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Terms and Conditions and Quality Clauses

STANDARD PURCHASE ORDER TERMS & CONDITIONS                                                  (25th September, 2013)

Clause 1 - Definitions

Unless otherwise specifically stated, the terms hereunder, when capitalized, are defined as follows:

“Article(s): Goods and/or services described in this Order.
“Buyer”: DCM Aéronautique Inc., Entreprise de Soudure Aérospatiale Inc. (Aerospace Welding Inc.) or Lego Centre de Finition Inc.., all affiliates of Groupe DCM Inc., as indicated on the Order.
“Order” or “Change Order”: Purchase order or Change Order for the Articles.
“Seller”: Natural person, partnership, association, legal person or other entity providing the Articles.

Clause 2 – Orders & Change Orders

These terms & conditions shall be part of each Order and Change Order Buyer may issue to Seller.

Clause 3 – Agreement, Acceptance & Modifications

An Order is Buyer’s offer to Seller. Seller’s acknowledgement of this Order, commencement of performance or delivery of the Articles described in this Order shall constitute acceptance of such offer by Seller. Seller shall have 10 days to refuse the offer or to request an amendment thereto. No change or modification to this Order, including any additional or different terms in Seller’s acceptance, shall be binding on Buyer unless signed by Buyer’s authorized representative.

Clause 4 - Changes

Buyer may, upon written notice to Seller, make changes to the Order or to any element of the Order, including but not limited to specifications, quantity, delivery date, method of shipment and packaging. Seller shall proceed immediately with the Order as changed. If the costs materially increase or decrease as a result of the change, Buyer and Seller will agree on an equitable price adjustment to the Order. If Seller fails or omits to provide written notice of a cost impact to Buyer within 10 days of the receipt of the Change Order, the price shall be deemed accepted by Seller.

Clause 5 – Stop Work Notice

Buyer may, upon written notice to Seller (“Stop Work Notice”), order that all work be stopped in which case Seller shall immediately cease all activities related to the Order. This Stop Work Notice may be valid for up to 180 days at no extra costs to Buyer. When resuming the Order, Seller’s delivery schedule shall be adjusted by a reasonable delay which in no case shall exceed the period of the Stop Work Notice.

Clause 6 – Termination for convenience

Buyer may, upon written notice (“Termination Notice”), terminate for its convenience the whole or part of this Order. Upon receipt of such Termination Notice, Seller shall stop performance of all activities related to the Order, including any procurement of materials and services on the cancelled portion of the Order. Once Seller’s claim is received, Buyer and Seller shall agree on an equitable adjustment of the Order price, which in no case shall exceed the total Order price. If Seller fails to file a claim with Buyer within 60 days of issuance of the Termination Notice by Buyer, Seller shall have no remedy after this period.

Clause 7 – Termination for default

If Seller is in default of carrying out any of its obligations under this Order, Buyer shall, prior to termination, give Seller a 10-day written notice during which Seller shall cure the default.

If Seller fails to cure the default during the specified cure notice period, or becomes bankrupt or insolvent, makes an assignment for the benefit of creditors or takes the benefit of any statute relating to bankrupt or insolvent debtors, Buyer may cancel the Order and the Order shall therefore be automatically terminated.

Buyer may terminate the whole or only a part of the Order. Upon such termination, Seller shall have no claim for further payments and shall be liable to Buyer for any excess costs paid by Buyer in procuring the terminated portion of the Order from another source as well as any direct damages incurred by Buyer as a result of Seller’s default.

Clause 8 – Excusable delay

A delay in the performance of Seller’s obligations under the Order which is caused by an event which (i) is an act of God, act of government, terrorism, fire, riot or war and (ii) interferes with the performance of Seller’s obligations and (iii) the effects of which could not have reasonably been avoided by Seller shall constitute an excusable delay.

Seller shall notify Buyer in writing upon the occurrence of the event and will diligently work with Buyer in coming up with an acceptable work-around plan which will limit the impact of such delay on the delivery schedule.

If the excusable delay lasts for more than 30 days, Buyer shall have the right to terminate the whole or any part of the Order in accordance with the provisions of Clause 6 (Termination for Convenience) herein.

Clause 9 – Quality Control

Seller shall comply with Buyer’s quality requirements. Seller shall also comply with the requirements of its civil airworthiness authority (Transport Canada, Federal Aviation Authority or other foreign airworthiness authority as may be applicable).

Buyer reserves the right, upon reasonable prior notice to Seller, to audit Seller’s quality manual, and to verify the conformance of Seller’s procedures, manufacturing processes and procedures and acceptance of Articles to Buyer’s quality requirements. Seller shall provide, at no cost to Buyer, appropriate facilities to perform such audits and verifications during normal business hours.

Seller shall allow Buyer’s customers, upon reasonable prior notice, to audit Seller’s quality manual, and to verify the conformance of Seller’s procedures, manufacturing processes and procedures and acceptance of Articles to such customers’ quality requirements. Seller shall provide, at no cost to Buyer’s customers, appropriate facilities to perform such audits and verifications during normal business hours.

All Articles are subject to final inspection and acceptance by Buyer at destination, notwithstanding any payment or prior source inspection by Buyer at Seller. Inspection and tests by Buyer do not relieve Seller of responsibility for defects or other failures which may later be found during the warranty period.

Clause 10 – Warranty

Seller warrants that all Articles delivered under this Order will be free from defects in design, material and workmanship and will conform to all the requirements contained in the Order, including all applicable drawings and specifications. All Articles are subject to final inspection and acceptance by Buyer. The final inspection will be made within a reasonable time, not-to-exceed 90 days after receipt at Buyer. Defective Articles shall be returned to Seller at Seller’s expense for repair or replacement at Buyer’s option. Buyer, at its option, may also perform the necessary repair and charge the reasonable costs thereof back to Seller.

This warranty shall be in addition to all warranties arising as a matter of law and shall be enforceable by Buyer’s customers as well as Buyer for a period of 36 months after delivery of the Articles to Buyer.

Clause 11 – Prices, invoicing and payment

Seller shall invoice Buyer at the prices stated on the Order. All invoices will indicate the Order number, Article description, quantity, unit price and total price of the Articles as well as the payment to address, amount of applicable taxes and Goods and Services Tax (GST) and Quebec Provincial Sales Tax (PST) registration numbers.

Buyer shall pay Seller within 90 days from the latter of (i) Buyer’s receipt of acceptable Articles, (ii) applicable delivery date specified on the Order or (iii) receipt of Seller’s invoices.

Clause 12 – Delivery

Time is of the essence in performing Seller’s obligations under the Order. The Articles shall be delivered complete on the delivery date, and not beforehand, and at the place specified on the Order. If Seller delivers an Article or Articles prior to the delivery date on the Order, Buyer reserves the right to retain the Articles and make payment per the applicable Order schedule or return them to Seller at Seller’s expense. If Buyer opts to retain the Article or Articles, payment shall be made in accordance with the provisions of Clause 11 hereinabove.

All deliveries by Seller shall be made FCA Seller (Incoterms 2010) and Seller shall use the carrier designated by Buyer. Buyer shall debit Seller’s account for all applicable freight costs incurred by Buyer if Seller uses a carrier other than that designated by Buyer.

Clause 13 – Packaging

All Articles must be suitably packaged and prepared for shipment to withstand normal transportation and stocking functions. Containers must be in accordance with best commercial practices and all applicable laws. When multiple Orders or Articles are combined in one container, they must be separately packaged inside that container.

A separate invoice and a separate packing list are required for each Order and must accompany each shipment. Seller will provide bar coded shipping labels with each shipment. When required on the Order, Seller shall also provide a certificate of compliance (CofC) duly signed by its authorized representative certifying the compliance of the Articles to all drawings and specifications contained in the Order. All documents must include the applicable Order number.

Clause 14 – Hazardous materials

Seller certifies that it is in compliance with any federal or provincial laws and regulations in force in Canada, as well as any federal or state laws and regulations in force in the United States, including but not limited to the U.S. Occupational Safety and Health Act (OSHA) and the Canadian Hazardous Products Act, as may be applicable.

If the Articles purchased herein are considered toxic or hazardous under the abovementioned laws and regulations, Seller shall provide a copy of the applicable Material Safety Data Sheet (MSDS) with each shipment.

Clause 15 – Government regulations – Import / Export of Articles and data

The Articles and data provided under the Order may be subject to the provisions of the Export Administration Act and the Export Administration Regulations promulgated thereunder; the Arms Export Control Act and the International Traffic in Arms Regulations (ITAR) promulgated thereunder; the Canadian Export and Import Act; the Defense Production Act and the Foreign Corrupt Practices Act.

The Parties acknowledge that these statutes and regulations impose restrictions on import, export and transfer to third countries of certain categories of data and Articles and that licenses from the U.S. Department of State and/or the U.S. Department of Commerce and/or the Canadian Department of Foreign Affairs and International Trade may be required before data and Articles may be provided hereunder. Seller agrees to comply with governmental regulations mentioned above as they relate to the import / export of data and Articles. Seller shall indemnify and hold Buyer and its customers harmless to the full extent of any loss, damage or expense, including lost profit, attorney’s fees and court costs, for any failure of Seller to comply with the above referenced laws and regulations.

Clause 16 - Indemnification

Seller agrees to indemnify, defend and hold harmless Buyer and customers from and against any and all losses, costs and expenses of any kind whatsoever in connection with any breach by Seller of third-party proprietary or intellectual property rights, except to the extent caused by Buyer.

Each party shall hold harmless the other party from and against any and all damages, losses or other injuries suffered by either one of the parties or by third parties and that result from its fault or negligence during the performance of the Order or result from the poor quality of the Articles described in the Order.

Clause 17 – Occupational Health and Safety

Seller undertakes, at all times during the performance of the Order, to take the necessary measures to protect its employees against industrial accidents and to comply, at all times, with any laws or regulations in force in the Province or Territory having jurisdiction over its employees. Should a part of the Order be subcontracted, Seller shall have the obligation to ensure that all subcontractors also comply with any laws or regulations governing the occupational safety of their employees.

Clause 18 – Disputes

The Parties shall attempt to resolve any disputes by escalating the matter through their respective management structures. If the Parties fail to resolve the dispute, they may submit the dispute to the tribunals identified in Clause 18 – Applicable law and venue. Pending final resolution of the dispute, Seller shall proceed diligently with the performance of the Order as directed by Buyer.

Clause 19 – Applicable law and venue

The Order, including these terms and conditions, are governed by and construed exclusively by the laws of the Province of Quebec and those of Canada applicable therein, without reference to its conflict of law rules. The Parties agree to submit any dispute related to the Order to the tribunals of the Province of Quebec, district of Montreal.

The Parties agree that these terms and conditions and any document referenced herein or in the Order be drafted in English. Les Parties aux présentes ont convenu que ces termes et conditions ainsi que tous les documents s’y rapportant, incluant le bon de commande, soient rédigés en Anglais seulement. 

Clause 20 – Partial invalidity; Non-Waiver

If any provision of the Order or of these terms and conditions becomes null and void or unenforceable, the other provisions shall remain valid and enforceable.

The failure of Buyer to enforce, at any time, any of the provisions of the Order or of these terms and conditions or to require at any time the performance by Seller of any of the provisions hereof, shall in no way be construed to be a waiver of the right to enforce such provisions, nor in no way affect the validity of the Order and these terms and conditions or the right of Buyer to enforce such provisions.

Clause 21 – Order of precedence

In the event of any inconsistency among the provisions of the Order, such inconsistency shall be resolved by giving precedence in the following sequence:

• Provisions contained in the Order
• Long term agreement, Master agreement or other agreement, as applicable
• These terms and conditions
• Statement of work, as applicable
• Specifications, as applicable
• Other document, as applicable

Clause 22 – Entire Agreement

The Order, including these terms and conditions and all documents referred therein, constitute the entire agreement between the Parties and supersedes and replaces all prior discussions, representations, understandings or agreements whether oral or written, between the Parties. 

AEROSPACE WELDING INC. QUALITY CLAUSES FOR TYPE A & B SUPPLIERS       (13th February, 2014)

Products and services purchased by Aerospace Welding Inc (AWI) are grouped into the two (2) principal categories identified as Type A and Type B suppliers.

If your purchase order indicates that you are either one of these providers you must meet the following requirements that each of them includes:
All suppliers are also subject to our standard purchase order terms and conditions which are available on Aerospace Welding’s website.

Categories of products for Type A suppliers 
A. Outside Special Process: Must be manufactured and processed completely to drawing requirements. All specifications referenced therein, and all P.O. requirements including such items as part marking, identification, inspection, stamps, certification, inspection records, etc. All special processes that are called out on the PO, engineering drawings or specifications must be carried out by OEM approved sources.

B. Fabrication:  Sheet metal fabrication, tool and die making, castings, extrusions and moldings, fusion and adhesive bonding, machining, heat treating, fabricated hardware and mechanical assembly.

C. Special Process:   This category involves suppliers who perform a production process, the results of which cannot be fully verified by subsequent verification and testing of the product and where, for example, processing deficiencies may become apparent only after the product is in use.  Accordingly, continuous monitoring and/or compliance with documented procedures are required to ensure that the specified requirements are met.  Examples of special processes are:  Fusion welding, resistance welding, thermal spray, liquid penetrant inspection, chemical cleaning.

D. Calibration:  This category involves suppliers who perform calibration of measuring, monitoring and testing equipment for AWI.  Calibration labs must meet the requirements of ISO/IEC 17025:2005 or its equivalent and have a system of traceability to national or international recognized standards.  A certificate of Calibration must be included with each instrument calibrated.

E. Raw Material and tooling: This category involves suppliers who must purchase from an approved mill, and have complete traceability.

F. OEM Equipment:  This category involves suppliers who provide original parts, components, subassemblies, and/or complete assemblies.   Suppliers for these types of products are required to have a quality system which meets those requirements defined within ISO, AS, or equivalent.

Note:  For all Lockheed Martin Aeronautics products the Supplier must utilize approved sources per QCS-001.
For all Bombardier Aerospace products the Supplier must utilize approved sources per QD 4.6-40.

Quality Clauses for Type A supplier:

1. Third party sub-contracting
If during the accomplishment of the contract, the supplier intends to sub-contract work to a third party, this third party shall also be subjected to Aerospace Welding’s evaluation of its capabilities in the same manner as described above. ONLY upon Aerospace Welding’s written consent can this third party be utilized by the supplier as services.
The supplier is responsible to flow down to their sub-tiers all conditions and requirements set forth by AWI and its customers.

2. Notification of Changes
Seller shall notify buyer, in writing, within ten (10) days of any (1) change in its quality system status resulting in loss of 3rd party registrar’s certification; or (2) adverse action initiated by Buyers customer, the Government, the Federal Aviation Agency (FAA), or the Civil Aviation Agency (CAA) resulting in disapproval or suspension of Seller’s quality system. Seller shall notify Buyer, in writing, at least ninety (90) days in advance of any sale, relocation, or transfer of any portion of Seller’s manufacturing operations.

3. Non-Conforming products
Notify AWI of any nonconforming product and obtain organization approval for nonconforming product disposition before and after delivery.

The supplier shall provide effective corrective and preventive action in a timely manner upon request by Buyer. When requested by Buyer, Seller shall provide trend data and findings. Seller shall identify true root cause findings and corrective and preventive action(s) to preclude recurrence by utilizing tools such as cause mapping, cause and effect analysis, 5 why’s etc.

The supplier shall implement and maintain a documented quality system that provides for identification, documentation, and disposition of nonconforming material.

4. Waiver / Deviation Requests
The supplier shall ensure that written authorization has been granted by an AWI representative with authority to do so prior to the shipping of the product which does not conform to the specified requirements for the product.

5. Documentation and Record control
Identify the latest revision status of specifications, drawings, process requirements, inspection / verification, instruction and other relevant technical data used for the processing of AWI work.

Must retain all contractual records for ten (10) years and make them available upon request to AWI within 48 hours of the request.

All quality records shall be returned to AWI in the case where the supplier’s business operations terminate. 

6. Right of Access
Must allow Aerospace Welding Inc., Regulatory Authorities, and their customers, the right of access to the applicable areas of all facilities, at any level of the supply chain involved in the order, and to all applicable records. Aerospace Welding Inc reserves the right to perform an audit at the supplier if it is necessary.

7. Quality Management System
The supplier shall maintain an ISO, AS, Military Standard equivalent quality system acceptable to Buyer.

8. Counterfeit parts / Non-Certified Materials
Supplier agrees and shall ensure that Counterfeit Work is not delivered to AWI. The supplier shall immediately notify AWI with the pertinent facts if the supplier becomes aware or suspects that it has furnished Counterfeit Work. When requested by AWI, the supplier shall provide appropriate documentation that authenticates acceptable traceability of the affected items

Seller shall establish and maintain controls to prevent the use of non-certified materials when certified materials are required.

9. Foreign object damage / debris (FOD)
Seller shall maintain a FOD prevention program and when the potential for FOD entrapment or migration can occur during manufacturing or processing by the supplier’s subcontractor(s), Seller shall ensure flow down of applicable FOD requirements to the subcontractor(s).

10. Calibration
The supplier shall calibrate or have calibrated by an external certified source all testing and inspection equipment used in the manufacture and acceptance of AWI’s products/parts.
Seller shall maintain a documented calibration system for the calibration and maintenance of tools, jigs, inspection and test equipment.

11. Special processes
All special processes must be performed by purchaser or customer approved facilities. The supplier shall list all of the sources used to perform special processes on their certificate of conformance and identify which source completed which special process.

12. First Article Inspection Report
When requested by the purchase order, the supplier is responsible for completing a first article inspection report which is in accordance with SAE standard AS9102 latest revision. It is recommended that the supplier use the checklist (or similar document) contained in Appendix F of the AS9102 standard to ensure all FAI requirements have been fulfilled prior to submission.
The product used to complete the first article inspection shall be identified as such.

13. Purchaser supplied material
The supplier shall not substitute other material without specific written authorization of AWI. (See Quality Clause # 4 above)

14. Inspection and Testing
The supplier shall work within and inspect tolerances and limitations specified on the drawings and test specifications covering the work and shall make such tests as are specified by the drawings and specifications.  Only qualified personnel shall perform inspection and testing.
The supplier shall have a system in place to identify the inspection status of the product as it is being produced for conformance or non-conformance with regards to inspection tests performed. The inspection status of each product should be easily identifiable using routers, stamps, tags, etc. the system shall ensure that only the products that have passed all of the required inspection tests are released, used or installed. 

15. Handling, Storage, Protection and Preservation
Packaging and preservation shall be completed in a manner that ensures adequate protection against damage, deterioration and tampering during shipment, storage and distribution.

The supplier is responsible for labeling the package in a manner which ensure it is easily identifiable.

16. Release documents (Certificate of Conformance or Form 1 / US FORM)
When requested on the purchase order a certificate of conformance, signed by an authorized member of the suppliers company, must be shipped inside the package with the part to AWI. The certificate shall contain at minimum the following information:
a) Supplier name and address
b) Purchase order number
c) Unique identification number of certificate
d) Authorized signature
e) Material specification and revision (if applicable)
f) Part number and revision
g) Serial number and or lot number ( if applicable)
h) Quantity
i) List of special processes performed including the sources who performed them (if applicable)
j) A statement indicating the material/part/process has been completed, inspected and is in conformance to the applicable drawing, and or specification and purchase order

17. Training
The supplier shall have objective evidence that the personnel performing process operations and quality inspection or test functions have been trained and properly qualified to perform their tasks.

Categories for Type B suppliers
Suppliers in this category involve suppliers / distributors who may provide but are not limited to:
A. Consumables: Items such as ear plugs,  safety glasses, steal toe boots, basic work gloves, etc. which are used on a daily basis but which do not require traceability to AMO.

B. Contractors: Suppliers who complete contract work which does not directly or indirectly impact the quality of products produced for or by AWI. Ex: Landscaping, snow removal, etc.

C. Office supplies: Items such as telephones, computer software, computer paper, and all other clerical office supplies needed.
 
D. Furniture: Items such as desks, computer chairs, shelving units,  etc.

E. Consultants: Any person who is hired to provide expert advice to Aerospace Welding Inc.

Quality Clauses for Type B supplier:
Distributors / Consumables:
1. Non-Conforming products
The supplier shall provide effective corrective and preventive action in a timely manner upon request by Buyer. When requested by Buyer, Seller shall provide trend data and findings. Seller shall identify true root cause findings and corrective and preventive action(s) to preclude recurrence by utilizing tools such as cause mapping, cause and effect analysis, 5 why’s etc.

2. Handling, Storage, Protection and Preservation
Packaging and preservation shall be completed in a manner that ensures adequate protection against damage, deterioration and tampering during shipment, storage and distribution.
Distributors must have a system which ensures that materials are stored, identified, packaged and preserved properly and includes a system of traceability which ensures that any product shipped to AWI is traceable to the original manufacturer including all batch or lot numbers applicable.

3. Waiver / Deviation Requests
The supplier shall ensure that written authorization has been granted by an AWI representative with authority to do so prior to the shipping of the product which does not conform to the specified requirements for the product.

4. Right of Access
Must allow Aerospace Welding Inc., Regulatory Authorities, and their customers, the right of access to the applicable areas of all facilities, at any level of the supply chain involved in the order, and to all applicable records. Aerospace Welding Inc reserves the right to perform an audit at the supplier if it is necessary.

Note: If you have any questions about the vendor type applicable to your company, do not hesitate to contact a purchasing agent or a quality representative for clarification.

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