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TERMS AND CONDITIONS OF SALE

1.  The following Terms and Conditions of Sale shall govern all sales transactions that involve Cloeren Incorporated (“Cloeren”) and shall not be altered, supplemented, amended, modified, revised, superseded, or limited in any way, without the prior written consent of Cloeren.  Any inconsistent, different and/or additional terms and conditions provided or proposed by Buyer, in any form, shall be deemed to be a modification of these Terms and Conditions of Sale and shall be of no force or effect and shall not be binding on Cloeren.

2.  Prices are payable in the currency stated in this Proposal and payable at Orange, Texas.  Buyer shall further be responsible for any additional costs incurred by Cloeren as a result of Buyer’s failure to perform in accordance with this Proposal.  Prices are net of any import duties, sales, use, excise or other similar taxes that may be applicable to the sales transaction contemplated herein.  In the event Cloeren is required by law to collect any such import duties or taxes, Cloeren will add such import duties and/or taxes to the sales price and same shall be invoiced to and shall be paid by Buyer.  Buyer shall defend, indemnify and hold Cloeren harmless from and against any and all liability for such taxes or import duties and attorney’s fees or costs incurred by Cloeren in connection therewith.

3.  Buyer grants to Cloeren a security interest in the equipment purchased hereunder and all its proceeds to secure payment of Buyer’s obligations to Cloeren.  Buyer agrees that its order shall constitute a “security agreement” as defined in §9.102 of the Uniform Commercial Code and Buyer authorizes Cloeren to file a financing statement describing the equipment in order to perfect its security interest.  Furthermore, Buyer hereby appoints Cloeren as its attorney-in-fact to take any action and to execute any instrument which Cloeren may deem necessary or advisable to accomplish the foregoing.  Such power of attorney is coupled with an interest.  Any account balance not timely paid to Cloeren shall bear interest at the rate of 18% per annum on the unpaid balance from the due date until paid in full, but in no event shall such rate exceed the maximum rate of interest permitted by law. 

4.  Unless expressly stated otherwise in Cloeren’s Proposal, shipment of goods to destinations within the continental United States shall be delivered F.O.B. Cloeren’s dock and shipment of goods to destinations outside the continental United States shall be delivered “Ex Works” (Incoterms 2010) Cloeren’s dock.  Title and liability for loss or damage of the goods shall pass to the Buyer upon Cloeren’s delivery of the goods to a carrier for shipment to Buyer and any subsequent loss or damage to the goods shall not relieve the Buyer from any of its obligations to Cloeren.  Delivery dates are estimates and Cloeren shall not be liable for any loss or expense (consequential or otherwise) incurred by Buyer if Cloeren fails to meet the estimated delivery dates due to reasons set forth in Paragraph 6 herein below.

5.  Cloeren warrants that, on the date of shipment, the goods to be supplied hereunder will be free from defects in material and workmanship, normal wear and tear excepted, for a period of twelve (12) months from the date of shipment; provided, however, that proper storage, handling, maintenance and operation of the goods has been effected by Buyer.  Equipment and expendable parts manufactured by others are covered by the original manufacturers' warranties and are not warranted by Cloeren.  All electrical components are considered expendable items and are not covered by this warranty.

THIS WARRANTY IS IN LIEU OF ALL OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY AND FITNESS FOR ANY PARTICULAR PURPOSE.  THE IMPLIED WARRANTY OF MERCHANTABILITY, THE IMPLIED WARRANTY OF FITNESS FOR ANY PARTICULAR PURPOSE, AND ALL OTHER WARRANTIES NOT SPECIFICALLY SET FORTH HEREIN ARE EXPRESSLY DISCLAIMED.  THE OBLIGATION AND LIABILITY OF CLOEREN UNDER THIS WARRANTY SHALL NOT INCLUDE ANY TRANSPORTATION OR OTHER CHARGES OR THE COST OF INSTALLATION. 

The liability of Cloeren hereunder or otherwise and Buyer’s remedies hereunder or otherwise are solely and exclusively limited to repair or replacement of any defective product which is returned by Buyer during the applicable warranty period.  Cloeren, in its sole discretion, shall make the determination of whether the goods shall be repaired or replaced.  Repair or replacement of the defective goods will be made only upon return, at Buyer’s expense, of the defective goods to Cloeren, and only after inspection by Cloeren and its determination that the alleged defect was not caused by accident, misuse, neglect, alteration, improper installation, unauthorized repair or improper operation.  This warranty shall become void and unenforceable in the event Buyer or its agents alter, remove, disconnect, or otherwise render useless any device and/or parts designed or affixed by Cloeren.

6.  Cloeren shall not be liable for any delay or failure to perform due to any cause beyond its reasonable control, including, without limitation, acts of God, acts of the public enemy, war, outbreak of hostilities, insurrection, riot, civil disturbance, Government Act or regulation, fire, flood, casualty, accident, inability to procure materials, partial or complete embargoes imposed by originating or connecting modes of transportation, acts or inaction of third party suppliers, or any other cause beyond the reasonable control of Cloeren.

7.  Cloeren retains the right, prior to delivery of the equipment and without notice to the Buyer, to make any change in the composition or fabrication of the equipment which, in the opinion of Cloeren, in its sole discretion, does not affect the general characteristics or properties of the equipment or which are within governmental or professional standards or specifications applicable at the time of manufacture.

8.  Cloeren will provide the Buyer with assembly drawings and service manuals that Cloeren, in its sole discretion, considers necessary for proper maintenance and operation of the equipment sold hereunder.  However, nothing contained herein shall be interpreted nor construed to require Cloeren to furnish or otherwise provide Buyer with detailed or shop-working drawings of the equipment and all other such drawings are, and shall remain, the sole and exclusive property of Cloeren.  Moreover, it is understood by Buyer that the drawings, service and operating manuals (and any other descriptions or specifications provided to Buyer) are descriptive in nature and ARE NOT WARRANTIES OF PERFORMANCE AND ARE NOT WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE.  

9.  During the process of the sales transaction contemplated hereunder, Cloeren may disclose information, documentation and devices which are confidential and proprietary to Cloeren (hereinafter referred to as "Know-How").  In consideration of the disclosure to Buyer of information incidental to the sale of the equipment, Buyer will keep the Know-How in strictest confidence and will not disclose the Know-How, or any portion thereof, to any third party and will limit disclosure of the Know-How to only those employees of Buyer who have a need to know such information to perform the limited task incidental to using the equipment sold to Buyer.  Buyer further agrees that it will not copy, reproduce or disseminate the Know-How, in whole or in part, without the prior written consent of Cloeren.  Nothing contained herein or otherwise shall be deemed nor construed to grant to Buyer, either directly or by implication, estoppel or otherwise, any right or license under any patents, copyrights, trademarks, or trade secrets of Cloeren, and no such right or license will arise from this sale or from any acts, statements, or dealings resulting in or related to this sale. 

 10.  Cloeren may cancel all or part of the contract arising from or evidenced by Cloeren’s Proposal and these Terms and Conditions immediately upon the happening of any of the following, to-wit:  insolvency of Buyer; the appointment of a custodian as that term is defined in Title 11 U.S.C., as amended (the "Bankruptcy Code"), or the commencement of a case under any chapter of the Bankruptcy Code for, by or against Buyer, Buyer's suspension or termination of business or assignment for the benefit of creditors; or any event, whether or not similar to the foregoing, which, in Cloeren’s sole discretion, materially impairs Buyer's ability to perform hereunder.

11.  At Buyer’s request and expense, Cloeren agrees to provide Buyer technical assistance with respect to the equipment purchased hereunder.  Unless otherwise stated in Cloeren’s Proposal, all such technical assistance provided by Cloeren shall be charged to Buyer at Cloeren’s then prevailing rates and terms.  Cloeren makes no warranties of any kind with respect to the technical assistance provided hereunder.  

12.  Cloeren’s Proposal and these Terms and Conditions shall be governed by and construed in accordance with the laws of the State of Texas without giving effect to conflict of law rules and any disputes arising hereunder shall be resolved in courts of competent jurisdiction, Orange, Texas.  If any provision hereof shall be held invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall in no way be affected or impaired thereby.  No right or interest in the contract arising from this document shall be assigned by Buyer, and no delegation of any obligation owed by Buyer shall be made without the prior written consent of Cloeren. 

13.  Independent Representatives that may be utilized to facilitate communications between Cloeren and Buyer during the course of any transaction resulting from this Proposal are independent contractors and are not employees or agents of Cloeren.  Such Independent Representatives have no authority to make any commitments on behalf of, nor bind, Cloeren in any manner whatsoever. 

14.  Buyer agrees to adhere to the United States Export Administration Laws and Regulations and shall not export or re-export any technical data or products received from Cloeren or the direct product of such technical data to any proscribed country listed in the United States Export Administration Regulations unless properly authorized by the United States Government.

15.  IN NO EVENT SHALL CLOEREN BE LIABLE FOR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES LOSS OF ANTICIPATED PROFIT, OR OTHER ECONOMIC LOSS, WHATSOEVER, WHETHER SUCH DAMAGES ARISE FROM BREACH OF CONTRACT, BREACH OF WARRANTY, OR ARISE IN TORT WHETHER BY REASON OF STRICT LIABILITY, NEGLIGENCE, OR OTHERWISE.  CLOEREN’S LIABILITY, INCLUDING ATTORNEY’S FEES, ON ALL CLAIMS OF ANY KIND, WHETHER BASED ON CONTRACT, WARRANTY, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY OR OTHERWISE, FOR ALL LOSSES OR DAMAGES ARISING OUT OF, CONNECTED WITH, OR RESULTING FROM, ANY TRANSACTION WITH THE BUYER, CLOEREN’S PROPOSAL, OR THESE TERMS AND CONDITIONS, OR FROM THE PERFORMANCE OR BREACH THEREOF, OR FROM ANY EQUIPMENT OR SERVICE PROVIDED BY CLOEREN, SHALL IN NO CASE EXCEED THE ACTUAL FUNDS PAID TO CLOEREN BY BUYER RESULTING FROM THIS PROPOSAL.

 16.  Cloeren’s failure to exercise its rights hereunder does not waive subsequent exercise of those rights.  Neither delay in exercise or partial exercise of any of Cloeren’s rights hereunder shall waive further exercise of those rights. 

17.  Buyer represents and warrants that before entering into this sales transaction with Cloeren, (a) Buyer has fully informed itself of the terms, conditions, contents, and effects of this sales transaction and has relied solely and completely upon its own judgment, experience, and expertise in entering into this transaction, (b) Buyer has had the opportunity to seek and obtain the advice of counsel before entering into this transaction, (c) this sales transaction is the result of arm’s length negotiations conducted by and between Cloeren and the Buyer, and (d) Buyer has not relied upon any statement, material, document, or communication, that is not specifically set forth in Cloeren’s Proposal or these Terms and Conditions 

18.  Cloeren’s Proposal and these Terms and Conditions constitutes the entire understanding and agreement between Cloeren and the Buyer with respect to the equipment purchased hereunder and may not be contradicted by evidence of prior, contemporaneous, or subsequent oral agreements.  There are no unwritten oral agreements between Cloeren and the Buyer.  No change, modification, alteration, or addition to any provision of these Terms and Conditions shall be binding upon Cloeren unless same is contained in a writing signed by an authorized representative of Cloeren.   

19.  Any transaction resulting from this Proposal shall be in the English language.  In the event there is any communication in a language other than English and a discrepancy between the non-English communication and the English version exists, the English version shall control and prevail.

20.  In all instances clerical errors are subject to correction, at Cloeren’s sole discretion.