Warranty & Returns Policy

1. Intellectual Property; Proprietary Rights.

1.1 The VerdTek Appliance purchased under this Agreement contains intellectual property and trade secrets, as well as firmware, embedded software, application software, if any, which are owned by VerdTek (collectively referred to as the “VerdTek IP”). If portions of the VerdTek IP have been licensed to VerdTek by a third party, whether or not embedded into the VerdTek IP, each such Licensor(s) shall, at all times, continue to own its respective software. Except as provided in the aforesaid sentence, VerdTek retains all rights, title, and interest in and to the VerdTek IP, including software updates, workarounds, bug fixes, all of which are considered confidential information of VerdTek and its licensors and is protected by U.S. and international trade secret and copyright laws. Customer agrees to hold the VerdTek IP and its licensor’s software in strict confidence and to take all reasonable precautions consistent with generally accepted standards in the data processing industry to safeguard the confidentiality thereof. No portion of the VerdTek Appliance, including any VerdTek IP or third party software, may be modified, adapted, translated, decompiled, disassembled, reverse engineered or used to create derivative works or duplicated by Customer and/or any third party. Except as expressly provided in section 2 below, this Agreement does not grant Customer or any third party any rights to the VerdTek IP or any licensor’s software.

1.2 Because of the unique nature of the VerdTek IP, Customer understands and agrees that VerdTek may suffer irreparable harm in the event Customer fails to comply with any of its obligations hereunder, and that monetary damages may be inadequate to compensate VerdTek for any such breach. Accordingly, Customer agrees that VerdTek shall be entitled to injunctive relief, as well as all other remedies available to it at law or in equity, including money damages.

1.3 Notice to U.S. Government End Users: All Software licensed under this Agreement is a “commercial item,” as that term is defined in 48 C.F.R. §2.101, consisting of “commercial computer software” and “commercial computer software documentation,” as such terms are used in 48 C.F.R. §12.212 and is provided with ‘Restricted Rights’. Consistent with 48 C.F.R. §12.212 and 48 C.F.R. §227.7202- 1 through 227.7202-4, all U.S. Government end users acquire all software only with the rights set forth therein along with the terms of this Agreement.

2. Grant of License. VerdTek hereby grants Customer a non-exclusive, non-transferable, non-assignable license to use the embedded software and the applications software (collectively the “Licensed Programs”) only with the VerdTek Appliance. This Agreement applies to all Licensed Programs purchased hereunder. Neither Customer, nor any third party under Customer’s control, shall copy [except for such copying as is essential for archival or disaster recovery purposes], distribute, loan, rent, lease, transfer, license, sub-license, modify, adapt, decompile, disassemble or otherwise reverse engineer the Licensed Programs [including any VerdTek IP], in whole or in part, by any means. Additionally, neither Customer, nor any third party under Customer’s control, shall remove or alter any copyright or other proprietary notices shown on the Licensed Programs, the VerdTek Appliance or documentation.

3. Payment Terms; Taxes; Delivery.

3.1 Prices for the VerdTek Appliance and related support fees are as shown in VerdTek’s then current quotation (the “Quotation”), which is incorporated herein by reference. All payments shall be made to VerdTek in U.S. Dollars and are due and payable to VerdTek in full within thirty (30) days from the date of invoice. In all cases, VerdTek retains a security interest in the VerdTek Appliance pending receipt of full payment therefore. Customer agrees to execute, upon request of VerdTek, financing statements deemed necessary or desirable by VerdTek to perfect such security interests, and hereby authorizes VerdTek to file a copy of this Agreement or such other financing statements as may be required with the appropriate governmental authorities at any time in order to perfect such security interests.

3.2 All prices/fees are exclusive of any and all federal, state and local taxes, including sales, use, transaction, privilege, gross receipts, value-added, service or other similar taxes [excluding taxes based on VerdTek’s net income] (the “Taxes”) that may be imposed or assessed on this Agreement or the support services. Any such Taxes are the responsibility of the Customer. If VerdTek is audited and assessed any such Taxes, then in that event, Customer shall promptly reimburse VerdTek for any such Taxes, including interest, late fees, or penalties (if any), which VerdTek was required to pay to the taxing authority.

3.3 All shipments are made F.O.B. origin, VerdTek’s place of business and risk of loss or damage to the VerdTek Appliance will pass to Customer on delivery of the VerdTek Appliance to the carrier. Insurance, shipping, handling, and other related costs will be added to each invoice as a separate line item.

4. Limited Warranty.

A. THE APPLIANCE:

A.1. VerdTek warrants that the hardware will be free from defects in material and workmanship, and, along with the embedded software, will substantially conform to VerdTek’s then current documentation accompanying the VerdTek Appliance for a period of one (1) year from the date of installation (the “Appliance Warranty Period”). A.2 VerdTek, or its then current authorized service provider, will use reasonable commercial efforts to either repair or replace, as necessary, any hardware component or part found to be defective, and/or provide reasonable programming services to correct any embedded software defects. Customer must notify VerdTek within the Appliance Warranty Period and provide specific details of the defect(s). The repaired/replaced hardware, component, or part and/or the embedded software are then warranted for thirty (30) days or the remaining unexpired term of the original Appliance Warranty Period, whichever is longer. Upon replacement, all defective hardware, components or parts become the exclusive property of VerdTek and will be returned to VerdTek upon request. This shall constitute your sole and exclusive remedy and VerdTek’s sole obligations for a defective VerdTek Appliance.

B. APPLICATION SOFTWARE:

B.1 If Customer also licenses VerdTek’s application software (the “Application Software”) under this Agreement, VerdTek warrants that the Application Software will substantially conform to VerdTek’s then current documentation accompanying the Application Software for a period of ninety (90) days from the date of delivery (the “Application Software Warranty Period”). VerdTek does not warrant that the Application Software will meet your requirements or will operate in combinations other than as specified by VerdTek in its documentation or that the operation of the Application Software will be uninterrupted or error free.

B.2. If the Application Software does not substantially conform to VerdTek’s then current documentation, VerdTek will provide reasonable programming services to correct any material defects, or provide a ‘workaround’ or replace the Application Software or defective media. Customer must notify VerdTek within the Application Software Warranty Period and provide specific details of the defect(s). If neither of the foregoing remedies is reasonably commercially available to VerdTek, VerdTek will accept return of the defective Application Software or media, and refund the license fee paid to VerdTek. This shall constitute your sole and exclusive remedy and VerdTek’s sole obligations for any defective Application Software and/or media.

C. WARRANTY LIMITATIONS:

VerdTek may disclaim any obligation or liability under this section 4 if VerdTek determines that the hardware, components, parts, including the embedded software and Application Software, if any, have been: (i) altered, modified or serviced, other than by VerdTek or a VerdTek authorized service provider; (ii) improperly installed either by Customer or an unauthorized third party; (iii) improperly used or used in a manner other than as specified by VerdTek in writing; or (iv) due to any cause beyond the reasonable control of VerdTek.

5. DISCLAIMER OF WARRANTY.

EXCEPT AS NOTED IN SECTION 4 ABOVE, VERDTEK MAKES NO OTHER REPRESENTATIONS OR WARRANTIES, EXPRESS, IMPLIED OR STATUTORY WITH RESPECT TO THE VERDTEK APPLIANCE, THE EMBEDDED SOFTWARE, THE APPLICATION SOFTWARE, DOCUMENTATION, UPDATES, WORKAROUNDS, OR SERVICES PROVIDED. VerdTek SPECIFICALLY DISCLAIMS ANY AND ALL IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. This Section 5 shall survive expiration or termination of this Agreement.

6. LIMITATION OF LIABILITY.

IN NO EVENT WILL VERDTEK OR ITS LICENSORS BE LIABLE FOR ANY INCIDENTAL, INDIRECT, SPECIAL, PUNITIVE OR CONSEQUENTIAL DAMAGES OF ANY NATURE WHATSOEVER, WHETHER IN CONTRACT, WARRANTY OR TORT, INCLUDING WITHOUT LIMITATION, DAMAGES FOR LOSS OF PROFITS, LOST REVENUE, DATA, LOSS OF OR INTERRUPTION OF BUSINESS OR COVER, WHETHER OR NOT VERDTEK OR ITS LICENSORS HAVE BEEN ADVISED OF THE POSSIBILITIES OF SUCH DAMAGES. VERDTEK’S MAXIMUM LIABILITY FOR DAMAGES, IF ANY, SHALL NOT EXCEED THE AMOUNT PAID TO VerdTek FOR THE SPECIFIC VERDTEK APPLIANCE [OR APPLICATION SOFTWARE] THAT CAUSED THE DAMAGE(S), WHETHER BASED ON CONTRACT, WARRANTY, TORT (INCLUDING BUT NOT LIMITED TO NEGLIGENCE) OR ANY OTHER LEGAL OR EQUITABLE GROUNDS. This section 6 shall survive expiration or termination of this Agreement.

7. Infringement Claims.

7.1 VerdTek will, except as provided below, defend any third party action brought against Customer to the extent that such action is based on a claim that the VerdTek Appliance or the Application Software infringe a United States patent, copyright, or other intellectual property right of a third party, provided VerdTek has sole control and authority to defend, negotiate, or settle any action or claim brought hereunder. Customer shall promptly notified VerdTek in writing of any such known or suspected claims. If VerdTek is found liable under this section by a final court of competent jurisdiction, VerdTek will pay the damages awarded to such third party by such court. Additionally, VerdTek also has the right, at VerdTek’s sole option, to: (i) replace or modify the VerdTek Appliance, including the Application Software, if any, so they are non- infringing, or (ii) procure for Customer the right to continue using the VerdTek Appliance and Application Software, or (iii) if such remedies are not reasonably commercially available to VerdTek, VerdTek will accept return of the infringing VerdTek Appliance and related software and issue Customer a credit or refund, as applicable, of the net purchase price, less depreciation on a straight-line basis over an assumed five-year life.

7.2 VerdTek may disclaim any obligation or liability under this clause if the alleged infringement arises from: (a) use or combination of the VerdTek Appliance or Application Software with other hardware, software, or items not furnished or authorized in writing by VerdTek or (b) use of other than a current unaltered version of the VerdTek Appliance or Application Software available from VerdTek.

The foregoing states VerdTek’s entire liability and obligations and Customer’s sole and exclusive remedy for any patent, copyright, or other intellectual property infringement claims.

8. Termination. Either party may terminate this Agreement, including the licenses granted under section 2, upon proper written notice should a breach of any of the provisions of this Agreement occur and such breach is not cured within thirty (30) days from said notice [failure to make payments when due and a breach of the license grant are considered material breaches of this Agreement]; or immediately if either party has been adjudicated bankrupt, or if a receiver or trustee is appointed or if an assignment is made for the benefit of creditors, or a party ceases doing business. If this Agreement is terminated by VerdTek, then Customer shall promptly return the original copies of all licensed software to VerdTek, or destroy and/or delete all copies and backup copies thereof from Customer’s computer systems and certify in writing that Customer is in compliance with the foregoing requirements and that the software is no longer in Customer’s possession or in use.

9. Maintenance Support Services.

VerdTek’s warranty and on-going support services is provided in accordance with VerdTek’s then current standard maintenance support policy, which currently consists of 3 services options: ‘Standard’, ‘Silver’ and ‘Gold’. Upon completion of installation of the VerdTek Appliance, VerdTek will furnish Customer its then current prevailing ‘Maintenance Support Agreement’ for signature. VerdTek reserves the right to modify or change its current service offerings and fees upon proper notice.

10. Indemnification.

Customer will indemnify, defend and hold VerdTek, its affiliates and its/their officers, directors, employees, service representative, agents, representatives, and consultants, harmless from and against third party claims, suits, losses, demands, damages or expenses (including reasonable attorney’s fees, court costs, expert witness fees and expenses, penalties, fines) arising out of Customer’s use of the VerdTek Appliance or Application Software or any update, modification, workaround, bug fix, or upgrade provided by VerdTek, or out of any breach of this Agreement, including a violation of any export/import regulations, and any third party infringement claims caused by Customer, its representatives, consultants or contractors. This clause 10 shall survive any expiration or termination of this Agreement.

11. Disputes. The parties agree to try, in good faith, to resolve any dispute arising under this Agreement amicably between themselves. If after 30 days, or such extended period as the parties may agree upon, the dispute has not been resolved or settled to the satisfaction of both parties, then the parties agree to engage a third party mediator, i.e. ADR (Alternative Dispute Resolution) to help settle the matter. The mediation will be held at a location convenient to both parties and each party will be responsible for their own costs and expenses, except that the costs of the mediation will be shared equally between the parties. This section 11 shall survive any expiration or termination of this Agreement.

12. Force Majeure. Neither party will be responsible or liable for its performance under this Agreement for a Force Majeure event, such as, but not limited to, strikes, shortages, riots, fires, flood, Acts of God, war, terrorists acts, governmental action, export/import regulations, which are beyond the reasonable control of a party. Customer, however, will continue to be liable for its payment obligations to VerdTek on any outstanding invoices that were legally due and payable prior to any Force Majeure event.

13. General. This Agreement is the complete and exclusive statement of the agreement between Customer and VerdTek with respect to the subject matter hereof and supersedes any and all prior written and/or oral communications, agreements, or understandings between the parties. Additionally, VerdTek’s ‘Click-wrap’ Agreement incorporated into the VerdTek Appliance, and Customer’s purchase order or other form(s) [if used] shall also not apply and are superseded by the terms of this Agreement. No waiver, alteration, or modification of any of the provisions of this Agreement shall be binding on the parties hereto unless evidenced by a written amendment signed by duly authorized representatives of such party. No delay or failure to enforce any rights under this Agreement will be deemed a continuing waiver of such rights. This Agreement is governed by the appropriate laws of the State of Texas, and the parties hereto agree and consent to the exclusive jurisdiction and venue of the Courts of the State of Texas. In the event that the Uniform Computer Information Transactions Act (UCITA) or any substantially similar law is enacted as part of the laws of the State of Texas, said statute will not govern any aspect of this Agreement or any license granted hereunder, and instead the law as it existed prior to such enactment will govern. Additionally, the United Nations Convention on Contracts for the International Sale of Goods is expressly excluded. The provisions of this Agreement are severable and if any clause is declared void or unenforceable by a court of competent jurisdiction it shall not affect the validity of any other clause. The VerdTek Appliance and related Application Software may be covered by US export and international import laws and regulations, and Customer agrees to fully comply with all such export/import laws and regulations of the United States of America and any foreign government, if applicable.

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