A. ACCEPTANCE This Order must be accepted in writing by Seller within the time specified on the face of this Order or, if not so specified, within a reasonable time of Seller s receipt hereof. If for any reason Seller fails to accept this Order in writing, the shipment by Seller of any Goods (or lots thereof) ordered hereby, the furnishing or commencement of any Services called for hereunder (including preparation for manufacture), or the acceptance of any payment by Seller hereunder, or any other conduct by Seller that recognizes the existence of a contract pertaining to the subject matter hereof, may, at Buyer s election, be treated as an unqualified acceptance by Seller of this Order and all terms and conditions hereof. Any terms and conditions proposed in Seller s acceptance or in any acknowledgment, invoice, or other form of Seller that add to, vary from, or conflict with the terms herein are hereby rejected. Any such proposed terms shall be void and the terms and conditions of this Order shall constitute the complete and exclusive statement of the terms and conditions of the contract between the parties and shall apply to each shipment received by Buyer from Seller hereunder. The acceptance of this Order or performance by Seller in furtherance of this Order or acceptance of payment under this Order constitutes a certification that the Seller is not debarred, proposed for debarment, suspended, or otherwise ineligible for the award of contracts by any agency of the United States Government. B. DEFINITIONS As used throughout this Order, the following definitions apply unless otherwise specifically stated: 1. Buyer means Helicopter Support, Inc. a corporation having a principal place of business in the State of Connecticut, United States of America. "Buyer" shall also be extended to include any of Helicopter Support, Inc's wholly owned subsidiaries issuing Orders. 2. "Day" or "days" whenever and wherever used refers only to calendar days. 3. Goods means goods, supplies, or items that include, but are not limited to, those part numbers, model numbers, and/or descriptions set forth on the face of this Order. These terms also include computer software or hardware (including any software, firmware or other hardwired logic embedded within the hardware) delivered or to be delivered under this Order. THESE TERMS AND CONDITIONS DO NOT APPLY TO THE FOLLOWING SIKORSKY DESIGN PART NUMBERS which follow one of the following formats: a. 15 character (XXXXX-XXXXX-XXX) format Examples: S6135-64015-000 76210-02001-103 70600-02004-058 33776-52148-130 65361-04005-101 33770-54415-103 61070-36115-101 61088-20222-132 61270-50172-101 b. Sikorsky Specification/Standard (SSXX-XXX..., SSXXXX-XXX...) format. Examples: SS41-07A180000 SS52H0943Z1500 SS27576-4-38 SS3999-2 SS5013-10-29 SS70-902K-8J Page 1 of 14
c. 8, 9, or 10 character Sikorsky Bearing format (SBXXXX-X, SBXXXX-XX, SBXXXX- XXX) or (SBXXXXX-X). Examples: SB1056-02 SB1138-102 SB3151A-1 SB3202B-2 SB8000-103 SB1518-1 d. Overhaul & Repair Instruction (O.R.I.) Part Number format (XXXX-XXX-XXX) Examples: 6135-285-451 6135-342-141 6180-003-001 76100-011-461 e. Raw Material format (RAWMAXX-XXX-XXX) Examples: RAWMA02-221-079 RAWMA12-455-825 4. Purchase Order or Order means this contractual instrument, including written change notices, supplements, amendments, or other written modifications thereto. 5. Seller means the legal entity providing Goods and Services or otherwise performing work pursuant to this Order. 6. Services means any effort supplied by Seller incidental to the sale of Goods by Seller under this Order including, without limitation, installation, repair and maintenance Services. The term Services shall also include, without limitation, any effort specifically required by this Order, including all associated efforts such as design, engineering, repair, maintenance, technical, construction, consulting, professional, or other services. C. SPECIFICATIONS Seller shall comply with all specifications and drawings set forth in or appended to this Order and with all specifications wherever and however incorporated, including by reference or otherwise. D. DELIVERY Time is of the essence in the completion of this Order. Seller agrees to make timely delivery of the Goods being purchased hereunder as specified in the faces sheet of the Order. Buyer reserves the right to pursue any remedy available to it under law or contract to recover all costs and damages associated with Buyer's failure to comply with such delivery dates. Seller shall not, without first obtaining Buyer's written consent, deliver any goods or services to Buyer before the delivery date specified on the face sheet of the Order. If Seller tenders Goods for delivery to Buyer earlier than the delivery date, Buyer may, in its absolute discretion, either : (i) refuse delivery and require re-delivery at Seller's expense on the delivery date; or (ii) retain such Goods and make payment in accordance with the original payment schedule in this Order regardless of the actual date of delivery. E. INSPECTION, ACCEPTANCE & REJECTION Page 2 of 14
Seller shall tender to Buyer for acceptance only Goods that have been found by Seller to be in conformity with all requirements of this Order. Notwithstanding (i) prior inspection, (ii) payment for, or (iii) use of the Goods ordered hereunder, Buyer shall have the following rights with respect to any Goods that do not conform to all requirements of this Order, at Buyer s election, exercisable within sixty (60) days following Buyer s receipt of the Goods called for hereunder: 1. Buyer shall have the right to reject such Goods. All such rejected Goods shall be returned to Seller at Seller s risk and expense, transportation collect and declared at full value unless Seller advises otherwise, for full credit or refund (at Buyer s option). 2. Nonconforming Goods may be repaired by Buyer or a third party selected by Buyer, at Seller s expense, or retained by Buyer at an equitable reduction in price at Buyer s election. F. WARRANTY 1. Seller warrants to Buyer, Buyer s successors, assigns, Customers, and users of Goods sold by Buyer that all Goods provided hereunder shall, for a period of (i) twenty-four (24) months after delivery to Buyer s Customer; (ii) or thirty-six (36) months after delivery to Buyer, which ever comes first, be: a. merchantable and fit for the purpose intended; and b. free from defects in material and workmanship; and c. with regard to Goods designed by Seller, free from defects in design; and d. in compliance with all applicable specifications, drawings, and performance requirements; and e. free from liens or encumbrances on title. 2. Seller warrants to Buyer that any Services or technical data provided by Seller under this Order shall for a period of 12 months or 1000 hours, whichever occurs later (i) have been performed or prepared in a professional and workmanlike manner and according to best industry standards and practices, (ii) are suitable for the purposes intended whether expressed or implied, and (iii) are in compliance with all applicable specifications and performance requirements. 3. Delivery, inspection, test, or use of, or payment for the Goods furnished hereunder shall not affect Seller's obligation under this warranty, Seller agrees, without expense to Buyer, to correct defects in, or replace any Goods not conforming to the foregoing warranty promptly, but in no event shall such repair or replacement and redelivery exceed five (5) days from receipt of returned Goods. G. INDEMNIFICATION 1. Seller covenants and agrees to defend, indemnify, protect, and hold harmless Buyer, its officers, directors, employees and agents ( Indemnified Person ) from and against any liability, claim of liability, allegation, judgment, cost, expense (including reasonable attorneys fees), cause of action, loss, or damage whatsoever, including, without limitation, death or injury to any person or damage to any property, resulting from or arising out of Seller s performance under this Order, howsoever arising, including, without limitation, by reason of negligence, breach of warranty, defect in design, material, workmanship or Service, or strict liability, unless caused by the sole negligence of the Indemnified Person. Seller shall comply with all applicable national, state, provincial, and local laws, ordinances, rules, and regulations, including those relating to import/export regulation, pollution control, waste disposal, hazardous substances, and protection Page 3 of 14
of the environment; and Seller shall defend, indemnify, and hold Buyer harmless from and against any and all liability due to the Seller s failure or alleged failure to so comply. 2. For goods or services delivered hereunder, Seller shall be liable for and shall indemnify and save Buyer and each subsequent purchaser or user thereof, harmless from any infringement claim, suit or action, including proceeding under 28 U.S.C. 1498, alleging that manufacture, use, or sale infringes any patent, trademark, copyright, semiconductor chip product mask work right other right; except, however, that when such alleged infringement arises as a necessary consequence of Seller s compliance with specification or designs furnished by Buyer which describe that aspect of the Goods or Services on which such alleged infringement is based. In such event, Buyer shall save Seller harmless there from, but this exception shall not apply if the subject matter giving rise to the claim for infringement either: (i) was derived from, or selected by Seller, or (ii) relates to materials or compositions, or processes relating to materials or compositions. 3. In the event Buyer should bring an action for enforcement of these indemnification provisions, Seller agrees that Buyer shall be entitled to be awarded its reasonable attorneys fees and costs if Buyer prevails in such proceeding. H. SHIPPING INSTRUCTIONS 1. Shipments Originating and Terminating in the United States Unless otherwise specified by the Buyer, all shipments which originate and terminate in the United States shall be FCA Seller s Facility (as defined by ICC Incoterms 2000 or latest version). 2. Shipments Originating Outside the United States Unless otherwise specified in the Order, all shipments which originate outside the United States and terminate inside or outside the United States shall be delivered Delivery Duty Paid (DDP), Buyer s designated destination. The term DDP and the rights and obligations of Buyer and Seller will be as defined by Incoterms 2000, the ICC Official Rules for the Interpretation of Trade Terms. 3. Title and Risk of loss for Goods shall at all times remain with Seller until title transfer pursuant to (i) below. Payment shall be made in accordance with Clause I, Invoicing. (i) Seller shall bear title and the risk or loss or damage for Goods until title transfer of the Goods to Buyer s customer. Seller understands that Buyer shall inspect and certify the Goods at its facility and that the Goods shall be held in Consignment by Buyer s Customer prior to installation by Buyer s Customer. Transfer of title of such Goods to Buyer shall not occur until Buyer notifies Seller that Buyer has received a purchase order from it s customer for the sale of the Goods from Buyer s customer s consignment inventory. (ii) In those instances in which Buyer bears the risk of loss or damage for delivered Goods in accordance with the above and payment for such Goods has not been made to Seller, Seller shall be named as the loss payee under any insurance policy that Buyer may have for such of Seller s Goods. The value assigned to such Goods for the purposes of this paragraph shall be determined in accordance with the firm fixed prices or not to exceed prices for such Goods. In those instances in which Seller bears the risk of loss or damage for delivered Goods, Buyer shall be named as the loss payee under any insurance policy that Seller may have for such Goods. The amounts payable to Buyer shall be the amounts for which Buyer has compensated Seller or the amount to repurchase from Seller, whichever is greater. 4. Notwithstanding any provision in this Order to the contrary, Seller shall employ such packaging, containment, handling, and delivery methods as necessary to: Page 4 of 14
i. Ensure delivery of Goods without damage or degradation resulting from deliver to Buyer and comply with all Federal, State, and local laws and/or regulations; and ii. Minimize the amount of non-recyclable packaging or containment materials in which the Goods are packaged and delivered; and iii. Maximize the use of reusable packaging, which Buyer can return to Seller for Buyer s utilization in shipping additional Goods to Buyer. 5. Buyer reserves the right to reject and return, at Seller s expense, any and all Goods which are not packaged and/or delivered in conformity with Paragraph H(3). At Buyer s sole option, Buyer may accept Goods not packaged and/or delivered in accordance with Paragraph H(3) and deduct an equitable amount from payments due to Buyer. 6. Exterior containers must be marked with the following: (i) address, including receiving well number, (ii) purchase order number, (iii) part number, (iv) prime contract number, if any, and (v) any other special markings called for by this Order. 7. Include with each shipment of Goods a packing slip containing: (i) the purchase order number, (ii) the item nomenclature/description; (iii) the item part number; (iv) the item U.S. National Stock Number (where applicable); (v) the item serial number (where applicable), and (vi) the quantity of items. 8. The bill of lading must reference purchase order number, correct ship to address, and receiving well number, if applicable. An original of the bill of lading shall be retained by Seller for one (1) year and provided to Buyer s Transportation Department on request. 9. Any invoices accompanying a shipment to be imported must meet requirements imposed by the Customs Service of the recipient country. 10. If Seller will be the importer of record for any items required to fulfill this Order, Seller represents that Seller is a certified member of the Customs-Trade Partnership Against Terrorism (C-TPAT) initiative. If Seller fails to maintain its C-TPAT certified member status, any delays or failure to perform based on Seller s inability to obtain imported goods due to US Customs requirements shall not be considered an excusable delay. I. INVOICING Payment terms will be net sixty (60) after title transfer of Goods or Services to Buyer or Buyer's designated delivery destination as defined in Clause H herein. All prices set forth in the Order shall be inclusive of all federal, state, and local taxes, levies, tariffs, and duties, the payment of which remain Seller's obligation. J. AIRWORTHINESS DIRECTIVES Seller agrees that in the event that the FAA issues Airworthiness Directives (ADs), or if the CAA or JAA issue the equivalent of Airworthiness Directives, to the extent that such ADs are issued in connection with Goods supplied to Buyer hereunder, Seller shall, at its sole expense, immediately remove the cause(s) of the ADs or AD equivalents in all Goods delivered and to be delivered to Buyer including but not limited to Goods utilized in the field. Seller further agrees to reimburse Buyer for any and all damages incurred by Buyer as a result of such ADs or CAA and JAA equivalent of ADs. K. INSURANCE Page 5 of 14
Seller agrees to secure and carry as a minimum General Liability Insurance in which the limit of liability for property damage or injuries (including accidental death) shall be no less than $1,000,000 for any one occurrence. Such insurance shall be issued by companies authorized to do business under the laws of the applicable governmental authority for the place in which Seller is located, shall be in form satisfactory to Buyer, and shall contain a provision prohibiting cancellation except upon at least ten (10) days' prior notice to Buyer. All such insurance policies will be primary in the event of a loss arising out of the Seller's performance of Order. Certified copies of certificates evidencing such insurance and naming Buyer as an additional insured shall be provided to Buyer upon request within 30 days after the date of this Order and within a reasonable time after any renewals or changes to such policies are issued. Any failure of Buyer to request evidence of such coverage shall in no way reduce or affect Seller s obligation to name Buyer as an additional insured. L. DELAYS Seller shall be liable for its failure or delay in making deliveries except when such failure or delay is due to a cause beyond the control and without the fault or negligence of Seller, provided that Seller gives to Buyer prompt notice in writing when it appears that such cause will result in failure or delay in making deliveries under this Order. In the event of any such failure or delay, Buyer shall have the right, at its option and without any liability to Seller, to cancel this Order (in whole or part) by notice in writing to Seller. Correspondingly, Buyer shall be excused for failure or delay in performance herein due to any cause beyond its control. M. TERMINATION FOR DEFAULT 1. Buyer may by written notice terminate the entire Order, or any part thereof, for default in the following circumstances: a. Seller fails to deliver the Goods or perform the Services required by this Order within the time specified herein, or any extension thereof granted by Buyer in writing; or b. Seller fails to perform any of the other provisions of this Order or fails to make progress so as to endanger performance of this contract in accordance with its terms and Seller does not cure or submit to Buyer a plan to cure such failure to Buyer s reasonable satisfaction within a period of ten (10) days after receipt of notice from Buyer specifying such failure; or c. Seller consents to the appointment of a receiver, trustee, liquidator, assignee, custodian, sequestrator or similar official of Sellers or of all or a substantial part of its property, or Seller admits in writing its inability to pay its debts generally as they come due, or makes a general assignment for the benefit of creditors; or d. Seller files a voluntary petition in bankruptcy or a voluntary petition or an answer seeking reorganization in any bankruptcy or insolvency case or an answer admitting the material allegations of a petition filed against Seller in any such case, or an order for relief is entered against Seller in any such case, or Seller seeks relief by voluntary petition, answer or consent, under the provisions of any other now existing or future bankruptcy or other similar law providing for the reorganization or winding-up of the corporation, or providing for an agreement, composition, extension or adjustment with its creditors; or e. An order, judgment or decree is entered in any proceeding by any court appointing, without the consent of Seller, a receiver, trustee, liquidator, assignee, sequestrator or similar official of Seller or of all or any substantial part of its property, or sequestering all or any substantial part of the property of Seller, and any such order, judgment or decree of appointment or sequestration remains in force undismissed, unstayed or unvacated for a period of ten (10) days after the date of entry thereof; or 2. If this Order is entirely or partially terminated by Buyer under this section, Buyer may procure, upon such terms and in such manner as Buyer may deem appropriate, goods or services similar to those so terminated, and Seller shall be liable to Buyer for any and all reprocurement costs for such similar goods or services, including any price for such similar goods or services that is higher than this Order provided however, that Seller shall continue the performance of this Order to the extent not terminated. Seller shall not be liable for such additional costs if Seller s failure to perform this Order arises out of causes beyond the control and Page 6 of 14
without the fault or negligence of Seller. Such causes may include, but are not restricted to, acts of God or of the public enemy, acts of a government in its sovereign capacity, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, and unusually severe weather. 3. If, after notice of termination under this section, it is determined that Seller was not in default, or that the default was excusable, the rights and obligations of the parties shall be the same as if the notice of termination had been issued pursuant to the section entitled Termination for Convenience. N. TERMINATION FOR CONVENIENCE 1. Buyer may at any time terminate this Order for its convenience in accordance with this provision. Termination of work shall be effected by delivery to Seller of a notice of termination specifying the extent to which performance of work under the Order is terminated, and the date upon which such termination becomes effective. After receipt of a notice of termination and except as otherwise directed by Buyer, Seller shall stop work under the Order on the date and to the extent specified in the notice of termination and shall: a. Place no further orders or suborders for materials, services, or facilities except as may be necessary for completion of such portions of the work under the Order that is not terminated; b. Terminate all orders and suborders to the extent that they relate to the performance of any work terminated by the notice of termination; c. Assign to Buyer, in the manner, and to the extent directed by Buyer all of the right, title and interest of Seller under the Orders or subcontracts so terminated; d. Settle all outstanding liabilities and all claims arising out of such termination of orders and subcontracts subject to the approval or ratification of Buyer to the extent Buyer may require, which approval or ratification shall be final for all the purposes of this section e. Use its best efforts to sell in the manner, to the extent, at the time, and at the price or prices directed or authorized by Buyer, any property of the types referred to above; provided however, that Seller: (i) shall not be required to extend credit to any purchaser, and (ii) may acquire any such property under the conditions prescribed by and at a price or prices approved by Buyer; and provided further that the proceeds of any such transfer or disposition shall be applied in reduction of any payments to be made by Buyer to Seller under this Order or shall otherwise be credited to the price or cost of the work covered by this Order or paid in such other manner as Buyer may direct. 2. After receipt of a notice of termination, Seller shall submit to Buyer its termination claim promptly, but not later than sixty (60) days from the effective date of termination, provided that the total sum to be paid to Seller shall not exceed the total Order price reduced by the amount of payments otherwise made and as further reduced by the Order price of work not terminated. Under no circumstances shall Buyer be liable to Seller for any direct, indirect, special, incidental, or consequential damages associated with this Order or the termination of this Order. O. PROPRIETARY INFORMATION Seller agrees not to use any of the Proprietary Information or Intellectual Property provided to it by Buyer or by any of Buyer's affiliates, parent companies, or any other affiliated entities for any other purpose other than fulfilling delivery obligations under this Order. Buyer grants to Seller, and to Seller s subcontractors or suppliers in connection with this Order being fulfilled for Buyer, an irrevocable (for the term of the Order), nonexclusive, paidup, worldwide license under any patent, copyright, industrial design, drawing, specification or process owned, controlled and which may be licensed by Buyer or its affiliates and existing prior to or during the term of this Purchase Order. This license is granted only to the extent that fulfillment of this Order would necessarily require Page 7 of 14
use of Buyer s or its affiliates' industrial design, drawing, specifications or processes or would necessarily infringe Buyer s or its affiliates' patents or copyrights. No license is granted for any other purpose including, but not limited to, Seller s fulfillment of third party orders or maintenance of Seller s facility or equipment. Upon Buyer's request, Seller shall furnish Buyer with such certifications or affidavits as Buyer may require to verify compliance with this provision. Additionally, Buyer may at its option, conduct such audits as may be required to verify compliance with this provision. P. FAR/DFAR REQUIREMENTS 1. For orders placed in support of and charged to a U.S. Government Prime Contract procuring an item meeting the Federal Acquisition Regulation (FAR) definition of a "commercial item", the following clauses set forth in the FAR or the Defense Federal Acquisition Regulation Supplement (DFARS) in effect as of the date of this Order are incorporated herein by reference. In all clauses listed herein the terms "Government" and "Contractor" shall be revised to identify properly the contracting parties under the Order: a. Utilization of Small Business Concerns - 52.219-8 (applicable to Orders greater than $500,000, does not apply if Seller is a small business concern as defined by 52.219-8) b. Equal Opportunity - 52.222-26 c. Affirmative Action for Special Disabled and Vietnam Era Veterans - 52.222-35 d. Affirmative Action for Handicapped Workers - 52.222-36 e. Subcontracts for Commercial Items and Commercial Components - 52.244-6 f. Subcontracts for Commercial Items and Commercial Components (DoD Contracts) - 252.244-7000 g. Preference for Domestic Specialty Metals, Alternate 1(DoD Contracts) - 252.225-7014 h. Restriction on Acquisition of Ball and Roller Bearings (DoD Contracts) - 252.225-7016 i. Transportation of Supplies by Sea (DoD Contracts) - 252.247-7023 j. Notification of Transportation of Supplies by Sea (DoD Contracts) - 252.247-7024 2. By virtue of its acceptance of this Order, Seller certifies that to the extent that such Goods and Services delivered hereunder are being provided in support of a US Government contract, such Goods and Services meet the definition of "commercial item" set forth in the Federal Acquisition Regulation. Prior to its acceptance of the Order, Seller shall notify Buyer in writing of any deviations or exceptions to the foregoing certification requirement. 3. Seller agrees to include all regulations (as flowdown clauses) noted above as necessary to comply with FAR/DFAR requirements. Q. MISCELLANEOUS PROVISIONS 1. Duty to Proceed. Seller shall proceed diligently with the performance of this order. Except as expressly authorized in writing by Buyer, no failure of Seller and Buyer to reach any agreement regarding a dispute related to this Order shall excuse the Seller from proceeding. Page 8 of 14
2. Partial Invalidity/Unenforceability. In any instance any provision of this Order shall be determined to be invalid or unenforceable under any applicable law, such provision shall be ineffective only to the extent of such prohibition or unenforceability. The remaining provisions shall be given effect in accordance with their terms. 3. Applicable Law and Forum. This Order shall be interpreted in accordance with the plain English meaning of its terms and the construction thereof shall be governed by the laws of the State of Connecticut, USA, without regard to conflicts of law principles. The exclusive forum for any claim, action or lawsuit arising from or relating to this Order will be the state or federal courts of Connecticut. The parties specifically disclaim application to this Order of the United Nations Convention on Contracts for the International Sale of Goods. 4. Publicity. Seller shall not, without first obtaining the written consent of Buyer, in any manner advertise or publish the fact that Seller has contracted to furnish Buyer the Goods or Services ordered by Buyer, or use any trademarks or trade names of Buyer in Seller's advertising, recruiting, or promotional materials. 5. Industrial Cooperation/Offset. Buyer may use all or any part of the value of this Order for offset purposes, including but not limited to: (i) fulfilling Buyer s (or Buyers' affiliates) offset or industrial cooperation obligations; and (ii) retaining credits granted for use in satisfying future offset obligations. Seller agrees to assign to Buyer all offset and countertrade credits earned by Seller as a result of this Order and to cooperate with (and to furnish any certificates or other documents reasonably required by) Buyer in fulfillment of Buyer s offset obligations. 6. Assignment and Setoff. Seller shall not subcontract all or substantially all of the work required by this Order without first obtaining Buyer s prior written consent. Performance of this Order shall not be assigned by the Seller in whole or in part without the prior written consent of Buyer. All claims for money due or to become due from Buyer arising out of Seller s performance under this Order or any other transaction with Seller shall be subject to deduction or setoff by Buyer. 7. Entire Agreement. This Order constitutes the entire agreement between Buyer and Seller and supersedes all prior oral and written agreements, communications and negotiations between the Parties with respect to the subject matter hereof. 8. Waiver. Any failure by either Party to exercise any right granted by the terms and conditions of this Agreement shall not be construed as a waiver of such right or any other rights under this Agreement, and shall in no way affect the subsequent exercise of such right or of any other rights under this Agreement by such Party. R. QUALITY ASSURANCE REQUIREMENTS SECTION I- GENERAL REQUIREMENTS The Following Provisions are incorporated into this Purchase Order 1. Technical Data Seller shall comply with all specifications and drawings stated in this Order and with all specifications wherever and however incorporated, including by reference or otherwise. Seller shall comply with the most stringent specification in the event of a conflict in specifications. 2. Certification - Seller shall furnish to Buyer upon request, any certificate required to be furnished by any provision of this Order. 3. Inspection Records - Seller shall prepare records evidencing all inspections made under this Order, and the outcome of such inspections. These records shall be complete and made available to Buyer during performance of this Order and for as long afterwards as required by this Order. Page 9 of 14
Buyer, Buyer's Customer and the FAA shall have the right to inspect and test the material and workmanship of all goods required under this Order at all places and times including, when practicable, during the period of manufacture; and if any such inspection or test is made on the premises of Seller, Seller shall furnish, without additional charge to Buyer, all reasonable facilities and assistance for the safe and convenient performance of the inspection or test. 4. Source/First Article Inspection - Source inspection is required on any characteristic that cannot be inspected upon receipt at Buyer s facility. When source or first article inspection is required, Seller shall notify Buyer s Customer Service Representative seven (7) working days in advance of the date on which the subject material will be ready for Buyer's inspection. 5. Acceptance of parts by Buyer does not relieve the Seller of any responsibility for meeting all of the engineering drawing and specification requirements. 6. Sampling - Seller shall perform 100% inspection of all parts unless a Statistical Acceptance Sampling Plan has been approved in writing by the Buyer s Quality Assurance Department. 7. Cure Date Controlled Material: Materials which require cure date control from the date of manufacture must be delivered to Buyer with at least eighty-five percent (85%) of the shelf-life remaining on the material upon receipt at Buyer's facility. 8. The Seller agrees to afford access to Buyer for surveys or audits of systems or facilities. SECTION II- QUALITY ASSURANCE PROVISIONS The Following Provisions are incorporated into this Purchase Order if noted on the Face Sheet of this Purchase Order 1. Two copies of Certificate of Compliance Form QAF-876 certifying that goods, items, and supplies meet all applicable specification and drawing requirements signed by a representative of Seller are required to be retained by Seller subject to audit and examination at all times by Buyer. If at any time, Buyer requests a copy of Form QAF-876 for any particular shipment under this Purchase Order, Seller shall within three (3) working days of receipt of such request provide a certified copy of such form to Buyer. Seller shall retain Form QAF-876 and all supporting documentation pursuant to the record retention requirements in Clause 2 below. 2. Seller shall maintain supporting evidence that the items identified in this Order have been produced in accordance with applicable instructions, specifications and drawings and all other requirements of this Purchase Order for a period of seven (7) years after final payment by Buyer to Seller under this Purchase Order. This documentary evidence shall be made available to Buyer for inspection upon request. 3. Seller's Material Certificate showing chemical, physical and other requirements listed on the applicable specifications, signed by an authorized company representative, must be attached to the packing slip accompanying each shipment. 3a. Seller's Material Certificate showing chemical, physical and other requirements listed on the applicable specifications, signed by an authorized company representative, must be available at Seller's facility with all supporting documentation pursuant to the record retention requests in Clause 2 above and must be provided to Buyer, upon request, within two (2) business days. 4. When Seller is manufacturing product for which Seller retains design responsibility, minor nonconformances can be processed by the Seller using Seller's documented Non-conforming Material Control System. However, Sikorsky Aircraft always retains design responsibility for the design and interface Page 10 of 14
requirements on all Specification and Source Control Drawings. Seller shall submit a Buyer Nonconforming Material Report QAF-342 to Buyer in sufficient time prior to shipment for dispositioning any design specification or interface non-conformances. Further, Seller shall submit documentation to Buyer describing any major non-conformances which affect or involve critical parts, safety, performance, reliability, service life, weight or appearance (when applicable) relative to Seller's design responsibility drawings. Seller shall submit a Request for Waiver or Deviation (letter format is acceptable) to the cognizant Buyer Customer Service Representative prior to shipment to Buyer in sufficient time to enable Buyer to determine what action should be taken with respect to the subject non-conforming material. 5. The requirements of QAF-908, Section II, Clause 6 as stated below are applicable. 5a. RESERVED 5b. A statement certifying that each shipment of material supplied under this Purchase Order has been inspected and is in full compliance with all applicable drawings and specifications shall be completed and retained on file at Seller's facility. Seller shall provide upon request of Buyer a statement certifying compliance with the Purchase Order requirements. 6. For Sellers of Group I and Group II Purchases, the goods, items, supplies and repair/modification services purchased under this Order are subject to the requirements of Sikorsky Aircraft s S2000, Seller Certification Manual. Seller shall flow down the applicable requirements of this Order to its lower tier sellers. For Sikorsky design part numbers (i.e., not specification control, source control or altered item drawings), any changes made to a lower tier supplier, process or operation by Seller or its lower tier seller(s) after submittal of qualification samples or initial deliveries, shall be controlled with documented evidence that the changes have been independently verified to assure continued conformance to the requirements of this Order including, but not limited to safety, performance, reliability, interchangeability, service life, weight or appearance (when appearance is applicable). 7. If this Order is for a Flight Safety Part or any assembly which contains a Flight Safety Part, the requirements of this Order related to flight safety parts are applicable to the Flight Safety Part or any assembly which contains a Flight Safety Part. 8. Purchase Orders for parts with hidden dimensions/characteristics and designated to be inspected at source are annotated "Seller's Inspection Record for Reportable Characteristics, Form SA 5182 Required". This record delineates the characteristics which must be recorded by Seller and is attached to the Purchase Order. This form is to be completed by Seller for each shipment. The actual value or actual range of values for each characteristic enumerated on the Form shall be recorded for each lot as specified on the Form. All Forms SA 5182 s are to be maintained on file by the Seller in accordance with Purchase Order retention requirements and are to be made available to the Buyer on request. In addition, when the Form SA 5182 requires recording (a) Method of Manufacture and Control and/or (b) Carburization data, the Form shall be submitted to Buyer with each shipment. 9. All nonconforming material dispositioned in accordance with Sikorsky Aircraft s Material Review Board procedures must be inspected and accepted by Seller, at their facility prior to shipment to Buyer. If the MRB action will cause hidden dimensions/characteristics that cannot be inspected upon receipt at Buyer's facility the Seller shall notify Buyer prior to shipment to Buyer. If Buyer determines that source inspection verification is required, Seller shall notify Buyer seven (7) working days in advance of the date on which the subject material will be ready for Buyer's inspection. All material in this category shall be properly identified and segregated from conforming material when shipped to Buyer. 10-13. RESERVED Page 11 of 14
14. In the event that Seller receives a Sikorsky Aircraft Approved Source List for Special Processes and Laboratories dated subsequent to the edition shown on the face of this Purchase Order and that new edition affects the material to be delivered hereunder, Seller shall do the following: a. In the event that affected material is in process, or the process is contracted for, or there is a cost impact on this Purchase Order, Seller shall promptly give written notice to the responsible to that effect; or b. Proceed in accordance with the new edition in the event that the conditions of (a) are not present. 15-19. RESERVED 20. Each part/assembly delivered to Buyer must be accompanied by a certificate which attests to the fact that the equipment has passed the acceptance tests and shall list the Part Number and the ATP Number and the applicable revision thereto. Buyer reserves the right to witness testing of parts. SECTION III - SUPPLEMENTAL QUALITY ASSURANCE PROVISIONS The following provisions are incorporated into this Purchase Order. 1. FLIGHT SAFETY PARTS This Provision is Applicable to All Orders for Flight Safety Parts: If this Purchase Order is for a part or an assembly which contains a Flight Safety Part, Seller shall accomplish the following: a. Seller shall at all times maintain a Sikorsky Aircraft approved Quality System under this Order. In addition to any Section II requirements identified in this Order, Seller shall comply with the requirements of Sikorsky Aircraft s S2000 Supplier Certification Manual as required by Buyer. b. Seller shall provide to Sikorsky Aircraft for review and approval by Sikorsky Aircraft, as requested, all operation sheets, planning and processing documentation, inspection processes and procedures, routing guides, quality assurance processes and procedures and parts traceability procedures (hereinafter collectively referred to as "Flight Safety Parts Documentation") relating to or arising out of Seller's proposed performance of "Critical Characteristics or Processes". Sikorsky Aircraft will identify "Critical Characteristics or Processes". c. Seller shall, at no cost to Buyer or Sikorsky Aircraft, make such changes as may be required by Sikorsky Aircraft to obtain and maintain approval of Seller's Flight Safety Parts Documentation. d. Upon approval of Flight Safety Parts Documentation including without limitation those operations identified as "Critical Characteristic" or "Critical Processes" by Sikorsky Aircraft, Seller shall make no changes to its Flight Safety Parts Documentation including without limitation "Critical Characteristics or Critical Processes" or other aspects frozen by Sikorsky Aircraft in the "Flight Safety Parts Documentation", or use any alternate material, without the prior written approval of Sikorsky Aircraft. e. For each part delivered by Seller and accepted by Buyer under this Purchase Order, Seller shall develop and maintain as part of its "Flight Safety Parts Documentation", verification of compliance with all the requirements of Seller's "Flight Safety Parts Documentation". This includes a system to identify and verify that each "Critical Characteristic" or "Critical Process" strictly complies with all the requirements set forth in "Flight Safety Parts Documentation" and in this Clause, and that the part was manufactured/processed in compliance with the "Flight Safety Parts Documentation". Page 12 of 14
f. Seller shall maintain all Flight Safety Parts documentation developed and used under this Order for a period of the later of twenty-five (25) years after final payment under this Order or four (4) years after final payment under the Sales Contract under which this Order was issued and objective fully documented evidence of compliance with the requirements of this provision for each part made under this Clause (f). Buyer and Sikorsky Aircraft are granted the right from time to time to audit Seller's books and records for compliance with the requirements of this Clause (f). g. Seller represents and warrants that it shall not deny any responsibility or obligation to Buyer or Sikorsky Aircraft whatsoever on the grounds that Buyer or Sikorsky Aircraft approved any documentation prepared by Seller or that Buyer or Sikorsky Aircraft provided recommendations, assistance, modifications or alternatives for documentation prepared by Seller. Approvals or recommendations by Buyer or Sikorsky Aircraft do not limit or diminish Seller's obligations under this Order. h. No Non-Conforming Material Rejection Reports will be approved for those characteristics identified as a "Critical Characteristic" or Critical Process by Sikorsky Aircraft. i. From time to time, Buyer or Sikorsky Aircraft reserve the right to add or delete "Critical Characteristics or Processes" at no additional cost or liability. For those processes that are added Seller shall comply with all the requirements of this Clause. 2. QUALITY ASSURANCE Seller shall, at Buyer's request, perform physical and functional configuration audits of Goods, supplies or items required to be delivered under this Order at no cost to Buyer. Seller shall at its own expense correct all discrepancies to the requirements of this Order. Seller shall flow down the applicable requirements of this Order to its lower tier sellers. For Sikorsky design part numbers (i.e., not specification control, source control or altered item drawings), any changes made to a lower tier seller, process or operation by Seller or its lower tier seller(s) after submittal of qualification samples or initial deliveries, shall be controlled with documented evidence that the changes have been independently verified to assure continued conformance to the requirements of this Order including, but not limited to safety, performance, reliability, interchangeability, service life, weight or appearance (when appearance is applicable). 3. FIRST ARTICLE/QUALIFICATION TESTING a. Seller shall test unit(s) as specified in this Order. At least thirty (30) calendar days before the beginning of first article tests, Seller shall notify Buyer, in writing, of the time and location of the testing so that Buyer may witness the test. b. Seller shall submit the first article test report as required by this Order marked "FIRST ARTICLE TEST REPORT: Order No., Lot/Item No." in accordance with the delivery schedule in this Order. Within sixty (60) calendar days after Buyer receives the test report, Buyer shall notify the Seller, in writing, of the conditional approval, approval or disapproval of the First Article Test Report. Approval or conditional approval shall not relieve Seller from complying with all requirements of the specifications and all terms and conditions of this Order. A notice of disapproval shall cite reasons for the disapproval. c. If the First Article is disapproved, Seller, upon Buyer's request, shall at its own expense repeat any and all First Article Tests. Seller shall, at its own expense, make any necessary changes, modifications and repairs to Goods to successfully complete First Article Testing. If Buyer or Sikorsky Aircraft is performing First Article Tests, Seller shall as requested by Buyer and at no cost to Buyer, make changes to goods in order for Buyer or Sikorsky Aircraft to complete First Page 13 of 14
Article Testing. All costs relating to additional tests or retest whether performed by Buyer, Sikorsky Aircraft, or Seller shall be borne by Seller. d. Before First Article Approval, the acquisition of materials or components for, or the commencement of production, and any risks associated with such effort is performed by Seller at its sole risk. Before first article approval, the costs thereof shall not be allocable to this Order for (1) progress payments, or (2) termination settlements, if the Order is terminated for the convenience of Buyer. e. The First Article and production quantities shall be produced at the same facility. f. If Seller is permitted or required by Buyer prior to First Article Approval to acquire materials and components and commence production or deliver to the extent essential to meet the delivery schedules, such does not release Seller from any of the requirements of this Order. Notwithstanding Buyer's permission or requirement to commence production or to deliver or to acquire materials, regardless of whether such are qualified, if First Article Tests reveal deviations or differences from Order requirements, the Seller shall make the required changes and/or replace all items produced and/or delivered under this Order at no cost to Buyer including without limitation, retrofit, removal and reinstallation costs for items in Aircraft, and shall, at no cost to Buyer, make all modifications necessary to assure that items in production comply with the requirements of this Order. g. In the event Seller is late in performing any of its obligations under this Order including but not limited to Seller's obligation to deliver qualified hardware, and as a result of such, Buyer's Customer withholds monies from Buyer, Buyer has the right to withhold an amount it deems reasonable until such time as Seller completes its obligations under this Order and Buyer is in receipt of payment from its Customer as the case may be. 4. CONFIGURATION CONTROL Seller shall comply with the requirements set forth in this Order for controlling the configuration of Goods, supplies or items required under this Purchase Order. S. EQUAL OPPORTUNITY AND AFFIRMATIVE ACTION Seller will comply with the following sections of the Code of Federal Regulations: 48 C.F.R. 52.222-26 ("Equal Opportunity"); 48 C.F.R. 52.222-35 ("Affirmative Action for Special Disabled and Vietnam Era Veterans"); and 48 C.F.R. 52.222-36 ("Affirmative Action for Handicapped Workers"), as the same may be amended from time to time, to the extent that such sections are applicable to Seller's performance under this Order. Page 14 of 14