MANUFACTURING RESOURCES INTERNATIONAL, INC.
General Terms and Conditions
M-PRP01.01 07/15/13

1. DEFINITIONS. As used herein, “Buyer” means MANUFACTURING RESOURCES INTERNATIONAL, INC. “Seller” means the party identified on the face of this order. “Subcontract” means either purchase order or subcontract, and “Products” means all articles, materials, work or services to be furnished by Seller under this order. “Buyer’s Authorized Procurement Representative” means the person or persons authorized by Buyer to alter, modify or change the provisions of this order.

2. ACCEPTANCE. (a) This order becomes the exclusive agreement between the parties for the Products, subject to the terms and conditions herein. Any of the following shall constitute Seller’s unqualified acceptance of this order: (i) acknowledgment of this order; (ii) furnishing of any Products under this order; (iii) acceptance of any payment under this order, or (iv) commencement of performance under this order. (b) Additional or different terms or conditions proposed by Seller shall be void and of no effect unless accepted in writing by Buyer. No change in, modification of, or revision to this order shall be valid unless in writing and signed by Buyer’s Authorized Procurement Representative.

3. PACKING AND SHIPMENT. (a) All material shall be suitably packed, marked and shipped as designated by Buyer in accordance with the requirements of common carriers in a manner to secure lowest transportation cost, and no additional charge shall be made to Buyer therefore unless otherwise stated herein. (b) F.O. B. point and cash discount terms must be shown on all invoices. (c) Transportation must be prepaid on all shipments to which delivered price applies. (d) Charges for prepaid transportation must be substantiated by attaching the original transportation bill to the invoice, receipted by the carrier. (e) This order may not be filled at prices higher than those last charged or quoted for the same material without notification and acceptance by Buyer of the advanced prices. (f) No charges for packing, packaging, or dryage will be accepted except by express agreement to such charges. (g) Drafts against Buyer will not be honored, nor C.O.D. shipment accepted, except by express agreement to that effect. (h) Shipments for which Buyer is responsible for transportation charges must be properly described on the bill of lading to
obtain the lowest applicable charge. The lowest valuation available must be declared when the carrier offers released valuation rates.

4. QUALITY CONTROL AND INSPECTION. (a) Seller shall provide and maintain a Quality Control system acceptable to Buyer. During performance of this order, Seller’s Quality Control, Inspection System, and Manufacturing Processes are subject to review, verification and analysis by Buyer. (b) All Products ordered may be subject to: (i) inspections, verification, or testing during the period of manufacture; (ii) inspection or verification prior to shipment; and (iii) final inspection and acceptance at destination, notwithstanding any prior payment or inspection and acceptance. If this order is placed in support of a contract between Buyer and higher tier contractor, such inspection and verification rights shall extend to the higher tier contractor. If any inspection or test is made on the premises of Seller or its lower tier suppliers, Seller shall, without additional charge to Buyer, provide and shall require its lower tier suppliers to provide all reasonable facilities and assistance for the safety and convenience of Buyer/Inspector in the performance of their duties. (c) Buyer may reject and hold at Seller’s expense subject to Seller’s reasonable disposal instructions, Products which do not conform to applicable specifications, drawings, samples or descriptions or which are defective in material, workmanship or design unless such design is Buyer’s detailed design. If within fifteen (15) days after Buyer has notified Seller of the rejected Products, Seller has not provided Buyer with reasonable disposition instructions, including agreement to pay expenses incurred by Buyer, Buyer may at his option continue to hold the rejected Products at Seller’s expense or return them to Seller’s facility at Seller’s expense. Without limiting any other rights Buyer may, at its option, require Seller: (i) to repair or replace at Seller’s expense any Products or items thereof which fail to meet the requirements of applicable design, specifications, drawings, samples, descriptions, or other requirements of this order, or (ii) to refund the price of any such item. Previously rejected Products reworked to specifications, or replaced shall not be retendered to Buyer by Seller unless notification of such past rejection is submitted with the retender and Buyer has consented to such retender.

5. INSPECTION AT SOURCE. If it is indicated elsewhere on this Order that Products to be furnished hereunder shall be subject to inspection by Buyer or its representatives upon the premises of Seller; Seller, without additional cost, shall provide all reasonable facilities and assistance for the safety and convenience of such inspectors. At the time of source inspections, Seller shall make available to the inspectors copies of all drawings, specifications, test and packaging data applicable to the material ordered hereunder. Such inspections shall be deemed as preliminary only and all material ordered hereunder shall be subject to final inspection and acceptance in Buyer’s plant.

6. NON-CONFORMING MATERIAL. Seller shall maintain an effective system to identify, segregate and disposition non-conforming material. The decision to accept non-conforming material detected at Seller’s facility must be made by Buyer’s Material Review Board. Seller’s written request for disposition must contain a complete description of discrepancy and a statement of the corrective action taken to prevent recurrence of discrepancy. Seller must receive Buyer’s written authorization prior to shipment of non-conforming material. Seller shall reference the Manufacturing Resources International, Inc. Authorization Number on the shipping paper for all shipments covered by the Material Review Authorization.

7. DELIVERY. Delivery according to schedule is a material requirement of this order. Time is of the essence on this purchase order. Seller shall not, without Buyer’s prior written consent, deliver in advance of schedule. Buyer may return or store at Seller’s expense any items delivered in advance of the delivery date specified for such items. Buyer shall not be required to remit payment for such items until after the specified delivery date. If at any time it appears to Seller that any delivery schedule cannot be met, Seller shall notify Buyer in writing as soon as possible as to the cause or causes therefore, actions being taken to remove such cause or causes, when schedule status will be achieved, and at Seller’s expense, shall take reasonable action necessary with or without request of Buyer to meet such schedules as set forth herein or to recover to the maximum extent possible any delay in meeting such schedules. Such reasonable action by the Seller shall include, but shall not be limited to, shipment via expedited routing and carrier. Buyer reserves the right to invoke Liquidated Damages calculated at a rate of one percent (1%) per day of the price of the delayed Product(s) until such delayed shipment is effectively made. Furthermore, Buyer reserves the right to cancel or purchase elsewhere if delivery schedules are not met.

8. EXCUSABLE DELAYS. Strikes, fires, accidents or other causes beyond the reasonable control of Buyer which affect its ability to receive and use the material ordered hereunder shall constitute valid grounds for suspension of shipment under this order upon notification to Seller by facsimile or letter, and any such suspension of shipment shall be without penalty or cost to Buyer. Except for delays of Seller’s subcontractors, Seller shall not be liable for damages to Buyer or its customers for delays or defaults in deliveries due to unforeseeable contingencies beyond Seller’s control and without Seller’s fault or negligence. Seller’s delays or defaults in deliveries shall be grounds for cancellation of this order regardless of the cause thereof. Seller shall within three (3) days of the occurrence thereof notify Buyer in writing of the occurrence of any cause which will give rise to a delay in delivery. Failure to give such notice shall render Seller liable for all damages, including incidental and consequential damages to Buyer and its customer occasioned by delay in the delivery of the material covered by this order.

9. WARRANTY. Seller warrants that all Products furnished hereunder will be free from defects in material and workmanship, conform to applicable specifications, drawings, samples and descriptions or other requirements of this order and, unless Buyer’s detailed design, be free from design defects for a period of eighteen (18) months after delivery. If there is a breach of warranty, Buyer may return such Products, at Seller’s expense, for correction, replacement or credit as Buyer may direct. Products required to be corrected or replaced shall be subject to the provisions of this clause and the clause herein entitled “Quality Control and Inspection.” All warranties shall run to Buyer and its customers.

10. CHANGES. (a) Buyer may at any time by written notice and without notice to sureties or assignees, make changes within the general scope of this order in any one or more of the following: (i) drawings, designs or specifications; (ii) method of shipping or packing; (iii) place of inspection, acceptance or point of delivery; and (iv) delivery schedule. Should any such change increase or decrease the cost of or the time required for performance of this order, an equitable adjustment may be requested by Seller or Buyer in the price, or delivery schedule, or both. No request by Seller for adjustment will be valid unless submitted to Buyer in a form acceptable to Buyer within fifteen (15) days from the date of such change, and shall be accompanied by an estimate of charges for redundant material or work in process, if any.

11. RESPONSIBILITY FOR PROPERTY. Unless otherwise specified, Seller shall be liable for any loss or destruction or damage to Buyer or Buyer’s customer property furnished to Seller by the Buyer’s customer or buyer and shall be responsible for returning any such property in as good condition as when received except for reasonable wear and tear for the utilization of it in accordance with the provisions of this order. Seller shall include nothing in its prices for direct damage insurance on property of Buyer as Buyer for its sole benefit insures such property. Title thereto shall not be affected by the incorporation or attachment thereof to any property not owned by Buyer or Buyer’s customer, nor shall any such property, or any part thereof, be or become a fixture or lose its identity as property by reason of affixation to any realty. Buyer, or Buyer’s customer, shall have the right to enter Seller’s premises at all reasonable timers to inspect their property and Seller’s records with respect thereto.

12. USE OF BUYER’S DATA. Seller shall not reproduce, use or disclose any data, designs or other information belonging to or supplied by or on behalf of Buyer, except as necessary in the performance of orders for Buyer. Upon Buyer’s request, such data, designs, or other information, and any copies thereof shall be returned to Buyer. Buyer shall be considered the “person for whom the work was prepared” for the purpose of authorship in any copy-rightable work created by Seller under this order. Where Buyer’s data, designs or other information are furnished to Seller’s suppliers for procurement of Products by Seller for use in the performance of Buyer’s
orders, Seller shall insert the substance of this provision in its orders.

13. ASSIGNMENT. Neither this order nor any duty or right under it shall be delegated or assigned by Seller without the prior written consent of Buyer.

14. INSOLVENCY. This contract may be terminated by Buyer by giving written notice to Seller, in the event Buyer has reasonable basis for concluding that Seller’s financial condition is such that Seller is at or near insolvency, and Seller, within ten (10) days after receipt of such notice, does not provide acceptable information upon which it is reasonable to conclude that Seller is not at or near insolvency and will be able to perform its obligations under this contract.

15. TOOLING AND MATERIAL. Title to, and the right of immediate possession of, all tooling and material furnished by Buyer to Seller shall remain in Buyer. Buyer does not guarantee the accuracy of any tooling or the quality or suitability of any material supplied to Seller. If this order is for tooling, interest in and title to such tooling shall be governed by the special J and K series conditions as shown in the Applicable Clauses block on the face of this order, invoices shall be submitted for tooling after acceptance by Buyer of sample or production parts for which the tooling was ordered. Payment by Buyer of invoices for tooling will be made following receipt of a Seller Receiving Memorandum showing Buyer’s part number and tool code number and the unit price of each tool for which payment is sought and bearing Seller’s certification that each tool listed is completed and satisfactory for the use for which it is intended. Such tooling shall be maintained in good condition and must be permanently identified showing the contract number (if one is indicated on this order), the part number and tool code number. All such tooling ordered and such tooling and material furnished by Buyer shall be used solely in the performance of work ordered by Buyer. Such tooling and property shall be subject at all times to disposition as Buyer may direct and shall not be commingled with property belonging to Seller or others. Seller agrees to maintain inventory control of all such tooling and property and to furnish inventories thereof when required by Buyer. Seller shall insert the substance of this clause in its orders for procurement of supplies for use in the performance of this order.

16. PATENT INDEMNITY, TRADEMARKS AND COPYRIGHTS. To the extent that the Products are produced to detailed designs not originated and furnished by Buyer or by a process or method, the use of which is not specifically directed by Buyer, Buyer shall have no responsibility to Seller for patent infringement and Seller guarantees that the sale or use of such Products or the use of such process or method hereunder will not infringe any United States or foreign patents, trademarks, or copyrights. Seller shall defend, indemnify and hold Buyer and its customers harmless from any loss, cost, damage, expense (including attorneys fees) or liability which may be incurred on account of infringement or alleged infringement of patent rights, trademarks or copyrights with respect to such Products, and defend, at its own expense, any action or claim in which such infringement is alleged by third parties.

17. COMPLIANCE WITH LAWS. Seller guarantees that all equipment, work and other items supplied by Seller pursuant to this order will comply with all applicable federal, state, and local laws, ordinances and regulations. Unless otherwise expressly set forth herein, the laws of the state from which this order is issued, as shown by the address of Buyer, shall apply to and govern the interpretation, performance and enforcement of this order. Seller further guarantees that all equipment furnished by Seller in performance of this order will comply fully with the Occupational Safety and Health Act of 1970 (84 U.S. Stat. 1950), as amended, and state plans approved under such Act, and the regulations thereunder, to the extent applicable to such equipment, and Seller shall indemnify Buyer and its customer, if any , from and against any and all claims, loss, or liability arising from failure of such equipment to comply therewith. Seller agrees, in connection with the production of the material specified herein and services performed hereunder, to comply therewith. Seller agrees, in connection with the production of the material specified herein and services performed hereunder, to comply with all applicable local, state, and federal always, regulations, rulings and executive orders issued pursuant thereto, and agrees to indemnify Buyer against any loss, cost, liability, or damage by reason of Seller’s violation of this paragraph. Without limiting the generality of the foregoing, Seller agrees to comply with the applicable provisions of the following laws and any regulations, rulings or executive orders thereunder (or any amendments thereof, successors thereto, or other similar laws and regulations); any and all of which provisions are incorporated herein by reference. Applicable laws, regulations, rulings and executive orders include, but are not limited to, the following:
a) The Wage Hour Act (40 U.S.C. 324-326).
b) The Fair Labor Standards Act (29
U.S.C. 209-219).
c) The Federal Occupational Safety and Health Act (Pub. L. 91-596).
d) The provisions of Section 202 of Executive Order 11246 and rules and regulations issued pursuant to Section 201 therein are hereby incorporated by reference and the Seller represents, by acceptance of this purchase order, that they will comply with such Executive Order and rules and regulations and amendments thereto, to the extent the same are applicable to the manufacture and/or sale of goods purchased hereunder; or the contracting and/or subcontracting of services or work hereunder.
e) The Vietnam Era Veterans Readjustment Assistance Act of 1974 (Pub. L. 93-508, as it amend 38 U.S.C. 2012).
f) The Rehabilitation Act of 1973 (Pub. L. 93-112 as amended by Pub. L. 93-516).
g) The Walsh-Healy Public Contracts Act as amended (41 U.S.C. 35-45).

18. LABOR DISPUTES. Whenever any actual or potential labor dispute develops or threatens to delay the timely performance of this order, Seller shall immediately give notice thereof to Buyer. Seller shall insert the substance of this provision in its orders issued hereunder.

19. NONDISCLOSURE OF INFORMATION. Seller shall not, without prior written consent of Buyer disclose any information relative to this order.

20. REPORTING. Buyer may request status reports as to performance under this order, and Seller shall immediately comply with all such requests.

21. REMEDIES. The rights and remedies of Buyer provided herein shall be cumulative and in addition to any other rights and remedies provided by law or equity.

22. WAIVER. The failure of Buyer in any one or more instances to insist on performance of any of the provisions of this order shall in no way be construed to be a waiver of such provisions in the future.

23. INDEMNIFICATION. In the event Seller, its officers, employees, agents or subcontractors at any tier enter premises occupied by or under the control of Buyer or third parties in the performance of this order, Seller shall defend, indemnify, and hold harmless Buyer, its officers, employees and agents from any claim, suit, loss, cost, damage, expense (including attorney’s fees), or liability by reason of property damage or personal injury (including death) to any person, including Seller’s employees, of whatsoever nature or kind arising out of, as a result of, or in connection with such performance occasioned in whole or in part by the actions or omissions of Seller, its officers, employees, agents or subcontractors at any tier. Seller shall take all precautions necessary, special or otherwise, and shall be responsible for compliance with all federal, state and local safety laws in the performance of work hereunder. Without in any way limiting the foregoing undertakings, Seller and its subcontractors at any tier shall maintain public liability and property damage insurance in reasonable limits covering all employees performing this order.

24. QUALIFICATION. If qualification is required by drawing or specification for any Products called for in this order, such Products or components thereof may not be shipped until after receipt of Buyer’s written acceptance of the Qualification Test Procedure and Qualification Test Report. The Buyer may authorize, in writing, shipment of Products prior to completion of qualification testing. Such authorization shall not be considered an elimination of the requirement. The Seller shall remain fully obligated to perform applicable qualification testing in accordance with the Purchase Order. Buyer has approval rights of qualification test procedure and test report. Test procedures should be submitted to Buyer in writing no less than three (3) weeks prior to qualification testing. The Buyer shall have the right to witness testing. Nothing in the above is intended to prevent the continued production of Products or of components thereof as required to meet schedules called for by this order.

25. EXAMINATION OF RECORDS. (a) In the event the Products consist of aircraft parts, components, or support equipment or services in connection therewith, Seller shall maintain all pertinent data respecting quality relating thereto until three (3) years after final payment; (b) Seller’s facilities, manufacturing processes and quality control systems pertaining to the Products shall at all reasonable times be subject to review and inspection by Buyer or the Federal Aviation Administration; and c) shall upon request furnish a copy of this order to the authorized representative of Buyer or the Federal Aviation Administration. If this order is issued in support of a contract between Buyer and a higher tier contractor such review and inspection rights shall extend to the higher tier contractor.

26. SETOFFS AND COUNTERCLAIMS. All claims for money due or to become due from Buyer shall be subject to deduction by the Buyer for any setoff or counterclaim arising our of this or any other of buyer’s purchase orders with Seller.

27. PRICE DISCRIMINATION. Seller represents that the prices and terms of purchase, and any allowances available shall be in full compliance with the Robinson Patman Act.

28. WAIVER OF LIENS. Seller hereby waives and relinquishes all liens and claims statutory or otherwise which Seller now has or may hereafter have as a result of labor done and materials furnished by Seller or Buyer in performance of the order.

29. TERMINATION. A) Buyer may terminate work under this order in whole or in part at any time by written or facsimile notice to Seller. Such notice shall state the extent and effective date of such termination, and upon receipt thereof Seller will, as and to the extent directed by Buyer, stop work under this order and the placement of further orders or subcontracts hereunder, terminate work under orders and subcontracts outstanding hereunder, and take any necessary action to protect property in Seller’s possession in which Buyer has or may acquire an interest. B) If the parties cannot by negotiation agree within a reasonable time upon the amount of fair compensation to Seller for such termination, Buyer, in addition to making prompt payment of amounts due for material delivered or services rendered prior to the effective date of termination, will pay to Seller the following amounts without duplication: 1) The contract price for all material or services which have been completed in accordance with this order and not previously paid for. 2) The actual costs incurred by Seller which are properly allocable or apportionable under recognized commercial accounting practices to the terminated portion of this order, including the cost of discharging liabilities which are so allocable and apportionable. 3) The reasonable costs of Seller in making settlement hereunder and in protecting the property in which Buyer has or may acquire an interest. Payments made under this sub-paragraph (3) shall not exceed the aggregate price specified in this order, less payments otherwise made or to be made. C) With consent of Buyer, Seller may retain, at an agreed price, or sell, at an approved price, any completed articles, or any articles, material, work in process or other things, the cost of which is allocable or apportionable to this order under sub-paragraph (b) (2) above, and will credit or pay the amounts so agreed or received as Buyer directs. As directed by Buyer, Seller will transfer title to and make delivery of any such articles, and material or work.

SPECIAL TERMS AND CONDITIONS OF PURCHASE

(These clauses apply only when indicated on the purchase order.)

A. CERTIFICATION BY PERFORMANCE. Seller, by making deliveries under this order, certifies that all Products have been manufactured, processed and inspected in conformance with applicable drawings, specifications, and other approved acceptance criteria. Test reports when applicable shall be kept on file, copies of which will be furnished for examination by Buyer and its customer upon request.

B. FUNCTIONAL TEST. Seller shall perform required Buyer Functional Test Procedure (FTP). Seller shall certify on packing slips that parts have satisfactorily passed required tests, and identify the test performed by test procedure number and
change status symbol/date. Seller shall identify part tested by means of a test stamp or decal.

C. CONFIGURATION MANAGEMENT. Wherever invoked by the purchase order, the Seller shall conform to the configuration management and other requirements specified in the Procurement Control Drawing and/or the specified General Engineering Requirements Document.

D. SAFETY REQUIREMENT. Seller agrees to comply with all applicable federal, state and local laws relative to safety regulations and standards as to material, tools, mechanical equipment, warning signs, barricades, etc.

E. FIRST ARTICLE INSPECTION. Seller shall submit the first article manufactured together with the first article report for inspection and acceptance by Buyer. If Seller proceeds with production prior to approval it does so at its own risk. Upon shipping such article to Buyer, Seller shall identify it as being the first article. First article reports shall include results of dimensional measurements and, when applicable, results of mechanical tests and nondestructive test inspections. Such reports shall accompany the first unit submitted to Buyer, after each Seller effected drawing change, or any change which affects tools or molds.

F. PROCESS CERTIFICATIONS/TEST REPORTS AND CERTIFICATES OF CONFORMANCE. Objective evidence of conformance, such as process certificates/ tests reports and certification of conformance shall accompany each shipment of Products. Drawings or catalogs, sufficiently definitive to provide Receiving Inspection criteria, subject to Buyer Engineering Approval, shall accompany the initial shipment of Seller Proprietary items. Items fabricated from Buyer furnished material shall be accompanied by a statement to that effect and shall include a clause that no unauthorized substitution of material was made. The certificates/reports shall verify and show the results of chemical, physical and performance test(s) required to assure conformance to applicable material or process specifications. Final heat treat reports on all heat and corrosion resistant steel (17-4PH, 17-7PH, PH17-7MO, AM350, AM355, PH13-8M, etc.) shall include the solution heat treat. Austenite conditioning and sub-zero cooling, and aging heat treat schedules, including temperatures, time parts were at temperature, atmosphere used, and mechanical properties resulting from final heat treatment. All plated steels will be 100% hardness tested prior to plating and identified with the hardness measurement after plating. Hardness measurements may be indicated by permanent ink stamping on the finished part by tagging or by listing by serial number when parts are identified by serial numbers. One copy of a test report shall be included in each shipment of production units. The reports shall show quantitative and qualitative results for each test conducted, shall be identifiable to the unit or lot tested, shall include the identity of the inspector, date of test, buyer’s test procedure and revision number, and signature of the authorized Seller’s quality control representative.

G. REWORK. Seller shall accumulate all scrap and salvage materials resulting from rework of the Products, and not less than every six months shall provide Buyer with a complete list of such materials, including assembly/component and rejection tag numbers, and referencing Buyer’s order number. Upon receipt of instructions from Buyer, Seller shall dispose of the materials as directed.

H. TITLE TO TOOLING. Title to tooling shall vest in the Buyer upon completion and acceptance by Buyer. Buyer’s name shall be added to the permanent identification.

I. EXCLUSIVE USE. As to all casting, forging and extrusion dies manufactured or acquired by Seller for use in connection with the performance of this order or subsequent orders, or the cost of which is chargeable in whole or in part to Buyer, the following terms shall apply: (a) The provisions of Clause 15 of the General Terms and Conditions of Purchase are hereby waived as to such dies (b) Seller agrees that all such dies shall be used solely for the production of the Products ordered by Buyer and shall not be used for the manufacture or production of quantities other than those specified by Buyer except with Buyer’s written consent. Seller’s charges to Buyer applicable to such dies shall cover only the exclusive use of such dies in connection with Seller’s performance of this order or subsequent orders from Buyer or otherwise for Buyer’s benefit. Seller shall maintain in good working condition, repair or replace at Seller’s expense all such dies during the performance of this order or any subsequent orders and for the further period of time specified herein. In the event Buyer places no further orders with Seller for a period of three consecutive years following the completion of this order by Seller, Seller shall after giving Buyer thirty days written notice, have the right to make such disposition of such dies as Seller may deem appropriate. Seller shall, upon request, provide Buyer Quality Assurance with test data as recorded during performance of quality conformance test and such other data as necessary for the purpose of quality analysis.

J. ACCEPTANCE TEST PROCEDURE/TEST REPORT. Seller shall obtain Buyer’s approval of Seller’s Acceptance Test Procedure and any subsequent revisions prior to inspection and test of production units. The procedure shall provide a detailed description of the proposed test, including equipment list, instrumentation tolerances, setup schematics, allowable limits of measurement, and a facsimile of test report data sheet to be used for production units. Each unit furnished under this order shall be tested by Seller in accordance with applicable specification acceptance test requirements and shall be identified as having been tested by showing the data tested and Seller’s inspection stamp. Said date and stamp may be shown on a tag attached to each unit if the size or configuration of the Product does not permit marking on the exterior surface.