PMF INDUSTRIES INC.

Purchase Order Terms and Conditions

All PMF Industries, Inc. purchase orders are subject to the terms and conditions below, notwithstanding any different conditions that may be contained on vendor’s quotation or acknowledgement of the order, and if all terms and conditions shown below are not acceptable to the vendor it will immediately notify PMF Industries Inc. (Buyer) in writing. No change, additional or modified term or condition will be effective unless contained in a record that is signed by a duly authorized representative of PMF Industries, Inc.

1. PRICES.  Prices on face of purchase order may not be changed without written approval of the Buyer.

2. QUANTITIES.  Buyer may accept up to 5% overages of specified quantity with the restriction that the value does not exceed $500 of the original amount.  A quantities less than the specified quantity is not acceptable and buyer shall have the right to cancel the order without obligation thereof to vendor.

3. CARTING, BOXING, AND CRATING.  No charges for the cartage, boxing or crating will be allowed unless specified in the quotation or previously arranged.

4. CANCELLATION.  Buyer may terminate work under this order in whole or in part at any time by giving written notice to vendor of such termination, and, in such event and if vendor is not then in default, direct material and labor costs incurred by vendor up to the time of such termination shall be paid by Buyer.

5. SUPPLIER EH&S.  A PMF Industries we are committed to supporting Environment, Health and Safety (EH&S) Standards that protect the Environment, our facilities, people and products. PMF Industries will not be satisfied until its products and services are safe and its commitment to and record in protecting the natural environment are unmatched.

Our global supplier environmental health and safety initiative is a joint effort between EH&S and supply management to ensure that 100% of all identified key and critical suppliers meet UTC's EH&S five minimum expectations.

Key and critical supplier identified to participate in this program complete an 18 question self-assessment and create corrective action plans as necessary to comply with UTC's five minimum expectations. UTC monitors the progress of these corrective action plans to ensure they are closed, and will be conducting on-site reviews for a minimum of ten percent of the suppliers in the program. The self-assessments are to be completed by the suppliers every three years.

Five minimum expectations

1. Provide safe working conditions for all employees, customer, and contractors.
2. Adhere to all applicable national, regional, state, and local laws and regulations governing Environment, Health & Safety.
3. Operate in a manner that minimizes the impact to the environment.
4. Limit the use of natural resources and promote sustainable natural resource practices.
5. Extend and communicate these EH&S requirements to their employees and suppliers

6. RIGHT OF ENTRY AND INSPECTION.  Buyer, Buyer’s Customers, and regulatory authorities have the right to access vendor’s facilities and applicable records pertinent to this order. Vendor shall require all sub-tier suppliers involved in this order to adhere to Buyer’s order requirements, terms and conditions, including key characteristics. All articles are subject to inspection and approval at Buyer’s plant. Buyer has the right to waive this inspection.

7. AEROSPACE MATERIALS. For purchase orders making reference to aerospace specifications, all suppliers and all applicable members of their sub-supplier chain shall be in compliance with all requirements of the AS9100 Quality Management System and (if required) UTC quality specification ASQR-01. Additionally, the supplier shall notify the Buyer of all nonconforming product, and shall establish communication with the Buyer to ensure that the Buyer has sole right of approval of supplier nonconforming material. The supplier shall notify the Buyer in writing of any changes in process that affect product configuration or properties, and shall not proceed with said process changes without expressed approval from the Buyer. The supplier shall flow down all customer requirements, including identified key characteristics, to any and all sub- tier suppliers.

8. WARRANTY.  Vendor warrants the articles furnished hereunder (whether materials, parts, or equipment) to be as specified; to be free from defects in design, workmanship, material, and manufacture; to be suitable for the purpose intended by Buyer; and if any such articles are found to be defective or have failed in proper use or operation by reason of defective material or workmanship vendor shall replace the articles so found to be defective f.o.b. vendor’s plant without charge to Buyer.  The foregoing and all other express and implied warranties that can have application to the articles furnished hereunder shall be deemed conditions of this order and the remedies provided in this paragraph shall be cumulative and in addition to any other or further remedies Buyer may have.  The warranties and remedies provided for in this paragraph shall run to Buyer, its successors, assigns and customers and to the users of its products and Buyer ’s inspection, approval, acceptance of, and/or payment for articles do not relieve vendor of the warranties provided herein.

9. DISCLAIMER AND LIMITATION OF LIABILITY FOR DAMAGES.  In no event shall buyer be liable for any special, indirect, incidental, consequential or contingent damages for any reason, whether or not buyer has been advised of the possibility of such damages.

10. INDEMNIFICATION.  Vendor shall defend, indemnify and hold harmless Buyer and Buyer’s successors, assigns, customers and agents from and against any and all losses, suits, penalties, damages, claims, demands and actions (whether actual, punitive, consequential or otherwise) and associated costs and expenses ( including attorney’s fees, expert’s fees, and costs of investigation) and all liabilities that are caused in whole or in part by: (a) any actual or alleged infringement of any Rights or Encumbrances; (b) any breach by Vendor of these Terms and Conditions; (c) any negligent, grossly negligent or intentional act, error, or omission by Vendor, its employees, officers, agents or representatives in the performance of this order; (d) or that are for, in the nature of, or that arise under warranty, strict liability or products liability with respect to or in connection with the Items.

11. TOOLS.  If the price charged includes the cost of any tools, designs, patterns, dies, jigs, fixtures, special machines, drawings or the like, acquired for the specific purpose of filling this order, such tools, designs, patterns, dies, jigs, fixtures, special machines, drawings, or the like, shall be disposed of as Buyer shall direct.  No designs, tools, patterns, dies, jigs, fixtures, special machines, drawings or the like supplied by Buyer shall be used for the manufacture of any articles other than the quantity actually specified herein without Buyer ’s consent.

12. ASSIGNMENT.  This order or any monies due hereunder may not be assigned without Buyer ’s written consent.

13. DELIVERY DATE.  Vendor is responsible to deliver “On-Time”.  “On-Time” delivery is up to three days (3) early from the specified date and zero (0) days after the specified date. Vendor shall be excused if delivery is delayed by causes beyond reasonable control of the vendor including but not restricted to acts of God, floods, fires, storms, acts of civil and military authorities, war, and insurrections provided, however, that if such delay continues for an unreasonable length of time, the unfilled portion of this order may be cancelled at the Buyer ’s option and Buyer shall have no obligation with respect to the portion so cancelled.  If delivery is delayed beyond the specified delivery date by reason of events or causes other than those enumerated in the preceding sentence, Buyer shall have the right to cancel the unfilled portion of this order without obligation thereof to vendor, and Buyer shall have the right to place the unfilled portion of the order with another supplier or suppliers, and any consequent increase in cost to Buyer shall be paid by vendor.

14. RENEGOTIATION.  To the extent required by law, this order is subject to the Renegotiation Act of 1951 (50 U.S.C. App. 1211, et seq.) as amended and to any subsequent Act of Congress providing for the renegotiation of contracts.  Nothing contained in this clause shall impose any renegotiation obligation with respect to this order or any subcontract hereunder not imposed by an Act of Congress heretofore or hereafter enacted.  Subject to the foregoing this order shall be deemed to contain all the provisions required by Section 104 of the Renegotiation Act of 1951 and by any such other Act without subsequent contract amendment specifically incorporating such provisions.  Vendor agrees to insert the provisions of this clause, including this sentence, in all subcontracts as that term is defined in Section 103(g) of the Renegotiation Act of 1951, as amended.

15. NONDISCRIMINATION IN EMPLOYMENT.  The vendor as “contractor” agrees in the performance of its work hereunder to comply with the provisions of Section 202 of Executive Order 11246, dated September 24, 1965 as now or hereafter amended, which are hereby incorporated by reference as if set forth in full herein, and to comply with the lawful rules and regulations issued there under and that the work was performed in compliance with the Fair Labor Standard’s Act of 1938, as amended.

16. COMPLIANCE WITH LAWS.  Vendor agrees that in the performance of this purchase order it will comply with the requirements of all applicable federal and state statutes, rules, regulations and orders and will save Buyer harmless from and indemnify Buyer against any loss or damage resulting from vendor’s violation of the provisions of any such laws, including without limitation laws relating to labor, wages, hours and other conditions of employment and laws relating to prices and unfair competition.

17. PENNSYLVANIA CONTRACT.  Unless otherwise specified, the laws of the State of Pennsylvania shall govern this order and all matters arising hereunder.

Form PR-185 Rev. 4 07/27/2009

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