Ridge Engineering, Inc.

Purchase Order Terms and Conditions


1. DEFINITIONS – (a) “Buyer” shall mean Ridge Engineering, Inc. and “Seller” shall mean the party with whom Buyer is contracting and to whom Buyer has issued the Purchase Order (“Order”). (b) As used herein “Subcontract” means either purchase order or to subcontract.

2. ACCEPTANCE – (a) This Order constitutes Buyer’s offer to Seller, and is expressly made conditional on Seller’s acceptance of Buyer’s terms and conditions only. Any additional, different or inconsistent terms proposed by Seller are specifically rejected, unless otherwise agreed to in writing by an authorized representative of Buyer. Seller shall have accepted this Order by issuance of its acknowledgement, commencement of performance or delivery hereunder, or Buyer’s acceptance, payment or use of any Products, products, materials, components, articles, parts, services or other property of Seller subject to the Order (collectively “Products”). No revision to this Order shall be valid unless in writing and signed by an authorized representative of Buyer.

3. PACKING, SHIPMENT, DELIVERY AND TITLE – (a) Unless otherwise specified, all packing and crating shall be at Seller’s expense and conform to applicable carrier regulations and be in suitable containers for protection in shipment and storage. Materials shall be packaged in such a manner to protect from loss, deterioration and where applicable, protected from foreign object debris (FOD). Packing lists shall accompany each shipment, showing Buyer’s Order number and description of Products.

(b) Unless otherwise stipulated by Buyer, all Products shall be shipped F.O.B and to the destination or point of delivery specified in the Order. (c) Title of all Products subject to this Order shall remain with the Seller until delivery and acceptance of Products by Buyer. (d) Time is of the essence for the delivery schedule for this Order, if delivery is delayed beyond the time indicated herein for any reason, Buyer reserves the right without liability to cancel this Order by written of facsimile notice confirmed in writing.

4. INSPECTION - All Products are subject to inspection, testing and approval by Buyer, Buyer’s customer and/regulatory authority, both at Seller’s facility and Buyer’s point of destination. Buyer reserves the right to reject and refuse acceptance of any Products which do not comply with all the terms of this Order. Acceptance, payment, use, or resale of Products by Buyer shall not release Seller of any obligations, representations, or warranties hereunder. Payment for any Products shall not be deemed an acceptance hereof. Seller shall not substitute materials or accessories, even if Seller believes they are of superior quality, without written consent of Buyer. If the Products are specifically manufactured for Buyer in accordance with drawings, designs, or specifications furnished by Buyer: (1) Seller shall provide and maintain an inspection and quality control system acceptable to Buyer and provide access to Seller's facilities including all subcontractors facilities used in performance of this Order at all reasonable times, and without additional charge, for inspection by Buyer's agents or employees, and shall provide all tools, facilities, and assistance reasonably necessary for inspection relating to the performance of this Order; and (2) Seller shall maintain adequate and authenticated inspection and test documents which relate to work performed under this Order for a period of three years after completion of this Order or as otherwise specified in this Order, and shall make such records available to Buyer upon request; (3) Seller shall supply Buyer with inspection and test reports, affidavits, certifications, technical documents generated or related to this Order, or any other documents as may reasonably be requested by Buyer; (4) Seller shall notify Buyer in writing of any changes in Product and/or process definition and obtain Buyers written approval prior to proceeding; and (5) Seller agrees to insert the substance of this clause, including this sentence, in any lower–tier subcontract.

5. CHANGES – Buyer shall have the right by written order to suspend work or to make changes from time to time in services to be rendered or the materials to be furnished by Seller hereunder or the delivery date. If such suspension or changes cause an increase or decrease in the cost of performance of this Order or in the time required for its

performance, an equitable adjustment shall be negotiated promptly and the Order shall be modified in writing accordingly. Any claim by Seller for adjustment under this Section 5 must be asserted in writing within (15) days from the date of receipt by the Seller of notification of the change or suspension and shall be followed as soon as practical with specification of the amount claimed and supporting cost figures. However, Seller shall not be excused from processing the Order as so changed by Buyer pending resolution of any claim made by Seller for adjustment under this Section 5.

6. TERMINATION FOR CONVENIENCE – (a) Buyer may, by notice in writing, terminate this Order or work under this Order for convenience and without cause, in whole or in part, at any time, and such termination shall not constitute default. In the event of partial termination, Seller is not excused from performance of the non-terminated balance of work under this Order. (b) In the event of termination for convenience by Buyer, Seller shall be reimbursed for actual, reasonable, substantiated and allowed costs, plus a reasonable profit for work performed to the date of termination. Buyer may take immediate possession of all work so performed upon written notice of termination to Seller. (c) Seller’s obligations, including but not limited to obligations under the warranty, proprietary rights, infringement and indemnity against claims provisions shall survive such termination.

7. TERMINATION FOR DEFAULT - (a) Buyer may, by notice in writing, terminate this Order in whole or in part at any time for Seller’s breach of any one or more of its terms, for failure to make progress so as to endanger performance of this Order, or failure to provide adequate assurance of future performance. In the event of partial termination, Seller is not excused from performance of the non-terminated balance of work under the Order. (b) In the event of Seller's default hereunder, Buyer may exercise any or all rights accruing to it, both at law, including without limitation, those set forth in Article 2 of the Uniform Commercial Code, or in equity. (c) Seller’s obligations, including but not limited to obligation under the warranty, proprietary rights, infringement, and indemnity against claims provisions of this Order, shall survive such termination.

8. FORCE MAJEURE – Except with respect to defaults by Seller’s subcontractors, neither Buyer nor Seller shall be liable for failures or delays that arise out of cause beyond their reasonable control and without fault or negligence. Such causes include acts of God or of the public enemy, acts of Government in its sovereign or contractual capacity, fires, floods, epidemics, terrorism, quarantine restrictions, strikes, freight embargoes, and unusually severe weather. In the event that performance of this Order is hindered, delayed or adversely affected by causes of the type describes above (“Force Majeure”), the party whose performance is so affected shall so notify the other party’s authorized representative in writing and at Buyer’s option, this Order shall be completed with such adjustments as are reasonably required by the existence of Force Majeure or this Order may be terminated for convenience by Buyer. (b) Seller shall include the substance of this clause, including this subparagraph (b), in all its purchase orders issued at all tiers under this purchase order.

9. DISPUTES – (a) Any controversy or claim that may arise out of or in connection with this Order that after good faith negotiations cannot be resolved to both Parties’ mutual satisfaction may be resolved by submitting the claim to a court of competent jurisdiction. (b) Pending resolution or settlement of any dispute arising under this Order, Seller shall proceed diligently as directed by Buyer with the performance of this Order.

10. GOVERNING LAW – This Order and the acceptance of it shall, as provided herein, shall be governed by and subject to the Uniform Commercial Code as enacted in the State of Maryland.

11. PROTECTION OF INFORMATION – (a) All information specifications, data, drawings, software and other items supplied to Buyer by Seller shall be disclosed to Buyer on a non-proprietary basis and may be used and/or disclosed by Buyer without restriction or unless (i) otherwise required by the U.S Government regulations or (ii) Buyer has executed a separate proprietary agreement with Buyer. (b) Information furnished to Seller by Buyer under this Order, that include but are not limited to, specifications, information, data, drawings, software shall be considered proprietary to the Buyer,

shall only be used for purposes of providing Products to Buyer pursuant to this Order, and shall not be disclosed to any third party without Buyer’s express written consent. (c) Seller’s obligations with respect to Information disclosed hereunder, prior to performance in full or termination of Order shall not, except as expressly set forth herein, be affected by such performance in full or termination. (d) Seller will extend its obligation set forth herein, to its suppliers.

12. SECURITY REQUIREMENTS – (a) Seller shall be responsible for safeguarding all classified information in accordance with all applicable Government requirements including, without limitation, FAR 52.204-2, “Security Requirements” incorporated herein by reference. (b) The current provisions of DFARS 252.204-7012, “Safeguarding Covered Defense Information” and “Cyber Incident Reporting” in effect on the date of this purchase order are incorporated in in this paragraph by reference. Seller shall rapidly report any cyber incident to the Department of Defense (DoD) at http://dibnet.dod/mil and to the Buyer’s authorized Purchasing Agent within seventy two (72) hours of discovery. (c) Seller shall include the substance of this clause, including para. (c), in its lower-tier purchase orders and subcontracts that require access to classified information or covered defense information as defined by 252.204-7012.

13. GOVERNMENT AND BUYER PROPERTY - If in the performance of this Order any Government property furnished to Seller by the Buyer or Government, Seller shall assume risk and responsibility for, all loss, or damage of the property while in Seller’s possession or control except to the extent that this Order provides for the relief of Seller from such liability. Seller shall have the obligation to maintain such property in a condition as good as when received except for reasonable wear and tear. Seller shall establish and maintain a system in accordance with the provisions of FAR 54.254- 1 for the control of Government or Buyer owned property. Seller’s property system shall be approved by the Government. Seller shall notify Buyer should approval status of system be withdrawn. The Government and Buyer shall have unlimited access to Seller’s facilities for the purpose of reviewing compliance and management of the Government/Buyer property related to this Order.

14. WARRANTY – Seller warrants that all Products furnished under this Order shall conform to applicable drawings, specifications, samples and/or appropriate standards, will be new, and will be free from defects in material or workmanship. Seller warrants that all Products furnished hereunder will be merchantable, and will be safe and appropriate for the purpose for which Products of that kind are normally used. Such warranty will survive acceptance of, and payment for, Products furnished hereunder. Warranty for Products shall run to Buyer and its customers. Seller agrees to replace or correct defects of any Products not conforming to the foregoing warranty, without expense to the Buyer.

15. DEFECTIVE WORK – (a) Not withstanding any prior acceptance, Buyer, at its option, may reject or require prompt correction of any Products which are in Buyers judgement, defective in material or workmanship or otherwise fail to meet the drawings, specifications or other requirements of this Order. (b) Seller shall notify the Buyer of any nonconforming Products or nonconformity affecting product furnished under this order, within five days of initial discovery to make arrangements for Buyer to disposition the nonconformity. Seller shall not ship nonconforming material without authorization by the Buyer.

16. INFRINGMENT – (a) Seller warrants that all work, items, materials, equipment or Products provided by Seller pursuant to this Order, which are not of Buyer’s design, shall be free from claims of infringement (including misappropriation) of third party intellectual property rights, and that use or sale of such items by the Buyer or any of Buyer’s customers shall be free from claims of infringement. (b) Seller shall indemnify and save Buyer and its customers harmless from any and all expenses, liability and loss of any kind (including all costs and expenses including attorney’s fees) arising out of claims, suits, or actions alleging such infringement. If requested by Buyer, Seller agrees to defend at Seller’s expense any claims, suits or actions alleging such infringement.

17. SUBCONTRACTING AND ASSIGNMENT – Seller shall not assign this Order, any rights or obligations under this Order or any monies due or to become due hereunder nor delegate or subcontract any obligations or work hereunder without prior written consent of Buyer. No purported assignment or delegation by Seller shall be binding on Buyer without such consent.

18. MATERIAL AUTHENTICITY – (a) All material delivered under this Order shall be authentic and traceable to the Original Equipment Manufacturer/Original Component Manufacturer OEM/OCM. Seller shall provide authenticity and traceability records to Buyer upon request. (b) If counterfeit parts are delivered to Buyer or found in any Products delivered hereunder, such items will be impounded by Buyer. (c) To further mitigate the possibility of the inadvertent use of counterfeit parts, Seller shall only purchase component parts directly from the OEM/OCM or through OEM/OCM authorized distributor chain. Procurement through independent distributors or brokers is NOT authorized by Buyer, unless approved in advance in writing by Buyer. (d) Seller shall immediately notify Buyer with the pertinent facts if Seller becomes aware or suspects that it has delivered counterfeit parts to buyer under this Order. (e) The substance of this clause shall be incorporated into any subcontract or purchase order entered into by Seller for the performance of any work under this purchase order.

19. INSURANCE – Seller and its subcontractors and sub-tier suppliers shall maintain Public Liability and Property damage Insurance in reasonable limits covering the obligations set forth herein and shall maintain proper Workman’s Compensation Insurance covering all employees performing this Order.

20. LIABILITY FOR INJURY – Seller shall indemnify and hold Buyer harmless against all loss and liability on accounts and claims of personal injury, death and property damage resulting from any act or omission of Seller (including its agents, employees or subcontractors) in the course of performing this Order, including any Products delivered hereunder.

21. COMPLIANCE WITH LAW – Seller shall comply with the provisions of all applicable federal, state, and local laws, regulations, rules, and ordinances applicable to this Order and purchased Products thereunder, including without limitation, any fair labor standards or statutes and any statue or regulation regulating occupational safety and health.

22. EQUAL OPPORTUNITY – This Order incorporates by reference: (a) all provisions of 41 C.F.R. 60-1.4, as amended, pertaining to equal opportunity cause in government contracts.

23. EXPORT/IMPORT CONTROLS – (a) If applicable to this Order, Seller shall control the disclosure of and access to technical data, information and other items received under this Order in accordance with U.S export control laws and regulations, including but not limited to the International Traffic in Arms Regulations (ITAR). Seller agrees that no technical data, information, or other items provided by Buyer in connection with this Order shall be provide to any foreign persons or to any foreign entity, including without limitation, a foreign subsidiary of Seller, without express written authorization of the Buyer and the Seller’s obtaining of the appropriate export license, technical assistance agreement or other requisite documentation for ITAR-controlled technical data or items. Seller shall indemnify Buyer for all liabilities, penalties, losses, damages, costs or expenses that may be imposed on or incurred by Buyer in connection with any violations of such laws and regulations by Seller. (b) Seller shall immediately notify Buyer if it is or becomes listed on any excluded or denied party list of any agency of the U.S Government or its export privileges are denied, suspended or revoked. (c) Subcontracts. The substance of this clause shall be incorporated into any lower-tier subcontract or purchase order entered into by the seller for the performance of any part of the work under this purchase order.

24. SEVERABILITY – If any provision of this Order or applicable thereof is found invalid, illegal or unenforceable by law, the remainder of this Order will remain valid, enforceable and in full force and effect, and the parties will negotiate in good faith to substitute a provision of like economic intent and effect.

25. STOP-WORK ORDER – In accordance with the provisions of the “Stop-Work Order” clause set forth in FAR 52.242-15 in effect on the date of this purchase order, Buyer may, at any time, by written order to Seller, require Seller to stop all, or

any part, of the work called for by any purchase order for a period of ninety (90) days after the order is delivered to Seller, and for any further period to which the parties may agree. Upon receipt of such an order, Seller will immediately take all reasonable steps to minimize the incurrence of costs allocable to the work covered by the order during the period of work stoppage. Within the indicated 90-day period, Buyer will take the actions prescribed in FAR 52.242-15.

26. SPECIALTY METALS – Specialty metals incorporated in articles delivered to Buyer must comply with the requirements of this clause. The following articles are specifically exempt:

Circuit Card Assemblies (CCAs) and components designed or intended for use on CCAs or substrates, such as diodes, capacitors, resistors, transistors and integrated circuits; however, assemblies and components are not exempt if they incorporate high performance magnets (samarium cobalt).

Any other waivers, Domestic Non-Availability Determinations, deviations, or other forms of exemption from this requirement do not apply to this purchase order, unless otherwise stated in the Purchase Order Line Item Material Details text. (a) Definitions. As used in this clause—

(1) “Qualifying country” means any country listed in subsection 225.003 of the Defense Federal Acquisition Regulation Supplement.

(2) “Specialty metals” means—

(i) Steel—

(A) With a maximum alloy content exceeding one or more of the following limits: manganese, 1.65 percent; silicon, 0.60 percent; or copper, 0.60 percent; or

(B) Containing more than 0.25 percent of any of the following elements: aluminum, chromium, cobalt, columbium, molybdenum, nickel, titanium, tungsten, or vanadium;

(ii) Metal alloys consisting of nickel, iron-nickel, and cobalt base alloys containing a total of other alloying metals (except iron) in excess of 10 percent;

(iii) Titanium and titanium alloys; or

(iv) Zirconium and zirconium base alloys.

(b) Any specialty metals incorporated in articles delivered under this contract shall be melted in the United States or its outlying areas.

(c) This clause does not apply to specialty metals melted in a qualifying country or incorporated in an article manufactured in a qualifying country.

(d) The Supplier shall insert the substance of this clause, including this paragraph (d), in all subcontracts, including commercial subcontracts, for items containing specialty metals.

27. OFFSET NOTIFICATION – This clause shall only apply to purchase orders in excess of fifty thousand dollars ($50, 000.00). (a) Definition: “Offset” means the obligations that Buyer undertakes, in order to market or sell its products, to assist a customer country in reducing any trade imbalance caused by its purchase of Buyer’s products or to meet customer country national objectives. (b) To the exclusion of all other, Buyer or its assignees shall be entitled to all benefits or Offset credits which might result from this purchase order. Seller shall provide documentation or information that Buyer or its assignees may reasonable request to substantiate claims for Offset credits. (c) Seller agrees to use reasonable efforts to identify the foreign content of items that Seller either produces itself or procures from subcontractors for work under this purchase order. Promptly after selection of a non-U.S. subcontractor for the work under this purchase order. Seller shall notify Buyer of the name, address, subcontractor point of contact (including telephone number) and dollar value of the subcontract. (d) Seller shall include the substance of this clause, in favor of Buyer, in its subcontracts issued at all tiers pursuant to this purchase order.

28. BUSINESS ETHICS – Seller shall conduct itself with the highest degree of integrity and honesty and comply with all applicable federal and state laws. Seller should have a written code of business ethics with an employee training program and internal control system that promotes awareness and compliance with such code of business ethics and conduct. The Seller’s program should address the importance of employee contributions to product safety and conformity, as appropriate.

29. ANTI-TRAFFICKING IN PERSONS – A. Seller is prohibited from engaging in activities that support or promote trafficking in persons, including, but not limited to, any of the following:

1. Trafficking in persons, including, but not limited to the following: i. sex trafficking; or ii. the recruitment, harboring, transportation, provision, or obtaining of a person for labor or services through the use of force, fraud, or coercion for the purpose of subjection to involuntary servitude, debt bondage, or slavery.


2. The procurement of a commercial sex act;

3. The use of forced labor in the performance of company business;

4. The use of misleading or fraudulent recruitment activities;

5. Charging employees recruitment fees;

6. Failing to pay for the return transportation at the end of employment for an employee who is not a national of the country in which the work is taking place and who was brought into that country for the purpose of working;

7. Providing or arranging housing that fails to meet the host country housing and safety standards; or

8. If required, failing to provide an employment contract, recruitment agreement, or similar work document in writing, in the individual’s native language and prior to the individual departing from his or her country of origin.

B. Seller represents and warrants that it shall abide by and comply with the requirements of this clause. Further, Seller shall require its employees, agents, contract laborers and subcontractors to abide by and comply with the requirements of this clause.

C. Buyer or its authorized representatives may, at any time, audit all pertinent books, records, work sites, offices, and documentation of Seller in order to verify compliance with this clause. Seller agrees to cooperate with and provide Buyer with any information reasonably requested in support of Buyer’s due diligence or other efforts and in order to verify compliance with this clause. Seller will, in all of its lower-tier subcontracts and contracts relating to this or any other Buyer Order with Seller, include provisions which secure for Buyer all of the rights and protections provided for within this clause.

D. Seller acknowledges that if Seller or any of its employees, agents, contract laborers or subcontractors engages in any of the prohibited activities in this clause, this Order is subject to termination.

E. Whenever Seller has knowledge, whether substantiated or not, that any actual or suspected violation of this clause has occurred, Seller shall immediately give written notice to Buyer’s PCO and provide all relevant information including, but not limited to, the nature of the actual or suspected violation.

F. Seller shall provide its full cooperation during any subsequent investigation of the actual or suspected violation by Buyer, Buyer’s representative, or cognizant government agency. Seller’s cooperation shall include, but not be limited to, permitting inspection of its work sites, offices, and documentation, as necessary to support any investigation.

G. Seller agrees to insert the substance of this clause, including this sentence, in any lower–tier subcontract.


30. LABOR DISPUTES - Whenever Seller has knowledge that any actual or potential labor dispute is delaying or threatens to delay timely performance of this Order, Seller shall immediately give notice to Buyer and provide all relevant information including, but not limited to, nature of dispute, labor organizations involved, contingency plans regarding the

protection of Buyer’s Order, and estimated duration. Seller shall also provide updated reports throughout the dispute duration. Seller agrees to insert the substance of this clause, including this sentence, in any lower–tier subcontract where a labor dispute might delay timely performance of this Order.