American Digital Corporation – Terms and Conditions of Software, Product, and Professional Services

The Terms and Conditions of product sales and services projects are limited to these items described below.   These Terms and Conditions constitute a binding contract between Customer and Seller (“American Digital Corporation”) and are referred to herein as either “Terms and Conditions” or this “Agreement”.  Customer accepts these Terms and Conditions by making a purchase from or placing an order with Seller requesting products or requesting Seller to perform or procure Professional Services.  Additions, modifications, or deletions to any Term or Condition described within must be agreed to in writing before purchase of product or beginning a Professional Service engagement (can be containing within a Statement of Work).

Governing Law

This Agreement is deemed to be made under and shall be construed according to the Laws of the State of Illinois.  Except in the case of nonpayment, neither party may institute any action in any form arising out of these Terms and Conditions more than one (1) year after the cause of action has arisen. The rights and remedies provided Seller under these Terms and Conditions are cumulative, are in addition to, and do not limit or prejudice any other right or remedy available at law or in equity.

Payment

Orders are not binding upon Seller until accepted by Seller. Customer agrees to pay the total purchase price for the Products plus shipping (to the extent shipping is not prepaid by Customer).  Payments can be made via paper check or ACH credit.  Terms of payment are net 30 unless otherwise agreed to in writing within a Purchase Order and/or Statement of Work.  In connection with Services being performed pursuant to a Statement of Work, Customer will pay for the Services in the amounts and in accordance with any payment schedule set forth in the applicable Statement of Work. If no payment schedule is provided, Customer will pay for the Services as invoiced by Seller. Invoices are due and payable within the time period specified on the invoice, measured from the date of invoice, subject to continuing credit approval by Seller. Seller, or any of its Affiliates on behalf of Seller may issue an invoice to Customer. Seller may invoice Customer separately for partial shipments, and Seller may invoice Customer for all of the Services described in a Statement of Work or any portion thereof. Customer agrees to pay interest on all past-due sums at the lower of one and one-half percent (1.5%) per month or the highest rate allowed by law. Customer will pay for, and will indemnify and hold Seller and its Affiliates harmless from, any applicable sales, use, transaction, excise or similar taxes and any federal, state or local fees or charges (including, but not limited to, environmental or similar fees), imposed on, in respect of or otherwise associated with any Statement of Work, the Products or the Services. Customer must claim any exemption from such taxes, fees or charges at the time of purchase and provide Seller with the necessary supporting documentation. In the event of a payment default, Customer will be responsible for all of Seller’s costs of collection, including, but not limited to, court costs, filing fees and attorneys’ fees. In addition, if payments are not received as described above, Seller reserves the right to suspend Services until payment is received. Customer hereby grants to Seller a security interest in the Products to secure payment in full. Customer authorizes Seller to file a financing statement reflecting such security interest. Except as otherwise specified on an

applicable Statement of Work, Customer will reimburse Seller for all reasonable out-of-pocket expenses incurred by Seller in connection with the performance of the Services, including, but not limited to, travel and living expenses.

Pricing Estimates

All prices provided as estimates as part of a hardware proposal and/or Statement of work are valid for only 30 days from the date listed on the proposal.  Changes to any proposal may result in additional charges based on configuration or scope changes.  All estimates are for budgetary purposes only until final configurations or scope of Professional Services are agreed to by both parties in writing.

 

Professional Services

Customers may purchase professional services from or through Seller. Certain Professional Services may be provided by third parties, including, but not limited to, extended warranty service by manufacturers, and are sold by Seller as distributor or sales agent (“Third Party Services”).

Where Services are ordered in a Statement of Work, each Statement of Work hereby incorporates these Terms and Conditions and constitutes a separate agreement with respect to the Professional Services performed. In the event of an addition to or a conflict between any term or condition of the Statement of Work and these Terms and Conditions, these Terms and Conditions will control, except as expressly amended in the applicable Statement of Work by specific reference to this Agreement. Each such amendment will be applicable only with respect to such Statement of Work and not to future Statements of Work. Changes to the scope of the Services described in a Statement of Work will be made only in a writing executed by authorized representatives of both parties. Seller will have no obligation to commence work in connection with any such change, unless and until the change is agreed upon in that writing executed by both parties. All such changes to the scope of the Services will be governed by these Terms and Conditions and the applicable Statement of Work. Each Statement of Work may be signed in separate counterparts each of which shall be deemed an original and all of which together will be deemed to be one original.

Access

Seller may perform the Professional Services at Customer’s place of business, at Seller’s own facilities or such other locations as Seller and Customer deem appropriate. When the Services are performed at Customer’s premises, Seller will attempt to perform such Services within normal business hours (8 AM – 5 PM) unless otherwise jointly agreed to by the parties. Customer will also provide Seller access to Customer’s staff and any other Customer resources (and when the Services are provided at another location designated by Customer, the staff and resources at such location) that Seller determines are useful or necessary for Seller to provide the Services. When the Services are provided on Customer’s premises or at another location designated by Customer, Customer agrees to maintain adequate insurance coverage to protect Seller and Customer’s premises and to indemnify and hold Seller and its Affiliates, and its and their agents and employees harmless from any loss, cost, damage or expense (including, but not limited to, attorneys’ fees and expenses) arising out of any product liability, death, personal injury or property damage or destruction occurring at such location in connection with the performance of the Services, other than solely as a result of Seller’s gross negligence or willful misconduct.

Warranties

Customer understands that Seller is not the manufacturer of the Products purchased by Customer hereunder and the only warranties offered are those of the manufacturer, not Seller or its Affiliates. In purchasing the Products, Customer is relying on the manufacturer’s specifications only and is not relying on any statements, specifications, photographs or other illustrations representing the Products that may be provided by Seller or its Affiliates. Seller and its affiliates hereby expressly disclaim all warranties either express or implied, related to products, including, but not limited to, any warranty of title, accuracy, merchantability or fitness for a particular purpose, warranty of non-infringement, or any warranty relating to third party services. The disclaimer contained in this paragraph does not affect the terms of any manufacturer’s warranty. Customer expressly waives any claim that it may have against Seller or its Affiliates based on any product liability or infringement or alleged infringement of any patent, copyright, trade secret or other intellectual property rights (each a “Claim”) with respect to any Product and also waives any right to indemnification from Seller or its Affiliates against any such Claim made against Customer by a third party. Customer acknowledges that no employee of Seller or its Affiliates is authorized to make any representation or warranty on behalf of Seller or any of its Affiliates that is not in this Agreement.

Seller makes no warranties to the Customer and the Customer hereby acknowledges that Seller makes no warranties in regard to the applicability of all laws and regulations affecting, without limitation the manufacture, performance, sale, packaging and labelling of the Products which are in force within the Customer’s territory.

Customer further acknowledges and agrees that Seller makes no representations, warranties or assurances that the Products are designed for or suitable for use in any high risk environment, including but not limited to aircraft or automobile safety devices or navigation, life support systems or medical devices, nuclear facilities, or weapon systems, and Customer agrees to indemnify Seller in connection with any such use of the Products. Customer further agrees to review and comply with the manufacture’s disclaimers and restrictions regarding the use of the Products in high risk environments.

Seller warrants Professional Services will be performed in a good and workmanlike manner. Customer’s sole and exclusive remedy and Seller’s entire liability with respect to this warranty will be, at the sole option of Seller, to either (a) use its reasonable commercial efforts to re-perform or cause to be re-performed any Services not in substantial compliance with this warranty or (b) refund amounts paid by Customer related to the portion of the Services not in substantial compliance; provided, in each case, Customer notifies Seller in writing within five (5) business days after performance of the applicable Professional Services. Except as set forth herein or in any statement of work that expressly amends seller’s warranty, and subject to applicable law, seller makes no other, and expressly disclaims all other, representations, warranties, conditions or covenants, either express or implied (including without limitation, any express or implied warranties or conditions of fitness for a particular purpose, merchantability, durability, title, accuracy or non-infringement) arising out of or related to the performance or non-performance of the services, including but not limited to any warranty relating to third party services, any warranty with respect to the performance of any hardware or software used in performing services and any warranty concerning the results to be obtained from the services. This disclaimer and exclusion shall apply even if the express warranty and limited remedy set forth herein fails of its essential purpose. Customer acknowledges that no representative of seller or of its affiliates is authorized to make any representation or warranty on behalf of seller or any of its affiliates that is not in this agreement or in a statement of work expressly amending Seller’s warranty.

Customer shall be solely responsible for daily back-up and other protection of its data and software against loss, damage or corruption. Customer shall be solely responsible for reconstructing data (including but not limited to data located on disk files and memories) and software that may be lost, damaged or corrupted during the performance of Services.  Seller, its affiliates, and its and their suppliers, subcontractors and agents are hereby released and shall continue to be released from all liability in connection with the loss, damage or corruption of data and software, and customer assumes all risk of loss, damage or corruption of data and software in any way related to or resulting from the Professional Services.

Seller will not be responsible for and no liability shall result to Seller or any of its Affiliates for any delays in delivery or in performance which result from any circumstances beyond Seller’s reasonable control, including, but not limited to, Product unavailability, carrier delays, delays due to fire, severe weather conditions, failure of power, labor problems, acts of war, terrorism, embargo, acts of God or acts or laws of any government or agency. Any shipping dates or completion dates provided by Seller or any purported deadlines contained in a Statement of Work or any other document are estimates only.

Seller reserves the right to make adjustments to pricing, Products and Service offerings for reasons including, but not limited to, changing market conditions, Product discontinuation, Product unavailability, manufacturer price changes, supplier price changes and errors in advertisements. All orders are subject to Product availability and the availability of Personnel to perform the Services. Therefore, Seller cannot guarantee that it will be able to fulfill Customer’s orders. If Professional Services are being performed on a time and materials basis, any estimates provided by Seller are for planning purposes only.

Limitation of Liability

Under no circumstances and notwithstanding the failure of essential purpose of any remedy set forth herein, will seller, its affiliates or its or their suppliers, subcontractors or agents be liable for: (a) any incidental, indirect, special, punitive or consequential damages including but not limited to, loss of profits, business, revenues or savings, even if seller has been advised of the possibilities of such damages or if such damages are otherwise foreseeable, in each case, whether a claim for any such liability is premised upon breach of contract, warranty, negligence, strict liability or other theory of liability; (b) any claims, demands or actions against customer by any third party; (c) any loss or claim arising out of or in connection with customer’s implementation of any conclusions or recommendations by seller or its affiliates based on, resulting from, arising out of or otherwise related to the products or services; or (d) any unavailability of the product for use or any lost, damaged or corrupted data or software. in the event of any liability incurred by seller or any of its affiliates, the entire liability of seller and its affiliates for damages from any cause whatsoever will not exceed the lesser of: (a) the dollar amount paid by customer for the product(s) giving rise to the claim or the specific services giving rise to the claim; or (b) $50,000.00.

Limited License

Customer’s sole rights to the work product, materials and other deliverables to be provided or created (individually or jointly) in connection with the Services, including but not limited to, all inventions, discoveries, methods, processes, formulae, ideas, concepts, techniques, know-how, data, designs, models, prototypes, works of authorship, computer programs, proprietary tools, methods of analysis and other information (whether or not capable of protection by patent, copyright, trade secret, confidentiality, or other proprietary rights) or discovered in the course of performance of this Agreement that are embodied in such work or materials (“Work Product”) will be, upon payment in full, a non-transferable, non-exclusive, royalty-free license to use such Work Products solely for Customer’s internal use. Customer will have no ownership or other property rights thereto and Customer shall have no right to use any such Work Product for any other purpose whatsoever. Customer acknowledges that Sellers may incorporate intellectual property created by third parties into the Work Product (“Third Party Intellectual Property”). Customer agrees that its right to use the Work Product containing Third Party Intellectual Property may be subject to the rights of third parties and limited by agreements with such third parties.

Confidential Information

Each party anticipates that it may be necessary to provide access to information of a confidential nature of such party, the Affiliates or a third party (hereinafter referred to as “Confidential Information”) to the other party in the performance of this Agreement and any Statement of Work. “Confidential Information” means any information or data in oral, electronic or written form which the receiving party knows or has reason to know is proprietary or confidential and which is disclosed by a party in connection with this Agreement or which the receiving party may have access to in connection with this Agreement, including but not limited to the terms and conditions of each Statement of Work. Confidential Information will not include information which: (a) becomes known to the public through no act of the receiving party; (b) was known to the receiving party, or becomes known to the receiving party from a third party having the right to disclose it and having no obligation of confidentiality to the disclosing party with respect to the applicable information; or (c) is independently developed by agents, employees or subcontractors of the receiving party who have not had access to such information. To the extent practicable, Confidential Information should be clearly identified or labeled as such by the disclosing party at the time of disclosure or as promptly thereafter as possible, however, failure to so identify or label such Confidential Information will not be evidence that such information is not confidential or protectable.

Each party agrees to hold the other party’s Confidential Information confidential for a period of three (3) years following the date of disclosure and to do so in a manner at least as protective as it holds its own Confidential Information of like kind but to use no less than a reasonable degree of care. Disclosures of the other party’s Confidential Information will be restricted (i) to those individuals who are participating in the performance of this Agreement or the applicable Statement of Work and need to know such Confidential Information for purposes of providing or receiving the Products or Services or otherwise in connection with this Agreement or the applicable Statement of Work, or (ii) to its business, legal and financial advisors, each on a confidential basis. Each party agrees not to use any Confidential Information of the other party for any purpose other than the business purposes contemplated by this Agreement and the applicable Statement of Work. Upon the written request of a party, the other party will either return or certify the destruction of the Confidential Information of the other party.

If a receiving party is required by law, rule or regulation, or requested in any judicial or administrative proceeding or by any governmental or regulatory authority, to disclose Confidential Information of the other party, the receiving party will give the disclosing party prompt notice of such request so that the disclosing party may seek an appropriate protective order or similar protective measure and will use reasonable efforts to obtain confidential treatment of the Confidential Information so disclosed.

Termination

Either party may terminate performance of a Statement of Work for cause if the other party fails to cure a material default in the time period specified herein. Any material default must be specifically identified in a written notice of termination. After written notice, the notified party will, subject to the provision of warranties herein, have thirty (30) days to remedy its performance except that it will only have ten (10) days to remedy any monetary default. Failure to remedy any material default within the applicable time period provided for herein will give cause for immediate termination, unless such default is incapable of being cured within the time period in which case the defaulting party will not be in breach (except for Customer’s payment obligations) if it used its reasonable efforts to cure the default. In the event of any termination of the Services or a Statement of Work, Customer will pay Seller for all Services performed and expenses incurred up to and including the date of termination plus any termination fee if one is set forth in the applicable Statement of Work. In such event Customer will also pay Seller for any out-of-pocket demobilization or other direct costs resulting from termination. Upon termination, all rights and obligations of the parties under this Agreement will automatically terminate except for any right of action occurring prior to termination, payment obligations and obligations that expressly or by implication are intended to survive termination (including, but not limited to, limitation of liability, indemnity, confidentiality, or licensing of Work Product and this survival provision).

Arbitration

Any claim, dispute, or controversy (whether in contract, tort or otherwise, whether preexisting, present or future, and including, but not limited to, statutory, common law, intentional tort and equitable claims) arising from or relating to the Products, Professional Services, the interpretation or application of these Terms and Conditions or any Statement of Work or the breach, termination or validity thereof, the relationships which result from these Terms and Conditions or any Statement of Work (including, to the full extent permitted by applicable law, relationships with third parties who are not signatories hereto), or Seller’s or any of its Affiliates’ advertising or marketing (collectively, a “Claim”) will be resolved, upon the election of any of seller, customer or the third parties involved, exclusively and finally by binding arbitration. If arbitration is chosen, it will be conducted pursuant to the Rules of the American Arbitration Association. If arbitration is chosen by any party with respect to a Claim, neither Seller nor Customer will have the right to litigate that Claim in court or to have a jury trial on that Claim or to engage in pre-arbitration discovery, except as provided for in the applicable arbitration rules or by agreement of the parties involved. Further, Customer will not have the right to participate as a representative or member of any class of claimants pertaining to any Claim. Notwithstanding any choice of law provision included in these Terms and Conditions, this arbitration agreement is subject to the Federal Arbitration Act (9 U.S.C. §§ 1-16). The arbitration will take place exclusively in Chicago, Illinois. Any court having jurisdiction may enter judgment on the award rendered by the arbitrator(s). Each party involved will bear its own cost of any legal representation, discovery or research required to complete arbitration. The existence or results of any arbitration will be treated as confidential. Notwithstanding anything to the contrary contained herein, all matters pertaining to the collection of amounts due to Seller arising out of the Products or Services will be exclusively litigated in court rather than through arbitration.

Reference

Seller will have the right to use Customer name in marketing and advertising materials with permission of Customer, which will not be unduly denied.

Customer consents signatures (or copies of signatures sent via electronic means) are the equivalent of written and signed documents.  Customer may issue a purchase order however any additional or different terms and conditions contained in any such purchase order or any other document other than a signed Statement of Work will be null and void.

 

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