FLIGHT REFUELLING LIMITED T/A COBHAM MISSION SYSTEMS SUPPLEMENTAL FLOWDOWN TERMS (SFT) ADDITIONAL TERMS AND CONDITIONS FOR SUBCONTRACTS/PURCHASE ORDERS UNDER: 1. PRECEDENCE AGML III REV. 1 1 MARCH 2018 This SFT applies to Products supplied for the AGML III programme ( AGML III ). All terms and conditions contained in this SFT are in addition to the terms and conditions referenced in the Order and Agreement. In the event that there are any conflicts between the terms contained in this SFT and the Order and Agreement then the order of precedence shall be: i) The Order This SFT i The Agreement 2. DEFCONS The following contract clauses are incorporated by reference from the United Kingdom Ministry of Defence (UK MoD) DEFCONs and apply to the extent indicated. In all of the following clauses, Buyer, Purchaser or Purchaser shall mean Flight Refuelling Limited or the like and any reference to Supplier, Contractor or subcontractor shall mean Supplier except for those DEFCONs indicated to the contrary by an asterisk (*) where the Purchaser shall mean the UK MoD. Articles, Goods or Products shall have the same meaning as Products as contained in the Agreement. DEFCON 648 A DEFCON 651 DEFCON 528 DEFCON 643 DEFCON 14/A DEFCON 14 DEFCON 15/A Design Rights A DEFCON 15 DEFCON 90 DEFCON 632 DEFCON 23 DEFCON 76 DEFCON 611 DEFCON 612 DECON 649 DEFCON 117 Availability of Information : For subcontracts which exceed 150,000, Appendix A to DEFCON 648 applies Reference To The Review Board of Questions Arising In Relation To Relevant Subcontracts Including Those With a Subsidiary Company or Firm Overseas Expenditure And Import Licenses Price Fixing (Non Qualifying Contracts) Appendix to DEFCON 643 applies: Part I for subcontracts which are not fixed price; Part II for fixed price subcontracts Collaboration (Ownership of Patents And Registered Designs) Inventions and Designs Crown Rights and Ownership of Patents And Registered Designs Design Rights And Rights to Use Design Information Copyright Third Party Intellectual Property Rights and Restrictions Special Jigs, Tooling and Test Equipment Contractor s Personnel At Government Establishments Issued Property : Applies when MOD owned property is loaned to Supplier under the Contract Loss of or Damage to the Articles Vesting applies where advances against contract price have been made. Supply of Documentation for NATO Codification Purposes
DEFCON 513 DEFCON 516 DEFCON 520 DEFCON 521 DEFCON 619A DEFCON 624 DEFCON 644 DEFCON 654 Value Added Tax Racial Discrimination Corrupt Gifts and Payments of Commission Subcontracting to Supported Employment Enterprises Customs Duty Drawback Use of Asbestos In Arms, Munitions or War Materials Marking of Articles Government Reciprocal Audit Arrangements 3. The following prime contract special provisions apply to this purchase order ( Order ): 3.1. ACCESS i) Representatives of the Purchaser shall be granted reasonable access to work-in-progress at the Supplier s premises for the purposes of keeping in touch with the nature and progress of the work under the Order. Such access will be pre-coordinated and be on a non-interference basis. Proper Security and Export clearances shall be in place. The Supplier shall furnish to representatives of the Purchaser such copies of orders, specifications, drawings and other documents as may reasonably be required for the purposes of keeping in touch with the nature and progress of work under the Order. 3.2. DELAYS i) The Supplier shall not be liable for delays in delivery which are beyond the Supplier s control including acts of God, acts of civil or military Purchaser, acts of the public enemy, fires, strikes, floods, earthquakes, epidemics, quarantine restrictions, war, terrorism, riot, provided that in such cases the Supplier exercises due diligence in immediately notifying the Purchaser in writing of any known or anticipated delay and within five (5) days of the event, provides full details in writing of the events or circumstances which caused the delay and advise the estimated duration of the delay; and within fifteen (15) days of the event provides a full recovery plan defining the actions being undertaken to mitigate the impact of such delay. i The Supplier shall minimise the impact and period of delay and restore the original capability as quickly as is reasonably possible. Should the Supplier fail to deliver the material or goods in accordance with the Order (amended for any extension of the delivery schedule with the Supplier may be entitled or granted under this Article B), the Purchaser shall be entitled to maintain the Order, accept late delivery and recover liquidated damages at the a rate of 1% of the outstanding overdue Order value for every one week late to be capped at 20%. This shall apply to each and every breach. 3.3. REACH i) The Supplier shall comply with the EU Regulation n. 1907/2006, as may be amended from time to time (concerning the registration, evaluation, authorisations and restriction of the chemical substances - REACH Regulation ) The Supplier shall notify the Purchaser, within 3 (three) months of the Contract becoming effective, of any Substances of Very High Concern (SVHC) that will be newly present in the Products or used in their manufacture. In respect of such substances the Supplier shall provide:
a. the correct identification (CAS/EINECS/ELINCS/NLP) number and naming of the substances involved and information on its chemical composition; and b. the specific VHC substances (including their registration numbers), which are present in the Products in a concentration greater than 0.1% of the weight of the related Item. i The Supplier shall not modify the chemical composition of any substance already identified as being subject to REACH in Products to be provided under the Contract. Should a chemical substance used in Products become subject to REACH Regulations during the performance of the Contract, the Supplier shall immediately notify such information to the Purchaser. Within 30 (thirty) working days from the notification, the Parties shall agree the actions necessary as a consequence. iv) Should the Supplier be in breach of the obligations under this Clause, the Purchaser and the Supplier shall agree the actions necessary to remedy the default. In the event that no agreement on the action plan is found within 30 (thirty) days from the breach, the Purchaser shall be entitled to terminate the Contract for the Supplier s default. 3.4. SUPPLY OF DATA FOR HAZARDOUS ITEMS, MATERIALS AND SUBSTANCES i) The Supplier shall provide to the Purchaser: a. for each hazardous material or substance contained within any Article supplied, a Safety Data Sheet (SDS) in accordance with the extant Chemicals (Hazard Information and Packaging for Supply) Regulations (CHIP), and b. for each hazardous item, safety information as required by the Health and Safety at Work, Act 1974, at the time of supply. Nothing in this Condition shall reduce or limit any statutory duty or legal obligation of the Purchaser or the Supplier 3.5. LATENT & SYSTEMATIC DEFECTS i) The Supplier shall, at no cost to Purchaser, investigate, diagnose and correct any Latent and Systematic Defect in the newly made parts embodied in the Products and/or in the workmanship applied to the Products that is notified to it in writing by the Purchaser within the period of ten (10) years after the actual or contracted delivery, whichever is the later date, provided always that the defect has not been caused by the failure of the Purchaser and/or End User to operate, maintain and store the Products correctly. A Latent and Systematic Defect is defined as a defect which, despite the efforts of both Parties, may not have been discovered, or discoverable, through the inspection, qualification and acceptance test procedures pursuant to the Order and may not be evident from initial use by the Purchaser or End User and where the same of similar defect is, or there is evidence to suggest and cannot be disproved by the Supplier may be, present in great than 5% (five percent) of the quantity of the same or similar configuration Products delivered under any Order raised pursuant to the Contract. Cumulative failures of less than 5% (five percent) shall, unless otherwise agreed, be resolved in accordance with warranty provisions. 3.6. VESTING i) Title in all materials or equipment purchased, acquired or allocated, or Item(s) constructed, for the purposes of performing the Contract shall vest in the Customer via
the Purchaser progressively from the moment of purchase, acquisition, allocation or construction by the Supplier unless rejected or unfit. It is the Supplier s responsibility to ensure that all such materials, equipment, Products or free issue items are at all times separately identifiable as the property of the Purchaser. The Supplier shall not, nor shall they permit any Sub-contractor to possess any lien in respect of any Products, materials or equipment vested in the Purchaser. 3.7. HEALTH & SAFETY i) The Supplier shall carry out all work under the Order in strict accordance with all legislation and in particular health, safety and environmental legislation (including all applicable regulations in force at the time of the Order performance) applicable to the Supplier for the Prime Contract that he is supporting. The Supplier shall ensure that his subcontractors correspondingly comply with such legislation and regulations. No asbestos of any type shall be incorporated into any of the Products to be delivered under the Order. 3.8. LIFE i) Any item contained in the Products on delivery having a wear-out characteristic that requires it to be inspected and/or replaced at regulation intervals shall have more than 99% (ninety nine percent) of its service lift remaining. 3.9. OBSOLESCENCE MANAGEMENT i) For the purposes of this clause, obsolescence ( Obsolescence ) means either a part or parts of Product, which has (have) been taken out of production and cannot be purchased on the market, or spare parts which have been declared obsolete by an Aviation Authority note or a service bulletin. i Utilising its existing obsolescence monitoring tools and practices, the Supplier shall monitor, identify and notify the Purchaser of any Obsolescence issues that affect or may affect the supply and/or support of any Product, giving not less than six (6) months prior notice before going obsolete. Upon becoming aware of an Obsolescence issue that affects or may affect the Product and the Supplier shall either by e-mail and/or via the Company's internet portal notify the Purchaser and provide the following information: a) part number and description of the Product; b) part number description and usage of the component Item and/or raw material concerned; c) details of the obsolescence issue identified; d) the effect or impact of such obsolescence to the Product; e) date of expected discontinuity or End of Life (EoL) details iv) The Supplier shall notify the Purchaser of any known solutions for mitigating such Obsolescence this may include but not be limited to:- a) component buys (e.g life time buy last time buy or bridge buy) b) procurement of alternative components (the Supplier shall identify where such alternative components change the fit form or function weight change reliability and maintainability and\or qualification of the Equipment) modifications. v) Where possible the Supplier shall provide a price for each solution identified.
vi) Notwithstanding the above the Parties shall work together to identify mitigate and implement a solution for overcoming any Obsolescence issues that affect the Product. 3.10. SUBCONTRACTING i) Supplier shall flow down Clauses 2 & 3 to each of its subcontractors. The Supplier is entirely responsible for the management of its subcontractors, and no subcontracting, with or without the Purchaser s consent, shall relieve the Supplier from any of its obligations under this Agreement or prejudice any of the Purchaser s rights against the Supplier 4. PRICING FORMULA i) Supplier agrees that future pricing for the Products shall be in accordance with the formulas set out herein using the latest published data contained within table 4. Manufacture of Aircraft and Spacecraft of the Aerospace and Electronics Cost Indices MM19, as published by the Office for National Statistics. Where: PO = (P x F) + (P x [M x (M1 / M0)]) + (P x [L x (L1 / L0)]) PO = Price at date of order P = Base Price F = Portion of base price fixed (10%) M = Portion of base price related to Material (25%) L = Portion of base price related to Labour (65%) M0 = Material Indices at Base Economic Conditions Based on MM19 Table 4 M1 = Material Indices at Date of Order Based on MM19 Table 4 L0 = Labour Indices at Base Economic Conditions Based on MM19 Table 4 L1 = Labour Indices at Date of Order Based on MM19 Table 4 Should an index cease to exist or its composition be so altered that the new index can no longer be described as an extension of the original index, the Purchaser and the Supplier shall agree a fair and reasonable adjustment to the relevant index or, if appropriate, shall agree a revised formula that in either event will have substantially the same effect as the arrangements specified above.