Commercial Terms & Conditions

Thermoelectric Devices

1. ACCEPTANCE OF TERMS.

All sales of Phononic Devices, Inc. (“Phononic”) Thermoelectric Devices (“Products”) furnished by Phononic to the party purchasing Products from Phononic (“Customer”) are made pursuant to the terms and conditions (the “Terms”) set forth herein. To the extent of any conflict between these Terms and any terms and conditions provided by Customer, including any pre-printed purchase order terms and conditions, these Terms shall take precedence and any conflicting or additional terms and conditions provided by Customer are hereby rejected. In the absence of written acceptance of these Terms, acceptance of or payment for the Products shall constitute an acceptance of these Terms.

2. ORDERS.

Each purchase order (“Order”) submitted by Customer shall include: (a) the number of Products ordered by Customer; (b) the requested delivery date; (c) any preferred shipping instructions and shipping destination; (d) the price of Products ordered; (e) the billing location; and (f) Customer’s tax status (exempt or non-exempt). Shipments of Products must be scheduled within 12 months from the date ordered. Phononic’s standard order acceptance process is to acknowledge acceptance or propose modifications to Orders within two business days of receipt. Any Order not accepted within five business days is deemed rejected. All order acknowledgements will deem acceptance of an Order and will set forth Phononic’s proposed delivery dates. The confirmation of any Order by Phononic means that the terms of the Order have been agreed and Phononic accepts the Order, unless otherwise noted in the confirmation.

3. ORDER CANCELLATION AND RESCHEDULING.

(a)   Cancellation Fees.  Upon written notice (which may be given electronically) to Phononic, Company or the Subcontractor may cancel all or any part of such Purchase Order without any liability of any kind to Phononic other than the cancellation charges set forth below.  In case of such cancellation, Company or the respective Subcontractor shall pay to Phononic one of the following amounts:

(i)        For non-cancelable/non-reschedulable/non-returnable (“NCNR”) quoted orders: One hundred percent (100%) of the full quantity and amount of the purchase order.

(ii)      One hundred percent (100%) of the price of the Products ordered in the cancelled Purchase Order, if Phononic receives the cancellation notice up to four (4) weeks prior to the committed delivery date specified in the Phononic order confirmation;

(iii)      Seventy percent (70%) of the price of the Products ordered in the cancelled Purchase Order if Phononic receives the cancellation notice more than four (4) weeks but not more than eight (8) weeks prior to the delivery date specified in the Phononic order confirmation; or

(iv)      Fifty percent (50%) of the price of the Products ordered in the cancelled Purchase Order if Phononic receives the cancellation notice more than eight (8) weeks but not more than thirteen (13) weeks prior to the delivery date specified in the Phononic order confirmation; or

(v)       Nothing, if Phononic receives the cancellation notice more than thirteen (13) weeks prior to the delivery date specified in the Phononic order confirmation.

(b)   Rescheduled Deliveries.  Upon notice to Phononic given no less than thirty (30) calendar days prior to the scheduled delivery date for any Purchase Order, Company or the Subcontractor may reschedule the delivery of all or part of the Products covered by such Purchase Order. Delivery as to any given Purchase Order may not be rescheduled to occur later than twelve (12) weeks after the original delivery date stated in such Purchase Order and not outside of the current Phononic fiscal calendar. As to any Purchase Order that is rescheduled under this Section 3(b) and then cancelled under Section 3(a), the amount to be paid under Section 3(a) will be calculated based on the original delivery date stated in such Purchase Order. Company may change the delivery date for any Purchase Order two (2) times within the twelve (12) week period set forth above.

Cancellation Due to Delayed Delivery. If delivery of any Purchase Order is delayed more than three (3) weeks beyond the scheduled delivery date called for in the Purchase Order (or rescheduled delivery date pursuant to Section 3(b)), then Company and/or the Subcontractor may cancel the Purchase Order upon notice to Phononic, which notice may be given electronically, without any liability of any kind to Company.

Cancellation Due to Product Quality Issues. If at any time a conditional quality issue or an Epidemic Failure not caused by Company or its Subcontractors and confirmed by Phononic, then upon notice to Phononic and without any liability of any kind to Phononic, Company and/or any Subcontractor may cancel and/or reschedule any then-outstanding Purchase Orders.

4. DELIVERY.

Unless otherwise agreed in writing, all deliveries are EXW (Incoterms 2010) at Phononic’s manufacturing facility. All Products shall be deemed irrevocably accepted upon delivery. Title and risk of loss shall pass to Customer upon delivery. Phononic reserves the right to make partial deliveries, and the Order shall be severable as to such installments. Delivery delay or default of any installments shall not relieve Customer of its obligation to accept and pay for remaining deliveries, and Phononic will not be liable for any delay in the delivery of Products. Phononic retains a security interest in the Products until Customer makes full payment.

5. PRICES AND PAYMENT.

The prices for the Products are Phononic’s standard prices in accordance with its price list at the time of purchase unless the parties otherwise agree in writing. Customer shall bear, in addition to the purchase price, the amount of any freight, insurance, handling and other duties levied on the shipment of Products and all sales, use, excise, or other similar taxes levied on the purchase of Products. All payments shall be made in U.S. Dollars within 30 days of receipt of invoice. All amounts not paid when due shall bear simple interest until paid at the lower of 1.5% per month or the highest rate allowed by law. Phononic reserves the right at any time to revoke any credit extended to Customer or cancel Customer’s order because of Customer’s failure to pay for any Products when due or for any reason deemed good and sufficient by Phononic, and in such event all subsequent shipments shall be suspended until Customer’s account is current or so declared, or cancelled at Phononic’s option. If Phononic cancels Customer’s order due to Customer’s non-performance, Phononic shall invoice Customer for the price effect applicable to the quantity actually purchased.

6. INTELLECTUAL PROPERTY RIGHTS AND CONFIDENTIAL INFORMATION.

The sale of the Products furnished hereunder does not convey any license by implication, estoppel, or otherwise, under any proprietary or intellectual property rights of Phononic covering combinations of the Products with other equipment except as specified in the applicable Phononic documentation. In all cases, intellectual property rights in and relating to the Products shall be and remain the exclusive property of Phononic and its licensors or suppliers. All drawings, diagrams, specifications, and other materials furnished by Phononic and identified as confidential relating to the use and service of the Products, and the information therein, are confidential and proprietary to Phononic. Such materials have been developed at great expense and may contain trade secrets of Phononic. Customer may not reproduce or distribute such materials except to Customer’s employees who may use the Products as part of their duties. All such materials relating to the Products supplied directly by Phononic (except information as may be established to be in the public domain without fault or action of Customer or disclosed pursuant to judicial or government action) shall be received in confidence, and Customer shall exercise reasonable care to hold such information in confidence and in no event less care than Customer exercises to protect Customer’s confidential information. Customer may only use such information for purposes of installing and operating the Products as specified by Phononic.

7. LIMITED WARRANTY.

(a)       Phononic warrants that the Products as delivered shall, for a period of one (1) year from delivery (the “Warranty Period”), be free of material defects and shall conform in all material respects to Phononic’s specifications. For any material breach of the foregoing warranty, Phononic shall, at its option, refund the purchase price, or repair or replace the nonconforming Products, provided written notice of non-conformance is received by Phononic within the Warranty Period. Nonconforming Products shall be, with Phononic’s prior written authorization, returned to Phononic’s plant within the Warranty Period. Customer shall bear all risk of loss or damage to returned Products while in transit. Phononic reserves the right to examine any alleged non-conformance and perform a failure analysis to determine if the alleged non-conformance is a result of breach of the foregoing warranty. Upon verification by Phononic that the Products do not conform to this warranty, Phononic will reimburse Customer for the cost of transporting the Products to Phononic’s plant; such payment may be based on standard carrier tariffs and may not reflect the actual transportation costs. The foregoing states Phononic’s sole and exclusive obligation and Customer’s sole and exclusive remedy for breach of the foregoing warranty. In the event no defect or breach of warranty is discovered by Phononic upon receipt of returned Products, the Products will be returned to Customer at Customer’s expense and Customer will reimburse Phononic for the transportation charge, labor, and associated charges incurred in testing the allegedly defective Products. Any repair or replacement provided to Customer will not extend the Warranty Period for the Products.

(b)       The warranty under this Section 7 shall only be applicable to the original consumer purchaser of a Product and not to any subsequent owner of a Product. Given the variability in testing equipment and testing methodologies, Phononic cannot and does not warrant that its Products will deliver any particular results when tested by Customer or a third-party testing agency. The foregoing warranty shall not apply to Products that Phononic determines have been installed, tested, or operated in a manner other than specified by Phononic in the applicable specification and reference design provided by Phononic, or have been the subject of mishandling, misuse, neglect, improper repair, alteration, damage, assembly, or processing that alters physical or electrical properties, or damaged in transit.

(c)        DISCLAIMER OF WARRANTY. EXCEPT FOR THE WARRANTY EXPRESSLY SET FORTH ABOVE, Phononic EXPRESSLY DISCLAIMS ALL OTHER WARRANTIES, WHETHER EXPRESS, IMPLIED, OR STATUTORY, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, AND NON-INFRINGEMENT. This warranty shall not be enlarged, and no obligation or liability shall arise out of Phononic’s rendering of technical advice, facilities, or services in connection with the delivery of the Products. Some jurisdictions do not permit the disclaimer of warranties, so this warranty disclaimer may not apply to you.

8. LIMITATION OF LIABILITY.

TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, IN NO EVENT SHALL PHONONIC BE LIABLE TO CUSTOMER, OR TO ANY PARTY CLAIMING THROUGH OR UNDER CUSTOMER, FOR ANY LOST PROFITS, OR FOR ANY INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY, OR CONSEQUENTIAL DAMAGES OF ANY KIND, ARISING OUT OF OR RELATED TO THE SALE OF PRODUCTS TO CUSTOMER OR USE OR INABILITY TO USE ANY PRODUCTS BY CUSTOMER, EVEN IF PHONONIC HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, AND Phononic’s total CUMULATIVE liability is limited to the AMOUNTS PAID BY CUSTOMER TO PHONONIC DURING THE 12 MONTHS PRECEDING THE CLAIM. No action shall be brought more than one year after the accrual of such cause of action. Customer acknowledges that the foregoing limitations are an essential element of the agreement between the parties pursuant to these Terms and that in the absence of such limitations the pricing and other terms set forth in these Terms would be substantially different. Some jurisdictions do not permit limitations of liability, so THIS SECTION 8 may not apply to you.

9. GENERAL. Customer acknowledges that it has read and understands these Terms and agrees to be bound by them. These Terms shall not be governed by the 1980 United Nations Convention on Contracts for the International Sale of Goods or the United Nations Convention on the Limitation Period in the Sale of Goods, as amended; rather, these Terms shall be governed by the laws of Delaware exclusively, without regard to conflict of law provisions. Any or all products may be subject to export or resale restriction or regulation, and Customer agrees to comply with all such regulations or restrictions and any other applicable laws and regulations regarding use of the Products. Any or all Products may have been imported. Country of origin information is as provided to Phononic by its suppliers and is, where applicable, located on the Products or the innermost packaging thereof. If Customer’s order is placed under a contract with the United States Government, Phononic agrees to comply with those contract provisions and regulations with which, pursuant to law, it must comply and of which Customer has, at the time of order placement, provided Phononic written notice. All rights in technical data, software, and/or firmware owned or licensed by Phononic are hereby reserved and deemed restricted or limited. No provision of Customer’s contract with the Government will be binding on Phononic except as expressly set forth in this Section. Any Order may be assigned by Phononic to a successor in interest upon any merger, reorganization, change of control, or sale of all or substantially all of the assets of Phononic. Customer shall have no right to assign these Terms, or any Order hereunder, without the prior written consent of Phononic. Any assignment in violation of the foregoing shall be null and void from the beginning. These Terms shall be binding on any successor or assign. Phononic’s failure to or delay in exercising any of its rights hereunder shall not constitute or be deemed a waiver or forfeiture of such rights. All waivers must be in writing. Any waiver or failure to enforce any provision of this Agreement on one occasion will not be deemed a waiver of any other provision or of such provision on any other occasion. Customer’s relationship to Phononic is that of an independent contractor, and neither party is an agent or partner of the other. If any provision of these Terms is unenforceable, such provision will be changed to accomplish the objectives of such provision to the greatest extent possible under applicable law and the remaining provisions will continue in full force and effect. These Terms and the invoice, purchase order, or sales acknowledgement form supplied by Phononic to which it is attached constitutes the entire agreement between the parties regarding the subject hereof and supersedes all prior or contemporaneous agreements, understandings, and communication, whether written or oral. These Terms may be amended only by a written document signed by both parties that specifically references these Terms.

This Agreement represents the complete understanding of the parties and overrides all incompatible provisions contained in the Customer’s purchase order or other document emanating from either party. Except as otherwise provided herein, the sale of Parts will be subject to Phononic’s Commercial Terms and Conditions of Sale, and form an integral part hereof. This Agreement shall be governed by the laws of the State of North Carolina, USA.

Rev 1.1 May 28, 2016