General terms and conditions of purchase

These general terms and conditions of purchase supersede and replace any general terms and conditions published prior to this date.

Acceptance

These General Terms and Conditions of Purchase form an integral part of any purchase order issued by CMI Aeronáutica, S.L. (also known commercially as CMI Durango), hereinafter referred to as CMI in this document.

• Orders and all related agreements shall only be binding on CMI when they have been issued on its letterhead and signed by an authorized representative. Telephone agreements require written confirmation.
• For all intents and purposes, an Order shall be deemed to have been accepted when the Supplier expressly agrees to it by means of an acknowledgment of receipt, or tacitly when it has commenced the work covered by the order, or has not submitted a written objection within 10 calendar days from the date of issue of the order.
• Any clause included by the seller in its documents or correspondence that contradicts these general conditions shall not be considered valid, unless accepted in writing by CMI.
• The order, together with the written instructions developed and these general terms and conditions, contain the entire agreement between CMI and the seller. Any modification thereof requires the written acceptance of CMI.

Packaging, labeling, and shipping

All products supplied to CMI shall be packaged, marked, and shipped in accordance with existing legal regulations and the buyer’s specific requirements.

Delivery: Excusable delays

The terms and delivery deadlines shall be deemed essential. In the event that the seller anticipates delays in fulfilling the order, it shall immediately inform the buyer, without this exempting it from liability. During the delay, the buyer, after notifying the Supplier, may obtain supplies from another source and shall be entitled to reduce the quantity of supplies specified in the order by the same amount, without waiving the right to claim compensation for any damages incurred.

Free resolution

At any stage of order fulfillment, the buyer may terminate the order, in whole or in part, by written notice to the seller.

Once the notification has been received, the seller must:

• Immediately cease all work related to the order being canceled and cancel all orders and subcontracts affected by the notice of termination.
• It will settle the work carried out by him, the orders he has placed, and the work carried out by his subcontractors.
• You will transfer ownership and deliver to the buyer:
  • All goods or finished work that strictly conform to the order specifications.
  • All goods or work in progress involving materials or products purchased for the fulfillment of canceled orders that cannot reasonably be used by the seller to manufacture products for its own stock or for other customers, provided that they comply with the order specifications.
• It shall take all necessary measures to protect the goods in its possession over which the buyer has or may acquire any rights.
  • a) Promptly submit to the buyer, within a maximum period of 3 months from the effective date of termination (one month only in the case of partial termination), their written claim in accordance with the provisions of this condition. If the seller fails to submit it, and notwithstanding the provisions of section “c” below, the buyer may determine the amount owed to the seller. The determination thus made by the buyer shall be final and definitive.
  • b) El comprador, al resolver el contrato en virtud de la presente condición, pagará al vendedor el importe de los materiales, mano de obra incorporada y la parte proporcional de los gastos generales imputables. La liquidación de los productos en proceso de subcontratistas del vendedor, se realiza aplicando el mismo criterio del párrafo anterior.
  • c) El vendedor, con vistas a una posible valoración de los trabajos incurridos, facilitará al comprador los documentos que este considere oportuno.
  • d) The provisions of this condition shall not apply if the buyer cancels the order due to delay or non-compliance attributable to the seller in accordance with the following condition.

Resolution for breach of contract by the seller

If the seller fails to comply with the provisions or specifications of the order, or fails to make progress in the execution of the order, thereby jeopardizing its completion, the buyer may cancel the order without charge.

Penalty

The seller shall be liable for any delays or failures in the delivery of the materials purchased under this order, and CMI may apply the penalty established therein. If no penalty has been specified in the order, it shall be 0.5% per week of the total order amount, up to a maximum of 5%.

Delivery notes and documentation

a) Goods must be sent together with their delivery note or shipping document, which must include, in addition to the name or company name of the seller, at least the following information:

• Delivery note number
• Order number
• Concepts
• Number of packages

b) The goods must always be accompanied by the documents, such as plans, certificates, guidelines, etc., requested either in our order, in the plans or in the standards. Without these documents, the reception process will not begin.

Early deliveries and excesses

If the seller makes early or excessive deliveries with respect to what is specified in the order or schedule, the buyer may choose between returning the early or excessive quantities or accepting them in their warehouses. In the first case, the seller shall bear the risks and costs of the return. In the second case, acceptance shall not imply any modification of the buyer’s payment obligations, which shall be effective within the terms and amounts specified in the order or schedule. Early deliveries may only take place if there is prior written agreement from CMI and payment shall be made at the end of the contractual term.

Quality

All parts or materials supplied by the seller must comply with all quality specifications required by the buyer in its standards, plans, inspection guidelines, etc., and the seller accepts the control systems that the buyer applies in its receiving inspections. The seller shall be responsible for the control, filing and internal dissemination of the standards provided by CMI. In the event of non-compliance with the quality specifications, the buyer may choose any of the following actions:

• a) Reject and return the entire shipment, considering it as not received for the purposes of fulfilling the order or programme.
• b) Separate the correct goods by means of individual inspection, returning the rest for recovery by the seller, if possible, or recovering them by the buyer if necessary. In either case, the buyer shall pass on to the seller the corresponding charges for additional 100% inspection and/or recovery operations.

In this case, the risks and costs of returning parts or materials that do not meet quality standards shall be borne by the seller. Parts manufactured using plans provided by the buyer and returned without the possibility of recovery must be rendered unusable.

Failure to comply with the requirements for documents to be attached to the shipment of goods, such as delivery notes, plans, instructions for use, quality guidelines, certificates, etc., gives the buyer the option to apply the provisions of point a) of this condition.

Outsourcing

The buyer may, when deemed appropriate, veto the subcontracting of part of the work to be carried out under this order to third parties, without exempting the seller from its responsibility for quality.

Acceptance of goods

• a) The simple delivery of the goods to our Receiving personnel or to our Forwarding Agent does not signify acceptance of the goods.
• b) Acceptance of the material by the purchaser shall depend on the conformity with respect to the quantity and quality of the same.

Non-conforming goods

The complaint of defects or hidden defects of the goods received may be made by the buyer, either upon receipt or at any time thereafter, within a period of 2 years even if the invoices have already been paid. The complaint of quantity differences and non-concealed defects may be raised within 6 months from the date of receipt of the goods. In case of finding defects in the material, the buyer may:

1. Reject the material to be replaced in the same quantity.
2. Reject the material, without replacement by the seller.
3. Reject the entire batch, cancelling the order.
4. The removal of the rejected material shall be carried out within 7 days, at the seller’s expense, otherwise it shall be carried out by the buyer at the seller’s expense.

Warranty

The machinery, means of work and specific installations, electrical, hydraulic, etc., object of the order, shall be considered guaranteed in their entirety and in their elements manufactured or acquired by the seller, against all defects in material, manufacture or assembly, for a period of 2 years, the buyer reserving the right to charge the seller for the expenses that during this period may be caused by a defective operation, as well as to demand compensation for damages caused.

Prices

The prices stipulated in the orders are fixed. Any order modification that is proposed by any of the parties and that implies an alteration of the agreed conditions, must be accepted before its realization, by the Purchasing Department and confirmed in writing. Without the fulfillment of this requirement CMI will not be responsible for any additional increase of the agreed conditions.

Billing

Payment will be made upon acceptance of the goods at CMI and receipt of the corresponding invoices.

Use of models or drawings provided by the purchaser

• a) Models or drawings provided by the Buyer may not be copied by the Seller, nor may they be transferred to any other person or entity or used for any purpose other than manufacture for the Buyer. Such drawings or models shall be returned to the buyer.
• b) Consequently, any operation of copying, registration, manufacture, trade, publicity, assignment or use carried out by the Seller for any purpose other than that defined in the preceding paragraph and for the due observance of the provisions therein shall be considered unlawful. The seller is forbidden to register under any industrial property modality any of the supplied objects, as well as the manufacturing plans or procedures.

Confidentiality

The Seller undertakes not to disclose and transmit to third parties the specific knowledge, relating to Products, Means and Processes, which it has acquired, during its stays at the Buyer’s and the Buyer’s Customers’ premises. The Seller assumes the obligation to maintain absolute confidentiality and therefore to keep in strict secrecy all confidential technical information of which it becomes aware in connection with the execution of the object of each of the orders, and in general with respect to any other information relating to the product or production process developed by CMI.

Therefore, the seller and its employees, who provide their services on CMI’s premises or those of its customers or third parties, are obliged to keep confidential both the product and the production process of CMI, its customers or third parties after the termination of the order for a period of ten years.

Industrial Property

In general and without exception, the seller warrants to the buyer that the materials delivered are both as a whole and in all its components, duly purchased, manufactured and assembled in accordance with current regulations and in particular, with full observance of those governing industrial property, including freedom of use and trade of those materials both in Spain and abroad. Any contravention of such rules, or the limitations or damages caused by them to the buyer, will determine that their effects will be assumed directly by the seller who undertakes to keep the buyer immune from third party claims brought against the buyer and arising directly and indirectly from the use and sale of the products covered by this order.

Prohibition of advertising

The seller may not carry out, in his own interest or in the interest of third parties, any publicity concerning the sales he makes to the buyer, unless the latter authorizes him to do so in writing.

Liability for damages

If the Seller carries out works or works on the Buyer’s premises or on the Buyer’s premises and/or uses the Buyer’s property on or off the Buyer’s premises, the Seller shall be liable for any damage or loss caused to persons and property (including, but not limited to, the Buyer’s employees and property) arising from its fault or negligence or that of its agents, servants or employees in connection with the execution of the orders. Consequently, the Seller undertakes to hold the Buyer harmless and, if applicable, to indemnify the Buyer, by payment or set-off in its accounts, against any liability arising from such damages. Likewise, the Seller shall hold harmless or, if applicable, indemnify the Buyer in relation to the fulfillment, as Employer, of its obligations with its own employees, both of a strictly labor nature and in relation to Social Security, Health and Safety at Work, or any other obligations governing such labor relations. Prior to commencing work, Seller shall furnish a certificate that it has taken out adequate liability and property damage insurance, all with insurance companies and in amounts acceptable to Buyer. Seller’s failure to furnish such certificate shall not be construed as a waiver of the requirement thereof or of any other provision of the Orders. Seller shall be liable for product liability for damages arising out of or resulting from defects in the design or manufacture of the product manufactured by Seller.

Waiver of rights

The waiver by the buyer, one or more times, to demand the fulfillment of any of the terms or conditions of this contract, to exercise any of the rights or privileges granted by the same, shall not be understood as a generic waiver of such terms, conditions, rights or privileges, which shall continue in full force and effect as if such waiver had not occurred.

Responsibility

In no event and under no circumstances shall CMI be liable for any damages that may result from the fulfillment of an order placed with the Seller.

Jurisdiction

For all questions that may arise in connection with the fulfillment of the order once formalized, both parties, waiving their own jurisdiction that may correspond to them, submit to the courts of Bilbao, Bizkaia (Spain).

Applicable Law

This agreement and any amendments, modifications, alterations or supplements thereto shall be interpreted and governed by Spanish law.