Acceptance. Unless otherwise provided, it is agreed that sales are made on the terms, conditions, and warranties contained herein and that to the extent of any conflict, the same take precedence over any terms or conditions which may appear on Buyer's order form. American Digital Corporation (hereafter referred to as "ADC" or "Seller") shall not be bound by Buyer's terms and conditions unless expressly agreed to in writing. In the absence of written acceptance of these terms, acceptance of or payment for any of the articles covered hereby shall constitute an acceptance of these terms and conditions.

Additional terms. Special terms and/or conditions otherwise listed separately on quotation, price listings, software licenses, or related publications shall also apply as if contained herein.

Delivery. Shipping dates are approximate only. ADC shall not be held liable for any loss or expense (consequential or otherwise) incurred by Buyer if ADC fails to meet the specified delivery schedule by reason of any delays in delivery including without limitation war, fire, sabotage, strikes, floods, accidents, judicial actions, government priorities or regulations, shortages of material, shortages of labor, acts of God, or any other cause beyond ADC's reasonable control. If any contingency occurs, ADC may allocate production and deliveries among ADC's customers.

Carrier. Unless specific instructions from Buyer specify which method of shipment is to be used, ADC will exercise its own discretion. Shipments are generally prepaid by ADC with freight charges being invoiced to Buyer.

Ex Works (or F.O.B.) Point / Transfer of Title. All sales are made Ex Works point of shipment. ADC's title (excluding software and other trade secrets) passes to Buyer and ADC's liability as to delivery ceases upon making delivery of articles purchased hereunder to carrier (acting thereby as Buyer's agent) at shipping point in good condition. Buyer assumes risk of loss beyond the Ex Works point; therefore all claims for any damages must be filed with the carrier by the Buyer. Claims for loss or damage on shipment must not be deducted from our invoice, nor payment of the invoice withheld awaiting adjustment of such claims, as we do not guarantee safe delivery.

Returns. Contact Customer Service in Houston for issuance of a R.M.A. (Return Material Authorization) number. Returned goods will not be accepted by us from the transportation company unless this R.M.A. number appears on the carton. Credit for goods returned will depend on value to us based on our selling price less a fair charge to cover, without limitation, expense of shipping, rehandling, inspection, or refinishing provided however, material is received in good condition, transportation charges prepaid. Returns from foreign countries classified as either "Return for Credit" or "Non-warranty Repair" may, if applicable, be billed for any U.S. Customs (U.S. entry) charges.

Limited Warranty. If applicable, ADC effects standard warranties at the time of product shipment, a copy of which is included with each warranted item, which shall apply solely to the enduser or owner of the product.

Payments. Where ADC has extended credit to Buyer, terms of payment shall be net thirty (30) days from date of invoice. The amount of credit or terms of payment may be changed, or credit withdrawn by ADC at any time. If the articles are delivered in installments, Buyer shall pay for each installment in accordance with the terms hereof. Payment shall be made for the articles without regard to whether Buyer has made or may make any inspection of the articles. If shipments are delayed by Buyer, payments are due from the date when ADC is prepared to make shipments. Articles held for Buyer are at Buyer's risk and expense. ADC shall retain a security interest in the products sold hereunder until the full purchase price and all other Buyer liabilities due the Seller hereunder are received in full. If the Seller so requests, Buyer agrees to execute whatever documents may be necessary to perfect such security interest. In the event of Buyer's bankruptcy or insolvency, or in the event any proceeding is brought by or against Buyer under the bankruptcy or insolvency laws, ADC shall be entitled to cancel any order outstanding at any time during the period allowed for filing claims against the estate and shall receive reimbursement for its cancellation charges.

Delinquent Accounts. A fee of 1.0% per month of the amount due ADC will be charged to all accounts not paid within thirty (30) days of date of invoice. If collection or legal action is taken by ADC, Buyer agrees to pay any collection and/or legal fees reasonable and customary.

Foreign Orders. All foreign orders shall be prepaid with a bank draft, cashier's check, or Letter of Credit drawn on a U.S. bank in U.S. funds only. Orders may require a U.S. export license which may delay shipment approximately 4 weeks after receipt of order. User must supply a completed U.S. export form (#ITA-629A) available from any U.S. Consulate.

Taxes. ADC's prices are exclusive of all federal, state, and local sales, use, excise, and similar taxes. Consequently, in addition to the price specified herein, the amount of any present or future sales, use, excise or other tax applicable to the sale or use of the products sold hereunder shall be paid by Buyer, or in lieu thereof, Buyer shall provide ADC with a tax exemption certificate acceptable to the taxing authorities. All foreign taxes including without limitation income, stamp and turnover taxes, customs duties, fees, and assessments of foreign authorities in connection with this contract, its execution and performance thereunder, shall be for Buyer's account.

Cancellation. Buyer may terminate this contract in whole or from time to time in part upon 60 days written notice to ADC. In such event, Buyer shall be liable for termination charges which shall include a price adjustment based on the quantity of articles actually delivered, and all costs direct and indirect, incurred and committed for this contract together with a reasonable allowance for pro-rated expenses and profits. Any termination or rescheduling will not be allowed on shipments scheduled for the month in which the request is made and for the month following.

Assignment. The Buyer shall not assign his order, or any interest therein, or any rights thereunder without the prior written consent of ADC.

Nondisclosure. Buyer agrees to hold in confidence and refrain from disclosing to any third party (except applicable Buyer's employees) any information, documentation, software, know how, trade secrets, and all of that which is identified by ADC to be of a proprietary and/or confidential nature. Buyer is expressly prohibited from the assignment, sublicense, disclosure, or transfer of Seller's proprietary technology or information without prior written consent. The provisions and obligations of this Nondisclosure article shall survive the termination of this contract for a period of five (5) years.

Patents. ADC shall defend any suit or proceeding brought against Buyer so far as based on a claim that any product or any part thereof furnished under this contract constitutes an infringement of any patent of the United States. If notified promptly in writing and given authority, information, and assistance (at ADC's expense) for the defense of same, ADC shall pay all damages and costs awarded therein against Buyer. In case said product, or any part thereof, is in such suit held to constitute infringement and the use of said product or part is enjoined, ADC shall, at its own expense and at its option, either procure for Buyer the right to continue using said product or part; or replace same with non-infringing comparable products; or modify it so it becomes non-infringing; or remove said product or part and refund purchase price and the transportation and installation cost thereof. Buyer shall hold ADC harmless from any expense or loss resulting from infringement of patents, trademarks or copyrights arising from compliance with Buyer's designs, specifications or instructions. The sale of products by ADC does not convey any license by implication, estoppel or otherwise, under present claims covering combinations of said product or part with other devices or elements.

Origin of Articles. If Buyer ships the articles hereunder out of the U.S. for assembly, then at Buyer's request in writing, ADC shall provide information applicable to identification of any articles not of U.S. origin.

Government Contracts. If the articles to be furnished under this contract are to be used in the performance of a Government contract or subcontract, and a Government contract number shall appear on Buyer's purchase order, those clauses of the applicable Government procurement regulation which are mandatorily required by Federal Statute to be included in Government subcontracts shall be incorporated herein by reference.

Governing Law. This contract shall be governed by and construed in accordance with the laws of the State of Texas. Except to the extent that the provisions of this contract are clearly inconsistent therewith, this contract shall be governed by applicable provisions of the Texas Uniform Commercial Code.

Headings not controlling. Headings used in this contract are for reference purposes only and shall not be deemed a part of this contract.

Entire Agreement. This contract constitutes the entire agreement between the parties with respect to the subject matter; all prior agreements, representations, and understandings are superseded hereby. No amendment to this contract shall be effective unless it is in writing and signed by duly authorized representatives of both parties.

Partial Invalidity. If any provision of this contract shall be held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

Non-Waiver. No delay or failure of ADC in exercising any right hereunder and no partial or single exercise thereof shall be deemed of itself to constitute a waiver of such right or any other rights hereunder.

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