TERMS AND CONDITIONS OF THE PURCHASE ORDER

1. Loran Aerospace Inc., Purchase Orders including any attachments, contain the complete and final agreement between Loran Aerospace Incorporated (“Loran”, “Loran Aerospace” or Buyer) and Supplier (Seller).
2. Upon acceptance of any Purchase Order by Seller, all the terms and conditions of the transaction and no term or condition at variance with the Order proposed by Seller in acknowledging or accepting this Order will be binding on Buyer unless specifically accepted in writing.
3. Buyer is only allowed to purchase from vendors pre-approved in advance. New vendors should ensure they receive a Loran Aerospace vendor number before completing first sale.
4. Buyer will not approve vendors that are debarred from doing business with the US Government or are listed on the US Department of State list of debarred persons / entities.
5. Seller shall not ship under reservation. Failure of Buyer to enforce any right hereunder shall not constitute a waiver of such right or any other rights hereunder. The Order and the agreement entered pursuant to its acceptance by Seller shall be governed and interpreted in accordance with the laws of the State of Georgia.
6. Neither the Order, any interest therein, nor shall claim there under, be assigned or transferred by the Seller except as expressly authorized by the Buyer.
7. Neither all, nor substantially all, of any order may be further subcontracted by the Seller without the prior written consent of the Buyer.
8. Buyer may, at any time, in writing make changes to an order. If any such change causes an increase or decrease in the cost or time required for performance of the work, the price and/or delivery schedule shall be equitably adjusted and the Purchase Order so modified. The Seller shall submit any claim for adjustment to the Buyer within seven (7) days following receipt of the Buyer’s written Change Order. Failure of the parties to agree to an adjustment shall be considered a dispute under the Disputes clause hereof; however pending resolution of any dispute, the Seller shall immediately proceed with the work as changed.
9. Payment terms shall be NET 30 days after receipt and acceptance of material. If a vendor wishes to have payment in advance, all trade references must be verified and a management determination by Buyer will be made.  Even in these circumstances, specifically for initial / first time procurement, it is Buyer policy to only accept cash on delivery (COD) or upon verification of material in our possession to ensure a) delivery is made and b) material is in conformance with documentation provided and c) visual inspection to ensure goods are airworthy and in conformance with desired condition requested on the purchase order.
10. FOR SHELF LIFE AND AGE CONTROLLED MATERIALS, THE SUPPLIER/SELLER SHALL ENSURE THAT AT LEAST 75% OF MATERIAL LIFE IS REMAINING AT TIME OF DELIVERY, THIS REQUIREMENT MAY BE WAIVED BY LORAN MANAGEMENT.
11. The supplier shall perform 100% visual inspection for defects: caps, plugs, part name, part number, lot number, serialization, and trace documentation.
12. Buyer has the right of final approval of products supplied based on compliance to drawings, standards, and raw material certification requirements.
13. Seller must notify Buyer of any non-conforming processes, products or services and Buyer must give approval for their disposition.
14. To comply with Buyer’s requirements of their QMS, Buyer may conduct vendor evaluations, scorecards or other performance evaluations as defined on the Seller.
15. Most interactions between Buyer and Seller will be over electronic mail or telephone. Buyer does on occasion use online sourcing portals to inquire and receive initial quotations.
16. Buyer, as a distributor, normally has no specific design or development control requirements.  Any special requirements, critical items or key characteristics on a “build to print” item or an item to be manufactured to a Buyer supplied drawing, will be listed on our PO.
17. If applicable, Buyer may request on-site product verification and inspection, at supplier’s premises, when source inspection is required.
18. All material delivered must be accompanied by a signed Certificate of Conformance (“CofC”) stating the material complies with the requirements of Buyer’s Purchase Order and drawing (when applicable).  If not provided upon receipt, if not provided upon receipt, the invoice may be aged for payment based on final date of certifications received.
19. For Commercial aviation items, including parts in NE, NS, OH and RP conditions, an FAA8130-3 shall be supplied whenever possible. Buyer cannot automatically accept parts Commercial parts with a CofC only.
20. Seller shall supply a proper Bill of Lading signed by carrier or any other legal applicable documents providing title to the goods to the purchaser upon delivery, fully protecting all parties in case of damages in transit. All costs incurred due to improper packaging will be borne by the supplier.
21. Buyer reserves the right to designate requirements for first article reports or tests, specimens, design approval, inspection/verification sampling, statistical techniques, and/or key characteristics. Additional requirements above and beyond the normal deliverable items will be specified on the Purchase Order.
22. Seller must maintain the proper identification and revision status of specifications, drawings, process, requirements, inspection/verification instructions, and other relevant technical data. The latest revision of the specification or drawing to be used in manufacture and inspection, unless specific written instruction requesting a previous revision is specified.
23. Seller is required to maintain compliance to a Quality Management System standard and notify Buyer of changes to certification status (i.e. ISO9001, AS9100, AS9120, etc.).
24. Seller is required to notify Buyer of major changes to Loran operation, such as a change in manufacturing location, Loran Aerospace name changes, changes in ownership.
25. Seller is required to maintain records associated with the Purchase Order as required for a period of no less than 10 years.
26. Buyer retains the right of access of Buyer’s personnel, our customer, our regulatory authorities (including FAA and EASA), to the applicable areas of all facilities, and at any level of the supply chain, for the purposes of auditing the maintenance activity, relative to the Purchase Order in accordance with CFR 145.233(b).
27. Customer directed sources must operate in accordance with approved specifications and standards as directed and controlled by the customer in question.  Any supplier requirements defined by Buyer’s customers will be stated on the Purchase Order, as applicable.
28. Seller is required to prevent delivery of counterfeit parts or material. Contact Buyer for any questions related to counterfeit material prevention and control.
29. Any nonconforming materials, parts, assemblies, subassemblies, systems, subsystems or services shall be documented and reported to Loran within 24 hours.
30. Seller is required to ensure that their personnel are trained to the requirements of the drawings, standards and Purchase Order requirements supplied by Buyer.
31. Seller must flow applicable requirements, including key characteristics and customer requirements, down to secondary level suppliers and subcontractors as necessary for compliance to requirements.
32. Seller is expected to act ethically, honestly, and with the highest standard of personal integrity always in the performance of work, product / service conformity and product safety.
33. No rights in any plans, drawings, or other data furnished by the Buyer or derived there from shall pass to the Seller in fulfillment of the order or be released to third parties without the written consent of the Buyer.  To the extent that the items ordered are manufactured to designs not originated by Buyer, Seller guarantees that the sale and/or use of such items delivered hereunder will not infringe any United States or foreign patents. Seller agrees to indemnify and save Buyer harmless from any expense, loss, cost, damage or liability that may be incurred on account of infringement or alleged infringement of patent rights against the Buyer.

SUPPLIER QUALIFICATION AND PURCHASE ACKNOWLEDGEMENT

• This Supplier Qualification and Purchase Acknowledgement (SQPA) is made and entered into effective as of the issue date of the Purchase Order by Loran Aerospace Incorporated (Loran, Loran Aerospace), located at 5077 Dallas Hwy. Ste. 211, Powder Springs, GA 30127, USA, with the Supplier Company is placed in the vendor section of this purchase order, where each is an individual “Party” and, collectively, the “Parties”.

 NOW, THEREFORE, the Parties hereby agree:

•  This SQPA is not an agency, an authorized distributorship, or similar authorization. Loran does not grant any company authorization, and this SQPA shall not be considered such under any circumstances. Government or NATO projects are outside the scope of this SQPA.

Applicable Law

• This SQPA shall be governed by and construed under the laws of the State of Georgia, USA. Georgia courts shall have exclusive jurisdiction.
• Loran reserves the right to pursue all legal action against the supplier for any non-compliance arising under this SQPA.
• Both Parties agree to comply with all national and international laws and that no technical data shall be exported from the United States without first complying with all requirements of the International Traffic in Arms Regulations and the Export Administration Act, including the requirement for obtaining any export license.
• NEITHER PARTY MAKES ANY EXPRESS WARRANTIES AND DISCLAIMS ALL IMPLIED WARRANTIES WITH RESPECT TO INFORMATION DELIVERED HEREUNDER, INCLUDING IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR FREEDOM FROM PATENT OR COPYRIGHT INFRINGEMENT, WHETHER ARISING BY LAW, CUSTOM, OR CONDUCT.  IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR SPECIAL, INCIDENTAL, INDIRECT, OR CONSEQUENTIAL DAMAGES.

Foreign Corrupt Practices Act.:

• The supplier agrees that it shall take no action or spend any funds, regardless of source, in violation of the laws of the United States of America of any country or countries, including but not limited to the payment of bribes, kickbacks, political contributions, or other prohibited payments per the United States Foreign Corrupt Practices Act (“FCPA”) 15 USC Section 78, as amended.  The supplier shall indemnify and hold Loran harmless from all claims, judgment, demand, damages, costs, fines, penalties, attorney’s fees, expenses, and all other legal actions which may be taken against Loran, arising from failure of to comply with the FCPA.

 SUPPLIER QUALIFICATION AND RESPONSIBILITIES

• Supplier Status: Loran divides its suppliers into three main classes:

Approved Supplier: Suppliers with a score depending on on-time delivery and product quality, with a minimum of 70 or a maximum of 3 product rejections within a year.

Conditionally Approved Supplier: The suppliers who can supply the products hard-to-find or the suppliers who is specially requested by the customer and is not listed in the Loran supplier list, or the suppliers who are a new suppliers for Loran. The score of the conditionally approved supplier is between 50 and 69.

Canceled Supplier: Suppliers whose scores are below 50. The canceled supplier term covers all companies that provide counterfeit products and or forge traceability documents and or cannot provide adequate technical support and warranty.

• Approval of the Supplier Status

3.2.1.        The approved status of a supplier may be revised following a surveillance process audit or linked to the following major events:

3.2.1.1.              Quality performance is insufficient in a recurrent manner,

3.2.1.2.              Findings noted during the process audit without associated corrective actions,

3.2.1.3.              Delivery performance is inadequate in a recurrent manner,

3.2.1.4.              Recurrent failure of the supplier to respond correctly to complaints,

3.2.1.5.              Third-party certification not achieved or maintained,

3.2.1.6.              Information from Customers or Regulatory authorities about quality-related risks.

3.2.2.        In these cases, a letter should be sent to the supplier by the Purchasing Department of LORAN indicating the reason(s) for the change in approval status.

3.2.3.        LORAN performs surveillance process audits at the frequencies adapted to the risk level of each supplier. This frequency can range from 12 to 36 months.

3.3.            Supplier Score

3.3.1.        Loran carries out all purchasing processes through the ERP system. In this context, there is a Risk Assessment section for both suppliers and products. If necessary, risk factors for the supplier or product are stated in these fields.

3.3.2.        The purchasing department evaluates suppliers before purchasing a product or service to determine their ability to meet the LORAN's requirements. The main criterion of this evaluation process is the supplier's historical success for LORAN projects.

3.3.3.        LORAN is used the criteria are described in the SAE ARP9134 Rev.A document while supplier qualification evaluation performing.

3.3.4.        While conducting supplier qualification evaluation by LORAN, it also published the Supplier Code of Conduct document (see #683494 - Supplier Code of Conduct) for these companies. In this document, LORAN determined the general rules that its suppliers must comply with and requested that these rules be implemented.

3.3.5.        LORAN monitors its suppliers on a project basis, according to the criteria specified in the Supplier Risk Assessment Table, and scores them based on the main criteria.

3.4.            Record Retention Responsibilities

3.4.1.        Loran requires the following record storage and recalls capabilities from all its suppliers.

3.4.2.        The supplier is responsible for retaining quality records according to the latest requirements for a minimum of 10 years of Loran or per contract requirements.

3.4.3.        All quality records are to be written in English, legible, reproducible, and identifiable to the purchase order.

3.4.4.        All non-digital quality records (printed medium) shall be documented in ink or other permanent marking.

3.4.5.        Correction to quality records must be recorded, dated, and signed in ink or other permanent marking method with the original data being legible and retrievable after the change.

3.5.            FAI Approval for Custom (Special) Manufacturing

3.5.1.        FAI product and process approval is required for custom manufacturing (special production) and configuration processes.

3.5.2.        Unless otherwise specified by the customer, all custom manufacturing processes will be carried out only by authorized manufacturers. It is strictly forbidden for the supplier to develop a process outside of this clause, and Loran reserves all its legal rights in this regard.

3.6.            Prohibited Practices

3.6.1.        Material substitution by Supplier is forbidden for all materials, parts, assemblies, subassemblies, systems, subsystems, or services supplied to Loran.

3.6.2.        Scrap: The Supplier shall return any finished materials, parts, assemblies, subassemblies, systems, subsystems or services that the supplier has dispositioned as scrap to Loran. Loran shall determine whether the proper disposition will be scrapped.

3.6.3.        Repair: The supplier shall not repair a product without Loran's prior written approval.

3.6.4.        Rework: The supplier shall not perform work outside the specific specification limits.

3.6.5.        Re-Sell of Rejected Items: The supplier shall clearly identify the products rejected by LORAN or any customer, and the rejected products are strongly prohibited from reselling in the market.

3.6.6.        Conflict Minerals: The supplier must comply with the requirements of the Dodd-Frank Act on Conflict Minerals (for more details, please visit:

https://www.sec.gov/newsroom/press-releases/2012-2012-163-related-materials or https://ec.europa.eu/commission/presscorner/detail/fr/memo_14_157). If a conflict mineral is used in the product, and if the supplier detects this situation before or after product delivery, Loran must be notified within a maximum of 60 days after this determination.

3.6.7.        Foreign Object Debris or Foreign Object Damage (FOD): The Supplier shall have a fully implemented FOD Prevention Program that provides for the Detection, Removal, and Reporting of Foreign Object Debris. The procedure shall include provisions for customer notification, internal audits and training of personnel and will contain all necessary requirements of AS9146 as determined by the supplier’s Quality Assurance and Engineering functions.

3.6.8.        Working Conditions and Human Rights: The seller cannot engage in practices that violate human rights and legal regulations under any circumstances. Loran reserves the right to cancel all active orders without any payment in case of any violation. The seller agrees and confirms that any material violation of law relating to basic working conditions and human rights, including laws regarding slavery and human trafficking, applicable to the seller’s performance under a contract may be considered a material breach of contract. Loran may elect to cancel any open orders with the seller at no cost to Loran.

3.6.9.        Russian Material Exclusion: All material with a melt source within Russia is prohibited from being used to manufacture products procured for Loran. If Russian material is to be used, written authorization must be obtained from the Loran purchasing representative prior to manufacturing/shipping products to Loran.

3.6.10.      Unauthorized Manufacturers: Any manufacturer outside the NATO-DFAR supply chain is not accepted in the LORAN supply chain. Under no circumstances may a supplier procure a product manufactured outside of NATO-DFAR.

3.6.11.      Unless otherwise specified by the customer, all custom manufacturing processes will be carried out only by authorized manufacturers. It is strictly forbidden for the supplier to develop a process outside of this clause, and Loran reserves all its legal rights in this regard.

3.7.            Traceability Documents

3.7.1.        All suppliers providing products on behalf of LORAN must ensure full traceability. Accordingly, if required by customer demand, the supplier will include LORAN's name alongside their own name in the manufacturer's traceability document.

3.7.2.        The supplier must ensure complete and uninterrupted traceability from the manufacturer to LORAN.

3.7.3.        Prohibited Under All Circumstances:

3.7.3.1.              Counterfeit products,

3.7.3.2.              Forged documents,

3.7.3.3.              Making unauthorized corrections, alterations, deletions, or any other revisions to traceability documents,

3.7.3.4.              Using the same manufacturer's documents through different manufacturers in partial product shipments,

3.7.3.5.              Sourcing products from China, India, or any country outside of DFAR-NATO,

3.8.            ITAR Regulations

The parties agree to comply with all national and international laws and that no technical data shall be exported from the United States without first complying with all requirements of the International Traffic in Arms Regulations and the Export Administration Act, including the requirements for obtaining any export license.

 

3.9.            Supplier Score and Audit: LORAN monitors its suppliers on a project basis, according to the criteria specified in the Supplier Risk Assessment Table, and scores them based on the main criteria.

SUPPLIER RISK ASSESSMENT TABLE AND SCORING
RISK CRITERIA			PROJECT SCORE FOR THE SUPPLIER
Criteria	Description	Criteria Class	Scoring (Success)	Scoring (Failure)
PRODUCT QUALITY	Capability to deliver products and/or services to the customers quality requirements.	MAIN CRITERIA	100	-10
TRACEABILITY AND CUSTOMER SATISFACTION	Documentation from the manufacturer to the final end-user, includes test reports and CofC documents for the product.	MAIN CRITERIA	100	-10
ON-TIME DELIVERY	Capability to deliver products and/or services to the customers scheduled requirement.	MAIN CRITERIA	100	-1 (per day)
PROHIBETED ACTIONS	Sections 3.7.3 and its sub-sections	MAIN CRITERIA	CANCELLED SUPPLIER / RECORD IN “COMPANY RECORDS”

 

3.10.         Packing Process: The main packaging requirements are classified and must comply with ASTM-D3951. If applicable, the packing requirements must be suitable for MIL-STD-129-R 2023 and MIL-STD-2073-1.

3.10.1.      Thread and Shank Protection: Unless otherwise specified by the required packaging requirement, all externally threaded fasteners 3/8” (76.2mm) diameter and above shall have the full length of the threads and shank protected from handling damage by covering these areas with plastic sleeves.

3.10.1.1.            The sleeves shall be appropriately sized so as not to fall off during normal handling,

3.10.1.2.            Other alternative methods of protection can be used, such as covering the entire fastener with protective webbing or protecting the fasteners from touching each other by packaging the fasteners using the vacuum packaging method,

3.10.1.3.            External threads, splines and close tolerance surfaces shall be provided additional protection by means of individual ferrules or additional wrapping.

3.10.2.      Warning Labels: Depending upon the content, boxes must identify with instructions such as: “Fragile Handle with Care”, “Delicate Unit”, “This Side Up”, up arrows, “Center of Balance”, “Keep Dry”, “Do not Use Forklift”, Do Not Stack”, “Open This Side”, “Do not open This Side”, “Glass-Fragile”, etc.…

3.10.3.      Corrosion Preventive: Packaging must prevent damage such as corrosion, mildew, scratching, denting, and salt contamination of part. The supplier is responsible for selecting packaging materials. Materials shall be chemically compatible with transport material and the mode of transport used (maritime, air or road).

3.10.4.      Coated Products: The supplier is responsible for packaging the products according to the coating type. Appropriate packaging equipment will be used to ensure that the products remain healthy and uSQPAmaged on the shelf for a long time, depending on the coating type.

3.10.5.      Alternative Product: In case of alternative product supply, the supplier must supply a full usability confirmation between both products, which is guaranteed by the OEM or main manufacturer for the alternative product.

3.11.         Labeling

3.11.1.      The label must be made of material that will not be affected by weather conditions and external factors.

3.11.2.      Package labeling must be suitable with IATA regulations. For transport, the mark must be displayed on the external surface of the outer packaging on a background of a contrasting color and must be clearly visible and legible.

3.11.3.      The product descriptive labels must include at least the following information:

3.11.3.1.            Product Information Section:

ü  Product Name,

ü  Manufacturer Part Number,

ü  Customer Part Number,

ü  Manufacturer Product Reference Number (if any),

ü  Lot/Batch/Serial Number and Quantity,

ü  Manufacturer CAGE Code,

ü  Product Origin Information,

ü  Raw material (staSQPArd and heating number) detail,

ü  Heat treatment, coating, welding, etc.,

ü  Date of manufacturing,

ü  Packaging Date,

ü  The product quantity in the Package,

ü  Shelf-life information (for shelf-life limited products),

ü  Product condition (for only Overhauled, Serviceable, As Is)

3.11.3.2.            Customer Information Section:

ü  Loran Aerospace full name and address,

ü  Loran purchase order reference number,

ü  Loran Order Quantity,

ü  Delivery Quantity,

ü  Back-order amount (if any),

ü  Delivery Date

3.12.         Supplier Order Acknowledgement and Supplier Performance

3.12.1.      The supplier shall acknowledge receipt of the LORAN order within 72 hours. After this period, the date requested in the LORAN order becomes the date accepted by the supplier.

3.12.2.      In case of a discrepancy between the delivery date requested in the order and the date indicated in the acknowledgment of receipt of the order, the date of reference for the calculation of the on-time-delivery rate remains the date indicated in the order except in case of agreement between LORAN and the supplier on a new delivery date. In this case, LORAN will have to modify the date of reception in its systems.

3.12.3.      Targets of quality performance & on-time-delivery rate are defined before the start of each fiscal year. These annual targets are shown on each supplier's scorecard via the Loran ERP System portal.

3.12.4.      Supplier performance reviews will be organized at the level of top management, and the performance status of the suppliers is discussed at the management review meeting.

3.12.5.      With regards to the suppliers have critical level, an action plan will be defined to converge as soon as possible towards the performance objectives set by Loran. The suppliers will be observed by management representative, and the final status of the supplier will be reported to top management.