Purchase Order Terms and Conditions

By Acceptance of this Order, Seller or External Provider agrees with Custom Products of Litchfield, Inc. (“CPL”) as follows:

ETHICAL BEHAVIOR: As a supplier to CPL, please be aware of your importance to the contribution of product conformity and safety as well as the ethical behavior during interaction and services provided.

IDENTIFICATION: A Packing List must be furnished with each shipment. All invoices, packages, shipping notices, instruction manuals and other written documents affecting this order shall contain the applicable order number. Packing Lists shall be enclosed in each box or package shipped pursuant to this order, clearly indicating CPL part number, purchase order number, and the contents therein including accurate quantities.

Invoices will not be processed for payment until all items invoiced are received.

CHANGES: CPL shall have the right at any time to make changes to an order. If any such changes cause an increase in cost, a decrease in cost, or the time required for performance, an equitable adjustment shall be made and this order shall be modified in writing accordingly.

External Provider is obligated to give notification of changes to their product, services and/or processes within 60 business days, including changes of manufacturing facility location and where required obtain approval from CPL prior to such a change. These changes would include those affecting certification status and regulatory requirements. CPL and/or its customers will evaluate whether the changes affect the finished product and determine whether they are acceptable or not. External Provider shall reimburse CPL for any damage or expense sustained by CPL in violation of this clause.

DELIVERY/INVOICING: Delivery of the goods and services covered by this Order must be performed within the time stated on this Order. In the event that a delivery date is not met without prior notification and authorization, CPL may cancel this Order without cost and External Provider will be liable to CPL for any loss incurred by CPL as a result of External Provider’s failure to make timely delivery. CPL may from time to time change delivery schedules or direct temporary suspension of scheduled shipments. Acceptance of any part of this Order, partial, or full payment under this Order, will not bind CPL to accept any future shipment, or deprive CPL of the right to return goods or materials already accepted.

External Provider shall not ship goods or materials in excess of the quantity ordered (or deliverable in accordance with CPL’s delivery schedule) without CPL’s expressed agreement to the contrary. In the absence of such agreement, quantities shipped in excess of this Order or the delivery schedule may be returned by CPL to External Provider at the External Provider’s expense, including transportation both ways and all handling charges. This paragraph will not limit any other rights or remedies CPL may have against External Provider for such a breach.

If there is a delay of one hundred twenty (120) days or more in the delivery of any type of invoice to CPL, the amount of such invoice due and payable by CPL may be forfeited at CPL’s sole discretion and no further payment obligations by CPL with respect to the delayed invoice will be due.

PRODUCTION PART APPROVAL PROCESS AND NEW PRODUCT INTRODUCTION: Per requirements, samples, certifications, or PPAP submissions may be required prior to the delivery or at the time of receiving product. Requirements may be communicated via a statement of work, part drawings, purchase order, email, or verbally. External Provider shall provide timely submissions. Requested changes shall be approved by an authorized CPL representative prior to submission (i.e. dimensional discrepancies, out of specification or alternate material, missing documents, temporary tooling, temporary process, etc.) Failure to obtain approval of a requested change prior to PPAP submission will result in a rejection of the PPAP. In the absence of clear requirements, please default to a level 3 PPAP submission.

INDEMNIFICATION: External Provider shall defend, indemnify and hold harmless CPL against all damages, claims or liabilities and expenses (including attorneys’ fees) arising out of or resulting in any way from any defect in the goods or services purchased hereunder, or from any act or omission by External Provider, its agents, employees or subcontractors. This indemnification shall be in addition to the warranty obligations of External Supplier.

ONSITE AUDITS/INSPECTION RIGHT OF ACCESS: CPL, CPL’s customer representatives, or any authorized representatives of the government of the United States, reserves the right to evaluate the adequacy of the External Provider’s quality program through on-site audits to applicable area of all facilities, any level of the supply chain involved in the order, and to all applicable records. This includes product verification at External Provider’s premises and any subcontracted product ensuring conformance to specified requirements.

PRODUCT RECALL AND CONFORMITY: Any nonconforming product must be immediately identified by External Provider and communicated to CPL. Nonconforming product cannot be shipped or reworked without review and documented or verbal approval from CPL for product disposition. External Provider must ensure that personnel have the appropriate skills and experience to handle and process the product or service conformity throughout the performance of this contract.

CORRECTIVE ACTION: CPL reserves the right to issue External Provider a corrective action when External Provider does not meet CPL’s requirements for service or quality. External Provider then has 15 working days to respond to a corrective action or CPL can withhold payment for services. CPL has the right to return any defective product at External Provider’s expense. There must be a product recall method established at External Provider’s premises as part of their product control, confirming lot traceability if required.

COMPLIANCE WITH LAWS AND BUSINESS PRACTICES: In connection with the manufacturing of any goods, materials, or services, the External Provider shall comply with all applicable regulations and provisions of the country of origin. The External Provider further shall comply with all applicable laws, rules, regulations, orders, conventions, ordinances and standards of or in the country(ies) of destination, including but not limited to those relating to the manufacture, labeling, transportation, importation, exportation, licensing or approval of supplies, environmental matters, data protection and privacy, wages, hours and conditions of employment, subcontractor selection, discrimination, occupational health/safety and motor vehicle safety. The External Provider Further shall comply with and certify products are compliant with the related requirements of European Union Regulation (EC) 1907/2006 concerning the Registration, Evaluation, Authorization and Restriction of Chemicals (REACH) and of RoHS 3 (2015/863/EU) compliance. The External Provider further represents that neither the External Provider nor it’s subcontractors will utilize child, slave, prisoner or any other form of forced or involuntary labor or engage in abusive employment or corrupt business practices (including without limitation practices that violate the U.S. Foreign Corrupt Practices Act or any similar law of any other country). At the request of CPL, you shall certify in writing your compliance with the foregoing. You shall indemnify us and hold us harmless from and against any Claims arising from or relating to your noncompliance.

CONFIDENTIAL INFORMATION: All specifications, drawings, notes, instructions, engineering notices, technical data, equipment referred to or supplied by CPL, in connection with any orders, quotes, or product development, are incorporated into a contractual agreement by reference. External Provider agrees that this, together with all information (whether disclosed directly or indirectly, orally, in writing or by inspection of tangible objects, and whether or not labeled confidential, including without limitation technical design, manufacturing and application information, financial information and business plans, information concerning customers, sales and marketing, know-how and trade secrets) we disclose to you or information or work product created by you in providing the manufacturing of any goods, materials, or services, is CPL confidential and Proprietary Information, and you will not reproduce, extract, use or disclose it to others without CPL prior written consent.

External Provider will not disclose to any person outside of its employ or use for any purpose other than to fulfill its obligations under this order, what has been disclosed by CPL. External Provider will safeguard such information at least to the same extent as with External Provider’s Proprietary Information.

ITAR (International Traffic in Arms Regulations): If noted on the Purchase Order, the External Provider will be required to follow ITAR security regulations. The Purchase Order, as well as any attachments and exhibits hereto, may contain technical data subject to ITAR. Transferring or handling of product or data by any means to/by foreign persons whether in the U.S. or abroad without first obtaining proper authority, may be a violation of the law.

COUNTERFEIT OR SUBQUALITY COMPONENTS/PARTS: Delivery of known counterfeit or subquality components/parts/material is not permitted. If External Provider identifies components/parts to be counterfeit or subquality after delivery, CPL must be notified immediately. Any possible counterfeit components/parts/material must be evaluated, confirmed and dispositioned if found.

Adherence to the most recently dated version of SAE AS5553 should be referenced when dealing with electronic components.

PRODUCT RECORDS: A method must be established by External Provider for the retention of any records of processes, inspections, tests and/or evaluations performed during production and acceptance of External Provider’s product. Records must be available for review by CPL, their customer, and/or regulatory authorities. Records must be maintained for a minimum of 7 years unless contractually agreed upon otherwise.

SHELF LIFE: If a product has a shelf life, it must be received with at least 75% remaining.

SUBCONTRACTING / OUTSOURCING: The External Provider is required to flow down to supply chain the applicable requirements, including customer requirements unless contractual requirements prohibit External Provider from subcontracting / outsourcing without prior approval.

WORKMANSHIP: Products must be handled, stored, and maintained according to good practices and general workmanship standards. Items are to be packed in containers or separated individually in keeping with good commercial practices to preclude any damage from being incurred during shipping or handling.

PACKING: External Provider may not charge CPL for blocking, boxing, crating, packing, etc. unless CPL otherwise agrees expressly in writing. All goods shipped in connection with this Order must be adequately boxed or crated with any special handling requirements clearly marked and the contents otherwise protected to prevent damages in transit, and in the case of export, shipments must be waterproofed in addition to meeting all export shipping requirements.

All electronic components that are Moisture Sensitive Devices (MSDs) as classified per ANSI/JSTD-020 shall be handled, stored, and packaged for shipment to CPL per ANSI/J-STD-033, with the components dry-packed in a vacuum-sealed Moisture Barrier Bag, including fresh desiccant and a Moisture Indicator Card (MIC) inside of the dry-pack and the MSD label prominently attached on the outside of the dry-pack. Failure to do so will result in violation of terms of this contract, and CPL may hold you liable for any monetary damages ensuing as a result of unknowingly using these components.

ELECTROSTATIC DISCHARGE SENSITIVE COMPONENTS: All electronic components that are Electrostatic Discharge Sensitive (ESD) as classified per EOS/ESD 20.20-1999 shall be handled, stored, and packaged for shipment to CPL per ANSI/J-STD-033, with the proper ESD-safe packaging and the ESD label on the outside of the packaging. Failure to do so will result in violation of terms of this contract, and CPL may hold you liable for any monetary damages ensuing as a result of improper packaging.

CALIBRATION EXTERNAL PROVIDERS: External Provider providing calibration services must have ISO 10012, ISO 17025 or equivalent accreditation. Changes affecting certification status must be reported immediately to CPL. Calibration certificates provided must identify standards used. The standards of calibration used must be traceable to the National Institute of Standards and Technology (N.I.S.T.). Certificates of calibration are required. Records of competence and certification must be maintained of those employees performing calibration activities.