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STANDARD TERMS and CONDITIONS

1.     Seller guarantees that the prices mentioned in this order (orother lower prices) at which Seller will invoice the goods to Buyer areSeller’s lowest and best prices for the goods ordered herein and that allprevailing taxes, otherwise which may apply to domestic sales but which do notapply to goods exported from this Country have been excluded and will not,therefore, be included in Seller’s invoice prices. When requested, Buyer willfurnish proof of having exported the goods.

2.     PRISON MADE GOODS – Federal Government regulations prohibit theimportation and sale of goods which have been made either wholly or in part byPrison Labor. If this applies to the goods supplied by Seller, this order MUSTbe returned immediately to Buyer.

3.     Buyer reserves the right to change delivery schedules and tosuspend temporarily scheduled shipments. If the goods are shipped or receivedin advance of schedule, Buyer may return such goods to Seller at Seller’s riskand expense.

4.     CANCELLATION WITH CAUSE – Buyer reserves the right to cancel thisorder if Seller does not comply with the terms hereof, and in the event of thehappening of any of the following: Seller’s insolvency; Seller’s filing of avoluntary petition in bankruptcy; the filing of an involuntary petition to haveSeller declared bankrupt, provided it is not vacated within thirty (30) daysfrom the date of filing; the appointment of a receiver or trustee for Seller,provided such appointment is not vacated within thirty (30) days from the dateof such creditors. In the event of any such cancellation, Buyer with Buyer’s prejudiceto any other right available to Buyer for breach of contract, shall have theright (a) to refuse to accept delivery of the goods, (b) to return to Sellerany goods already accepted, (c) to recover from Seller all payments madetherefore, and for freight, storage, handling, and other expenses incurred by Buyerand to be relieved from liability for any future payments to Seller; and (d) topurchase elsewhere and charge Seller with any resultant losses.

5.     CANCELLATION WITHOUT CAUSE – Buyer reserves the right to cancelthis order, in whole or in part, at any time, without cause or Seller’sdefault, and to make changes in specifications or requirements. Seller shall,upon Buyer’s request, immediately suspend shipments of goods and performance ofwork until further written orders from Buyer. Any such cancellations orextensions in times of delivery and performance, and any losses or damages,resulting from such cancellations and suspensions shall be equitably adjustedbetween Buyer and Seller and this order modified accordingly. However, Buyershall not be liable for failure to accept the goods ordered herein and forcancellation of this order arising from causes beyond Buyer’s reasonablecontrol, such as Seller’s inability to ship (export) as intended because ofconditions abroad, floods, fires, court orders, strikes, work stoppages or actsof governmental authorities.

6.     NONASSIGNABILITY – This order shall not be assigned, in whole orin part, without Buyer’s written consent, and if so assigned, shall be bindingupon the successors and assigns of the parties hereto.

7.     APPLICABLE LAW – The rights and duties of the parties hereto shallbe determined by the laws of the State of Delaware, and to that end thisagreement shall be construed and considered as a contract made and to beperformed in the State of Delaware.

8.     PACKING & SHIPPING – All items shall be prepared and packedfor shipment in a manner that will prevent damage in transit. Buyer is notliable for extra charges for packing, cartage or anything else unless stated inthis order. Seller shall mark the number of this order on each container andenclose a packing slip with the order number in each container. Seller shall submitinvoices by email to avionicupload@iqbackoffice.com no later than one day afterthe shipment has been made.

9.     DELIVERY SCHEDULE – Seller shall follow the delivery scheduleshown on this order and shall not make deliveries later or substantiallyearlier than dates shown. Time is the essence of this agreement. If items areshipped substantially in advance of scheduled delivery dates, Buyer may returnthem at Seller’s expense. If Seller exercises due care, Seller shall not beliable for delays in delivery due to acts of God, floods, fire, war, riot,strikes and damage in transit due to causes beyond its reasonable control.However, if Seller does not adhere to the delivery schedule regardless of thecause (acts of God, etc.) Buyer may terminate this order without liability uponit to Seller, or Buyer may agree to a revised delivery schedule.

10.   INSPECTION – Seller agrees to permit the Buyer’s inspectors tohave access to the Seller’s plant at all reasonable times for the purpose ofinspecting the items set forth on this order or work in process for productionof such items. All items are subject to final inspection and approval atBuyer’s plant or other place designated by Buyer. Such inspection shall be madewithin a reasonable time after delivery, irrespective of the date of payment.Buyer may return rejected items at Seller’s expense. Seller shall not replaceitems returned as defective unless so directed by Buyer in writing.

11.   CHANGES BY BUYER – Buyer may make changes in the drawing andspecifications on any item at any time. If such changes result in delay oradditional expense to Seller, an equitable adjustment of price and deliveryschedules will be made.

12.   CHANGES BY SELLER – Seller agrees to notify Buyer of changes toprocesses, products, or services, including changes of sub-tier suppliers orlocation of manufacture for Buyer’s approval. Sellershall notify Buyer of any potential work movement or placement at least sixty(60) days in advance of Seller committing to any such movement or placement.

13.   BUYER’S PROPERTY – All tools, dies, jigs, patterns, equipment ormaterial and other items purchased, furnished, charged to or paid for by Buyer,and any replacement thereof, shall remain the property of the Buyer. Suchproperty shall be plainly marked to show it is the property of the Buyer andshall be safely stored apart from other property. Seller shall not substituteother property for Buyer’s property and shall not use such property except infilling Buyer’s orders. Seller shall hold such property at its own risk andupon Buyer’s written request shall redeliver the property to Buyer in the samecondition as originally received by Seller, reasonable wear and tear excepted.

14.   WARRANTY – Seller confirms any express warranty (oral or written)previously made and warrants that all items shall be free from defects ofmaterial or workmanship, shall conform to drawings and specifications and anysamples previously delivered shall be of merchantable quality and fit for thepurpose for which purchased. Such warranties, together with all other services,warranties, and guarantees of Seller, not including any disclaimers, shall runin favor of Buyer, its employees and its customers. Seller agrees to indemnifyand hold Buyer harmless from any and all liability of Buyer arising out of orin any way connected with a breach of this warranty or the negligence of Sellerin the manufacture or design of the items set forth in this order.

15.   DRAWING, SPECIFICATIONS & TECHNICAL INFORMATION – The ideas,information and designs contained in or shown upon, and the drawings,specifications, photographs and other engineering and manufacturing informationsupplied by Buyer, shall remain Buyer’s property, shall be retained inconfidence by Seller and not disclosed to any other person or entity, and shallnot be used or incorporated into any product, or item later manufactured orassembled by Seller for anyone other than Buyer. Any unpatented knowledge orinformation concerning Seller’s processes, present or contemplated products ortheir uses which Seller may order shall, unless otherwise specifically agreedin writing, be deemed to have been disclosed as a part of the consideration forthis order, and Seller agrees not to assert any claim (other than a claim forpatent infringement) against Buyer by reason of any use or alleged use to whichany such information or knowledge may be put by Buyer.

16.   PATENT TRADEMARK & COPYRIGHT INDEMNITY – Seller agrees toindemnify Buyer and hold it harmless from and against all claims, liability,loss, damage or expense, including counsel fees, arising from or by reason ofany actual or claimed trademark, patent, or copyright infringements orlitigation based thereon, with respect to the goods or any part thereof coveredby this order and such obligation shall survive, acceptance to the goods andpayment thereof by the Buyer.

17.   ENGLISH LANGUAGE – When specifically requested by Buyer, Sellershall make specified quality data and/or approved design data available in theEnglish language.

18.   QUALITY ASSURANCE SYSTEM – Seller shall maintain a documentedinspection and quality assurance system acceptable to Buyer. Systems certifiedto the current revisions of the following standards are considered acceptable:

·       ISO 9001 - Quality Management Systems - Requirements

·       AS9100 - Quality Systems - Aerospace - Model for Quality Assurancein Design, Development, Production, Installation and Servicing

·       AS9120 - Quality Management Systems - Aerospace Requirements forStockist Distributors

·       ISO 17025 - Testing and Calibration Laboratories (CalibrationProviders only)

Sellers holding one or more of these standards shall provideevidence of certification. Sellers NOT certified to one of these standardsshall provide documentation of an acceptable quality assurance and inspectionsystem for Buyer’s review and approval.

19.   CERTIFICATE OF CONFORMANCE – Shall be included with each shipment.The Certificate shall certify that the shipment meets all contractrequirements. For chemical goods, a Certificate of Analysis shall be provided.The Certificate shall be traceable to manufacturing quality records, chemicalor physical data as applicable. The Certificate of Conformance shall include:

·       Purchase Order Number(s)

·       Lot and/or Serial Numbers

·       Part Name, Drawing, and/or Specification Number

·       Signature of Authorized Representative of the Seller

20.   SUBCONTRACT ASSIGNMENT & SETOFF – Seller shall not, withoutthe written consent of the Buyer, make any contract with any other person forfurnishing any of the completed items covered by this order or assign thisorder or any right hereunder. Buyer may set off against amount payable to anyperson under this order any claim or charge it may have against Seller.

21.   FAIR LABOR STANDARDS ACT – Seller represents that the items to befurnished hereunder are produced in compliance with the Federal Labor StandardsAct of 1938. Each of Seller’s invoices shall contain a certificate that theitems covered by the invoice were produced in compliance with the Fair LaborStandards Act of 1938.

22.   COMPLIANCE – Seller shall comply with all applicable laws,executive orders, ordinances and regulations.

23.   OCCUPATIONAL HEALTH & SAFETY – Seller shall ensure that it isin compliance with all occupational health and safety laws and regulations.

24.   ENVIRONMENTAL MANAGEMENT – Seller shall ensure that it is incompliance with all environmental laws and regulations. It is preferable thatthe seller shall implement an Environmental Management System in accordancewith ISO 14001.

25.   COMPLETE AGREEMENT – The conditions of purchase stated hereinincluding all insertions thereon by the Buyer constitute the complete agreementbetween the Buyer and Seller concerning this Purchase. Any prior negotiationsbetween the Buyer and Seller, or terms or conditions of sale set forth in theSeller’s quotation or order or sales acknowledgement shall not constitute apart of the agreement between the Buyer and Seller concerning this purchase.

26.   RIGHT OF ACCESS – Seller agrees to permit Buyer, Buyer’s customerand regulatory authorities’ right of access to all the applicable areas of Seller’s facilities, at any level of the supply chain, involved inthe order and to all applicable records.

27.   NONCONFORMING MATERIAL CONTROL – Seller shall establish andmaintain an effective and positive system for controlling nonconformingmaterial, including procedures for the identification, segregation,presentation and disposition of reworked or repaired supplies. Allnonconforming supplies shall be positively identified to prevent use, shipmentand intermingling with conforming supplies.

Seller shall report to Buyer if a product, article or service hasbeen released (shipped, delivered, etc.) from Seller and subsequently found notto conform to the applicable design data within 72 hours of discovery. Sellershall email Buyer Quality Representative to disclose the escapement, submit a Sellernotification of escapement or equivalent, and provide containment, root causeand corrective action statement.

28.   CORRECTIVE ACTION – Buyer may request formal Corrective Actionfrom the Seller to address nonconformances. The Seller shall submit itsresponse within the timeframe specified by Buyer. Buyer reserves the right toreject any root cause and/or corrective action provided by the Seller and mayrequest subsequent investigation and/or corrective action.

29.   DEVIATIONS – Items controlled by a Buyer control drawing must meetall requirements of the drawing. Any deviation to the drawing must have writtenapproval from Buyer prior to delivery.

30.   PROHIBITED MATERIAL USES – Parts supplied on this Contract shallnot be exposed to or contain functional mercury or mercury compounds.

31.   RECORD RETENTION – Records of tests, inspections, and otheractivities providing evidence of acceptability to specifications shall bemaintained by the Seller for a minimum of ten (10) years unless otherwise notedin the contract.

At the expiration of suchperiod set forth above and prior to any disposal of records, Seller will notifyBuyer of records to be disposed of and Buyer reserves the right to requestdelivery of such records. In the event Buyer chooses to exercise this right,Seller shall promptly deliver such records to Buyer at no additional cost onmedia agreed to by both parties.

32.   EQUIPMENTCALIBRATION – All measuring equipment shall be calibrated or verified, or both,at specified intervals, or prior to use, against measurement standardstraceable to NIST standards in accordance with the requirements of ANSI/NCSLZ540.3 and ISO 17025, or the latest equivalent.

33.   COUNTERFEIT GOODS – Seller shall implement an appropriate strategyto ensure that Goods furnished to Buyer under this contract are not CounterfeitGoods. Seller’s strategy shall include, but not be limited to, the directprocurement of items from OEMs or authorized suppliers, conducting approvedtesting or inspection to ensure the authenticity of items. When items are to beprocured from non-authorized suppliers, it is to be done only during DMS(Diminishing Manufacturing Sources) or when obsolescence conditions arepresent. Seller must disclose that they are not authorized to sell these partsand must obtain written approval from Buyer. Also required from suchnon-authorized suppliers are appropriate certificates of conformance thatprovide one or more of the following: (1) the OEM’s original certificate ofconformance for the item; (2) sufficient records providing unbroken supplychain traceability to the OEM; or (3) test and inspection records demonstratingthe item’s authenticity.

34.   ACCEPTANCE AUTHORITY MEDIA – Seller shall warrant that all recordsand information related to this Contract shall be free from any fraudulent statementsor omissions. The Seller shall establish controls for the use of acceptanceauthority media (AAM) (e.g., stamps, electronic signatures, passwords).

35.   QUALITY MANAGEMENT SYSTEM CHANGES – Seller shall notify Buyer ofany changes in or adverse Level II or Level III actions affecting the QualityManagement System including but not limited to changes of the CertificationStatus of the Quality Management System, Management Representative, QualityManager, Ownership and Location.

36.   COMPETENCYAND AWARENESS – The Seller shall ensure that all personnel who have aninfluence on the quality of the work performed shall have the necessarycompetence and skills. The Seller shall ensure that personnel are aware oftheir contribution to product or service conformity, to product safety, and tothe importance of ethical behavior.

37.   FLOW DOWN REQUIREMENTS – Seller shall flow down all applicablerequirements, including Key Characteristics, where required for all processesthat are outsourced to sub-tier suppliers.

38.   AFFIRMATIVEACTION COMPLIANCE – The parties hereby incorporate the requirements of 41 CFR60-1.4(a)(7), 29 CFR Part 471, Appendix A to Subpart A, 41 CFR 60-300.5(a)iiand 41 CFR 60-741.5(a), if applicable.

Buyer and Seller shall abide by the requirements of 41CFR60-300.5(a).This regulation prohibits discrimination against qualified protected veteransand requires affirmative action by covered prime contractors and subcontractorsto employ and advance in employment qualified protected veterans.

Buyerand Seller shall abide by the requirements of 41CFR60-741.5(a). This regulationprohibits discrimination against qualified individuals on the basis ofdisability and requires affirmative action by covered prime contractors andsubcontractors to employ and advance in employment qualified individuals withdisabilities.

39.   GIDEPMEMBERSHIP – The Seller is required to be a member of GIDEP(Government/Industry Data Exchange Program) if Seller is eligible.

40.   FOREIGNOBJECT CONTROL – Seller is required to established and maintain a FODprevention program in compliance with AS9146 Foreign Object Damage (FOD)Prevention Program - Requirements for Aviation, Space, and DefenseOrganizations.

41.   FIRSTARTICLE INSPECTION REPORT – Seller shall perform First Article Inspectionsaccording to the requirements of AS9102 AerospaceSeries - First Article Inspection Requirements.Seller shall provide a First Article Inspection Report for the first shipmentof articles delivered according to this contract which are built according to aBuyer provided source-controlled drawing. Records of First Article inspectionsshall be retained for not less than ten (10) years.

42.   IPCCertification and Workmanship (Printed Circuit Boards, Electronic Assemblies,and Cable and Wire Harness assemblies), Class 3

·       Printedcircuit boards, Electronic Assemblies, and Cable and Wire Harness Assembliesshall be built using J-STD and IPC certified personnel.

·       Unlessotherwise stated on the drawing or contract:

·       Solderingshall be performed by personnel certified to J-STD-001 – Requirements forSoldered Electrical and Electronic Assemblies.

·       PrintedCircuit boards shall have workmanship in compliance with IPC-6011 or IPC-6012,IPC-A-600 as applicable , Class 3 – Acceptability of Printed Boards

·       ElectronicAssemblies shall have workmanship in compliance with IPC-A-610, Class 3 –Acceptability of Electronic Assemblies

·       CableAssemblies shall have workmanship in compliance with IPC/WHMA-A- 620, Class 3– Requirements and Acceptance for Cable and Wire Harness Assemblies

43.   ESDSENSITIVE ITEMS – Shall be protected against Electro-Static Discharge (ESD)from time of manufacture to delivery at Buyer. ESDpackaging and marking is required for ESD sensitive items.An ESD control program as per ANSI/ESD S20.20 – Protection Of Electrical AndElectronic Parts, Assemblies And Equipment is recommended for propermethods of handling, storage, and assembly of ESD sensitive items.

44.   SAFETYDATA SHEETS (SDS) – Shall be included with all shipments of hazardousmaterials.

45.   OZONEDEPLETING SUBSTANCES – For Sellers performing value added activities on goodsand services ordered according to this contract, the Seller shall labelproducts which contain or are manufactured with ozone-depleting substances inthe manner and to the extent required by 42 U.S.C. 7671j (b), (c), and (d) and40 CFR Part 82, Subpart E, as applicable:

Warning: Contains *_______, asubstance(s) which harm(s) public health and environment by destroying ozone inthe upper atmosphere.

Or

Warning: Manufactured with *_______,a substance(s) which harm(s) public health and environment by destroying ozonein the upper atmosphere.

* Seller shall insert the name ofthe substance(s).

This requirement shall be includedin all contracts placed by the Seller, including the requirement that it beflowed throughout the supply chain.

Definition: “Ozone-depletingsubstance," as used in this clause, means any substance the EnvironmentalProtection Agency designates in 40 CFR Part 82 as –

(1) Class I, including, but notlimited to, chlorofluorocarbons, halons, carbon tetrachloride, and methylchloroform; or

(2) Class II, including, but notlimited to hydrochlorofluorocarbons.

46.   AGESENSITIVE MATERIALS – Must have 50% minimum life remaining when received unlessotherwise specified.

47.   SAMPLINGPLANS – Whenever applying statistical sampling methods as a means to ensureproduct, article, or service conformance Seller shall comply with requirementsof document AS9138 – Aerospace Series – Quality Management SystemsStatistical Product Acceptance Requirements, as may be amended from time totime. Seller’s statistical sampling procedure/plan must include the followingto be compliant:

·      Minimum protectionlevels as defined within AS9138 Table A1

·      C=0 criteria asdefined within AS9138 Section 3.11

·      Samplingrestrictions as contained within AS9138, Section 4.3 Safety/CriticalCharacteristics, and

·       Samplingrequirements and/or prohibitions contained within the approved part/product Design.

Buyer reserves the right to disallowa Seller's statistical methods for product acceptance for specificsites/programs, parts or characteristics, and to conduct surveillance atSeller's facility to assess compliance to the requirements of AS9138 and/orpart/product Design Data sampling requirements.

Non-Compliance with anyPO requirement will result in Material rejection.

Payment shall be madeonly when all Contract requirements are met.

SPECIALQUALITY REQUIREMENTS:

Special quality requirements shallbe called out on the contract when applicable.

1.     Buyer Source Inspection required.

2.     Customer/Government Source Inspection required.

3.     Other(See PO Notes).

IF THIS ORDER INDICATES THAT IT RELATES TO A GOVERNMENT CONTRACTTHE FOLLOWING ADDITIONAL CONDITIONS APPLY:

A.    ASPR ADDITIONS – The following clauses from the Armed ServicesProcurement Regulations in effect on the date of the prime contract inconnection with which this order is let are hereby incorporated and made a parthereof as though set forth in full: Defense Priority and AllocationRequirements (52.211-15); Buy American Act (7-104.3); Eight House Law(7-103.16); Walsh-Healey Act (7-103.17); Vincent-Trammel Act (7-103.11);Military Security Requirements (7-104.12); Examinations of Records (7-104.15);Notice to Government of Labor Disputes (7-104.4); Renegotiation (7-103.13);Filing of Patent Rights (9-107.2); and Data (9-203.1 and 9-203.4). Wherenecessary to make the context of these clauses applicable to this agreement theterm “contractor” shall mean the Seller and the term “contract” shall mean thisagreement.

B.     NON-DISCRIMINATION IN EMPLOYMENT – (7-103.18)

1.     In connection with the performance of work under this contract theSeller agrees not to discriminate against any employee or applicant foremployment because of race, religion, color, or national origin. The aforesaidprovisions shall include, but not be limited to, the following: employment,upgrading, demotion or transfer, recruitment or recruitment advertising, layoffor termination; rates of pay, or other forms of compensation; and selection fortraining, including apprenticeship. The Seller agrees to post hereafter inconspicuous places, available for employees and applicants for employment,notices to be provided by the contracting officer setting forth the provisionsof the non-discrimination clause.

2.     The Seller further agrees to insert the foregoing provision in allsubcontracts hereunder except subcontracts for standard commercial supplies orraw materials.

C.     SOURCE INSPECTION – Buyer reserves the right to request GovernmentInspection at the source. In the event that this right is exercised, theSeller, at its expense, shall make all necessary arrangements with the properGovernment agency to arrange for this inspection and shall promptly furnishBuyer with the resulting inspection certificates.

D.   TERMINATION – Buyer maycancel this agreement at any time by giving written notice to Seller. In suchevent, the procedure for termination and for the settlement of the obligationsof Buyer and Seller in connection with such termination shall be in accordancewith the principles set forth in Section VII of the Armed Service ProcurementRegulation. The provisions of the paragraph shall not limit or affect the rightof the Buyer to terminate this order for the default of the Seller.

E.    Government owned special toolingproduced or used under this Contract is the property of the United StatesGovernment. The Seller shall conform to the applicable requirements of DefenseFederal Acquisition Regulations (DFAR) regarding government property in thepossession of contractors.

IF THIS ORDER INDICATESTHAT ITMAY REQUIRE DIRECT SHIPMENT TO A BOEING COMMERCIAL AIRPLANES LOCATION:

THESELLER WILL PLACE THE FOLLOWING STATEMENT ON THE SHIPPING DOCUMENTATION OF ALLSHIPMENTS TO BOEING:

"Sellerhereby acknowledges that the parts and/or materials being shipped under thisorder are intended for use under Boeing's Federal Aviation Administration (FAA)issued Production Certificate 700 and no articles (or constituent partsthereof) or the accompanying paperwork (e.g., packages, shippers, etc.) containany Federal Aviation Administration- Parts Manufacturer Approval (FAA-PMA)markings."

THEPREFERRED LOCATION FOR THE STATEMENT IS ON THE SHIPPING DOCUMENT, NEXT TO, ORFOLLOWING, THE CERTIFICATE OF CONFORMANCE (C of C). THE STATEMENT MAY BEPRINTED, STAMPED OR ATTACHED AS A LABEL OR STICKER TO THE SHIPPINGDOCUMENTATION. IT IS ALLOWABLE TO REPLACE "Seller" WITH THE COMPANYNAME OR "WE".

Boeingrequires that the provisions/requirements set forth above, as determined by theSeller to be applicable, be included in Seller's direct supply contracts aswell as the obligation that they be flowed to the sub-tier supply chain.

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FORM-117 Rev 13

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