Purchase Order Terms and Conditions

Terms of Agreement: The purchase order, together with these terms and conditions, and any attachments, exhibits, specifications, drawings, notes, instructions and other information, whether physically attached or incorporated by reference (collectively the “Purchase Order”), constitutes the entire and exclusive agreement between CMD and the Supplier identified in the Purchase Order (PO). CMD’s submission of the PO is conditioned on Supplier’s agreement that any terms different from or in addition to the terms of the PO, whether communicated verbally or contained in any PO confirmation, invoice, acknowledgement, release, acceptance or other written correspondence, irrespective of the timing, shall not form a part of the PO, even if the Supplier purports to condition its acceptance of the PO on CMD’s agreement to such different or additional terms. Supplier’s electronic acceptance, acknowledgement of this PO, or commencement of performance constitutes Supplier’s acceptance of these terms and conditions. All PO’s are to be acknowledged with confirmation of CMD part number, Supplier and/or Manufacturer part number, description, quantity, delivery date, and pricing. Notwithstanding the foregoing, if a master agreement covering procurement of the Products of Work described in the PO exists between Supplier and CMD, the terms of such master agreement shall prevail over any inconsistent terms herein.

Buyer Changes: CMD may at any time by written order make changes or additions within the general scope of this purchase order in or to drawings, designs, specifications, and instructions for work, methods of shipment or packing, or place of delivery. If any such change causes an increase or decrease in the cost of, or the time required for performance of, this purchase order, Supplier shall notify CMD in writing immediately and an appropriate equitable adjustment will be made in the price or time of performance, or both, by written modification within five days after Supplier's receipt of notice of the change or within such other period as may be agreed to in writing by the Parties. Nothing herein shall excuse Supplier from proceeding with the purchase order as changed. If changes have been agreed upon, CMD will provide a revised PO to show such changes.

Supplier Changes: Suppliers to CMD must notify CMD of any changes in product and/or processes to manufacture the product, changes to suppliers, and/or changes of manufacturing facility locations involved with the order and, where required, obtain CMD approval for the change.

Delivery: Delivery shall be strictly in accordance with the delivery schedule set out or referred to in this order. When it is not, a phone call or email explaining the situation is required. If Supplier’s delivery shall fail to meet schedule, CMD, without limiting its other rights or remedies, may direct expedited routing, and any excess cost incurred thereby shall be debited to Supplier’s account. The date on the PO is the Delivery Date and items on the order should ship to arrive on that date at the PO “Ship To” location. Delivery times are 7:00am – 4:00pm. Any change to the Delivery Date must be approved by CMD. On Time Delivery (OTD) is defined to be up to 5 business days early and 2 business days late from the specified Delivery Date and within the same Delivery Date month. OTD is one of the categories used in the Supplier Quality Evaluation.

Shipping Instructions: (a) Utilize the shipping account # specified on the purchase order (b) Do not deliver more than 5 days ahead of schedule within the delivery date month unless authorized by CMD (c) For palletized shipments, record the Nation Motor Freight Classification (NMFC) number on Bill of Lading to obtain the lowest applicable freight rate. Do not insure or declare value on shipments. Consolidate all shipments to be forwarded on one day. (d) Articles furnished in excess of the quantity specified or in excess of any agreed upon overage will be retained by CMD at no additional cost unless Supplier notifies CMD before thirty (30) days after shipment that it desires the return thereof. Supplier shall reimburse CMD for the full cost of returning such over- shipment or a minimum charge of US$50.00; whichever is higher. No notification will be given to Supplier of any over-shipment unless the value thereof exceeds US$100.00. (e) No extra charge for packaging shall be allowed unless specifically noted herein. (f) Goods shall be packaged to ensure safe arrival at destination. Raw metal material requires protective wrap on plate with no adhesives, tape, or banding touching material. The St. Helens “Ship To” location is not trailer friendly and parts should be stacked on the tail of trailer. (g) The container within which the shipping documentation, certifications, test data, and inspection data shall be clearly marked. (h) All paperwork must include at least the CMD purchase order number, part number, description, quantity, supplier/manufacturer part number, and revision level if relevant. A packing list and any applicable certificates and/or reports must accompany the shipment certifying that the articles listed are in compliance to the contract, drawing, specifications and other applicable documents. The Certificate must be validated by an authorized quality representative and include Purchase Order number, part numbers & revisions, quantity and lot numbers as applicable. (i) C.O.D. orders will not be accepted.

Segregation of Lots: The Supplier will not co-mingle different date codes or production lots, nor combine resubmitted parts with new production parts. Parts may be submitted in one shipment provided the different lots are identified and segregated unless otherwise required to be from one lot. For all orders containing raw metal the material must be from one lot.

Nonconforming Material: The Supplier shall not ship or perform material review action on nonconforming material with the intent of delivering nonconforming material without written authorization from CMD. CMD reserves the right to reject nonconforming products. Furthermore the supplier shall notify CMD if a product or article has been released and subsequently found not to conform to the applicable design data within 24 hours.

Supplier Corrective Action Requests (SCAR): If the parts or services delivered by the supplier have non-conformities that are recurring or considered serious by CMD, a SCAR may be issued. Once issued, the supplier is required to respond within 15 business days. The SCAR form contains instructions for the process. Failure to provide an acceptable response/corrective action may result in a hold on future business with the supplier.

Inspection: The Supplier shall perform 100% inspection for workmanship, damage, foreign material, plating/finishing anomalies and other visible defects prior to delivery to CMD, or may employ sampling inspection when specifically authorized. Sampling Inspection must be a statistically valid (C = 0) sampling plan that precludes the acceptance of lots whose samples have known nonconformities. The use of other sampling plans or schemes is prohibited unless approved by CMD.

Inspection/test which cannot be readily examined in the completed products must be performed at the appropriate in-process stages of manufacturing. Adequate records of inspection/test must be maintained by the supplier. First Article documentation for all first manufactured parts must be available upon CMD’s request. Upon receipt,

CMD may reject any or all of the order which does not conform to the applicable requirements. At CMD’s option, CMD may (a) return the non-conforming parts to Supplier for complete replacement, (b) return the non-conforming parts to Supplier for repair or rework if deemed acceptable by CMD, (c) CMD may also accept the nonconforming parts if deemed acceptable to Use As Is by CMD. (d) For any subcontract work done to parts where CMD provides material and non-conforming parts are found to be unusable and not repairable, the Supplier will provide a refund or credit for the amount of the material and any CMD labor costs associated with the part up to the point of Supplier receipt, in addition to the credit of the subcontract work done on the parts. This also includes any quantity of parts not returned in full for any reason. (e) CMD’s payment to the Supplier for any orders prior to CMD’s rejection of such parts as non-conforming will not be deemed as acceptance by CMD.

Price Warranty: Supplier warrants that the price charged for the supplies/services specified in this order are equal or better than the selling price(s) that Supplier charges its most favored customer for the same or similar items, whether sold to the Government or to any other purchaser taking in account the quantity purchased and the terms and conditions of sale. Oregon has no sales tax; therefore sales taxes do not apply to CMD.

Records: The Supplier shall maintain adequate records of production, inspections, tests, material certifications and all relevant quality records that provide evidence of conformity to contract requirements and have these records be available for review by CMD or other regulatory authorities for a minimum of ten (10) years from completion of the purchase order contract.

Traceability: The supplier is required to provide traceability for all production assemblies and manufactured parts for use in production delivered to CMD and all such assemblies and parts must be controlled and uniquely identified of its components. Serial numbers, batch numbers, manufacture history and delivery data must be suitably recorded with all data to support traceability. All parts must be in new condition with full trace to the manufacturer. New surplus parts are not allowed unless clearly stated on the purchase order.

Calibration: A system for the control and maintenance of measuring and test equipment in accordance with ISO 10012, ISO/IED 17025 A2LA, MIL-STD-45662A, or ANSI/NCSL Z540-1 or equivalent shall be implemented and maintained. The Calibration System shall be documented, accountable, traceable, and provide for initial and re-calibration during the life of the equipment to traceability to the National Institute of Standards and Technology (NIST).

Warranty: Supplier warrants that all articles, material and work furnished hereunder will be free from defect in material and workmanship and will conform to applicable specifications, drawings, samples and/or descriptions furnished by CMD. The warranties of Supplier, together with its service guarantees, shall run to CMD and/or its customers for one year from the date of shipment. Work performed to the above warranty may be rejected and returned to Supplier, at Supplier’s expense, for correction or replacement.

Payment: CMD will pay Supplier the price agreed upon and acknowledged on the order in accordance with the payment terms set forth in the PO. Payment may be delayed due to any non-conforming issues with any associated parts until a resolution has been agreed upon. CMD may, at any time, setoff any amounts Supplier owes

CMD against any amounts CMD owes Supplier or any of its affiliated companies.

Right of Entry: CMD hereby reserves the right of entry to the Supplier’s facilities for the purpose of auditing procedures and/or inspection of purchased item(s). This Right of Entry shall extend to CMD’s customers, Government, or other regulatory agencies, including FAA surveillance and investigation. Right of access also applies to any level of the supply chain involved in the order and to all applicable records. Adequate notification to the Supplier shall be provided in advance of the visit.

Patents and Design Rights: Supplier warrants that the sale, use, or incorporation into manufactured products of all machines, devices, material, software, and firmware that are not of CMD’s design, shall be free and clear of infringement of any valid United States patent, copyright, trade mark, or other proprietary rights. Supplier shall hold CMD, its customers and lessees harmless from any and all expenses, liability, and loss of any kind including but not limited to attorney’s fees, all costs, expenses, and fees growing out of claims, suits, or actions alleging such infringements, which claims, suits, or actions Supplier agrees to defend.

Proprietary Drawings and Data: Supplier shall keep confidential all information, drawings, specifications, or data; and return upon request, all furnished documents requested by CMD. Supplier shall not divulge or use such information, drawings, specifications, or data for the benefit of any other party. Except as required for the efficient performance of this purchase order, Supplier shall not make copies or permit copies to be made without the prior written consent of CMD. Supplier shall thereafter make no further use, whether directly or indirectly, of any such data or any information derived there from without obtaining CMD’s written consent. The obligations of this clause shall survive the completion, cancellation, or termination of this purchase order. If CMD and Supplier have entered into a Proprietary Information Agreement (PIA) the parties shall treat the terms, conditions, and existence of the PO as Confidential Information as defined in the PIA. If the term of the PIA expires before the expiration or termination of the PO, then the term of the PIA shall be automatically extended to match the term of the PO.

CMDs Property/Furnished Equipment: Title to all property furnished to Supplier by CMD or paid for by CMD shall remain with CMD. Supplier shall not alter or use such property for any purpose or for any other party other than that specified by CMD without the prior written consent of CMD. Supplier shall keep adequate records which shall be made available to CMD upon request, and shall store, protect, preserve, repair and maintain such property in accordance with sound industrial practice, all at Supplier’s expense. In the event that CMD’s property becomes lost or damaged to any extent for any cause while in Supplier's possession, Supplier agrees to replace or repair such property, at Supplier's expense, in accordance with CMD’s request. At the completion or any termination of the work for the goods or services for which CMD’s property was required, Supplier shall request disposition instructions for all such property, or the remainder thereof, whether in its original form or in semiprocessed form. Supplier shall make such property available to CMD at CMD’s request, including preparation, packaging, and shipping as directed. Expense for preparation for shipment shall be for Supplier's account and shipment shall be made FOB Supplier's plant. Supplier assumes complete liability for any tooling, articles, or materials furnished by CMD to Supplier in connection with this purchase order and Supplier agrees to pay CMD for all such tooling, articles or material spoiled by it or not otherwise accounted for to CMD’s satisfaction. The furnishing to Supplier of any tooling, articles or material in connection with this purchase order shall not, unless otherwise expressly provided, be construed to vest title thereto in Supplier.

Flow-down of Requirements (Sub-Tier Supplier): Where critical processes, characteristics, or features are performed outside the Supplier’s facility, the Supplier is still responsible for control of sub-tier suppliers and the flow-down of applicable material, processes and testing requirements.

Termination: Without limiting CMD’s rights to cancel this order for default of Supplier by (a) failing to deliver within the specified time (b) failing to comply with the contract, CMD may terminate all or any part of the work under this order and process claims therefore for its inconvenience in accordance with the provisions set forth in current Federal procurement regulations. Supplier shall submit a claim for equitable adjustment within 30 days of receipt of termination notice.

Indemnification: To the extent that Supplier’s agents, employees, or subcontractors enter upon premises occupied by or under the control of CMD, or any of its customers, or suppliers, in the course of the performance of this purchase order, Supplier shall take all necessary precautions to prevent the occurrence of any injury (including causing death) of any persons, or of any damage to any property, arising out of acts or omissions of such agents, employees, or subcontractors; and, except to the extent that any such injury or damage is due directly and solely to CMD’s negligence. Supplier shall indemnify defend, and hold CMD, its officers, employees, and agents, harmless from any and all costs, losses, expense, damages, claims, suit, or any liability whatsoever, including attorney’s fees, arising out of any or omission of Supplier, its agents, employees, or subcontractors.

Special Tooling: Dies, tools and patterns specially developed for and used in the manufacture of the articles herein ordered shall be furnished by the Supplier and shall be kept in good condition and; when necessary, shall be replaced by Supplier. Any expenses associated with such items will be negotiated. CMD may at any time become the owner and entitled to possession of any or all such special tooling acquired or manufactured specially for use in the performance of this order if any portion of the cost of such special tooling is separately stated or included in the price of articles, material or work covered by this order upon Supplier being reimbursed the unpaid amount of Supplier's cost of such special tooling.

United States Export Regulations: CMD is required by law to comply with all US export regulations with regard to exporting of goods, products, materials, technology, data, etc, up to and including, but not limited to, drawings, e-mails, repair procedures, installation manuals, specification documents or any electronic or written technical data.

As a supplier of CMD it is essential to communicate to you that our suppliers, vendors and partners are as well subject to these same regulations. It is important to note that “export” is not limited to the transfer of materials or documentation crossing a country border. An export can also occur when controlled data or hardware is shared in the US or other countries with one or more individuals who are not US citizens or permanent residents and are therefore subject to US export regulations. The Supplier agrees to provide to CMD for each part number level: 1) the ECCN (Export Control Classification Number) ; 2) HTS classification number (Harmonized Tariff Schedule); 3) Certificate of Origin or a Manufacturers Affidavit; and 4) a NAFTA Preference Criteria, as applicable for every and all goods, materials, or services provided to CMD by Supplier as part of this agreement. If any goods, materials or services subject to this agreement are subject to ITAR (International Traffic-In Arms) Control the Supplier agrees to notify CMD in writing prior to execution of this agreement providing the classification for the product or service utilizing the proper USML (United States Munitions List) classification. If Supplier intends to conduct quotation work, manufacturing, supplying, or services including engineering services for this RFQ using anyone other than US citizens or permanent US resident aliens, Supplier must provide advance written notice to purchaser demonstrating detailed method of compliance in accordance with US export regulations.

Hold Harmless: To the fullest extent permitted by law, Supplier shall indemnify and hold harmless CMD, Inc. et al, its agents, directors, shareholders and employees, from and against any and all claims, damages, losses and expenses, including but not limited to attorneys’ fees, arising out of or resulting from performance of work, provided that such claim, damage, loss or expense is attributable to bodily injury, sickness, disease or death, or to injury to or destruction of tangible property, but only to the extent caused by the negligent acts or omissions of Supplier, anyone directly or indirectly employed by them or anyone whose acts they may be liable, regardless of whether or not such claim, damage, loss or expense is caused in part by a party indemnified hereunder.

Equal Opportunity & Affirmative Action for Sellers: The following provisions, rules and regulations pertaining to Equal Opportunity and Affirmative Action, are hereby incorporated by reference; and the seller represents, by acceptance of this purchase order, that it will comply with such provisions, rules, regulations and amendments thereto, to the extent the same rules are applicable to the manufacture and/or sale of goods purchased hereunder; or the contracting and/or subcontracting of services of work hereunder: to 41 CFR 60-1.4(a) (for women and minorities), 41 CFR 60-741.5(a) (for disabled), and 41 CFR 60-250.5 (for disabled veterans and veterans of Vietnam Era).

Equal Opportunity & Affirmative Action for Sub-Contractors: The following provisions, rules and regulations pertaining to Equal Opportunity and Affirmative

Action, are hereby incorporated by reference; and the subcontractor represents, by acceptance of this contract, that it will comply with such provisions, rules, regulations and amendments thereto, to the extent the same rules are applicable to the contractor and/or the contracting and/or subcontracting of services of work hereunder; or the sale of good purchased hereunder: to 41 CFR 60-1.4(a) (for women and minorities), 41 CFR 60-741.5(a) (for disabled), and 41 CFR 60-250.5 (for disabled veterans and veterans of Vietnam Era).