Customer’s Sales Order into Avalara’s billing system; or (ii) a date as mutually agreed by the parties in writing.
“Customer” means the legal entity that places a Sales Order, executes any other Avalara provided provisioning document, or uses Avalara Services, thereby accepting this Agreement. Customer may be referred to as “you”, “your” or a “party”.
“Customer Data” means (i) any information uploaded to the Services by Customers or Authorized Users, (ii) the resulting Customer unique output that is generated by the Services when processing the uploaded information, and (iii) any information provided by Customer in connection with its use of the Services.
“Distributor Agreement” means the order, agreement or other document between Customer and an Avalara Distributor for Customer’s acquisition of Services. Any terms that apply to Customer’s use of the Services when purchased from an Avalara Distributor are set forth in section 13.
“Documentation” means Avalara’s user guides, training manuals and other similar information, as updated or revised by Avalara from time to time, that Avalara provides to Customer at the following location: https://help.avalara.com/.
“Expenses” means any reasonable, preapproved expenses described in a Sales Order or otherwise as being reimbursable to Avalara by Customer that Avalara actually incurs while providing Customer the Services. Avalara’s reimbursable Expenses include postage fees, wire transfer fees, and other administrative costs.
“Intellectual Property” means all trade secrets, patents and patent applications, trademarks (whether registered or unregistered and including any goodwill acquired in such trademarks), service marks, trade names, copyrights, moral rights, database rights, design rights, rights in know-how, rights in Confidential Information, rights in Inventions (whether patentable or not) and all other intellectual property and proprietary rights (whether registered or unregistered, any application for the foregoing, and all rights to enforce the foregoing), and all other equivalent or similar rights which may subsist anywhere in the world.
“Invention” means any work of authorship, invention, know-how, device, design, algorithm, method, process, improvement, concept, idea, expression, discovery or invention, whether or not copyrightable or patentable and whether or not reduced to practice.
“Personal Information” means any personally identifiable information of an individual person that is protected by applicable law and by the confidentiality provisions set forth in section 7.
“Sales Order” means Avalara’s sales order form, sales proposal or other ordering document that describes the Services, fees, support plans, Expenses and any special terms for using the Services that Customer has ordered.
“Services” means the AvaTax 1099 services together with other computer software programs, networks and equipment that Avalara uses to make such services available to its customers.
“Subscription Term” means the duration that this Agreement is effective and includes the Initial Subscription Term and each Renewal Subscription Term (as defined in section 5 below)
“Tax Form” means tax or informational forms that are transmitted electronically or on paper to the appropriate regulatory agency, including any changes that are additions (new filings) and any changes that are corrections to a prior filing.
“Third-Party Applications” means computer software programs and other technology that are provided or made available to Customer by third parties. Third Party Applications may interoperate with the Services.
2. USE OF THE SERVICES
a. Customer’s Account. On or immediately following the Contract Effective Date, Avalara will enable an account that is personal to Customer for provision of the Services (“Account”). Customer will designate a single point of contact, subject to change at Customer’s discretion, who has been authorized by Customer to manage and support the Services and establish and manage the Account, including the creation of usernames and passwords for the Account. Customer is solely responsible for maintaining the status of its User base, and Customer will maintain the confidentiality of all usernames, passwords, access and account information in its possession or under Customer’s or its Authorized User’s control. Except to the extent caused by Avalara’s breach of this Agreement, Avalara is not responsible for unauthorized access to the Account. Customer will contact Avalara promptly if: (i) Customer believes an unauthorized third party may be using the Account; (ii) Account information is lost, stolen or disclosed to an unauthorized third party; (iii) Customer reasonably believes that the Account has been compromised or gains knowledge of any unauthorized access, use or disclosure of account information; or (iv) any other breach of security in relation to its passwords, usernames, access information or the Services may have occurred or is reasonably likely to occur.
b. Avalara’s Responsibilities. During the Subscription Term, Avalara will: (i) use commercially reasonable efforts to make the Services available 24 hours a day, 7 days a week except for: (a) planned downtime (of which Avalara will give at least 7 days’ written notice and which Avalara will schedule to the extent practicable during the weekend hours from 6:00 p.m. Friday to 3:00 a.m. Monday, Pacific Time) and in all cases scheduled so as to minimize disruption to the availability of the Services, (b) any unavailability caused by circumstances beyond Avalara’s reasonable control, including internet service provider failures or delays or denial of service attacks; (ii) provide its basic support for the Services to Customer at no additional charge, or upgraded support if purchased separately and (iii) conduct its business in compliance with all applicable local, state, federal and international laws and regulations (“Laws”).
c. Customer’s Responsibilities. Customer is responsible for (i) the accuracy and completeness of Customer’s initial and ongoing configuration and set up of the Services; (ii) ensuring that the Services are compatible with Customer’s business systems requirements; (iii) the accuracy, quality, legality and integrity of the Customer Data and the means by which Customer acquired Customer Data; (iv) the maintenance and use of Customer’s hardware, network, internet connectivity and software; and (v) compliance with the Acceptable Use Policy available at https://www.avalara.com/legal/acceptable-use, with all Documentation, and with all Laws. Customer will ensure that its Authorized Users, Affiliates, employees, agents and representatives comply with all of Customer’s obligations under this Agreement, and Customer is responsible for their acts and omissions relating to this Agreement as though they were those of Customer.
d. Restrictions. Customer will not (i) reverse assemble, reverse engineer, decompile or otherwise attempt to derive source code from any of the Services; (ii) reproduce, modify, create or prepare derivative works of any of the Services or Documentation; (iii) distribute or display any of the Services or Documentation other than to Customer’s Authorized Users; (iv) share, sell, rent, lease or otherwise distribute access to the Services, or use the Services to operate any timesharing, service bureau or similar business; (v) create any security interest in the Services; (vi) alter, destroy or otherwise remove any proprietary notices or labels on or embedded within the Services or Documentation; or (vii) disclose the results of any Service or program benchmark tests to any third parties without Avalara’s prior written consent. Customer may use the Services only as defined in the Sales Order, this Agreement, and the Documentation and not for the benefit of any third party.
e. TIN Matching Program. The Tax Identification Number (“TIN”) Matching Program is a service where an authorized agent submits Customer’s tax records that are subject to the provisions of IRC § 3406 to the “IRS Name and TIN Matching Program.” This service is used to verify that the recipient names and tax identification numbers are accurate, thereby reducing the number of “B” notices that are received. As per IRC § 3406, this service applies to the following tax forms: 1099 B, 1099 DIV, 1099 INT, 1099 MISC, 1099 OID and 1099 PATR. If selected on as part of Customer’s Service subscription, Customer must appoint Avalara or our designate as Customer’s agent for the purpose of submitting records to the IRS TIN Matching Program. Accordingly, if Customer has selected the TIN Matching Program as a part of the Services, Customer hereby appoints Avalara or Avalara’s designate as the transmitter of tax reporting information to the IRS Name and TIN Matching program on Customer’s behalf. This authorization remains in effect until this Agreement is terminated or until Customer revokes the authorization by providing Avalara notice of such revocation in writing.
f. Federal Government End Use Provisions. Avalara provides the Services, including related software and technology, for ultimate federal government end use solely in accordance with the following: Government technical data and software rights related to the Services include only those rights customarily provided to the public as defined in this Agreement. This customary commercial license is provided in accordance with FAR 12.211 (Technical Data) and FAR 12.212 (Software) and, for Department of Defense transactions, DFAR 252.227-7015 (Technical Data – Commercial Items) and DFAR 227.7202-3 (Rights in Commercial Computer Software or Computer Software Documentation). If a government agency requires rights not conveyed under this Agreement, then such rights must be separately negotiated and will be reflected in a mutually agreed upon written addendum to this Agreement.
3. TEMPORARY SERVICE SUSPENSION
a. Generally. Avalara will make a good faith effort to contact and provide notice to Customer in advance of suspension. As reasonably practicable under the circumstances, Avalara will endeavor to resolve together with Customer any circumstance that may give rise to Avalara’s suspension rights which include, without limitation, the following: (i) a material risk to the security or performance of the Services, the network or any other Avalara customer or business partner; (ii) use of the Services in violation of this Agreement; (iii) Customer has ceased to operate in the ordinary course, made an assignment for the benefit of creditors or similar disposition of Customer’s assets, or becomes the subject of any bankruptcy, reorganization, liquidation, dissolution or similar proceeding that is not resolved within 60 days of filing; or (iv) Customer is delinquent in its payment obligations for any undisputed fees. Unless otherwise agreed in signed writing, payment will be considered delinquent if not received within 15 days following the due date set forth on an applicable invoice. Avalara acknowledges that suspending Customer’s right to access or use some or part of the Services would be a drastic action, and, therefore, Avalara will not exercise this remedy except in good faith, together with pursuing other less drastic means to resolve the issue(s) giving rise to Avalara’s right to suspend the Services, including, without limitation, collaborating with Customer to isolate or mitigate the issue(s) giving rise to suspension and escalating unresolved issues to senior management of Customer and Avalara.
b. Effect of Suspension. If Avalara suspends Customer’s right to access or use some or all of the Services, then (i) Customer remains responsible for all fees and charges, including for Services to which Customer continue to have access, if any and (ii) Customer will not be entitled to any compensation or credits for any period of suspension, unless suspension was due to Avalara’s error or omission. Avalara will not erase any Customer Data during the suspension period.
c. Payment Disputes. Avalara will not exercise its suspension or termination rights or apply interest on late payments if Customer is disputing the applicable charges reasonably and in good faith, and is cooperating diligently, in a responsive and timely fashion, in order to resolve the dispute. Notwithstanding the foregoing, Customer must assert a payment dispute in writing to Avalara’s accounting department or Customer’s account representative within 30 days of the date of the invoice giving rise to the dispute.
4. PROPRIETARY RIGHTS
a. Use of the Services. Avalara grants Customer a nonexclusive, nontransferable (except in the case of an assignment in accordance with this Agreement) right, for the Subscription Term, to access and use the Services, solely for Customer’s and its Authorized Users’ internal business operations. Avalara reserves all other rights.
b. Customer Data. Customer retains all ownership rights in Customer Data, Customer’s Personal Information and Customer’s Confidential Information, including any intellectual property rights therein. Avalara may use Customer Data solely (i) for internal use in order to maintain, evaluate, develop and improve our Services and support; (ii) in order to respond to a Customer or an Authorized User’s support request; or (iii) to fulfill our obligations to Customer in accordance with this Agreement. Nothing in this Agreement transfers or conveys to Avalara any ownership interest in or to the Customer Data, Customer’s Personal Information or Customer’s Confidential Information.
c. Aggregate Data. Customer agrees that Avalara may aggregate Customer Data with other data and may use such Aggregate Data for its own purposes, provided that Avalara strictly complies in all respects with Laws and all confidentiality provisions and any related provision, of this Agreement. For clarity, any distribution or publication of Aggregate Data in which Customer (to include, without limitation, Customer’s products, services, location, purchasers or consumers) can reasonably be identified or re-identified is strictly prohibited.
d. Avalara’s Intellectual Property and Ownership Rights. As between Customer and Avalara, Avalara and Avalara’s licensors retain and own all right, title, and interest in all Intellectual Property rights in and to the Documentation, Avalara’s Confidential Information, and the Services(including any Inventions used, created or developed by Avalara or its employees or subcontractors in connection with this Agreement to the extent that the foregoing does not incorporate (i) any Customer Intellectual Property; or (ii) any “works for hire” created by Avalara for the exclusive use of Customer), and all enhancements or improvements to, or derivative works of the foregoing (collectively, “Avalara Intellectual Property”). Nothing in this Agreement transfers or conveys to Customer any ownership interest in or to Avalara Intellectual Property.
e. Suggestions. If Customer provides Avalara with any suggested improvements to the Services (“Suggestions”), then Customer also grants Avalara a nonexclusive, perpetual, irrevocable, paid up, royalty free, worldwide, transferable license with right to sublicense, to make, have made, sell, offer for sale, use, import, reproduce, distribute, display, perform, and make derivative works of the Suggestions, unless Customer has designated the Suggestions as confidential.
5. TERM AND TERMINATION
a. Initial Subscription Term. The initial period of this Agreement (the “Initial Subscription Term”) begins on the Contract Effective Date and ends after 1 calendar year, unless the Sales Order specifies a longer term.
b. Automatic Renewal. Upon expiration of the Initial Subscription Term, Customer’s subscription to the Services will automatically renew for successive 12 calendar month periods (each a “Renewal Subscription Term”), unless sooner terminated in accordance with this section 5.
c. Upgrades to the Service. The Service is purchased on an annual subscription basis for up to a specified number of Tax Forms per Subscription Term. Customer is entitled only to use up to the number of Tax Forms that Customer has indicated in the Sales Order. If Customer upgrades Customer’s Service subscription during a Subscription Term, then the Subscription Term for the upgraded Service will be coterminous with the current Subscription Term, and Avalara will charge Customer’s payment information on file, unless another payment method is specified, an amount equal to the difference between the original Service fee and the upgraded Service fee, which is, in effect, a prorated amount. If Customer subscribes to an additional Service, the Subscription Term for that Service will begin on the Contract Effective Date for that Service and Customer will be separately charged for the applicable activation and annual Service subscription fee for the additional Service.
d. Termination for Convenience. Either party may terminate this Agreement or Customer’s subscription to the Services effective upon expiration of the then current Subscription Term by providing the other party prior written notice of termination of at least the following length: if Customer is the terminating party, at least 30 days; if Avalara is the terminating party, at least 90 days.
e. Termination for Breach or Cause. Either party may terminate this Agreement or any affected Services by notice to the other: (i) if the other party materially breaches any of its obligations under this Agreement and, if the breach is capable of cure, fails to cure the breach within 30 days of receipt of notice of breach; (ii) upon the party ceasing to operate in the ordinary course, making an assignment for benefit of creditors or similar disposition of its assets, or becoming the subject of any bankruptcy, reorganization, liquidation, dissolution, or similar proceeding that is not resolved within 60 days of filing. Without limiting the foregoing, Customer materially breaches the Agreement by failing to pay any fees and Expenses within 15 days of their due date. Further, Avalara may terminate this Agreement by giving notice to Customer if (i) Customer is unable to resolve any issue leading to suspension of Customer’s Services to Avalara’s reasonable satisfaction within 15 days following notice of suspension or (ii) Avalara is compelled to do so in order to comply with a lawful request from a government entity.
f. Consequences of Termination for Breach or Cause. If Customer terminates this Agreement or the Services in accordance with the termination for breach or cause provisions, then Avalara will refund Customer a pro rata amount of any prepaid Service subscription fees (excluding, for clarification, any set up, activation, implementation time and materials or other fees) applicable to the unutilized portion of the Subscription Term of the terminated Services. If Avalara terminates the Agreement or Services in accordance with the termination for breach or cause provisions then Avalara will not refund Customer or relieve Customer from, and Customer remains obligated to pay, all fees attributable to the terminated Services, including those attributable to the unutilized portion of the terminated Subscription Term.
g. General Effects of Termination. Upon any termination of this Agreement: (i) all of Customer’s rights under this Agreement immediately terminate (with the exception of those expressly surviving termination); (ii) Customer remains liable for all fees, charges, Expenses and any other obligations Customer has incurred during Customer’s Subscription Term; (iii) upon request, each party will immediately return or, if instructed, destroy the other party’s Confidential Information in its possession or control; and (iv) Avalara will destroy or overwrite Customer Data and Personal Information within a reasonable period of time, subject to section 5(h), and Avalara’s backup and data retention policies, which will be subject to the Confidentiality provisions of this Agreement. The following sections will survive any termination of these this Agreement: 1, 2, 3(c), 4, 5(g-h), 6, 7, 9, 10 and 12.
h. Return and Retention of Data.
(i) During the Subscription Term, Avalara will maintain all of Customer’s Information for at least four years (i.e., the current input year and three prior years). The current and three prior years’ data will remain available on-line for immediate access at no additional cost to the Customer. Should Customer require access to data from a year other than the current plus three prior years, the files, if available, will be made available to Customer at an additional charge within a reasonable time frame, and will be provided as an export file in comma separated value (.csv) format, or other format commonly available, rather than available through the Service.
(ii) Avalara will make available to Customer an export file in comma separated value (.csv) format, or other format commonly available, of Customer Data stored as part of the Service if, within 60 days of the date of termination, Avalara receives from Customer a request for an export file. In order to reflect tax audit requirements, Avalara may retain certain Customer Data for at least 7 years from the date on which it was uploaded to or generated by the Services or for such length of time needed to comply with applicable law. Any Customer Data retained by Avalara will be subject to the confidentiality provisions of this Agreement.
6. FEES; BILLING; PAYMENT
a. Fees. Customer will pay all fees specified in each Sales Order or invoice as adjusted for any price increases pursuant to section 6(d). Except as otherwise specified in a Sales Order, (i) fees are quoted and payable in United States dollars; (ii) fees are based on the quantity of Services purchased and not actual usage; and (iii) payment obligations are non-cancelable and fees paid are nonrefundable, except as otherwise set forth herein. Avalara will automatically charge Customer’s payment information on file for any renewals, upgrades, overage fees and additional Services as incurred, unless otherwise set forth in a written agreement. For the Initial Subscription Term, overages related to the submission and processing of Tax Forms in excess of Customer’s particular Service subscription plan will be charged at the rate specified in the Sales Order and for each Renewal Subscription Term, Avalara’s then current overage rates will apply.
b. Subscription Plans. Customer’s subscription plan for the Services is specified in the applicable Sales Order. Customer may not reduce Customer’s commitment under the Service subscription plan specified in the Sales Order during the Service Subscription Term. Customer is not entitled to any refund of fees paid or relief from fees due if the volume of Services Customer actually uses is less than the volume Customer ordered, and Customer may not carry over any of the unused volume to Customer’s next Subscription Term. If Customer wishes to reduce the volume of a Service subscription plan, then Customer must notify Avalara at least 30 days before the start of the Renewal Subscription Term for the applicable Service; the reduction will be effective at the start of the Renewal Subscription Term.
c. Taxes. Customer is responsible for any applicable taxes, including without limitation, any sales, use, levies, duties or any value added or similar taxes (collectively, “Taxes”) payable with respect to Customer’s order of Services assessable by any local, state, provincial, federal or foreign jurisdiction. Unless expressly specified otherwise in any Sales Order, all fees, rates and estimates exclude Sales Taxes. If Sales Tax applies to your order of Services, it will be set forth on your invoice or other document reflecting fees owed, unless Customer provides Avalara with a valid tax exemption certificate. Avalara is solely responsible for taxes based upon Avalara’s net income, assets, payroll, property and employees.
d. Annual Increases. Unless otherwise agreed in writing, following the Initial Subscription Term, Service fees are subject to annual increases, which will become effective beginning upon the first day of the Renewal Subscription Term. Avalara will notify Customer of any increase at least 30 days’ prior to Customer’s Renewal Subscription Term; notice may be in the form of an invoice. If Customer objects to the increase, then Customer may elect to not renew its order of Services. Customer acknowledges that the following do not constitute fee increases: (i) additional fees for any upgrade or additional Service that Customer orders; and (ii) expiration of any discount or incentive programs to which Customer was previously entitled.
7. CONFIDENTIAL INFORMATION
a. Confidential Information. “Confidential Information” means all information designated by a party as confidential, or given the circumstances, would reasonably be understood by the receiving party to be confidential, and that is disclosed by either party to the other party, regardless of the form of disclosure, and includes, without limitation, (i) with respect to Avalara, the Service’s underlying software and technology and the Documentation, (ii) with respect to Customer, all Customer Data and Personal Information, and (iii) with respect to both parties, all information relating to business plans, customers and customer lists, data, designs, financial information, forecasts, inventions, know-how, methods, market analysis, patents, pricing, products, prerelease offerings, procedures, programs, research and development, security policies and processes, source and object code, strategies and other works of authorship of the disclosing party.
b. Exclusions. Confidential Information does not include information that the receiving party can establish: (i) (excepting with respect to Personal Information) has entered the public domain without the receiving party’s breach of any obligation owed to the disclosing party; (ii) has been rightfully received by the receiving party from a third party without confidentiality restrictions; (iii) is known to the receiving party without any restriction as to use or disclosure prior to first receipt by the receiving party from the disclosing party; or (iv) has been independently developed by the receiving party without use of or reference to the disclosing party’s Confidential Information. Restrictions on use or disclosure of Confidential Information do not apply to use or disclosure authorized in writing by the disclosing party. The terms of confidentiality under this Agreement will not limit either party’s right to independently develop or acquire products, software or services without use of or reference to the other party’s Confidential Information.
c. Disclosures Required by Law. If any applicable law, regulation or judicial or administrative order requires the receiving party to disclose any of the disclosing party’s Confidential Information (a “Disclosure Order”) then, unless otherwise prohibited by the Disclosure Order, the receiving party will promptly notify the disclosing party in writing prior to making any such disclosure in order to facilitate the disclosing party’s efforts to protect its Confidential Information. Following such notification, the receiving party will cooperate with the disclosing party, at the disclosing party’s reasonable expense, in seeking and obtaining protection for the disclosing party’s Confidential Information.
d. Restrictions on Use and Disclosure. Subject to the permitted disclosures set forth in section 7(c) (Disclosures Required by Law), the receiving party shall hold Confidential Information in strict confidence and shall not directly or indirectly disclose Confidential Information to third parties. The receiving party may disclose Confidential Information to an employee, advisor, or consultant (“Representatives”) who need such access in order to fulfill a party’s obligations under this Agreement on the condition that the receiving party: (i) ensures that such Representatives are bound by a written agreement that is as substantially protective as this Agreement; and (ii) accepts full responsibility for its Representatives’ use of the Confidential Information. The receiving party shall protect Confidential Information from unauthorized access and disclosure using the same degree of care, but in no event less than a reasonable standard of care, that it uses to protect its own Confidential Information and refrain from reverse engineering, decompiling or disassembling any Confidential Information.
e. Protection of Customer Data, Personal Information and Confidential Information. Avalara will implement and maintain commercially reasonable and appropriate technical, administrative and physical safeguards and security methods designed to prevent any unauthorized release, access to or publication of Customer Data, Confidential Information or Personal Information that Customer does not expressly authorize and subject to section 7(c) (Disclosures Required by Law). Avalara will implement processes and maintain procedures designed to comply with Laws and will facilitate Customer’s data security obligations with respect to Personal Information in Avalara’s possession or control to the extent that Customer is required to comply with the following: (i) the Health and Insurance Portability and Accountability Act of 1996 and the Health Information Technology for Economic and Clinical Health (HITECH) Act; (ii) Federal “Privacy of Consumer Financial Information” Regulation, (iii) the U.K. Data Protection Act 1998; (iv) Directive 95/46/EC of the European Parliament and of the Council (the “Directive”) and any applicable laws enacted by an EU member state implementing the requirements of the Directive; (v) the Australian Privacy Act 1988 (Cth.) and National Privacy Principles; and (vi) any amendments and successors to the aforementioned privacy laws.
f. Notice. Avalara will promptly notify Customer, as reasonably practicable under the circumstances (not to exceed 72 hours), of unauthorized access, use, or disclosure of Customer Data, Confidential Information or Personal Information within Avalara’s custody and control upon confirmation of the same; each party will reasonably cooperate with the other with respect to such unauthorized access, use, or disclosure, including its containment and investigation. Upon confirmation of any vulnerability or breach of Avalara’s security, Avalara will modify its processes and security program as necessary to remediate the vulnerability or breach, at Avalara’s sole cost and expense.
8. REPRESENTATIONS AND WARRANTIES
a. Mutual Warranties. Each party represents and warrants to the other party the following: (i) it has the right and legal authority to enter into this agreement and perform its obligations hereunder in the manner contemplated by this Agreement; (ii) this Agreement will not conflict with any other agreement entered into by it; and (iii) it does not conduct business for any unlawful purpose.
b. Avalara’s Warranties.
(i) Avalara warrants to Customer that: (A) the Services, as provided by Avalara to Customer, will perform in all material respects in accordance with its applicable, then current Documentation; and (B) Avalara will use commercially reasonable efforts, using then current versions of commercially available antivirus software, to ensure that the Services, as provided by Avalara to Customer under this Agreement, contain no computer virus, Trojan horse, worm, or other similar malicious code. Avalara does not warrant that the Services are free from all bugs, errors, or omissions.
(ii) As Avalara is reliant upon (A) thousands of state and local governmental agencies to timely update and provide Avalara with their correct and current tax rates, boundaries, rules and classifications (the “Tax Information”) and (B) Customer’s accurate configuration, set up, input and maintenance of Customer Data, Avalara provides no guarantee or assurance that the Services will at all times accurately determine Customer, Customer’s Affiliates or Authorized User’s tax liability.
(iii) If Avalara fails to conform to any of the foregoing warranties and if Avalara does not render the Services conforming within 30 days of Customer’s notifying Avalara of the nonconformance then, as Customer’s sole and exclusive remedy for any nonconformance, Customer may terminate this Agreement upon immediate notice to Avalara, and Avalara will refund Customer a pro rata amount of any prepaid Service subscription fees applicable to the unutilized portion of the Subscription Term of the terminated Service excluding, for clarification, any set up, activation (except if such nonconformance occurred in Customer’s Initial Subscription Term) implementation, time and materials or other fees or Expenses.
(iv) The warranties in this section 8(b) will automatically abate to the extent that the Services have been modified by persons other than Avalara’s employees or authorized representatives, or other than at Avalara’s express written direction. The warranties in this Agreement are for Customer’s sole benefit, and may not be extended to any other person or entity.
c. Customer’s Warranties. Customer represents and warrants to Avalara that: (i) the information Customer provides in connection with registration for the Services and any Renewal Subscription Term, including billing information, is current, accurate and complete to the best of Customer’s knowledge; (ii) Customer has not knowingly provided any false information to gain access to or use of any Avalara Intellectual Property; (iii) Customer is not on the United States Department of Treasury, Office of Foreign Asset Control’s list of Specially Designated National and Blocked Persons.
d. Disclaimer of Implied Warranties. EXCEPT AS EXPRESSLY PROVIDED HEREIN, NEITHER PARTY MAKES ANY WARRANTIES OF AN KIND, WHETHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, AND EACH PARTY SPECIFICALLY DISCLAIMS ALL IMPLIED WARRANTIES, INCLUDING ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW.
9. INDEMNIFICATION
a. Indemnification by Avalara. Avalara will defend Customer from and against claims, demands, proceedings, investigations or suits brought against Customer by any third party alleging that the use of the Services in accordance with this Agreement infringes an issued patent, copyright, trademark or other intellectual property right of such third party (collectively, an “Infringement”) and will indemnify Customer from any damages, reasonable attorneys’ fees and costs finally awarded against Customer or agreed to be paid by Customer in a written settlement approved in writing by Avalara that results from the Infringement.
b. Remedies. If the Services are subject to any claim of Infringement and, as a result, Customer’s use of the Avalara Services is enjoined, then Avalara will, at no cost to Customer, procure for Customer the right to continue using the Services or replace same with non-infringing or modified Services of materially equivalent functionality. If none of the foregoing is available on terms that are commercially reasonable for Avalara, then Avalara may terminate Customer’s right to access and use the Services that require the infringing Services, in which case Avalara will refund Customer a pro rata amount of any prepaid, unused Service subscription fees (excluding, for clarification, any activation and implementation fees, unless such indemnification obligation arises in Customer’s Initial Subscription Term) applicable to the unutilized portion of the Subscription Term of the terminated Services. Avalara has no obligation with respect to any actual or claimed Infringement if the Infringement is caused by Customer Data, use or modification of the Services other than as specified in the Documentation or this Agreement, or combination of the Services with any products, software, services, data or other materials not provided by Avalara or approved by Avalara in writing, if, but for such combination, the Infringement would not have occurred.
c. Indemnification by Customer. Customer will defend Avalara from and against claims, demands, proceedings, suits or investigations arising out of or in connection with any third party claim to the extent based on Customer Data, or Customer’s use of the Avalara Services, may be in breach of this Agreement, violates Laws or infringes the intellectual property rights of a third party and shall indemnify Avalara for any damages, reasonable attorneys’ fees and costs and expenses incurred by or finally awarded against Avalara or agreed to be paid by Avalara in a written settlement approved in writing by Customer.
d. Process. The obligations of a party (“Indemnitor”) to defend or indemnify the other (“Indemnitee”) under this section 9 are subject to the following: (i) the Indemnitee promptly informs the Indemnitor in writing of any claim within the scope of the Indemnitor’s defense or indemnity obligations set forth in this Agreement, provided that Indemnitor shall not be excused from its indemnity obligations for failure to provide prompt notice except to the extent that the Indemnitor is prejudiced by any such failure to provide prompt notice; (ii) the Indemnitor is given exclusive control of the defense of such claim and all negotiations relating to the settlement thereof (except that the Indemnitor may not make any admissions on the Indemnitee’s behalf or settle any such claim unless the settlement unconditionally releases the Indemnitee of all liability and the Indemnitee may participate in the defense of the claim at its sole cost and expense); and (iii) the Indemnitee reasonably assists the Indemnitor in all necessary respects in connection with the defense of the claim at the Indemnitor’s expense.
e. Exclusive Remedy. This section 9 (Indemnification) states the Indemnitor’s sole liability and the Indemnitee’s exclusive remedy with respect to any type of claim set forth in this section.
10. EXCLUSION OF CERTAIN CLAIMS AND LIMITATION OF LIABILITY
a. Exclusion of Certain Claims. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW AND EXCEPT FOR INSTANCES OF GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR ANY OTHER PARTY FOR ANY CONSEQUENTIAL, INDIRECT, SPECIAL, PUNITIVE, INCIDENTAL, EXEMPLARY OR LOST PROFITS DAMAGES OF ANY KIND, WHETHER FORESEEABLE OR UNFORESEEABLE (INCLUDING DAMAGES FOR LOSS OF DATA, GOODWILL, INVESTMENTS, USE OF MONEY OR USE OF FACILITIES, INTERRUPTION IN USE OR AVAILABILITY OF DATA, STOPPAGE OF OTHER WORK OR IMPAIRMENT OF OTHER ASSETS), EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, ARISING OUT OF (i) THE PERFORMANCE OR NONPERFORMANCE OF THIS AGREEMENT OR OF PRODUCTS, SOFTWARE OR SERVICES PROVIDED UNDER THIS AGREEMENT, OR (ii) ANY CLAIM, CAUSE OF ACTION, BREACH OF CONTRACT, INDEMNITY (EXCEPT TO THE EXTENT SUCH THIRD PARTY INDEMNIFICATION CLAIM INCLUDES THESE CATEGORIES OF DAMAGES), OR ANY EXPRESS OR IMPLIED WARRANTY, UNDER THIS AGREEMENT OR OTHERWISE, MISREPRESENTATION, NEGLIGENCE, STRICT LIABILITY, OR OTHER TORT. IN THE EVENT OF A PARTY’S BREACH OF ITS CONFIDENTIALITY OBLIGATIONS SET FORTH IN SECTION 7, THE EXCLUSIONS SET FORTH HEREIN SHALL NOT APPLY AND ANY DAMAGES WILL BE SUBJECT TO THE LIMITATION OF LIABILITY SET FORTH IN SECTION 10(b).
b. Limitation of Liability. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW AND EXCEPT FOR INSTANCES OF GROSS NEGLIGENCE OR WILLFUL MISCONDUCT BY EITHER PARTY, IN NO EVENT SHALL THE AGGREGATE LIABILITY OF EITHER PARTY EXCEED THE FEES ACTUALLY PAID OR PAYABLE BY CUSTOMER TO AVALARA UNDER THIS AGREEMENT IN THE 12-MONTH PERIOD IMMEDIATELY PRECEDING THE EVENT GIVING RISE TO SUCH A CLAIM, REGARDLESS OF WHETHER ANY ACTION OR CLAIM IS BASED IN CONTRACT, MISREPRESENTATION, WARRANTY, NEGLIGENCE, STRICT LIABILITY OR OTHER TORT OR OTHERWISE. THE FOREGOING DOES NOT APPLY TO EACH PARTY’S DEFENSE AND INDEMNIFICATION OBLIGATIONS, TO CUSTOMER’S OBLIGATIONS TO PAY FEES AND EXPENSES WHEN DUE AND PAYABLE, TO A BREACH OF A PARTY’S CONFIDENTIALITY OBLIGATIONS SET FORTH IN SECTION 7, TO CUSTOMER, CUSTOMER AFFILIATES OR AUTHORIZED USERS NONCOMPLIANCE WITH THE ACCEPTABLE USE POLICY, NOR TO ANY INFRINGEMENT OR MISAPPROPRIATION BY A PARTY OF ANY INTELLECTUAL PROPERTY RIGHTS OF THE OTHER PARTY.
c. General. Customer agrees that these exclusions and limitations apply even if the remedies are insufficient to cover all of the losses or damages of Customer, its Affiliates or Authorized Users. Customer agrees that without these limitations the fee for the Services would be significantly higher. Some jurisdictions do not allow the exclusion of certain warranties or the limitation or exclusion of liability for incidental or consequential damages. Accordingly, some or all of the above exclusions or limitations may not apply and the parties may have additional rights.
11. MODIFICATIONS
Avalara will provide Customer written notice of any modifications to this Agreement (a “Modification Notice”). If, in Customer’s reasonable assessment, the modifications materially and adversely affect Customer and Customer does not wish to accept such modifications, then Customer may terminate Customer’s subscription to the Services by notice to Avalara to that effect, subject to the following:
a. If the Modification Notice states that the modifications will become effective upon commencement of a Renewal Subscription Term, then Customer may terminate Customer’s subscription for convenience prior to commencement of the Renewal Subscription Term, in accordance with section 5(d) (Termination for Convenience).
b. If the Modification Notice states that the modifications will become effective during the then current Subscription Term, then Customer may terminate Customer’s subscription to the affected Service at any time within the 30 day period following the date of the Modification Notice. Customer’s termination will become effective on the later to occur of: (a) the date on which Customer delivers the termination notice, or (b) the date on which the applicable modifications become effective provided that Avalara shall continue to provide the Services to Customer as needed to manage a reasonable transition to another vender, not to exceed 60 days, and at Avalara’s then current rates for Services to which Customer subscribes. If Customer terminates a Service subscription pursuant to this section 11(b), then Customer will be entitled to a pro rata refund of any prepaid Service subscription fees for the terminated Service for the unutilized portion of the Subscription Term. For clarification, Service subscription fees do not include any set up, activation, implementation, or other Expenses incurred in connection with the Services. Notwithstanding the foregoing, if Customer elects to terminate during Customer’s Initial Subscription Term as a result of the Modification Notice, then Customer will be reimbursed for any activation fees.
c. If Customer does not terminate the affected Service subscription as specified in this section 11, then Customer will be bound by the modified terms beginning upon the effective date set forth in the Modification Notice.
12. GENERAL PROVISIONS
a. Relationship of the Parties; No Professional Tax Opinions or Advice. The parties are independent contractors. This Agreement does not create a partnership, franchise, joint venture, agency, or fiduciary or employment relationship. Customer acknowledges and agrees that Avalara’s other business partners, including any third party retained by Customer to provide computer consulting services, are independent of Avalara and are not Avalara’s agents. The parties are each responsible for paying their own employees, including employment related taxes and insurance. Customer acknowledges and agrees that Avalara does not provide tax or legal advice, including legal opinions, tax opinions, or tax management advice specific to the facts and circumstances of Customer’s business; Customer is encouraged to conduct due diligence and seek the assistance of a qualified legal, tax or accounting professional.
b. Export Compliance. Each party will comply with the export laws and regulations of the United States and other applicable jurisdictions in providing and using the Services. Without limiting the foregoing, Customer represents that, to the best of Customer’s knowledge, Customer, Customer’s Affiliates, or Customer’s Users are not prohibited by any government from receiving any exports.
c. Promotional Use. Neither party may issue any press release regarding this Agreement. Either party may include the name and logo of the other party in lists of customers or vendors without the other party’s prior written consent.
d. Third Party Applications. Avalara is not responsible for nor does Avalara in any way endorse any Third Party Applications or websites to which the Avalara Website or Services provides links.
e. Other Technology or Services; Changes. Customer acknowledges and agrees that Customer has not relied on any future availability of any service offerings, technology, or enhanced or updated features or functionality, and that the Services do not include any audit support.
f. Governing Law and Venue. This Agreement will be governed by and interpreted in accordance with the internal laws of the State of New York and, where such laws are preempted by the laws of the United States, by the internal laws of the United States, in each case without regard to (a) conflicts of laws principles, and (b) the applicability, if any, of the United Nations Convention on Contracts for the International Sale of Goods. Any disputes, actions, claims or causes of action arising out of or in connection with this Agreement or the Services will be subject to the exclusive jurisdiction and venue of the state and federal courts located as follows: If Customer is defendant, in the state and county courts located in the state and county of the defendant’s corporate headquarters; If Avalara is the defendant, in the state and county courts located in Seattle, Washington USA, and each party waives any claim that a more convenient forum can be found.
g. Equitable Relief. Each party acknowledges that damages may be an inadequate remedy if the other party, the other party’s Affiliates or Authorized Users violate its obligations under this Agreement pertaining to the protection, security or integrity of the other party’s Confidential Information, technology or Intellectual Property. Accordingly, each party shall have the right, in addition to any other rights such party may have, to seek in any court of competent jurisdiction, temporary, preliminary and permanent injunctive relief to restrain any breach, threatened breach, or otherwise to specifically enforce such obligations, without any obligation to post any bond or similar security.
h. Legal Actions and Expenses. Except with respect to any infringement or misappropriation of any Intellectual Property rights, misuse or unauthorized disclosure of Confidential Information or Personal Information, or Customer’s failure to pay fees and expenses when due and payable, neither party may bring any action arising out of or relating to this Agreement more than 2 years after the cause of action accrued.
i. Force Majeure. Neither party will be responsible for failure or delay of performance if caused by reason of any circumstances beyond its reasonable control, including any act of God, labor disputes or other industrial disturbances, systemic electrical, telecommunications, or other utility failures, earthquake, storms or other elements of nature, blockages, embargoes, riots, acts or orders of government, or acts of terrorism or war, provided, however, that the affected party will use all commercially reasonable efforts to avoid or remove such causes of nonperformance and will proceed whenever such causes are removed or cease. Notwithstanding the foregoing, if such force majeure event remains for greater than 30 days, either may terminate this agreement and Avalara will provide a pro-rated refund to Customer for any prepaid Services that have been unused as of the date of termination.
j. Notices. Avalara will communicate announcements of general interest (e.g., notice of an update made to the Services, upcoming webinars, rate and boundary changes, etc.) by email or by posting it on the Avalara Website or Customer’s console. Avalara will provide Customer with any legal notices by first class mail or national overnight carrier to the mailing or email address Customer provided Avalara during Customer’s registration for the Services, or to a substitute, updated mailing or email address that Customer has provided to Avalara for these purposes. Customer is responsible for keeping its mailing and email address current with Avalara. Except as otherwise specified in this Agreement, all account notices to be given to Avalara under this Agreement must be in writing and sent to customerloyalty@Avalara.com and any legal notices must be in writing and sent to legal@avalara.com or to Avalara’s headquarters’ location then specified on the Avalara Website, attention: Legal Department.
k. Successors and Assigns. Neither party may assign any of its rights or obligations under this Agreement without the other party’s prior written consent, which may not be unreasonably withheld or delayed; provided, however, that either party may assign all (but not some) of its rights and obligations to any entity into or with which it is merged, or which acquires all or substantially all of its assets, or which is an Affiliate of such party unless the assignee is a competitor of either party. It is not unreasonable for a party to withhold consent to an assignment to a competitor. Any attempt to assign this Agreement other than in accordance with this section 12(k) will be null and void. Subject to the foregoing, this Agreement will bind and inure to the benefit of each party’s permitted successors and assigns.
l. Severability. If any provision of this Agreement is determined to be invalid or unenforceable in any relevant jurisdiction, then to the fullest extent permitted by law: (i) it will be deemed modified to the extent necessary to make it enforceable in that jurisdiction and consistent with the original intent of the parties; (ii) the affected provision will remain in full force and effect; and (iii) all other provisions of this Agreement will remain in full force and effect.
m. Waiver. No waiver of or with respect to any provision of this Agreement, nor consent by a party to the breach of or departure from any provision of this Agreement, will in any event be binding on or effective against such party unless it is in writing and signed by such party, and then the waiver will be effective only in the specific instance and for the purpose for which it is given.
n. Captions and Headings. The captions and headings are inserted in this Agreement are for convenience only, and will not be deemed to limit or describe the scope or intent of any provision of this Agreement.
o. Entire Agreement. This Agreement constitutes and embodies the entire agreement and understanding between the parties with respect to the subject matter hereof and supersedes all prior or contemporaneous written, electronic or oral communications, representations, agreements or understandings between the parties with respect thereto. Except as specified in section 11, this Agreement may not be modified or amended except by a written instrument executed by both parties. Customer’s standard terms of purchase (including purchase order terms), if any, are inapplicable. If there is any conflict between the content of this Agreement, except to the extent expressly specified otherwise in the applicable document and any Sales Order, then the following order of precedence applies: (i) this Agreement and (ii) the Sales Order.
13. PURCHASE THROUGH DISTRIBUTORS
The following section only applies to Customers purchasing Avalara through an authorized Avalara Distributor. If you are uncertain as to the applicability of this section to your purchase of Avalara Services, please contact your Avalara account executive or our web site help center for further information.
a. Avalara Distributors. If Customer acquired the Services from an Avalara Distributor, then this Agreement is not exclusive of any rights Customer obtains under the Distributor Agreement; however, if there is any conflict between the provisions of this Agreement and the Distributor Agreement, then the provisions of this Agreement will prevail. If an Avalara Distributor has granted Customer any rights that Avalara does not also directly grant to Customer in this Agreement, or that conflict with this Agreement, then Customer’s sole recourse with respect to such rights is against the Avalara Distributor.
b. Subscriptions through an Avalara Distributor. If Customer ordered the Services through an Avalara Distributor, then sections 5(a) – 5(d) are inapplicable, and the Subscription Term will begin on the Contract Effective Date and, subject to the remainder of section 5, it will expire, renew and terminate in accordance with the terms of the Distributor Agreement.
c. Purchases through an Avalara Distributor. If Customer ordered the Services through an Avalara Distributor, then the provisions of section 6 do not apply to Customer, and Customer’s billing and payment rights and obligations are governed by the Distributor Agreement. However, if the Avalara Distributor from whom Customer purchased the Services fails to pay Avalara any amounts due in connection with Customer’s use of the Services, then Avalara may suspend Customer’s Account, with or without notice to Customer. Customer agrees that Customer’s remedy in the event of such suspension is solely against the Avalara Distributor and that Avalara is not liable to Customer in any manner for such suspension.