Supplier Terms and Conditions Agreement (Tier 1)

Effective – July 2017

Rev B

General

As a supplier to Rare Earth Coatings, Inc. (referred to as REC throughout this document) it is understood that your organization agrees to meet the following stipulations/AS9100 requirements whenever an REC Purchase Order specifies that the order is for an aerospace application (or contains some similar aerospace/AS9100 reference). These requirements are to be considered as terms and conditions to all aerospace purchases.

Where required on the REC Purchase Order, suppliers must use REC’s customer-approved special process sources.

REC is to be contacted (by the supplier) in the event of non-conforming product/material. Arrangements for the approval of supplier non-conformity product/material must be directed by an REC authorized manager or designee.

Prior to processing, the supplier is required to notify REC of any changes to product and/or process and obtain approval from an authorized manager or designee.

REC, their customers, and regulatory authorities retain the right of access to all supplier facilities involved in the aerospace order and to all applicable records.

The AS9100 standard requires all applicable customer/regulatory AS9100 requirements for the supplier also be issued to sub-tier suppliers (including requirements in the purchasing documents and key characteristics where required). However, REC does not allow its aerospace suppliers to subcontract any product or process to a sub-tier supplier without REC expressed written consent.

REC performs inspection activities to ensure that purchased product meets purchased requirements. They may include, but not be limited to:

Receiving inspections (of supplier products/services/documents) may be/are performed by a designated employee. REC verifies the authenticity of the appropriate certificate of conformity, material certificates, and other accompanying documentation by review and comparison (as is appropriate) to the drawing and/or industry specifications or by other means. When necessary, REC may inspect or audit at the supplier’s facility.

Products are inspected to ensure that they meet requirements (dimensions, etc.) and the results are recorded (as appropriate). All special processes (anodizing, heat treat, etc.) where the compliance cannot be verified by inspections will require a Certificate of Conformity.

When appropriate, REC may delegate the inspection authority to one of its approved suppliers. REC will communicate the inspection requirements (including approved monitoring and measurement equipment/methods) and REC will maintain a record of those approved to carry out such inspections.

When REC or its customer intends to perform verification at the supplier’s premises, REC will first state the intention for verification and the method of product release. This information will be communicated on the REC Purchase Order or via another acceptable purchasing arrangement.

Where specified in the contract, REC’s customer or customer’s representative will be afforded the right to verify at the supplier’s premises and REC’s premises that subcontracted product conforms to specified requirements. Verification by the customer is not used by REC as evidence of effective control of quality by the supplier and shall not absolve REC or its supplier of the responsibility to provide acceptable product, nor shall it preclude subsequent rejection by the customer.

To prevent the purchase of counterfeit or suspect/unapproved products and to ensure product identification and traceability, REC will institute controls that include the requirement of Material Certificates, Certificates of Conformity, and/or other supporting documentation from its supplies as is appropriate. These requirements may be specified on REC’s Purchase Order or may otherwise be communicated to the supplier.

Quality and order records associated with products/services ordered by REC shall be retained as defined by REC and available for review by customers and regulatory authorities in accordance with contract or regulatory requirements.

REC may also require specific actions where a timely and/or effective correction action to a supplier issue is not achieved. These actions may include, but are not limited to the following: withholding of payment until the issue is resolved and/or removal of the supplier from REC’s Approved Supplier List.

Suppliers will be evaluated on a 3 year basis. Suppliers will be sent the Vendor/Supplier Performance Evaluation (REC-FF-8.4.1B), and be asked to review and return to REC for our files.

Where design or development efforts are required, all plans must be reviewed and accepted by REC prior to the initiation of processing or production.

Key characteristics, special requirements and critical items must be adhered to. Deviations from any key characteristics, special requirements and critical items must be in writing from the design holder.

Supplier may be required to inspect to appropriate AQL (where applicable) or statistical sampling. Acceptance criteria must be adhered to (where required) and in accordance with applicable appropriate documentation.

REC suppliers shall have a documented Quality Management System (QMS). The QMS should conform to the latest revision of AS9100, which is the standard that governs the industry that REC supplies. A supplier that is providing a part or product that is not intended to be delivered to a customer and is used for internal REC purpose only is excluded from the requirements of a documented QMS.

REC expects all suppliers to comply with the current revision of Rare Earth Coatings Supplier Code of Conduct, which can be located on www.rareearthcoatings.com

Supplier:

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Supplier Acceptance: By signing this document, (supplier) is agreeing to the terms and conditions

Signature: Date:

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