Terms and Conditions

TERMS AND CONDITIONS OF SERVICE

1. Term and Termination: (a) The initial term of this Schedule of Services shall commence on the effective date and terminate after one (1) year. This Schedule shall automatically renew for successive terms of one (1) month unless either party gives notice of its intent not to renew at least thirty (30) days prior to the expiration of the then-current term (b) Either party may terminate this Schedule for cause if the other party fails to cure a material breach of any obligation set forth therein within thirty (30) days after written notice of such breach. Termination is not an exclusive remedy and the exercise by either party of such remedy shall be without prejudice to any other available legal or equitable remedies. Sections 3(b) (Warranty Disclaimer), 4 (Liquidated Damages), 5 (Limitation of Liability), 6 (Confidential and Proprietary Information) and 7-13 (general terms) shall survive any expiration or termination of this Schedule.

2. Fees and Payment: (a) Client agrees to pay all fees specified in this Schedule. Payment terms are net 30 days from date of invoice. Black Sails Consulting may invoice in advance for any recurring service. Client shall be responsible for all applicable taxes arising from the services. Black Sails Consulting may suspend service if Client has failed to pay any undisputed invoice within thirty (30) days of receipt. Unpaid invoices will be subject to a monthly service charge which is the lesser of one and one-half percent (1½%) per month or the highest rate allowed by law. (b) Black Sails Consulting reserves the right to adjust the fees if (i) the supported environment materially changes, such as a change in the number of end users, workstations, servers, network elements supported, warranty or hardware maintenance coverage or other changes in the IT infrastructure, or (ii) the level of support required by the client changes. Black Sails Consulting anticipates that its costs for providing services will increase annually. Accordingly, Black Sails Consulting reserves the right to increase its fees on the anniversary date of this Schedule. Black Sails Consulting shall provide at least thirty (30) days prior notice of any fee increases. Black Sails Consulting reserves the right to charge Client for the time utilized in the development of quotes for hardware or software not ultimately purchased through Black Sails Consulting at the then-current hourly rate for contracted clients. 3. Limited Warranty: (a) Black Sails Consulting warrants for a period of thirty (30) days following delivery (the “Warranty Period”) that all services shall be performed in a professional manner in accordance with generally applicable industry standards. Black Sails Consulting’s sole liability (and Client’s exclusive remedy) for any breach of this warranty shall be for Black Sails Consulting to re-perform any deficient services, or, if Black Sails Consulting is unable to remedy such deficiency within thirty (30) days, to void the invoice for the deficient services. BSC shall have no obligation with respect to a warranty claim (i) if notified of such claim after the Warranty Period or (ii) if the claim is the result of third-party hardware or software failures, or the actions of Client or a third party. (b) THIS SECTION 3 IS A LIMITED WARRANTY, AND SETS FORTH THE ONLY WARRANTIES MADE BY BLACK SAILS CONSULTING. BLACK SAILS CONSULTING MAKES NO OTHER WARRANTIES, CONDITIONS OR UNDERTAKINGS, EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR ANY WARRANTIES REGARDING THE PERFORMANCE OF ANY SOFTWARE OR HARDWARE PROVIDED OR INSTALLED BY BLACK SAILS CONSULTING. CLIENT MAY HAVE OTHER STATUTORY RIGHTS. HOWEVER, TO THE FULL EXTENT PERMITTED BY LAW, THE DURATION OF STATUTORILY REQUIRED WARRANTIES, IF ANY, SHALL BE LIMITED TO THE WARRANTY PERIOD.

4. LIQUIDATED DAMAGES FOR HIRING OTHER PARTY’S EMPLOYEES: During the term of this Schedule and for twelve (12) months thereafter, neither party shall retain the services (whether as an employee, independent contractor or otherwise) of any employee of the other party (or ex-employee within six (6) months of the employee’s termination of employment.) Client and BSC agree that any breach of the foregoing obligation would result in harm to the other party and that the amount of legal damages would be difficult to determine. Accordingly, Client and Black Sails Consulting agree that for each such employee or ex-employee retained in breach of this Section 4, the party in breach shall pay to the non-breaching party the sum of Ten Thousand Dollars ($10,000) as liquidated damages. Client and Black Sails Consulting acknowledge and agree that such liquidated damages constitute a reasonable estimate of the damages that would accrue to the non-breaching party and do not constitute a penalty. This provision shall not apply to individuals responding to a general advertisement of employment.

5. LIMITATION OF LIABILITY: (A) NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY INDIRECT, INCIDENTAL, SPECIAL, OR CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT LIMITATION, DAMAGES FOR INTERRUPTION OF SERVICES, LOSS OF BUSINESS, LOSS OF PROFITS, LOSS OF REVENUE, LOSS OF DATA, OR LOSS OR INCREASED EXPENSE OF USE), WHETHER IN AN ACTION IN CONTRACT, WARRANTY, TORT (INCLUDING, WITHOUT LIMITATION, NEGLIGENCE), OR STRICT LIABILITY, EVEN IF THE PARTIES HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH LIABILITIES. BLACK SAILS CONSULTING SHALL NOT BE RESPONSIBLE FOR PROBLEMS THAT OCCUR AS A RESULT OF THE USE OF ANY THIRD-PARTY SOFTWARE OR HARDWARE. (B) IN NO EVENT SHALL THE AMOUNT EITHER PARTY MAY RECOVER UNDER ANY SCHEDULE EXCEED IN THE AGGREGATE (AND NOT PER OCCURRENCE) THE TOTAL PAYMENTS MADE BY CLIENT TO BLACK SAILS CONSULTING IN THE TWELVE (12) MONTHS IMMEDIATELY PRECEDING THE OCCURRENCE OF THE EVENT GIVING RISE TO SUCH LIABILITY. (C) THE LIMITATIONS SET FORTH IN THIS SECTION 5 SHALL NOT APPLY TO PERSONAL INJURY OR DAMAGE TO TANGIBLE PROPERTY CAUSED BY THE WILLFUL MISCONDUCT OR GROSS NEGLIGENCE OF EITHER PARTY.

6. Confidential and Proprietary Information: (a) Each party agrees that all know-how, business, technical and financial information it obtains (as a “Receiving Party”) from the disclosing party (as a “Disclosing Party”) constitute the confidential property of the Disclosing Party (“Confidential Information”), provided that it is identified as confidential at the time of disclosure or should be reasonably known by the Receiving Party to be Confidential Information due to the nature of the information disclosed and the circumstances surrounding the disclosure. Except as may be necessary to perform its obligations under this Schedule, the Receiving Party will hold in confidence and not use or disclose any of the Disclosing Party’s Confidential Information. The Receiving Party’s nondisclosure obligation shall not apply to information that: (i) was known to it prior to receipt of the Confidential Information; (ii) is publicly available; (iii) is rightfully obtained by the Receiving Party from a third party; (iv) is independently developed by employees of the Receiving Party; or (v) is required to be disclosed pursuant to a regulation, law or court order. (b) Any templates, schematics, processes or technical documentation provided by Black Sails Consulting shall be deemed Confidential Information and proprietary information of Black Sails Consulting without any marking or further designation. Client may use such information solely for its own internal business purposes. Black Sails Consulting shall retain all rights to the aforementioned, which shall be returned to Black Sails Consulting upon termination of the applicable Schedule. (c) Black Sails Consulting shall maintain the confidentiality of protected health information in its possession or under its control in accordance with the Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act.

7. Independent Contractor: Black Sails Consulting and Client shall at all times be independent contractors. There is no relationship of partnership, joint venture, employment, franchise or agency created hereby between the parties. Neither party shall have the power to bind the other or incur obligations on the other party’s behalf without the other party’s prior written consent.

8. Assignment: This Schedule may not be assigned by either party without the prior written consent of the other party, which consent shall not be unreasonably withheld or delayed. No consent shall be required where an assignment is made (i) pursuant to a merger or change of control or (ii) to an assignee of all or substantially all of the party’s assets. Any purported assignment in violation of this section shall be void.

9. Disputes; Governing Law; Arbitration; Attorney’s Fees: California law, without regard to its conflict of laws principles, shall govern and enforce this Schedule. Any legal action between the parties arising out of or related to this Schedule shall be adjudicated by binding arbitration by the attorneys of both parties in accordance with its. The prevailing party in any such action shall be entitled to an award of reasonable attorney’s fees and costs in addition to any other award or recovery to which such party may be entitled. No legal action, regardless of form, maybe brought by either party against the other more than one (1) year after the cause of action has arisen.

10. Complete Understanding; Modification: This Schedule shall constitute the full and complete understanding and agreement between Client and Black Sails Consulting and supersedes all prior or contemporaneous negotiations, discussions or agreements, whether written or oral, between the parties regarding the subject matter contained herein. Any waiver, modification or amendment of any provision of this Schedule shall be effective only if in writing and signed by both parties.

11. Waiver and Severability: Waiver or failure by either party to exercise in any respect any right or obligation provided for in this Schedule shall not be deemed a waiver of any further right or obligation hereunder. If any provision of this Schedule is found by a court of competent jurisdiction to be unenforceable for any reason, the remainder of the Schedule shall continue in full force and effect.

12. Force Majeure: Neither party shall be liable to the other for any delay or failure to perform any obligation under this Schedule, except for a failure to pay fees, if the delay or failure is due to unforeseen events which are beyond the reasonable control of such party, such as strikes, blockade, war, terrorism, riots, natural disasters, power outages, and/or refusal of license by the government, insofar as such an event prevents or delays the affected party from fulfilling its obligations and such party is not able to prevent or remove the force majeure at reasonable cost.

13. Notices: Any notice or communication required or permitted to be given under this Schedule shall be in writing and addressed to Black Sails Consulting, Attn. Legal Counsel, 5795 Kearny Villa Road, San Diego, CA 92123 and shall be deemed given: (i) upon receipt if by personal delivery; (ii) upon receipt if sent by certified U.S. mail (return receipt requested); or (iii) one day after it is sent if by next day delivery by a major commercial delivery service.

14. Counterparts: This Schedule may be executed in any number of counterparts and each fully executed counterpart shall be deemed an original. The parties agree (a) that facsimile or electronic signature shall be accepted as original signatures; and (b) that the Schedule, or any document created pursuant to the Schedule, may be maintained in an electronic document storage and retrieval system, a copy of which shall be considered an original. In any legal proceeding relating to the Schedule, the parties waive their right to raise any defense based on the execution of the Schedule in counterparts or the delivery of such executed counterparts by copy, facsimile, or electronic delivery.