Terms and Conditions

ARTICLE 1. DEFINITIONS AND SCOPE OF APPLICATION

1.1 Definitions

"Purchaser" means Sphere Corporation, a company duly organized and existing under the laws of the Republic of Korea, with its principal place of business in Seoul, Republic of Korea.

"Supplier" or "Vendor" means the entity providing Goods and/or Services pursuant to a Purchase Order issued by Purchaser.

"Purchase Order" or "Order" means any written purchase order issued by Purchaser to Supplier, incorporating these Purchase Order Terms and Conditions by reference.

"Goods" means all raw materials, element materials, cathodes, tubing, round bars, billets, scrap metal, semi-finished goods, and any other materials or products specified in the Purchase Order intended for aerospace applications and manufacturing.

"Services" means any work, labor, processing, testing, inspection, or other services to be performed by Supplier as specified in the Purchase Order.

"Specifications" means all technical requirements, drawings, standards, specifications, quality requirements, and other documentation referenced in or attached to the Purchase Order.

"Counterfeit Goods" means Goods that are or contain unlawful or unauthorized reproductions, substitutions, or alterations that have been mismarked, misidentified, or otherwise misrepresented to be authentic and conforming Goods authorized by the applicable design authority.

"FAI" or "First Article Inspection" means a complete and independent verification by an objective and impartial party to provide assurance that the production process has the capability to produce Goods that meet specified requirements.

"Key Characteristics" means those features or dimensions of a material, process, or part whose variation has a significant influence on product fit, performance, service life, or manufacturability.

"Certificate of Conformance" or "C of C" means a document provided by Supplier certifying that delivered Goods conform to all requirements specified in the Purchase Order.

1.2 Scope and Application

These Purchase Order Terms and Conditions ("Terms") constitute the entire and exclusive agreement between Supplier and Purchaser with respect to the procurement of Goods and Services specified in each Purchase Order. These Terms apply to all purchases of aerospace raw materials, element materials, cathodes, tubing, round bars, billets, scrap metal, and semi-finished goods by Purchaser from Supplier.

These Terms shall take precedence over and supersede: (a) any prior or contemporaneous agreements, proposals, negotiations, or understandings, whether oral or written, between the parties; (b) any terms and conditions contained in Supplier's quotations, acknowledgments, confirmations, invoices, or similar documents; (c) any preprinted terms on Supplier's forms or electronic ordering systems; and (d) any terms or conditions to which Supplier purports to subject the transaction, unless expressly agreed to in writing by an authorized representative of Purchaser.

No modification, amendment, or waiver of these Terms shall be effective unless set forth in a written document signed by authorized representatives of both parties. Supplier's commencement of performance, shipment of Goods, or acknowledgment of the Order constitutes Supplier's unqualified acceptance of these Terms.

ARTICLE 2. QUALITY MANAGEMENT SYSTEM AND AS9100D COMPLIANCE

2.1 Quality Management System Requirements

Supplier shall establish, document, implement, and maintain a Quality Management System (QMS) that is appropriate for the aerospace industry and compliant with AS9100D or equivalent aerospace quality standard. Supplier shall:

Maintain current certification to AS9100D, AS9110, AS9120, or ISO 9001 with aerospace-specific supplements as applicable to the Goods and Services provided;
Upon request, provide Purchaser with copies of current quality system certifications and registration certificates;
Immediately notify Purchaser in writing of any suspension, withdrawal, or modification of quality system certifications;
Ensure that all quality documentation, procedures, and work instructions applicable to the Purchase Order are current, implemented, and available to personnel performing work under the Order;
Flow down all applicable quality requirements to sub-tier suppliers and ensure their compliance;
Maintain objective evidence of QMS effectiveness and compliance with Purchase Order requirements.

2.2 Flow-Down of Quality Requirements

Supplier shall ensure that all quality requirements specified in the Purchase Order, including but not limited to specifications, test requirements, inspection requirements, certifications, and these Terms, are flowed down to all sub-tier suppliers, subcontractors, processors, and service providers involved in the manufacture, processing, testing, or delivery of the Goods. Supplier remains fully responsible for the quality and conformance of all Goods and Services provided, regardless of the source.

2.3 Process Controls and Special Processes

Supplier shall ensure that all manufacturing processes, including special processes, are performed under controlled conditions in accordance with written procedures. Special processes (including but not limited to heat treatment, welding, non-destructive testing, chemical processing, coating, and plating) shall be performed by qualified personnel using qualified procedures and approved equipment. Supplier shall:

(a) Ensure special processes are performed in accordance with applicable industry standards and specifications;
(b) Maintain current process specifications and procedures;
(c) Maintain records of operator qualifications, equipment calibration, and process parameter monitoring;
(d) Perform process validation and revalidation as required by applicable standards;
(e) Notify Purchaser prior to any changes to special process parameters, procedures, or suppliers.

ARTICLE 3. COUNTERFEIT PARTS PREVENTION AND MATERIAL AUTHENTICITY

3.1 Prohibition of Counterfeit Goods

Supplier warrants that all Goods delivered under this Purchase Order are new, authentic, and not Counterfeit Goods. Supplier shall not furnish or supply any Counterfeit Goods to Purchaser. The delivery of Counterfeit Goods constitutes a material breach of the Purchase Order and subjects Supplier to all remedies available at law and in equity.

3.2 Counterfeit Parts Prevention Program

Supplier shall establish and maintain a documented Counterfeit Parts Prevention Program that includes:

(a) Policies and procedures to eliminate the use or introduction of Counterfeit Goods;
(b) Training for personnel responsible for procurement, receiving, inspection, and handling of Goods;
(c) Procurement of Goods directly from Original Equipment Manufacturers (OEMs), Original Component Manufacturers (OCMs), or authorized distributors whenever possible;
(d) For materials sourced from non-authorized sources, implementation of enhanced inspection and testing procedures to verify authenticity;
(e) Full traceability of all material sources through unbroken chain of custody documentation;
(f) Inspection procedures specifically designed to detect counterfeit material characteristics including altered markings, suspicious packaging, inconsistent documentation, or anomalous material properties;
(g) Immediate notification to Purchaser of any suspected or confirmed Counterfeit Goods;
(h) Quarantine and investigation procedures for suspect Counterfeit Goods;
(i) Flow-down of counterfeit prevention requirements to all sub-tier suppliers.

3.3 Material Source Requirements

For all aerospace-grade raw materials and element materials supplied under this Order, Supplier shall:

(a) Procure materials exclusively from approved mills, foundries, and producers with documented aerospace industry qualification;
(b) Provide complete supply chain documentation demonstrating unbroken traceability from original producer to Purchaser;
(c) Maintain a list of approved material sources and make such list available to Purchaser upon request;
(d) Obtain Purchaser's prior written approval before adding new material sources or changing existing sources;
(e) Ensure all material sourcing documentation includes producer name, location, certification number, and material pedigree information.

3.4 Remedies for Counterfeit Goods

If any Goods supplied under this Purchase Order are found to be or suspected of being Counterfeit Goods:

(a) Supplier shall immediately, at no cost to Purchaser, remove and replace all Counterfeit Goods;
(b) Supplier shall conduct a root cause analysis and implement corrective and preventive actions;
(c) Supplier shall bear all costs associated with removal, replacement, inspection, testing, investigation, and any resulting delays or damages;
(d) Supplier shall indemnify Purchaser for all losses, damages, costs, and expenses arising from the supply of Counterfeit Goods, including but not limited to consequential damages, loss of production, recall costs, and reputational harm;
(e) Purchaser may, at its sole discretion, terminate this and any other Purchase Orders with Supplier;
(f) Supplier shall report the incident to appropriate regulatory and law enforcement authorities as required by law;
(g) Supplier shall provide Purchaser with a detailed written report of the investigation, findings, and corrective actions within fifteen (15) calendar days.

ARTICLE 4. MATERIAL TRACEABILITY, CERTIFICATION, AND DOCUMENTATION

4.1 Complete Material Traceability

Supplier shall provide complete material traceability for all Goods supplied under this Purchase Order. Full traceability from original material producer to final delivery to Purchaser is mandatory. Supplier shall maintain and provide the following documentation:

(a) Material Test Reports (MTRs) or Mill Test Certificates (MTCs) from the original producer, showing complete chemical composition (all elements), mechanical properties (tensile strength, yield strength, elongation, reduction of area, hardness), and test results;
(b) Heat numbers, lot numbers, batch numbers, and any other identification necessary to trace material to the original melt or production batch;
(c) Material certifications demonstrating compliance with specified standards (ASTM, AMS, EN, JIS, KS, or other applicable standards);
(d) Certificate of Conformance (C of C) for each shipment, signed by an authorized quality representative, certifying that all Goods conform to Purchase Order requirements;
(e) Country of Origin documentation for all materials, including country of melt, country of manufacture, and country of final processing;
(f) For tubing: MTRs showing both ingot/billet analysis and finished tube analysis, dimensional inspection reports, and hydrostatic or non-destructive test results as applicable;
(g) For round bars and billets: MTRs showing complete chemistry and mechanical properties, grain size analysis if specified, ultrasonic or other NDE reports as required;
(h) For cathodes and element materials: Purity analysis, trace element analysis, physical property certifications, and producer certifications;
(i) For scrap metal: Material composition analysis, source documentation, certification of aerospace-grade origin, and contamination testing results;
(j) Processing history documentation including heat treatment records, cold work history, and any intermediate processing;
(k) Inspection and test records demonstrating compliance with all specified requirements;
(l) Chain of custody documentation for all material transfers from producer through all intermediaries to Purchaser.

4.2 Documentation Requirements and Delivery

All required certifications, test reports, and traceability documentation shall:

(a) Be provided in both English and Korean language versions if applicable, with Korean version controlling in case of discrepancy;
(b) Be provided in original form or certified true copies bearing original signatures or authenticated electronic signatures;
(c) Accompany each shipment of Goods and be delivered to Purchaser prior to shipment;
(d) Be legible, complete, and contain no alterations, erasures, or corrections unless properly authenticated;
(e) Include the Purchase Order number, item number, material specification, quantity, and delivery date;
(f) Include supplier name, address, and contact information;
(g) Be signed or certified by authorized personnel with authority to certify conformance;
(h) Be maintained in Supplier's records in accordance with retention requirements specified herein.

4.3 Material Identification and Marking

All Goods shall be clearly and permanently marked with: (a) material specification or grade designation; (b) heat number, lot number, or other traceability identifier; (c) supplier name or identification code; (d) country of origin; (e) Purchase Order number; and (f) any additional markings specified in the Purchase Order or applicable specifications.

Marking shall be applied using methods that do not adversely affect the material properties or serviceability of the Goods. Marking methods shall comply with applicable specifications and industry standards.

4.4 Consequences of Inadequate Documentation

Goods delivered without complete and accurate traceability documentation and certifications shall be deemed non-conforming and subject to rejection. Purchaser shall have no obligation to accept or pay for Goods lacking required documentation. Supplier shall bear all costs associated with return shipping, replacement, expedited delivery, and any delays or damages resulting from inadequate documentation.

ARTICLE 5. FIRST ARTICLE INSPECTION (FAI)

5.1 FAI Requirements

When specified in the Purchase Order or when required by applicable specifications, Supplier shall perform a complete First Article Inspection (FAI) and obtain Purchaser's approval prior to commencing production or shipment. FAI is required for:

(a) First production of a new part number or material specification;
(b) Changes to materials, processes, or manufacturing methods;
(c) Changes to material sources or sub-tier suppliers;
(d) Production after a period of manufacturing inactivity exceeding two (2) years;
(e) Changes to production facilities or tooling;
(f) Any other circumstances specified in the Purchase Order or when requested by Purchaser.

5.2 FAI Documentation and Approval

Supplier shall submit FAI documentation in accordance with AS9102 or equivalent aerospace standard acceptable to Purchaser. FAI documentation shall include: (a) First Article Inspection Report (FAIR) with all applicable forms completed; (b) complete dimensional inspection results verifying all specified dimensions and tolerances; (c) material test reports and certifications; (d) verification of all Key Characteristics; (e) results of all specified tests (mechanical, chemical, physical, functional); (f) process verification records for all special processes; (g) photographic documentation as applicable; (h) Certificate of Conformance; and (i) comparison to approved engineering drawings and specifications.

Supplier shall not commence production or shipment until written FAI approval is received from Purchaser. Purchaser reserves the right to witness FAI activities at Supplier's facility.

5.3 FAI Retention and Revalidation

Supplier shall retain FAI records for the duration of the production period and for a minimum of fifteen (15) years following final delivery, or as otherwise specified by applicable regulations or Purchaser requirements. FAI revalidation may be required at Purchaser's discretion for any changes to materials, processes, facilities, or following extended production breaks.

ARTICLE 6. RIGHT OF ACCESS AND INSPECTION

6.1 Purchaser Right of Access

Purchaser, its authorized representatives, customers, and regulatory authorities (including but not limited to Korean government agencies, foreign aviation authorities, and defense agencies) shall have the right of access to all facilities, at all tiers in the supply chain, where work is performed under this Purchase Order. Such access shall include the right to:

(a) Inspect all Goods, materials, processes, and workmanship at all stages of manufacture;
(b) Review and audit quality management system documentation, procedures, and records;
(c) Witness inspections, tests, and special processes;
(d) Review and audit material traceability records and certifications;
(e) Interview personnel involved in production, inspection, and quality assurance;
(f) Examine manufacturing facilities, equipment, and tooling;
(g) Review subcontractor and sub-tier supplier records and facilities;
(h) Verify implementation of corrective actions;
(i) Conduct surveillance audits and process assessments.

6.2 Notice and Cooperation

Purchaser shall provide reasonable advance notice of intent to exercise right of access, except in cases where immediate access is necessary to address quality or safety concerns. Supplier shall: (a) provide full cooperation and assistance to Purchaser and its representatives during all access activities; (b) make available all requested records, documentation, and personnel; (c) provide appropriate workspace, utilities, and administrative support; (d) ensure that similar access rights are flowed down to all sub-tier suppliers; and (e) bear no additional costs for providing access; all access activities shall be at no charge to Purchaser.

6.3 No Limitation of Rights

The exercise of right of access by Purchaser shall not constitute acceptance of Goods, relieve Supplier of any obligations under the Purchase Order, or transfer responsibility for quality or conformance. Purchaser's failure to exercise right of access shall not waive Purchaser's rights or remedies for non-conforming Goods.

ARTICLE 7. CONFIGURATION MANAGEMENT AND CHANGE CONTROL

7.1 Change Control Requirements

Supplier shall not make any changes to materials, processes, facilities, subcontractors, sub-tier suppliers, or any other aspect that could affect the Goods without prior written approval from Purchaser. Changes requiring Purchaser approval include but are not limited to:

(a) Changes to material specifications, grades, or sources;
(b) Changes to manufacturing processes or process parameters;
(c) Changes to facilities, production lines, or geographic manufacturing location;
(d) Changes to inspection or test methods;
(e) Changes to quality management system that affect the Goods;
(f) Addition or substitution of subcontractors or sub-tier suppliers;
(g) Changes to personnel performing special processes or key operations;
(h) Changes to heat treatment parameters or procedures;
(i) Changes to packaging, preservation, or shipping methods;
(j) Any other changes that could affect form, fit, function, quality, reliability, or traceability of the Goods.

7.2 Change Request Procedure

When Supplier desires to make any change requiring approval:

(a) Supplier shall submit a written change request to Purchaser a minimum of sixty (60) calendar days prior to the proposed implementation date;
(b) The change request shall include detailed description of the proposed change, reason for change, impact assessment, risk analysis, and proposed validation plan;
(c) Supplier shall not implement any change until receiving written approval from Purchaser;
(d) Upon approval, Supplier shall implement the change in accordance with the approved plan and maintain records of validation activities;
(e) Revalidation testing, re-inspection, or new FAI may be required at Purchaser's discretion;
(f) All costs associated with change requests, validation, and approval shall be borne by Supplier.

7.3 Unauthorized Changes

Any changes implemented without Purchaser's prior written approval shall constitute a material breach of the Purchase Order. Goods produced after unauthorized changes shall be deemed non-conforming. Supplier shall bear all costs to identify, quarantine, and disposition affected Goods, and shall be liable for all resulting damages and losses.

7.4 Configuration Control

Supplier shall maintain configuration control of all Goods to ensure that only current and approved specifications, drawings, and procedures are used in production. Supplier shall verify that all documents used in manufacture represent the latest approved revision.

ARTICLE 8. NON-CONFORMING MATERIAL HANDLING AND CORRECTIVE ACTION

8.1 Non-Conformance Notification

Supplier shall immediately notify Purchaser in writing upon discovery of any non-conformance, defect, or deviation in Goods supplied or to be supplied under this Purchase Order. Notification shall be provided within twenty-four (24) hours of discovery and shall include: (a) description of the non-conformance; (b) Purchase Order number(s), part number(s), and quantities affected; (c) heat numbers, lot numbers, or other traceability information; (d) root cause analysis or preliminary findings; (e) proposed containment actions; (f) assessment of potential impact to previously delivered Goods; and (g) proposed corrective and preventive actions.

8.2 Segregation and Identification

Supplier shall immediately segregate all non-conforming Goods and clearly identify them to prevent inadvertent use or shipment. Non-conforming Goods shall remain segregated pending disposition by Purchaser.

8.3 Disposition Authority

Only Purchaser has the authority to disposition non-conforming Goods. Supplier shall not use, ship, rework, repair, or scrap non-conforming material without written authorization from Purchaser. Disposition options include: (a) reject and return to Supplier at Supplier's expense; (b) scrap at Supplier's expense; (c) rework or repair in accordance with approved procedures (if authorized by Purchaser); (d) use-as-is (only if authorized in writing by Purchaser and all applicable regulatory requirements are met); or (e) any other disposition authorized by Purchaser in writing.

8.4 Corrective Action Requirements

For all non-conformances, Supplier shall:

(a) Submit a written corrective action plan to Purchaser within ten (10) calendar days of notification or discovery;
(b) Perform root cause analysis using appropriate quality tools (e.g., 5-Why, Fishbone, 8D methodology);
(c) Implement immediate containment actions to prevent delivery of additional non-conforming Goods;
(d) Implement corrective actions to eliminate the root cause;
(e) Implement preventive actions to prevent recurrence;
(f) Verify effectiveness of corrective actions;
(g) Complete all corrective actions within thirty (30) calendar days unless an alternative timeline is approved by Purchaser in writing;
(h) Provide Purchaser with documented evidence of completion and effectiveness verification.

8.5 Suspect Material Investigation

If Purchaser notifies Supplier of non-conformances or defects discovered in Goods after delivery, Supplier shall: (a) immediately investigate all material from the same or related heat, lot, or production batch; (b) notify Purchaser of investigation findings within forty-eight (48) hours; (c) at Purchaser's direction and Supplier's expense, retrieve, inspect, and replace all potentially affected material; and (d) bear all costs associated with investigation, retrieval, inspection, testing, replacement, and resulting delays.

ARTICLE 9. FOREIGN OBJECT DEBRIS (FOD) PREVENTION

9.1 FOD Prevention Program

Supplier shall establish and maintain a documented Foreign Object Debris (FOD) Prevention Program to prevent introduction of foreign objects into Goods. The FOD Prevention Program shall include: (a) written procedures for FOD prevention and control; (b) training for all personnel handling Goods on FOD awareness and prevention; (c) control of tools, hardware, and loose items in production and inspection areas; (d) cleanliness requirements for work areas, equipment, and tooling; (e) inspection procedures to detect and remove foreign objects; (f) use of FOD-free packaging materials and containers; (g) procedures for cleaning and inspection prior to packaging; and (h) documentation of FOD prevention activities and inspections.

9.2 FOD Prevention Standards

All Goods supplied under this Purchase Order shall be free from foreign objects including but not limited to: metal chips, shavings, filings, or machining debris; welding spatter or slag; grinding particles or abrasive residue; dust, dirt, sand, or soil; lint, fibers, or textile materials; liquids, oils, or chemical residues (unless specified as required); organic materials or biological contaminants; loose fasteners, hardware, or tool fragments; packaging materials or labels adhered to product surfaces; and any other extraneous material not specified as part of the Goods.

9.3 Inspection and Verification

Prior to shipment, Supplier shall perform final FOD inspection to verify that Goods are free from foreign objects. Visual inspection, cleaning verification, and any other inspection methods specified in the Purchase Order or applicable procedures shall be performed and documented.

9.4 Rejection for FOD

Goods containing foreign object debris shall be deemed non-conforming and subject to rejection. Supplier shall bear all costs for cleaning, re-inspection, replacement, and any damages resulting from FOD-contaminated Goods.

ARTICLE 10. RECORDS RETENTION AND AVAILABILITY

10.1 Retention Requirements

Supplier shall maintain all records associated with this Purchase Order for a minimum of fifteen (15) years following final delivery, or for such longer period as required by applicable aerospace industry regulations, customer requirements, or law. Records subject to retention include: Purchase Order and all amendments; Material Test Reports and Mill Test Certificates; Certificates of Conformance; First Article Inspection Reports; inspection and test records; special process records including heat treatment charts, welding records, and NDE reports; material traceability records including heat numbers, lot numbers, and chain of custody documentation; quality management system records including internal audits and management reviews; non-conformance reports and corrective action records; supplier and subcontractor qualification records; training and qualification records for personnel performing inspections or special processes; equipment calibration records; change control records; shipping and receiving records; and any other records demonstrating compliance with Purchase Order requirements.

10.2 Record Availability and Retrieval

Supplier shall make all retained records available to Purchaser, Purchaser's customers, and regulatory authorities upon request. Records shall be retrievable and provided within five (5) business days of request, or sooner if required by Purchaser for urgent safety or quality investigations. Records may be provided in original form, certified copies, or secure electronic format acceptable to Purchaser.

10.3 Notification of Record Loss

In the event of loss, destruction, or damage to any records required to be retained under this Article, Supplier shall immediately notify Purchaser in writing and take all reasonable steps to reconstruct or recover the records.

10.4 Records Transfer Upon Cessation of Business

If Supplier ceases business operations, is acquired, or undergoes significant organizational change, Supplier shall notify Purchaser in writing at least ninety (90) days in advance and make arrangements for transfer of all records to Purchaser or a storage facility designated by Purchaser, at Supplier's expense.

ARTICLE 11. REPRESENTATIONS, WARRANTIES, AND COMPLIANCE

11.1 General Warranties

Supplier represents, warrants, and covenants that:

(a) All Goods delivered will conform exactly to the specifications, drawings, samples, standards, and other requirements set forth in the Purchase Order;
(b) All Goods are new, authentic, not counterfeit, merchantable, of high-grade quality, free from defects in materials and workmanship, and fit for their intended purpose in aerospace applications;
(c) All Goods are manufactured using materials and processes appropriate for aerospace use and comply with all applicable aerospace industry standards;
(d) All Services will be performed in a professional, workmanlike manner by qualified personnel using appropriate methods and in compliance with all applicable standards and regulations;
(e) Supplier has full authority and legal capacity to enter into the Purchase Order and perform all obligations thereunder;
(f) All Goods and Services comply with all applicable laws, regulations, codes, ordinances, and industry standards of the Republic of Korea and any other applicable jurisdictions;
(g) No liens, encumbrances, or claims exist or will be placed on any Goods delivered or Services performed;
(h) Supplier has not and will not offer, promise, give, or authorize any payment or gift of anything of value to any government official or other person for the purpose of obtaining or retaining business or securing an improper advantage (anti-corruption compliance);
(i) Supplier complies with all applicable environmental, health, and safety laws and regulations.

11.2 Aerospace Application Warranty

Supplier specifically warrants that all Goods supplied are suitable and approved for use in aerospace applications and manufacturing. Goods shall meet or exceed all industry standards applicable to aerospace raw materials including but not limited to AMS (Aerospace Material Specifications), ASTM, EN, JIS, KS, and other applicable standards specified in the Purchase Order.

11.3 Conformance to Specifications

Supplier warrants that all Goods conform to the specifications in all respects. Unless otherwise specified, where ranges are provided in specifications, Supplier shall target mid-range values and maintain tight process controls to minimize variation. Key Characteristics identified in specifications shall be specifically verified and documented.

11.4 Regulatory Compliance

Supplier represents, warrants, and covenants that it shall comply with all applicable laws, regulations, ordinances, and orders of all relevant jurisdictions, including but not limited to: (a) aerospace industry regulations and standards, including AS9100D and regulations promulgated thereunder; (b) export control laws and regulations; (c) environmental laws including REACH, RoHS, and Korean environmental protection laws; (d) labor laws and ethical employment practices; (e) anti-corruption and anti-bribery laws including the Korean Improper Solicitation and Graft Act (Kim Young-ran Law) and U.S. Foreign Corrupt Practices Act; (f) conflict minerals regulations and sanctions laws; (g) data protection and privacy laws; and (h) any other applicable laws of jurisdictions where Goods are manufactured, shipped through, or delivered.

11.5 Duration and Survival of Warranties

All warranties shall survive delivery, inspection, acceptance, and payment. These warranties are in addition to, and not in limitation of, any warranties implied by law or otherwise available to Purchaser. Acceptance of Goods or payment shall not constitute a waiver of any warranties or remedies.

11.6 Warranty Period

The warranty period for all Goods shall be the longer of: (a) five (5) years from date of delivery to Purchaser; (b) the warranty period offered by the original material producer; or (c) such longer period as may be specified in the Purchase Order or required by applicable regulations.

ARTICLE 12. INSPECTION, ACCEPTANCE, AND REJECTION

12.1 Inspection Rights

All Goods and Services are subject to inspection and acceptance by Purchaser. Purchaser shall have a reasonable period of time, not less than sixty (60) calendar days following delivery, within which to inspect and accept or reject Goods. Receipt, signature for delivery, inspection, non-inspection, or payment for Goods or Services shall not constitute acceptance and shall not impair or waive Purchaser's right to inspect, test, reject, or revoke acceptance.

12.2 Rejection Rights

Purchaser may reject any Goods or Services that do not conform to Purchase Order requirements. Purchaser's rights upon rejection include:

(a) Reject and return non-conforming Goods to Supplier at Supplier's sole cost and expense;
(b) Require Supplier to retrieve rejected Goods at Supplier's expense;
(c) Require replacement with conforming Goods at no additional cost;
(d) Require Supplier to perform corrective action in accordance with Article 8;
(e) Dispose of rejected Goods at Supplier's expense and invoice Supplier for disposal costs;
(f) Cancel the Purchase Order and procure substitute goods from alternative sources at Supplier's expense;
(g) Recover all damages, losses, and costs resulting from non-conforming Goods;
(h) Exercise any other remedy available at law or in equity.

12.3 Revocation of Acceptance

Purchaser may revoke acceptance of Goods if non-conformances are discovered after acceptance, including latent defects, concealed defects, or defects not reasonably discoverable upon initial inspection. Upon revocation of acceptance, Supplier shall replace the Goods and bear all associated costs as if the Goods had been initially rejected.

12.4 Replacement Goods

All replacement Goods shall be subject to the same inspection, testing, and acceptance procedures as original Goods. The warranty period for replacement Goods shall commence upon acceptance of the replacement Goods.

ARTICLE 13. DELIVERY, PACKAGING, AND RISK OF LOSS

13.1 Delivery Requirements

Time is of the essence. Supplier shall deliver Goods and perform Services strictly in accordance with the delivery dates and schedule specified in the Purchase Order. Supplier shall notify Purchaser immediately, and in any event within forty-eight (48) hours of discovery, if Supplier anticipates any delay in meeting the delivery schedule.

13.2 Early or Late Delivery

Supplier shall not deliver Goods earlier or later than the specified delivery dates without Purchaser's prior written consent. Purchaser reserves the right to reject early deliveries or to accept early deliveries and adjust payment terms accordingly. Late deliveries may be rejected, and Supplier shall be liable for all resulting damages and losses.

13.3 Packaging and Preservation

Supplier shall package, preserve, and protect all Goods in accordance with industry best practices to prevent damage, deterioration, corrosion, contamination, or degradation during shipment and storage. Packaging shall:

(a) Comply with all applicable packaging specifications and requirements specified in the Purchase Order;
(b) Provide adequate protection against moisture, corrosion, physical damage, contamination, and environmental exposure;
(c) Be appropriate for aerospace materials requiring special handling or protection;
(d) Include desiccants, corrosion inhibitors, or other protective measures as necessary;
(e) Be clearly labeled with Purchase Order number, part number, quantity, material specification, heat/lot number, and any required handling instructions;
(f) Include packing lists identifying contents, quantities, and traceability information;
(g) Comply with FOD prevention requirements specified in Article 9;
(h) Comply with all applicable transportation and shipping regulations.

13.4 Risk of Loss

Unless otherwise specified in the Purchase Order, delivery terms shall be DDP (Delivered Duty Paid) to Purchaser's designated facility in accordance with Incoterms 2020. Supplier shall retain all risk of loss, damage, or destruction to the Goods until Goods are delivered to and accepted by Purchaser at the delivery destination.

13.5 Title Transfer

Title to Goods shall transfer to Purchaser upon acceptance of conforming Goods. However, risk of loss shall remain with Supplier until delivery and acceptance as specified above.

13.6 Shipping Documentation

Each shipment shall be accompanied by: (a) packing list identifying Purchase Order number, item numbers, quantities, and description of contents; (b) shipping documents including airway bill, bill of lading, or other carrier documentation; (c) all required certifications, test reports, and traceability documentation; (d) Certificate of Conformance; (e) any export/import documentation required; and (f) Material Safety Data Sheets (MSDS/SDS) if applicable.

ARTICLE 14. PRICING, PAYMENT, AND TAXES

14.1 Pricing

The price for Goods and Services is as stated in the Purchase Order and is firm and fixed unless otherwise specified. The price includes all costs and expenses necessary for full performance including materials, labor, overhead, packaging, transportation, insurance, and all other costs. No price increases shall be effective without Purchaser's prior written consent.

14.2 Taxes and Duties

Unless otherwise stated in the Purchase Order, the price includes all applicable taxes, duties, tariffs, levies, fees, and governmental charges including but not limited to sales tax, use tax, excise tax, value-added tax (VAT), customs duties, and import duties. If Purchaser is required to pay any such taxes or charges, Supplier shall promptly reimburse Purchaser upon demand.

14.3 Invoicing

Supplier shall submit invoices only after shipment of conforming Goods or completion of Services. Invoices shall reference the Purchase Order number, item numbers, quantities delivered, and unit prices. Invoices shall be accompanied by all required documentation including Certificate of Conformance and traceability documentation.

14.4 Payment Terms

Unless otherwise specified in the Purchase Order, Purchaser shall pay undisputed amounts within thirty (30) calendar days following the later of: (a) receipt of conforming Goods; (b) receipt of complete and correct invoice; or (c) receipt of all required documentation and certifications. Payment terms shall commence only after all three conditions are satisfied.

14.5 Withholding and Set-Off

Purchaser may withhold or set-off payment for any of the following reasons:

(a) Non-conforming Goods or Services;
(b) Incomplete or inadequate documentation;
(c) Claims, liens, or disputes;
(d) Failure to perform corrective actions;
(e) Outstanding debts or amounts owed by Supplier to Purchaser or its affiliates;
(f) Pending resolution of quality issues or warranty claims;
(g) Any breach of Purchase Order terms.

14.6 Payment Not Acceptance

Payment for Goods or Services shall not constitute acceptance and shall not waive Purchaser's rights to inspect, reject, revoke acceptance, or pursue remedies for non-conformance or breach.

14.7 Reconciliation and Waiver

Supplier shall reconcile all amounts claimed to be due and submit any invoice discrepancies to Purchaser in writing within ninety (90) calendar days of the initial invoice date. Failure to provide written notice of claimed amounts due within this period shall constitute Supplier's irrevocable waiver of any such claims, regardless of validity.

ARTICLE 15. PROPRIETARY INFORMATION AND INTELLECTUAL PROPERTY

15.1 Purchaser Property

All drawings, specifications, technical data, software, tools, molds, dies, equipment, and other materials furnished by or on behalf of Purchaser ("Purchaser Property") remain the exclusive property of Purchaser. Supplier shall:

(a) Use Purchaser Property solely for performance of this Purchase Order;
(b) Maintain Purchaser Property in good working condition, subject to normal wear and tear;
(c) Not reproduce, copy, or disclose Purchaser Property to any third party without written authorization;
(d) Maintain adequate insurance covering loss or damage to Purchaser Property;
(e) Upon completion, termination, or cancellation of the Purchase Order, immediately return or destroy Purchaser Property as directed by Purchaser;
(f) Maintain records of location and condition of all Purchaser Property.

15.2 Ownership of Developments

All inventions, discoveries, ideas, improvements, designs, developments, works of authorship, and other intellectual property (whether patentable or copyrightable or not) created or developed by Supplier: (a) arising from or based upon Purchaser's confidential information; or (b) developed specifically for Purchaser in connection with this Purchase Order, shall be the sole and exclusive property of Purchaser. Supplier hereby assigns, and agrees to assign, all right, title, and interest in such intellectual property to Purchaser.

15.3 Work Made for Hire

To the extent Supplier creates any copyrightable works for Purchaser, such works shall be deemed 'works made for hire' under applicable copyright law, with Purchaser owning all rights. If any work is determined not to be a work made for hire, Supplier hereby assigns all copyrights to Purchaser.

15.4 Confidentiality

Supplier shall maintain in strict confidence all information disclosed by Purchaser or learned in connection with this Purchase Order, including but not limited to technical data, business information, pricing, specifications, and the terms of the Purchase Order. Supplier shall not disclose confidential information to any third party or use it for any purpose other than performance of this Purchase Order, except as required by law and only after providing prior written notice to Purchaser.

ARTICLE 16. INDEMNIFICATION AND LIABILITY

16.1 General Indemnification

To the fullest extent permitted by law, Supplier shall defend, indemnify, and hold harmless Purchaser, its affiliates, customers, and their respective directors, officers, employees, agents, representatives, successors, and assigns from and against any and all claims, liabilities, losses, damages, costs, expenses (including reasonable attorneys' fees), fines, penalties, and judgments arising out of or related to:

(a) Any non-conforming Goods or Services;
(b) Breach of any representation, warranty, or covenant contained in the Purchase Order;
(c) Infringement or misappropriation of any patent, copyright, trademark, trade secret, or other intellectual property right arising from the purchase, use, or sale of Goods or Services;
(d) Personal injury, death, or property damage caused by Goods or Services;
(e) Violation of any law, regulation, or order;
(f) Negligent acts or omissions, or willful misconduct of Supplier, its employees, agents, or subcontractors;
(g) Failure to pay sub-tier suppliers or subcontractors;
(h) Environmental contamination or hazardous materials violations;
(i) Supply of Counterfeit Goods;
(j) Any other act or omission of Supplier related to performance under this Purchase Order.

16.2 Intellectual Property Indemnity and Remedies

If any Goods or Services are alleged or found to infringe or misappropriate any intellectual property right, Supplier shall, at Purchaser's option and Supplier's expense:

(a) Obtain for Purchaser the right to continue using and selling the Goods or Services;
(b) Replace or modify the Goods or Services to make them non-infringing while maintaining equivalent functionality and quality;
(c) Refund all amounts paid by Purchaser for the infringing Goods or Services; or
(d) Pursue any other remedy acceptable to Purchaser.

16.3 No Limitation of Liability

Supplier's liability under this Purchase Order is unlimited. Supplier shall be liable for all direct, indirect, incidental, consequential, special, exemplary, and punitive damages arising from breach of this Purchase Order or defective Goods or Services, including but not limited to lost profits, lost production, recall costs, repair costs, replacement costs, reputational harm, and any other losses suffered by Purchaser.

16.4 Defense Obligations

Supplier shall, at its own expense, defend any claim for which indemnification is required. Purchaser may, at its option, participate in the defense at Supplier's expense. Supplier shall not settle any claim without Purchaser's prior written consent.

ARTICLE 17. INSURANCE REQUIREMENTS

17.1 Required Insurance Coverage

Supplier shall procure and maintain, at its own expense, insurance coverage as follows:

(a) Commercial General Liability Insurance: Minimum KRW 2,000,000,000 (two billion Korean Won) per occurrence and aggregate, covering bodily injury, property damage, personal injury, and contractual liability;
(b) Product Liability Insurance: Minimum KRW 2,000,000,000 (two billion Korean Won) per occurrence and aggregate, covering claims arising from Goods supplied;
(c) Professional Liability Insurance (if Services are provided): Minimum KRW 1,000,000,000 (one billion Korean Won) per claim and aggregate;
(d) Workers' Compensation and Employer's Liability Insurance: As required by Korean law and minimum KRW 500,000,000 (five hundred million Korean Won) for employer's liability;
(e) Automobile Liability Insurance: As required by law for all vehicles used in connection with this Purchase Order;
(f) Cargo and Transit Insurance: Covering full replacement value of Goods during transportation;
(g) Such other insurance as may be required by law or specified in the Purchase Order.

17.2 Policy Requirements

All insurance policies shall:

(a) Be issued by insurers licensed to do business in the Republic of Korea and with a minimum financial rating of A- (A minus) by A.M. Best or equivalent;
(b) Name Purchaser and its affiliates as additional insureds;
(c) Include waiver of subrogation in favor of Purchaser;
(d) Provide that coverage is primary and non-contributory with respect to any insurance maintained by Purchaser;
(e) Provide that policies shall not be cancelled, materially altered, or non-renewed without at least thirty (30) days' prior written notice to Purchaser;
(f) Be maintained for the duration of the Purchase Order and for a minimum of five (5) years following final delivery.

17.3 Certificates of Insurance

Supplier shall provide Purchaser with certificates of insurance evidencing required coverage prior to commencement of performance and upon renewal of policies. Failure to maintain required insurance constitutes a material breach.

17.4 No Limitation

Supplier's maintenance of insurance shall not limit Supplier's liability or obligations under this Purchase Order.

ARTICLE 18. TERMINATION AND CANCELLATION

18.1 Termination for Convenience

Purchaser may, at its sole discretion and for any reason or no reason, terminate this Purchase Order in whole or in part at any time by providing written notice to Supplier. Upon such termination:

(a) Supplier shall immediately cease work and stop placement of orders for materials, services, or facilities;
(b) Supplier shall deliver to Purchaser all completed Goods, work in progress, and materials for which Purchaser has paid or is obligated to pay;
(c) Purchaser shall pay Supplier for conforming Goods delivered and accepted prior to termination;
(d) Purchaser shall have no further payment obligation to Supplier;
(e) Supplier shall not be entitled to anticipated profits or consequential damages;
(f) Supplier shall promptly refund any payments received for undelivered Goods.

18.2 Termination for Cause

Purchaser may immediately terminate this Purchase Order, in whole or in part, for cause by providing written notice to Supplier if:

(a) Supplier breaches any term or condition of the Purchase Order;
(b) Supplier fails to deliver Goods or perform Services in accordance with the delivery schedule;
(c) Supplier delivers non-conforming Goods or Services;
(d) Supplier fails to implement required corrective actions;
(e) Supplier becomes insolvent, files for bankruptcy, or is subject to any insolvency or bankruptcy proceeding;
(f) Supplier ceases business operations or undergoes change of control;
(g) Supplier's quality system certification is suspended or withdrawn;
(h) Supplier fails to maintain required insurance;
(i) Supplier engages in fraudulent, illegal, or unethical conduct;
(j) Any other event occurs that materially impairs Supplier's ability to perform.

18.3 Remedies Upon Termination for Cause

Upon termination for cause, in addition to any other remedies available:

(a) Purchaser shall have no further payment obligation to Supplier;
(b) Purchaser may procure substitute goods or services from alternative sources and charge Supplier for any excess costs;
(c) Supplier shall be liable for all damages, losses, and costs incurred by Purchaser as a result of the breach or termination;
(d) Purchaser may set-off any amounts owed to Supplier against damages and costs;
(e) All outstanding Purchase Orders with Supplier may be terminated.

18.4 Cancellation Prior to Shipment

Purchaser may cancel the Purchase Order at any time prior to shipment by providing written notice to Supplier. Supplier shall have no claim for damages or lost profits upon such cancellation.

18.5 Survival

Termination or cancellation shall not relieve Supplier of obligations that by their nature survive, including warranties, indemnification, confidentiality, intellectual property rights, records retention, and payment obligations.

ARTICLE 19. SANCTIONS, EXPORT CONTROLS, AND CONFLICT MINERALS

19.1 Sanctions Compliance

Supplier represents and warrants that neither Supplier nor any person or entity that owns or controls Supplier is a target of economic or trade sanctions imposed by the Republic of Korea, United Nations, United States, European Union, or any other applicable jurisdiction ("Sanctions"). Supplier shall:

(a) Comply fully with all applicable Sanctions laws and regulations;
(b) Not source, provide, or transport Goods from or through any sanctioned country, entity, or person;
(c) Not use any carrier, vessel, or means of transport owned, controlled, or flagged by any sanctioned entity;
(d) Immediately notify Purchaser if Supplier becomes subject to any Sanctions;
(e) Provide Purchaser with country of origin documentation and supply chain transparency to verify Sanctions compliance;
(f) Cooperate with Purchaser's requests for information to verify compliance.

Violation of Sanctions laws or regulations constitutes a material breach and grounds for immediate termination.

19.2 Export Controls

Supplier shall comply with all applicable export control laws and regulations of the Republic of Korea and any other applicable jurisdictions. Supplier shall provide all information necessary for Purchaser to comply with export control requirements including classification information and country of origin data.

19.3 Conflict Minerals

All Goods supplied shall be "DRC conflict-free" as defined by applicable regulations. Supplier shall:

(a) Ensure that any conflict minerals (tin, tantalum, tungsten, gold) contained in Goods are from recycled or scrap sources, or originate from sources outside the Democratic Republic of Congo and adjoining countries, or are from validated conflict-free sources;
(b) Conduct supply chain due diligence in accordance with the OECD Due Diligence Guidance for Responsible Supply Chains;
(c) Provide Purchaser with completed Conflict Minerals Reporting Template (CMRT) or equivalent documentation upon request;
(d) Provide updated conflict minerals information annually or upon request;
(e) Notify Purchaser immediately if conflict mineral status changes.

Goods containing non-compliant conflict minerals shall be deemed non-conforming and subject to rejection.

19.4 Environmental Compliance

Supplier shall comply with all applicable environmental laws and regulations including but not limited to REACH (Registration, Evaluation, Authorization, and Restriction of Chemicals), RoHS (Restriction of Hazardous Substances), and Korean environmental protection laws. Supplier shall provide documentation demonstrating environmental compliance upon request.

ARTICLE 20. GENERAL PROVISIONS

20.1 Governing Law and Jurisdiction

This Purchase Order shall be governed by and construed in accordance with the laws of the Republic of Korea, without regard to conflicts of law principles. The parties expressly exclude application of the United Nations Convention on Contracts for the International Sale of Goods (CISG) and any other international conventions relating to sale of goods.

20.2 Dispute Resolution

Any dispute, controversy, or claim arising out of or relating to this Purchase Order shall be subject to the exclusive jurisdiction of the courts of Seoul, Republic of Korea. Notwithstanding the foregoing, Purchaser may seek injunctive or equitable relief in any court of competent jurisdiction to protect its intellectual property rights, confidential information, or to enforce payment obligations.

20.3 Assignment and Subcontracting

Supplier shall not assign, delegate, or subcontract its rights or obligations under this Purchase Order without Purchaser's prior written consent. Any purported assignment without consent shall be void. Purchaser may freely assign this Purchase Order to any affiliate, successor, or third party without Supplier's consent. Approved subcontracting does not relieve Supplier of any obligations.

20.4 Force Majeure

Neither party shall be liable for failure or delay in performance due to causes beyond its reasonable control including acts of God, war, terrorism, riot, fire, flood, earthquake, epidemic, or pandemic, provided that:

(a) The affected party provides prompt written notice to the other party within forty-eight (48) hours;
(b) The event is truly beyond the party's reasonable control and not due to its fault or negligence;
(c) The affected party takes all reasonable measures to mitigate the effects and resume performance;
(d) Labor disputes, strikes, or personnel shortages of Supplier or its subcontractors do not constitute force majeure;
(e) Supplier's inability to obtain materials from its regular sources does not constitute force majeure unless the event directly affects all alternative sources;
(f) The party claiming force majeure bears the burden of proof.

If force majeure delay exceeds thirty (30) calendar days, Purchaser may terminate the Purchase Order without liability. Supplier shall deliver all completed Goods upon termination.

20.5 Waiver

No waiver of any term or condition of this Purchase Order shall be effective unless in writing and signed by Purchaser. Purchaser's failure to enforce any provision or to exercise any right shall not constitute a waiver. Any waiver granted shall be limited to the specific instance and shall not waive future compliance.

20.6 Severability

If any provision of this Purchase Order is held to be invalid, illegal, or unenforceable by a court of competent jurisdiction, such holding shall not affect the validity, legality, or enforceability of the remaining provisions, which shall remain in full force and effect. The invalid provision shall be modified to the minimum extent necessary to make it valid and enforceable while preserving the parties' intent.

20.7 Entire Agreement and Modification

This Purchase Order, together with these Terms and any documents expressly incorporated by reference, constitutes the entire agreement between the parties and supersedes all prior or contemporaneous agreements, understandings, representations, and communications. This Purchase Order may be modified only by written amendment signed by authorized representatives of both parties.

20.8 Language

This Purchase Order may be executed in both Korean and English languages. In the event of any inconsistency, ambiguity, or conflict between the Korean and English versions, the Korean language version shall prevail and control.

20.9 Notices

All notices required or permitted under this Purchase Order shall be in writing and delivered by hand delivery, overnight courier, registered mail, or email to the addresses specified in the Purchase Order. Notices shall be deemed effective upon receipt.

20.10 Independent Contractor

Supplier is an independent contractor. Nothing in this Purchase Order creates an employment relationship, partnership, joint venture, or agency relationship between the parties. Supplier has no authority to bind Purchaser or make commitments on Purchaser's behalf.

20.11 Compliance with Laws

Supplier shall comply with all applicable laws, regulations, ordinances, and orders of all relevant jurisdictions in performing its obligations under this Purchase Order. Supplier shall maintain all necessary licenses, permits, and approvals.

20.12 Order of Precedence

In the event of any conflict or inconsistency between documents, the order of precedence shall be:

Amendments or modifications to the Purchase Order signed by both parties;
The face of the Purchase Order;
These Purchase Order Terms and Conditions;
Specifications, drawings, and technical requirements referenced in the Purchase Order;
Standards and industry specifications referenced;
Supplier's quotation or proposal (to the extent not inconsistent with the above).

ACKNOWLEDGMENT AND ACCEPTANCE

By accepting a Purchase Order from Sphere Corporation, commencing performance, shipping Goods, or providing Services, Supplier acknowledges that it has read, understood, and agrees to be bound by these Purchase Order Terms and Conditions.

SPHERE CORPORATION

PURCHASE ORDER TERMS AND CONDITIONS