Terms of Service

Terms & Conditions of Sale for Customers of Whole Phonics, Inc.

Applicability

1.1. Scope. These Terms & Conditions of Sale for Customers of Whole Phonics, Inc. (“T&Cs”) shall apply to all goods (“Products”) that Whole Phonics, Inc. (“Seller”) sells and/or delivers to you and/or your affiliates (“Buyer”). Buyer hereby accepts these T&Cs as a condition to the purchase of any Products from Seller. Buyer’s acceptance of Products constitutes Buyer’s irrevocable acceptance of these T&Cs. These T&Cs are binding on both Buyer and Seller (the “Parties”).

1.2. No Additional or Different Terms. These T&Cs are intended as a complete and exclusive statement of the terms of the agreement between the Parties. Seller’s offer to sell and deliver Products is expressly limited to these T&Cs. Seller hereby objects to any additional or different terms contained in any Buyer purchase order, order acknowledgement, conditions of purchase, or other Buyer document or communication of any kind (“Contrary Communication”). Every such Contrary Communication shall be of no force or effect, except to the extent otherwise provided in ¶ 1.3 below.

1.3. Modification by Supply Contract. These T&Cs may be modified only by a writing that is signed by Seller’s authorized representative [¶ 9.4] and by Buyer (“Supply Contract”). When a conflict arises between these T&Cs and an existing Supply Contract, the provisions of the existing Supply Contract will control.

Contract Formation

2.1. Firm Offers. Either Party may withdraw its offer at any time prior to acceptance by the other Party, unless a “firm offer” is made. In order to be a firm offer, there must be written assurance that the offer itself will be held open for a stated period of time (but never more than 3 months).

2.2. Acceptance by Seller. An offer by Buyer to purchase Products shall be deemed accepted by Seller if and only if (i) Seller sends Buyer a written acceptance or other written confirmation of any kind; or (ii) Seller ships the Products to Buyer or hires a carrier to transport such Products; or (iii) Seller acts to its detriment in reliance on Buyer’s offer.

2.3. Cancellation by Buyer and Product Returns. No order for Products from Seller may be cancelled or changed by Buyer after acceptance by Seller without the prior written approval of Seller. Under no circumstances may Buyer return any Products to Seller without Seller’s prior written authorization.

Price and Terms

3.1. Price. The price shall be Seller’s price in effect at the time of shipment. A different price shall apply only if the other price is contained in a Supply Contract [¶ 1.3], a firm offer [¶ 2.1], a writing provided by Seller’s customer service department, or a writing that is signed by Seller’s authorized representative [¶ 9.4].

3.2. Other Charges. Buyer is responsible for and shall reimburse Seller for all taxes, excises, and other charges that Seller is required to pay to any government or taxing authority upon the sale, production, or transportation of the Products (other than income taxes). If omitted from an invoice, Seller may bill Buyer subsequently. Buyer shall reimburse Seller for all demurrage charges due to Buyer’s failure to unload and return delivery equipment in a timely manner. Seller may also charge Buyer for unusual packaging, special labeling requirements, and other appropriate charges. For all US orders under $150.00 USD, there is a $10.00 shipping fee. For US orders $150 and over, there is a 7% shipping rate.

3.3. Payment Terms. Except as authorized by Seller in writing, Buyer shall pay the entire amount it then owes Seller with no setoffs or discounts. For deliveries to Buyers in the United States and Canada, payment shall be due no later than thirty days after the delivery date (“Net 30”) unless Seller has extended credit in writing. For deliveries to all Buyers outside of the United States and Canada (“International Buyers”), see Section 3.4.4.

3.4. Credit Terms. Seller’s terms are Net 30, unless a different period is stated in a Supply Contract [¶ 1.3], a firm offer [¶ 2.1], a writing from Seller’s credit department, or a writing signed by Seller’s authorized representative [¶ 9.4].

3.4.1. Due Date for Invoices. An invoice will be sent by Seller to Buyer on the same date Product is delivered. Payment terms are always measured from the invoice date. To be timely, Buyer’s payment must be received by Seller within that time. A payment mailed by the due date, but received afterwards, is a late payment.

3.4.2. Missed or Late Payments. If a payment is missed or late, Seller may (i) accelerate Buyer’s outstanding debt, (ii) decline or suspend deliveries, (iii) change future terms to COD, (iv) demand credit enhancements, and/or (v) require any other credit requirements Seller in good faith deems appropriate. In all cases of missed or late payment, in addition to the principal amount due Buyer shall pay Seller interest thereon at the rate of eighteen percent (18%) per annum compounded daily, from the date payment is first due.

3.4.3. Additional Rights. Seller may also exercise the rights in ¶ 3.4.2 above if Buyer fails to provide financial statements or other financial data requested by Seller, or in accordance with UCC § 1-309, when Seller in good faith believes its prospects for obtaining payment or performance from Buyer have been impaired.

3.4.4. International Buyers. International Buyers are responsible to pay Seller in advance the full price of the Product together with all customs fees, import duties, taxes, wire transfer fees and other costs. Except as authorized by Seller in writing, for all international orders outside the US and Canada, Buyer must pay Seller in full cash-in-advance by wire transfer. Unless otherwise agreed upon in writing by Seller and Buyer, Seller shall release the Product for shipment to International Buyers at Seller’s designated location free carrier (FCA). International Buyers are solely responsible for payment of any additional fees (including but not limited to other customs fees, import duties, taxes, and delivery fees) incurred after the Product leaves Seller’s designation location.

3.5. PMSI. Seller may claim a purchase money security interest (“PMSI”) in the Products until Buyer pays for them in full. Seller is hereby authorized by Buyer to notify its other secured creditors of this PMSI, file financing statements, and take any and all other actions required to make this PMSI enforceable by Seller under UCC § 9-312 and other laws.

Delivery

4.1. Title & Risk of Loss. Unless agreed by Seller in writing, Seller may select the method of shipment and the carrier. Except as provided in ¶ 4.1.1 and ¶ 4.1.2 below or as Seller agrees in writing, all shipments are free on board (“FOB”) shipping point. FOB shipping point, and title & risk of loss pass from Seller to Buyer when Seller delivers the Products to the carrier at the shipping point.

4.1.1. Delivery Location. Seller shall ship the Product to such as address as provided by Buyer. It is Buyer's responsibility to ensure that the address location is attended, secure and otherwise reasonably suited to the receipt of the goods, to prevent loss of Product upon or after delivery. If delivery is to an address that is not attended, secure and suited to receipt of goods during reasonable hours (for example delivery to a school which might be closed during school holidays, vacation periods or summer break) it is Buyer’s responsibility to alert Seller of such circumstances at the time the purchase order is made.

4.1.2. Bulk Shipments. All bulk shipments are FOB shipping point. Title & risk of loss pass from Seller to Buyer when the Products pass the flange of the transportation vehicle.

4.2. Transportation Costs. Shipments are freight prepaid & allowed for Product shipped by bulk shipments [¶ 4.1.1], or when Seller otherwise agrees in writing. In all other cases, the shipment shall be freight collect. When an independent motor carrier is used, Seller may sign the Section 7 block on the Bill of Lading.

4.3. Delivery Date. Buyer understands that Seller’s delivery times are only estimates, and are always subject to printing schedules, production limits, and other factors. Under no circumstances shall Seller be liable for a late delivery unless otherwise stated in a Supply Contract [¶ 1.3] or a writing signed by Seller’s authorized representative [¶ 9.4].

4.4. Inspection Requirement. Following receipt, Buyer shall promptly (i) inspect the Products to see if they conform to Buyer’s order, and (ii) perform all quality control tests needed to determine whether the Products delivered to Buyer conform to its order. Buyer must retain damaged goods and packaging for inspection by the Seller and carrier.

4.4.1. Notice Requirement. Buyer must notify Seller in writing of any Product shortage, damage, non-delivery or nonconformity within 14 days following delivery (or, for defects that cannot reasonably be discovered within such time, within 10 days from when Buyer should reasonably have discovered the shortage, damage or nonconformity. If damaged or nonconforming Product is received, PHOTOS of the damaged Products must be submitted to Seller at the time written notice is given, to facilitate filing a claim against the carrier. It is also essential that Seller receive timely notice of non-delivery; therefore, if Buyer does not receive delivery of all or any part of the Product within 28 days from the order date or date of confirmation (whichever is later), Buyer must notify Seller within 14 days thereafter of such non-delivery by supplying Seller with the tracking number of any parcel not received.

4.4.2. Failure to Give Timely Notice. Notwithstanding anything else in these T&Cs or in the UCC to the contrary, unless Buyer gives timely notice pursuant to ¶ 4.4.1 above, Seller shall not be responsible for any losses sustained due to Buyer’s failure to notify Seller. Buyer shall have no claim against Seller for any alleged Product shortage, damage, or nonconformity (and all such claims are deemed to have been waived).

4.5. Carrier Claims. Buyer is solely responsible for filing claims against a carrier for Products shipped FOB shipping point under ¶ 4.1 and ¶ 4.1.1 that Buyer did not receive, were received in damaged condition, or for which Buyer has other claims against the carrier. Seller will provide Buyer with all information that Buyer reasonably requires for its claim, within a reasonable period of time.

Warranties

5.1. In General. Seller hereby warrants to Buyer that at the time of shipment its Products shall conform to Seller’s written specifications (“Specs”). The preceding warranties do not cover damage to the Product or any other damages of any kind that result from or arise out of (i) improper use of the Product, (ii) storage in damp, wet or other inappropriate conditions, and/or (iii) Buyer’s failure to take any other reasonable precautions to safeguard the Product. BUYER UNDERSTANDS AND AGREES THAT THE FOLLOWING PROVISIONS ARE A MATERIAL PART OF THE BARGAIN BETWEEN THE PARTIES:

5.1.1. Other Express Warranties. Seller makes no other express warranty of any kind. Other express warranties are binding on Seller if and only if they are made in writing and signed by Seller’s authorized representative [¶ 9.4]. No written or oral statement from any other person shall be an express warranty enforceable against Seller. Buyer understands and agrees to the preceding and hereby waives all rights to assert anything to the contrary.

5.2. Implied Warranties. SELLER HEREBY DISCLAIMS ALL OF THE IMPLIED WARRANTIES IN THE UCC AND ANY OTHER APPLICABLE LAW. THIS DISCLAIMER INCLUDES, BUT IS NOT LIMITED TO, THE IMPLIED WARRANTY OF MERCHANTABILITY AND ANY IMPLIED WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE.

6. Claims and Remedies

6.1. Remedies. No monetary award against Seller shall ever exceed the purchase price of the Products at issue. Alternatively, Seller may, at its option, (i) accept return of the Products and credit the Buyer for their price, and/or (ii) repair or replace the nonconforming Products. These remedies against Seller are exclusive; under no circumstance shall these remedies be deemed to fail their essential purpose. Buyer understands and agrees to the preceding, and hereby waives all rights to assert anything to the contrary. Seller shall not be liable for a breach of warranty unless: (a) Buyer gives written notice of the defect, reasonably described, to Seller as prescribed in ¶ 4.4.1; (b) Seller is given a reasonable opportunity to inspect the allegedly defective Products; and (c) Seller verifies Buyer’s claim that the Products are defective.

6.2. Damages Not Recoverable. EXCEPT AS PROHIBITED BY LAW, NEITHER PARTY SHALL RECOVER ANY (i) CONSEQUENTIAL OR INCIDENTAL DAMAGES, (ii) LOST PROFITS OR DAMAGES FOR LOST BUSINESS OPPORTUNITIES, (iii) WAGES FOR SALARIED PERSONNEL OR OTHERS PAYABLE IN ANY EVENT, (iv) PERSONAL INJURY DAMAGES, (v) DAMAGES TO EQUIPMENT OR ANY OTHER PROPERTY DAMAGES OF ANY KIND, (vi) ENVIRONMENTAL OR NATURAL LOSSES, AND (vii) PUNITIVE, SPECIAL, INDIRECT, OR EXEMPLARY DAMAGES.

6.3. Loser Pays. Plaintiff is the “prevailing party” — and defendant is the “losing party” — whenever plaintiff is awarded (i) at least 67% of plaintiff’s monetary demand, and/or (ii) a substantial portion of plaintiff’s request for injunctive relief. If plaintiff is awarded neither of the preceding, then the “prevailing party” is defendant and the “losing party” is plaintiff.

6.3.1. Costs & Disbursements. In all cases, the losing party must pay all of the prevailing party’s costs and disbursements including, without limitation, fees and expenses of expert witnesses. However, neither Party may recover for time spent by its employees or any of their travel costs, hotel charges, meals, or related items.

6.3.2. Attorney Fees. In all cases, the losing party shall pay the prevailing party’s reasonable attorney fees and their expenses. A contingency fee up to one-third (1/3) is reasonable. Legal fees may be charged by outside attorneys and, despite ¶ 6.3.1 above, by in-house counsel (provided there is no double counting).

6.4. Interest. Any claim by Seller against Buyer for a liquidated sum, or by Buyer against Seller for a liquidated sum, shall accrue interest on the unpaid amount at the rate of eighteen percent (18%) per annum compounded daily from the date payment is first due, or if the maximum applicable legal rate is less, at such lesser rate.

6.5. Collection Costs. Until the award is paid in full, interest shall accrue on the unpaid amount at the rate in ¶ 6.4 above. In the event the full payment is not made within 30 days of the award, the prevailing party shall be entitled to recover all of its reasonable collection coasts, including additional attorney fees relating to collection of those unpaid amounts.

Dispute Resolution

7.1. In General. These dispute resolution provisions may be modified by the Parties in writing. Nothing herein prevents the Parties from utilizing mediation to the extent they so agree. As used below, the amount of a Party’s requested claim or counterclaim excludes (i) interest; (ii) the monetary value of injunctive relief sought; (iii) any arbitration and arbitrator fees; (iv) all costs, disbursements, and attorney fees; and (v) damages not recoverable hereunder [¶ 6.2].

7.2. Court. Any controversy or claim arising out of or relating to these T&Cs or the contract between the Parties, or the breach thereof, shall be resolved by a court under the provisions below.

7.2.1. Exclusive Jurisdiction & Venue. The court proceeding must be commenced in the United States District Court for the Southern District of New York, or the Supreme Court, New York County, or the New York City Civil Court, and those courts shall have exclusive jurisdiction and venue to determine all legal and equitable disputes between the Parties.

7.2.2. Buyer Consent to Jurisdiction & Venue. Buyer (i) consents to the jurisdiction and venue of the above courts, (ii) waives any right to contest the same or claim that those courts are inconvenient forums, and (iii) agrees that those courts shall have exclusive jurisdiction and venue.

7.3. Statute of Limitation. Every action relating to Products governed by these T&Cs must be commenced within one year from the date of the sale. Any action commenced after that time shall be barred.

Miscellaneous

8.1. Force Majeure. Each Party’s duty to perform hereunder is suspended for the length of time of any (i) Act of God, fire, or explosion; (ii) war, other conflict, or terrorism; (iii) geopolitical disturbance in the Middle East or other regions; (iv) strike, lockout, or other labor trouble; (v) injunction or other legal prohibition; (vi) inability to obtain necessary raw materials or transportation; and/or (vii) other circumstances beyond its control. However, the Buyer must still pay for Products received, Products already in transit, and custom Products of Seller for which Seller already started production.

8.2. Allocation. Whenever Seller in good faith is unable to produce enough Product to fill all its orders, Seller may allocate Product to itself first, and thereafter among its customers in a fair and reasonable manner. In such an event, Seller shall not be liable to Buyer for its failure to fulfill Buyer’s full order (or for any other matter related to the allocation).

8.3. Buyer Obligations. Before ordering any Products from Seller, Buyer shall test the Product for its applications to assure itself that the Products meet Buyer’s needs and desires. Following delivery, Buyer assumes all risks and liabilities of any kind from the transportation, handling, storage, use, and disposal of the Products (whether used alone, in combination with other substances, or in any process). Except as prohibited by law, after Buyer accepts the Products (i) Seller shall not be liable for any claims involving Buyer and the Products, and (ii) Buyer must indemnify and hold Seller harmless from any and all losses and damages of any kind arising out of such claims (including attorney fees).

8.4. Right to Revise. Seller may revise these T&Cs at any time and in any way. However, no revision may be applied retroactively, and the existing T&Cs shall remain in effect for offers already accepted and for shipments in transit.

Rules of Construction

9.1. Waivers. A waiver by Seller of any provision of these T&Cs shall be effective only if, and only if, it is in writing and signed by Seller’s authorized representative [¶ 9.4]. No other alleged waiver by Seller shall be of any force or effect.

9.2. Assignment. Seller may assign its payment rights. Neither Party may assign its rights or delegate its duties hereunder without the other Party’s written consent, and any such action without that consent shall be void, except no such consent shall be required in the event of merger or sale of the assigning Party’s entire business for the relevant Products.

9.3. Binding Effect. These T&Cs are binding upon and inure to the benefit of each of the Parties, their permitted assigns, an acquirer of that Party’s business for these Products, and their affiliates and legal successors in interest.

9.4. Seller’s Authorized Representatives. In these T&Cs, a person is an authorized representative of Seller only if he or she serves Seller as (i) chairman, CEO, COO, president, or vice president; (ii) chief manager or general manager; or (iii) any other employee of Seller designed as such by name in a writing that has been signed by any of the preceding. Sales Managers and Business Managers may bind the Seller to sales offers and sales contracts (but nothing else).

9.6. Governing Law. These T&Cs shall be governed by the laws of the State of New York — except its choice of law rules — and not by the United Nations Convention on Contracts for the International Sale of Goods. New York law applies whether the proceeding is held within New York or elsewhere.