Terms and Conditions

CINCINNATI THERMAL SPRAY, INC.

PURCHASE ORDER SPECIFICATIONS
*Rev. K 8/3/2021

Unless modified in writing to Cincinnati Thermal Spray, Inc. (“CTS” or “Buyer”), any and all requirements contained in Purchase Orders must be followed by CTS subcontractors (“Sellers”), even if such requirements are not included in the specifications included herein or other terms and conditions which may be applicable to particular Purchase Orders. Seller must certify to CTS that Seller has met all applicable Purchase Order requirements. Such certification may be incorporated by Seller into one legible document, such document to be delivered to CTS promptly upon completion by Seller of the work stipulated in the Purchase Order. Where the word “Contractor” appears, substitute the word “Seller”, as defined herein.

1.0 SYSTEM REQUIREMENTS

1.1*Quality Management System (QMS) – When required by purchase order or flowed down requirements the Seller will maintain a QMS that complies with ISO 9001, ISO/IEC 17025, AS/EN/JISQ9100/9110/9120, or TS16949 as applicable (reference prime contractor requirements such as GE Aviation S1000, Pratt & Whitney QA6076, Honeywell, and Rolls-Royce RR9000:SABRe). AS13100 applies to all purchases related to aircraft engine manufacturers. A quality system survey may be required and such system is subject to audit by CTS Representatives. The Seller shall inform the Buyer if QMS certifications are suspended, revoked or permitted to lapse.

1.2Calibration System Requirements – Seller will provide and maintain a calibration system that complies with specification ISO 10012 and/or ANSI/NCSL Z540-1. The system is subject to audit by CTS Representatives.

1.3Sellers providing special process services for aerospace applications are required to maintain applicable Nadcap accreditations and shall inform the Buyer if such accreditations are suspended or permitted to lapse.

1.4Substantiation Requirements – In accordance with GE Aviation P1TF17, PWA 300, and other CTS customer specifications, Seller must document special processes and submit process sheets for purchase approval. Once approved the process may not change without prior approval by the Buyer and the Buyer’s customer, as applicable. For other processes and product the Seller must notify the Buyer of and obtain approval for changes in process, source, and location.

2.0 STANDARD REQUIREMENTS

2.1Nonconforming Material – Any process which deviates from or results in a nonconformance to any requirement, even though workable (unless rework is permitted by the procedure) is subject to approval by Buyer prior to shipment from the source performing the process. Seller will notify Buyer prior to any shipment of any nonconforming product. Seller shall provide to Buyer cause and corrective action reports on any nonconforming material within 20 working days of a request for such from the Buyer.

2.2Specification Requirements – Seller is responsible for obtaining and maintaining the current issue of all applicable specifications, standards, terms, and conditions. Seller is responsible for communicating in writing all necessary specifications and requirements to direct and subtier vendors, including the specifications contained in this document and applicable purchase order.

2.3Record Retention – Objective evidence of quality of work provided to Buyer, including but not limited to such documents as: receiving reports, inspections, tests, NDT reports, X-rays, inspection record sheets, process certifications, certificates of conformance, and other product acceptance records shall be retained by Seller for a minimum of 10 years from the date of completion by Seller of the work in question, unless otherwise superseded by specification. The Seller must have documented disposition requirements.

2.4Inspection and Tests – The specification of required inspections and tests (including NDT) by Buyer in its requirements or references are the minimum to be performed. Seller is responsible for performing any additional and unspecified tests and inspections required to initially qualify the product or process, control its manufacture and/or compliance of parts and processes to requirements and specifications. Seller’s manufacturing and quality systems must assure that product delivered to Buyer conforms with requirements 100%. Seller must report detailed chemistry and size certification for spray powders and wires.

2.5Anti-Kickback Procedures

A)The Anti-Kickback Act of 1986 (The Act) prohibits any person from:

1)providing or attempting to provide or offering to provide any kickback;

2)soliciting, accepting, or attempting to accept any kickback;

3)including, directly or indirectly, the amount of any kickback in the contract price charged by a prime contractor to the United States or in the contract price charged by a subcontractor to a prime contractor or higher tier subcontractor;

B)1)Seller shall have in place and follow reasonable procedures designed to prevent and detect possible violations described in paragraph B) above in its own operations and direct business relationships.

2)When Seller has reasonable grounds to believe that a violation described in paragraph B) above may have occurred the Seller shall promptly report in writing the possible violation. Such reports shall be made to the Buyer and to the inspector general of the contracting agency, the head of the contracting agency if the agency does not have an inspector general, or Department of Justice.

3)Seller shall cooperate fully with any federal agency investigating a possible violation described in paragraph B) above.

4)Regardless of the contract tier at which a kickback was provided, accepted, or charged under the contract in violation of paragraph B) above, upon direction of the contracting officer with respect to the prime contractor under which that order was placed or upon decision by Buyer, Buyer may:

I.offset the amount of the amount of the kickback against any moneys owed by the Buyer under this contract and/or

II.direct that Seller withhold from sums owed any of its subcontractors, the amount of the kickback.

Buyer may order that moneys withheld under this subparagraph be paid over to Buyer unless the Buyer has already offset those moneys under subparagraph I. In the latter case the Seller shall notify Buyer when the moneys are withheld and retained by Seller.

5)Seller agrees to indemnify and hold Buyer harmless from and against any loss or damage, including without limitations. Buyer’s costs, attorney fees, or any other fines or penalties assessed against Buyer as a result of violations of the Act of this provision by Seller, its officers, partners, employees, representatives, agents and Seller’s subcontractors, or their employees.

2.6When a priority rating is specified in a purchase order, such purchase order is a rated order certified for national defense use and Seller is required to follow all precision of the defense priorities and allocations system regulations (15 CFR part 350).

2.7Compliance with Laws – Seller shall comply with all applicable federal, state, and local laws, rules, and regulations.

2.8State/Provincial Law – Purchase orders shall be governed by the law of the state, commonwealth or province in which such order is issued.

2.9Fair Labor Standards Act – In accepting a purchase order Seller shall be deemed to represent that the goods to be furnished hereunder were or will be produced in compliance with the requirements of the Fair Labor Standards Act, as amended, unless otherwise mutually agreed in writing by Buyer and Seller. When requested in writing, Seller shall include a certificate with all invoices submitted with such purchase order stating that the goods covered by the invoice were produced in compliance with the Fair Labor Standards Act, as amended, including Section 12(A) of such Act.

2.10Rejections – If any of the goods are found at any time to be defective in material or workmanship, damaged as a result of Seller’s negligence or mishandling, or otherwise not in conformance with the requirements of a purchase order or specified requirements, Buyer, in addition to any other rights which it may have under warranties or otherwise, may at its option correct, or have corrected, the nonconformance at Seller’s expense.

2.11Termination – Orders other than U.S. government contracts or subcontracts – Buyer may terminate work under this order in accordance with the provisions of the Subcontract Termination Clause set forth in Section 8-706 of the Defense Acquisition Regulation, modified by deleting therefrom all references to the government.

2.12Nondiscrimination in Employment – Seller will not discriminate against any employee or applicant for employment because of race, religion, color, sex, or national origin. Seller will further take affirmative action to employee and advance handicapped workers and disabled veterans.

2.13Toxic Substance Control Act – Seller further warrants that each and every chemical substance constituting or contained in the product sold or otherwise transferred to Buyer under a purchase order is on the inventory of chemical substances compiled and published by the U.S. E.P.A. pursuant to the Toxic Substance Control Act and regulations thereunder 40 CFR part 710.

2.14Hazardous Chemicals – If any of the materials furnished under a purchase order contains a hazardous chemical as defined by Federal Regulation 29 CFR 1910, 1200 (OSHA Safety and Health Standards), Seller agrees to furnish, concurrent with the initial shipment, a current Material Safety Data Sheet (MSDS) prepared in accordance with 29 CFR 1910 on such material. If the MSDS is subsequently revised, such revised copy shall be furnished with the next shipment, or within thirty (30) days after the revision, whichever is earlier. All containers of hazardous chemicals shipped under a purchase order shall be properly labeled in accordance with 29 CFR 1910.

2.15On-Time Delivery – Buyer expects 100% on-time delivery of all purchased products and services. On-time delivery performance that affects the Buyer’s commitments to customers may affect Seller’s standing as an approved CTS supplier.

2.16Foreign Object Debris/Cleanliness (FOD) – Every supplier must assure their manufacturing systems and processes prevent potential contaminants capable of becoming entrapped in product. Additionally, cleaning processes must remove any foreign debris or burrs generated by normal manufacturing operations.

2.17Certificate of Conformance – When applicable to the product (raw material, powder, wire, paint, dry film lube, etc.) or service (special processes, etc.) supplied, Seller shall deliver a Certificate of Conformance with product or service. Certificate of Conformance must conform to specified requirements and must clearly indicate the status of product or service as conforming or nonconforming, including detailed chemistry/size certification.

2.18The Seller agrees to flow down to subsequent suppliers all relevant Buyer, customer, regulatory, and other applicable requirements, including current issues of GE Aviation S-1000 when providing materials or services for GEA parts and Rolls-Royce RR9000:SABRe when providing materials or services for RR parts.

2.19Buyer encourages vendors to source Conflict Minerals (gold, tantalum, tin and tungsten) from sources other than the Democratic Republic of Congo and adjoining countries. If providing to Buyer materials containing these minerals the Seller is requested to provide the country of origin on or with the material certifications.

2.20Seller and subcontracted sellers must comply with U.S. Federal Acquisition Regulations (FAR) 52.222-50 and 52.222-56 and Defense FAR Supplement (DFARS) 252.203-7004 and 252.222-7007 dealing with human trafficking and related activities.

2.21The Seller agrees to use vendors designated or approved by the Buyer or the Buyer’s customer, when applicable.

2.22The Seller must ensure that persons under its control are aware of their contribution to product conformity and safety and the importance of ethical behavior.

2.23Risk Control including Counterfeit Product – The Seller agrees to apply appropriate risk controls to the products or services provided and to apply appropriate controls to direct and subtier vendors to ensure requirements are met. This include assurance that counterfeit products are not used or provided to the Buyer.

2.24Calibration sources must ensure that those performing calibration and verification activities have annual eye examinations indicating compliance with minimum near vision requirements of Snellen 14/18 or Jaeger 2. Color perception is required one time only, and records shall be retrained.

3.0 GOVERNMENT INSPECTION

3.1When government inspection is required the following statement will be on the purchasing document and your compliance is required: “Government inspection is required prior to shipment from your plant”. Upon receipt of this order, promptly notify the government representative who normally services your plant so that appropriate planning for inspection can be accomplished.

3.2When copies of the purchasing document are to be furnished directly to the government channels the purchase order shall contain the following statement and your compliance is required: “On receipt of this order promptly furnish a copy to the government representative who normally services your plant, or, if none, to the nearest defense supply agency inspection office”. In the event the representative or office cannot be located, our purchasing agent should be notified immediately.

4.0 RIGHT OF ACCESS / VERIFICATION OF PRODUCT OR SERVICE

4.1When specified in the purchase order, customers of the Buyer shall be afforded the right to verify at the Seller’s premises and/or at the Buyer’s premises that the product or service conforms to specified requirements. Said verification shall not absolve the Seller of the responsibility to provide acceptable product or services, nor shall it preclude rejection by the Buyer or the Buyer’s customer.

4.2The Seller must allow the Buyer, the Buyer’s customer, and regulatory authorities right-of-entry to any applicable area of all facilities, at any level of the supply chain, involved in the order including areas necessary to determine and verify the quality of contracted work, records, and materials. The Seller agrees to flow this requirement to subsequent suppliers.

4.3The Seller will make available necessary tools, measuring devices, and personnel for use by the Buyer, the Buyer’s customer, or regulatory agencies, as required, to determine contract compliance.

5.0 UNITED STATES EXPORT CONTROL REGULATIONS

5.1Buyer complies with all U.S. export control regulations, including the International Traffic in Arms Regulations (ITAR) and the Export Administration Regulations (EAR), and has a formal program to prevent violations.

5.2Buyer requires as a condition of doing business that the Seller and subcontracted Sellers comply fully with these government regulations.

5.3Items (parts, technical data, software, and/or technology) transferred to the Seller may be subject to the ITAR or EAR. If the Seller desires to sell, resell, divert, export, re-export, transfer, transship, or otherwise dispose of the items to or in any other country outside of the U.S., either in original form or after being incorporated through an intermediate process into other items or data, the Seller must evaluate and classify the items or data as they apply to the appropriate U.S. export control regulations, including securing authorization for export through a properly executed license or agreement from the appropriate government agency. The Seller must also observe all sanctioned/embargoed countries and denied party restrictions involved in handling restricted items – including all denied parties lists and sanction/embargo lists identified by the U.S. Departments of State, Commerce, and the Treasury.

5.4The above also applies to the extent the Seller otherwise makes available to a Foreign Person (whether within or outside of the U.S.) the technical data, technology, or know-how comprising, or relating to, the item(s).

5.5Buyer will assist the Seller in properly classifying the items relative to export restrictions by providing all available information relative to classification to the Seller If the classification is not clearly delineated in the purchasing information the Seller must request assistance from Buyer in writing. In the event a definitive classification cannot be determined, Buyer and the Seller must regard the item(s) as export restricted and the Seller will not export the item to any Foreign Person or Company.

5.6Any violations of U.S. export regulations by the Seller must be reported to the governmental agency with jurisdiction over the item using the voluntary disclosure process outlined in the regulations on the governmental department’s web site. The Seller will inform Buyer of the any violations in writing and will give Buyer a copy of any disclosure issued to the government.

5.7Records associated with relevant export transactions must be maintained for a minimum of five (5) years and must be available to Buyer and/or any U.S. regulatory agency upon request.

6.0 PROTECTION OF INTELLECTUAL PROPERTY

6.1It is understood and agreed to that the Buyer may provide certain information that is and must be kept confidential. This information may be the intellectual property of the Buyer or the Buyer’s customer.

6.2The confidential information to be disclosed can be described as and includes: Technical data, drawings, prints, sketches, specifications, standards, work instructions, technical plans, invention description(s), technical and business information relating to proprietary ideas and inventions, ideas, patentable ideas, trade secrets, drawings and/or illustrations, patent searches, existing and/or contemplated products and services, research and development, actual product and data derived from examination of actual product supplied by the Buyer or the Buyer’s customer, regardless of whether such information is designated as “Confidential Information” at the time of its disclosure.

6.3The Seller shall limit disclosure of confidential information provided by the Buyer to its employees having a need to know. The Seller will not disclose the confidential information obtained from the Buyer to any other party unless required to do so by law.

6.4Those Sellers who may be provided access to confidential information must sign and return to the Buyer a confidentiality agreement when requested to do so by the Buyer.