ZUMASYS TERMS AND CONDITIONS

1.         Scope.  These Terms and Conditions (“Terms”) are incorporated into all quotations, bids, proposals, and offers made by Zumasys, Inc., and its affiliates (collectively, “Zumasys”) and all orders, work orders, and purchase orders accepted by Zumasys for all sales of services, software, hardware, and other products (collectively, “Products and Services”) by Zumasys to a Zumasys customer (“Customer”). The obligations and warranties stated in these Terms are provided solely by the entity that provides the Products and Services, and each entity separately shall be responsible solely for the portion of the Products and Services that entity provides to the Customer.  These Terms supersede and replace all of the terms and conditions of any Customer purchase order and other procurement documents issued by a Customer.  The acceptance by Zumasys of a Customer order is expressly conditioned upon Customer agreeing to these Terms.  All references to “sell”, “purchase”, or similar terms used in these Terms, when applied to software, means a limited, non-exclusive license to use the software as stated in the applicable Zumasys software license agreement.   

2.         Prices.  Zumasys will provide pricing for the Products and Services to Customer in writing.  All pricing will be subject to change on 30 days prior written notice from Zumasys.  If Zumasys provides an estimated total charge for time and materials, the estimate will be for planning purposes only. Zumasys charges will be based on actual time and materials expended or Customer’s actual or authorized use, subject to any specified minimum commitment.  Prices do not include shipping or insurance, which will be paid by Customer.  Customer shall pay all taxes related to the purchase and sale of the Products and Services other than Zumasys income taxes.  Taxes will be added to the Customer invoice unless Customer provides Zumasys with an exemption certificate acceptable to the taxing authorities.  Zumasys is under no obligation to accept Customer orders.  In order to bind Zumasys, Zumasys must confirm acceptance of an order in writing (including by email).

3.         Payment. All payments from Customer to Zumasys are due in full upon receipt of invoice unless Customer has applied for, and Zumasys has approved, other payment terms in writing signed by Zumasys.  All payments must be made in currency as stated on the invoice. If currency is other than US$ than payment must be made by electronic transfer to a bank or other financial institution of Zumasys’ choice. All payments in US$ may be made by electronic transfer, check or credit card. Any late payment will be subject to a late payment charge of 10% per annum or the maximum rate permitted by applicable law, whichever is less.  Additionally, if Customer does not timely make payment in full, Zumasys may, as nonexclusive remedies, (1) cancel Customer orders and (2) withhold delivery of any Products and Services. 

4.         Delivery.  Zumasys will deliver all Software electronically. In the event hardware is included in a Customer purchase, delivery dates and ship dates are estimates only and Zumasys has no liability for late shipments.  All shipments will be made at Customer’s risk.  Zumasys reserves the right to deliver in installments. All installments may be separately invoiced and must be paid when due without regard to subsequent deliveries. Delay in delivery of any installment will not relieve Customer of its obligation to accept remaining deliveries. 

5.         Third Party Providers.  If Customer purchases Products and Services provided by third parties and resold by Zumasys, Zumasys is not responsible for the actions or statements of any third party, or the obligations any third party may have to Customer, or any Products and Services a third party may supply to Customer under their agreements.  Zumasys may on or more occurrences provide third party Products and Services which Zumasys is entitled to warranties from the manufacturers or suppliers.  Zumasys shall pass through to Customer the benefits of the warranties to the extent Zumasys is able as directed by Customer.

6.         Maintenance and Support.  Zumasys will not be obligated to perform any maintenance, support, or upgrades for any software provided by Zumasys except as agreed by Zumasys in writing.   

Notice of cancellation of any support and maintenance services must be delivered by Customer to Zumasys at least 90 days prior to the renewal date or the support and maintenance services agreement will automatically renew from year-to-year until terminated by 90-day prior written notice by either party. Zumasys is not obligated to send a renewal reminder to Customer.

If Customer desires to reinstate maintenance services that have lapsed, the following applies:

• For a reinstatement where it is “less than” two years since the maintenance anniversary (either maintenance cancelled or payments not made prior to the maintenance anniversary):

The price to reinstate is 50% of the then-current undiscounted licence list price, and will include maintenance for one year.

• For a reinstatement where it is “more than” two years since the maintenance anniversary (either maintenance cancelled or payments not made prior to the maintenance anniversary):

The price to reinstate is the then current undiscounted licence list price, and will include maintenance for one year.

7.         Limited Warranty and Exclusions.

7.1       Limited Warranty.  Zumasys warrants to Customer that, for a period of 90 days after the date of shipment (including electronic delivery of an enabling key) from Zumasys, Zumasys’ proprietary software will perform substantially as described in the then-current, generally available licensed software user guides.

7.2       Exclusions.  Zumasys does not warrant that the software will perform without error or that it will run without interruption. Zumasys provides no warranty, and will have no responsibility, for any claim arising out of: (a) modification of the software made by anyone other than Zumasys; or (b) use of the software in combination with any operating system not authorized in the user manual, or with hardware or software forbidden by the user manual.  Zumasys does not warrant any third party Products and Services.  Despite any other provision of Section 7, during any free evaluation period, software is provided to Customer “AS IS” and without warranty of any kind.

            7.3       Exclusive Remedy.  If Zumasys verifies that the software does not comply with the warranty stated in this Section 7, Zumasys will, at its election, either (a) repair the defective software, (b) replace the defective software, or (c) refund the purchase price paid for the defective software.  These remedies will be pre-conditioned on Customer’s return of the defective software to Zumasys (or destruction if electronic delivery), at Customer’s expense.  Replacement product will be warranted from the date of Zumasys’ shipment (including electronic delivery) of the replacement.  This paragraph constitutes Customer’s sole and exclusive remedy and Zumasys’ entire liability for breach of warranty. 

            7.4       Disclaimer. EXCEPT AS STATED IN THIS SECTION 7, ZUMASYS MAKES NO WARRANTIES OF ANY KIND, WHETHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, INCLUDING ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT. 

8.  Limitation of Liability. 

            8.1       Force Majeure.  Zumasys will not be liable for delays, inability to perform, or loss, damage, or destruction to the extent caused by any event or circumstance, regardless of whether foreseeable, that was not caused by Zumasys (“Force Majeure Event”). Unless the Customer knows, or reasonably should know of the Force Majeure Event, Zumasys shall promptly notify Customer of the occurrence of the Force Majeure Event, the effect on performance, and how long Zumasys expects it to last.  During the Force Majeure Event, (a) Zumasys shall use reasonable effort to limit damages to Customer and to resume its performance under these Terms and (b) Customer shall continue to perform its obligations as stated in these Terms, including making full and on-time payments to Zumasys.

            8.2       Exclusion of Types of Damages.  IN NO EVENT WILL ZUMASYS OR ITS OFFICERS, DIRECTORS, AFFILIATES, AGENTS OR EMPLOYEES (THE “ZUMASYS PARTIES”) BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR FOR ANY LOSS OF PROFITS, DATA, BUSINESS OR GOODWILL RESULTING FROM OR IN ANY WAY RELATED TO LICENSED SOFTWARE OR THIS AGREEMENT.

            8.3       Dollar Cap.  THE TOTAL AGGREGATE LIABILITY OF ZUMASYS (INCLUDING ATTORNEYS’ FEES AND COSTS) RESULTING FROM OR IN ANY WAY RELATED TO THE PRODUCTS AND SERVICES OR THESE TERMS WILL NOT EXCEED THE TOTAL FEES PAID BY CUSTOMER TO ZUMASYS DURING THE 12-MONTH PERIOD IMMEDIATELY PRECEDING DELIVERY OF THE CLAIM BY CUSTOMER TO ZUMASYS.  

            8.4       Clarifications and Disclaimers.  THE ABOVE LIMITATIONS ON THE AMOUNT AND TYPE OF LIABILITY APPLY (a) TO LIABILITY FOR NEGLIGENCE; (b) REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT, TORT, STRICT PRODUCT LIABILITY, OR OTHERWISE; (c) EVEN IF ZUMASYS IS ADVISED IN ADVANCE OF THE POSSIBILITY OF THE DAMAGES IN QUESTION AND EVEN IF SUCH DAMAGES WERE FORESEEABLE; AND (d) EVEN IF CUSTOMER’S REMEDIES FAIL THEIR ESSENTIAL PURPOSE. IF APPLICABLE LAW LIMITS THE APPLICATION OF SECTION 8, ZUMASYS’ LIABILITY WILL BE LIMITED TO THE MAXIMUM EXTENT PERMISSIBLE.

9.         Dispute Resolution. 

            9.1       Any dispute, claim or controversy arising out of or relating to the Products and Services shall be determined by binding arbitration in Orange County, California before a single neutral arbitrator. The arbitration shall be administered by JAMS pursuant to its Comprehensive Arbitration Rules and Procedures then in effect. Judgment on the Award may be entered in any court having jurisdiction. All parties hereby consent to personal jurisdiction and venue in the courts located in Orange County, California.  These Terms and the rights of the parties hereunder shall be governed by and construed in accordance with the laws of the State of California, exclusive of conflict or choice of law rules. Notwithstanding the agreement regarding the applicable substantive law, any arbitration conducted pursuant to the Terms shall be governed by the Federal Arbitration Act (9 U.S.C., Secs. 1-16).

            9.2       Prior to any initiation of arbitration, the parties shall attempt in good faith to resolve any dispute arising out of or relating to the Products and Services promptly by negotiation between executives who have authority to settle the controversy and who are at a higher level of management than the persons with direct responsibility for administration of this Agreement.  Any party may give the other party written notice of any dispute not resolved in the normal course of business.  Within 10 calendar days after delivery of the notice, the receiving party shall submit to the other a written response. The notice and response shall include with reasonable particularity (a) a statement of each party’s position and a summary of arguments supporting that position, and (b) the name and title of the executive who will represent that party and of any other person who will accompany the executive.  Within 20 calendar days after delivery of the notice, the executives of all parties shall meet either in person or by teleconference at a mutually acceptable time and place.  Unless otherwise agreed in writing by the negotiating parties, the above-described negotiation shall end at the close of that meeting of executives.  Such closure shall not preclude continuing or later negotiations, if desired.  All offers, promises, conduct and statements, whether oral or written, made in the course of the negotiation by any of the parties, their agents, employees, experts and attorneys are confidential, privileged and inadmissible for any purpose, including impeachment, in arbitration or other proceeding involving the parties, provided that evidence that is otherwise admissible or discoverable shall not be rendered inadmissible or non-discoverable as a result of its use in the negotiation.  At no time prior to the meeting of executives shall either side initiate an arbitration related to this Agreement except to pursue a provisional remedy that is authorized by law or by JAMS Rules or by agreement of the parties. However, this limitation is inapplicable to a party if the other party refuses to comply with the requirements of the pre-arbitration protocol to resolve the dispute.  All applicable statutes of limitation and defenses based upon the passage of time shall be tolled while the above specified pre-arbitration procedures are pending and for 15 calendar days thereafter. The parties will take such action, if any, required to effectuate such tolling.

11.       Controlling Document.  In the event of any inconsistency between the Terms and a quote, bid, proposal, work order, a Customer order, a Customer purchase order, or any other contract documents between Customer and Zumasys, the Terms will control unless otherwise expressly stated and agreed to in a writing signed by Customer and Zumasys.  Further, if there is any conflict between these Terms and any prior contract between Zumasys and Customer regarding Products and Services, or if there is no prior contract between Zumasys and Customer regarding Products and Services, these Terms will control. 

12.       Other Important Terms.  These Terms (a) do not create any agency, partnership, or joint venture relationship; (b) cannot be amended except in writing signed by both parties; (c) are not assignable or delegable in whole or in part by Customer without the written consent of Zumasys; (d) will inure to the benefit of and be binding on each party and its successors and permitted assigns; (e) are not subject to waiver of any rights by lapse of time or by any statement, unless signed by an authorized representative of the party, and a waiver of any breach of these Terms will not constitute a waiver of any prior or subsequent breach; (f) will be construed as severable, so the court’s finding of any invalidity or unenforceability will not affect the validity or enforceability of any other portions of this Agreement; (g) is not for the benefit of any third party other than the parties’ respective successors and permitted assigns; (h) is signed by persons authorized by each of the respective parties; and (i) will be construed as if drafted jointly by the parties with no presumption or burden of proof favoring or disfavoring any party as a result of authorship